As filed with the Securities and Exchange Commission on August 8, 2006 Registration No. 333-______ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 Registration Statement under The Securities Act of 1933 ________________ Southern California Edison California 95-1240335 Company SCE Trust I Delaware 95-7104035 SCE Trust II Delaware 95-7104036 SCE Trust III Delaware 95-7250058 (Exact name of registrant as (State or other jurisdiction (I.R.S. Employer specified in its charter) of incorporation or Identification No.) organization) 2244 Walnut Grove Avenue Rosemead, California 91770 626-302-1212 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Michael A. Henry Attorney 2244 Walnut Grove Avenue (P.O. Box 800) Rosemead, California 91770 626-302-4328 (Name, address, including zip code, and telephone number, including area code, of agent for service) _____________________ Approximate Date of Commencement of Proposed Sale to the Public: From time to time after the effective date of this registration statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, check the following box. ___ If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. X If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ___ Page If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ___ If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. X If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ___CALCULATION OF REGISTRATION FEE --------------------------------- ------------------ ----------------------------- ----------------- Title of each class of Amount of securities Amount to be Proposed maximum aggregate registration to be registered(1) registered(1) offering price(1) fee(2) --------------------------------- ------------------ ----------------------------- ----------------- First and Refunding Mortgage $0 Bonds --------------------------------- ------------------ ----------------------------- ----------------- Debt Securities $0 --------------------------------- ------------------ ----------------------------- ----------------- $100 Cumulative Preferred Stock $0 and Cumulative Preferred Stock --------------------------------- ------------------ ----------------------------- ----------------- Preference Stock $0 --------------------------------- ------------------ ----------------------------- ----------------- Preferred Securities of SCE $0 Trust I, SCE Trust II and SCE Trust III (3) --------------------------------- ------------------ ----------------------------- ----------------- Guarantees of Preferred $0 Securities of SCE Trust I, SCE Trust II and SCE Trust III by Southern California Edison Company (3) --------------------------------- ------------------ ----------------------------- ----------------- (1) An indeterminate principal amount or number of first and refunding mortgage bonds, debt securities, $100 cumulative preferred stock, cumulative preferred stock, preference stock and guarantees of Southern California Edison Company and of preferred securities of SCE Trust I, SCE Trust II and SCE Trust III as may from time to time be issued at indeterminate prices. Debt securities or preferred or preference stock may be issued and sold to SCE Trust I, SCE Trust II and SCE Trust III, in which event such securities may later be distributed to the holders of preferred securities. (2) Registration fees are being deferred in reliance upon Rule 456(b) and Rule 457(r) under Securities Act of 1933, except for $108,872.50 that has already been paid with respect to $925,000,000 aggregate principal amount of securities that are not yet sold which were previously registered under the Company's and the Trust's Registration Statement on Form S-3 filed March 30, 2005 (No. 333-123683, --01, --02, and -03). Pursuant to Rule 457(p) under Securities Act of 1933, such unutilized registration fee may be applied to the registration fees payable pursuant to this registration statement. (3) Includes the rights of holders of the preferred securities under the guarantees of preferred securities and back-up undertakings, consisting of obligations by Southern California Edison Company, as set forth in the trust agreement, the applicable indenture and any supplemental indenture thereto, in each case as further described in this registration statement. No separate consideration will be received for any guarantees or back-up undertakings. PageEXPLANATORY NOTE This Registration Statement contains: o A form of base prospectus to be used by Southern California Edison Company in connection with offerings of its first and refunding mortgage bonds, debt securities, preferred stock and preference stock; o A form of base prospectus to be used in connection with offerings of the preferred securities by the SCE Trusts, and the related debt securities, preferred stock, preference stock, guarantees, and certain back-up obligations of Southern California Edison Company. Page The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PROSPECTUS SOUTHERN CALIFORNIA EDISON COMPANY First and Refunding Mortgage Bonds, Debt Securities, $100 Cumulative Preferred Stock, Cumulative Preferred Stock and Preference Stock __________________________ The securities may be offered and sold from time to time in one or more offerings. This prospectus provides you with a general description of the securities that may be offered. Each time securities are sold, a supplement to this prospectus that contains specific information about the offering and the terms of the securities will be provided. The supplement may also add, update or change information contained in this prospectus. You should carefully read this prospectus and any supplement for the specific offering before you invest in any of the securities. The securities may be sold to or through underwriters, dealers or agents or directly to other purchasers. A prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of the securities, the principal amounts of securities to be purchased by them, and the compensation they will receive. Southern California Edison Company may offer and sell first and refunding mortgage bonds, debt securities, $100 cumulative preferred stock, cumulative preferred stock and preference stock. ___________________________ This prospectus may be used to offer and sell securities only if accompanied by the prospectus supplement for those securities. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ___________________________ The date of this Prospectus is August 8, 2006 Page TABLE OF CONTENTS About This Prospectus........................................................................3 Forward-Looking Statements...................................................................3 Southern California Edison Company...........................................................3 Use of Proceeds..............................................................................4 Ratio of Earnings to Fixed Charges and Preferred Equity Dividends............................4 Description of the Securities................................................................4 Description of the First Mortgage Bonds......................................................5 Description of the Debt Securities...........................................................9 Description of the Preferred Stock and Preference Stock.....................................22 Experts.....................................................................................25 Validity of the Securities..................................................................25 Where You Can Find More Information.........................................................25 Page 2 ABOUT THIS PROSPECTUS This prospectus is provided by Southern California Edison Company which is sometimes referred to in this prospectus as "Southern California Edison" or by the terms "we," "us" and "our." We refer to the $100 cumulative preferred stock and cumulative preferred stock together as "preferred stock" and the preferred stock and preference stock together as "preferred equity." This prospectus is part of a "shelf" registration statement filed with the United States Securities and Exchange Commission. By using a shelf registration statement, we may sell any combination of the securities described in this prospectus from time to time in one or more offerings. This prospectus only provides you with a general description of the securities that we may offer. Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about the terms of the securities. The supplement may also add, delete, update or change information contained in this prospectus. You should rely on the information in the applicable supplement if this prospectus and the supplement are inconsistent. Before purchasing any securities, you should carefully read both this prospectus and any applicable supplement, together with the additional information described under the heading "Where You Can Find More Information." You should rely only on the information contained or incorporated by reference in this prospectus and in any supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any supplement is accurate only as of the dates on their covers. Our business, financial condition, results of operations and prospects may have changed since that date. FORWARD-LOOKING STATEMENTS This prospectus, any accompanying supplement and the additional information described under the heading "Where You Can Find More Information" may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "probable," "may," "will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or of plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ, or that otherwise could impact us are described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2005, and in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K incorporated by reference into this prospectus. We urge you to read this entire prospectus, including any supplement and the information incorporated by reference, and carefully consider the risks, uncertainties and other factors that affect our business. Forward-looking statements speak only as of the date they are made and we are not obligated to publicly update or revise forward-looking statements. You should review future reports we file with the Securities and Exchange Commission. SOUTHERN CALIFORNIA EDISON COMPANY Southern California Edison is an investor-owned electric utility company, providing retail electric service to 4.5 million business and residential customers over a 50,000 square mile service area in coastal, central, and southern California, excluding the City of Los Angeles and certain other cities. We own and operate transmission and distribution facilities and hydroelectric, coal, and nuclear power plants for the purpose of serving our customers' electricity needs. In addition to power provided from our own generating resources, we procure power through long-term contracts from a variety of sources Page 3 including other utilities, merchant generators, and other non-utility generators, including qualifying facilities. Our customers also receive power purchased on their behalf through contracts signed by the California Department of Water Resources. Based in Rosemead, California, Southern California Edison was incorporated in California in 1909, and had assets of more than $25 billion at June 30, 2006. All of our common stock is owned by Edison International, a holding company with subsidiaries involved in both electric utility and non-electric utility businesses. The mailing address and telephone number of our principal executive offices are P.O. Box 800, Rosemead, CA 91770 and (626) 302-1212. USE OF PROCEEDS Except as otherwise described in a prospectus supplement, we intend for the net proceeds of the offered securities to be used to redeem, repay or retire outstanding debt or other securities, to finance construction expenditures, for other general corporate purposes, or to reduce short-term debt incurred to finance such activities. RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED EQUITY DIVIDENDS The following table sets forth the ratios of Southern California Edison's earnings to combined fixed charges and preferred stock dividends and to fixed charges, for each year in the five-year period ended December 31, 2005 and for the six months ended June 30, 2006: ------------------------------------- ------------------------------------------ --------- Year Ended December 31, Six Months Ended June 30, ------------------------------------- ------- ------- -------- ------- -------- ---------- 2001 2002 2003 2004 2005 2006 ------------------------------------- ------- ------- -------- ------- -------- ---------- Ratio of Earnings to Combined 5.87 4.02 3.63 4.16 3.44 3.27 Fixed Charges and Preferred Equity Dividends . . . . . . . . . . . . . ------------------------------------- ------- -------- -------- ------- -------- ---------- Ratio of Earnings to Fixed 6.15 4.21 3.81 4.40 3.79 3.90 Charges . . . . . . . . . . . . . . ------------------------------------- ------- -------- -------- ------- -------- ---------- DESCRIPTION OF THE SECURITIES The following is a general description of the terms and provisions of the securities we may offer and sell by this prospectus in one or more distinct offerings. These summaries are not meant to be a complete description of each security. This prospectus and any accompanying prospectus supplement will contain the material terms and conditions for each security. The prospectus supplement may add, update or change the terms and conditions of the securities as described in this prospectus. For more information about the securities, please refer to: o the indenture between Southern California Edison and The Bank of New York Trust Company, N.A., and D.G. Donovan, as successor trustees, dated as of October 21, 1923, as amended and supplemented, for the issuance of first and refunding mortgage bonds, which we refer to as the "first mortgage bond indenture" in this prospectus; o the indenture between Southern California Edison and The Bank of New York Trust Company, N.A., as successor trustee, dated as of January 15, 1993, for the issuance of senior debt securities, which we refer to as the "senior indenture" in this prospectus; o the form of indenture between Southern California Edison and Bank of New York Trust Company, N.A., as trustee, for the issuance of subordinated debt securities, which we refer to as the "subordinated indenture" in this prospectus; and o Southern California Edison's restated articles of incorporation. Page 4 We have filed or incorporated by reference forms or copies of these documents as exhibits to the registration statement. In this prospectus we sometimes refer to the senior indenture and subordinated indenture together as the "unsecured indentures" and each separately as an "unsecured indenture." We refer to each trustee for each indenture as the "indenture trustee." The first mortgage bond indenture and the unsecured indentures are governed by the Trust Indenture Act of 1939 and may be supplemented or amended from time to time. The senior indenture and the subordinated indenture are substantially similar, but differ in some important respects. The material differences between the senior indenture and the subordinated indenture are set forth in the description below under "Description of the Debt Securities." DESCRIPTION OF THE FIRST MORTGAGE BONDS The following description discusses the general terms and provisions of the first and refunding mortgage bonds that we may offer by this prospectus in one or more distinct offerings. In this prospectus, we refer to the first and refunding mortgage bonds as "first mortgage bonds" or "bonds." The first mortgage bonds will be an additional series of our secured debt securities created by resolution of our board of directors or the executive committee of the board, or by an action of one or more of our authorized officers, and will be issued under the first mortgage bond indenture, as amended and supplemented by supplemental indentures. The first mortgage bond indenture gives us broad authority to set the particular terms of each series of first mortgage bonds, including the right to modify certain of the terms contained in the first mortgage bond indenture. The particular terms of a series of bonds and the extent, if any, to which the particular terms of the issue modify the terms of the first mortgage bond indenture will be described in the prospectus supplement relating to the bonds. The first mortgage bond indenture contains the full legal text of the matters described in this section. Because this section is a summary, it does not describe every aspect of the first mortgage bonds or the first mortgage bond indenture. This summary is subject to and qualified by all the provisions of the first mortgage bond indenture, including definitions of terms used in the first mortgage bond indenture. Therefore, you should read carefully the detailed provisions of the first mortgage bond indenture, which we have incorporated by reference as an exhibit to the registration statement that includes this prospectus. This summary also is subject to and qualified by the description in the applicable prospectus supplement of the particular terms of the first mortgage bonds and any applicable supplemental indenture. General Before issuing each series of first mortgage bonds, we will specify the terms of that series through a board or executive committee resolution or officer action and a supplemental indenture. The applicable prospectus supplement will contain a description of the following terms, among others, of each series of first mortgage bonds: o the title of the bonds; o any limit on the aggregate principal amount of the bonds of that series; o the price at which the bonds will be issued; o the date or dates on which principal will be payable or how to determine the dates; o the rate or rates or method of determining interest; the date or dates from which interest will accrue; the dates on which interest will be payable, which we refer to as the "interest payment dates;" and any record dates for the interest payable on the interest payment dates; o the place or places where payments on the bonds will be made; Page 5 o any obligation or option on our part to redeem, purchase or repay bonds; any option of the holder to require us to redeem or repurchase bonds; and the terms and conditions upon which the bonds will be redeemed, purchased or repaid; o the denominations in which the bonds will be issued; o whether the bonds are to be issued in whole or in part in the form of one or more global bonds and, if so, the identity of the depositary for the global bonds; o whether the bonds are to be issued in whole or in part in the form of one or more global debt securities and, if so, the identity of the depositary for the global debt securities; o whether the bonds may be issued in the form of bearer securities or registered securities, or both, and provisions related thereto; o if bearer securities are issuable, the terms and conditions upon which (a) interest payments will be credited to the persons entitled to them, (b) interests in a temporary global bond may be exchanged for interests in a definitive global bond or for definitive bonds, and (c) interests in any definitive global bond may be exchanged for definitive bonds; o if other than United States dollars, the currency or currencies in which the bonds will be denominated and principal and interest will be payable; o any index used to determine the amount of payments of principal of and any premium and interest on the bonds; o any deletions, modifications or additions to the covenants or events of default provided for the bonds; o whether the bonds are subject to discharge and defeasance at our option; and o any other terms of the bonds. Security The first mortgage bonds when issued, will, as to the security afforded by the first mortgage bond indenture, be secured equally and ratably with all other first mortgage bonds by a legally valid first lien or charge on substantially all of the property and franchises now owned by us (with exceptions and exclusions noted below). Such lien and our title to our properties are subject to the terms of franchises, licenses, easements, leases, permits, contracts and other instruments under which properties are held or operated, statutes and governmental regulations, liens for taxes and assessments, and liens of the indenture trustees. In addition, such liens and our title to our properties are subject to other liens, prior rights and other encumbrances, none of which, with minor or insubstantial exceptions affects from a legal standpoint the security for the first mortgage bonds or our rights to use such properties in our business, unless the matters with respect to our interest in the Four Corners Generating Station and the related easement and lease referred to in the following paragraph may be so considered. Our rights and the rights of the indenture trustees in the Four Corners Generating Station in northern New Mexico, located on land of the Navajo Nation under an easement from the United States and a lease from the Navajo Nation, may be subject to possible defects in title, including possible conflicting grants or encumbrances not ascertainable because of the absence of or inadequacies in the applicable recording law and the record systems of the Bureau of Indian Affairs and the Navajo Nation, our possible inability to resort to legal process to enforce our rights against the Navajo Nation without Congressional consent, possible impairment or termination under certain circumstances of the easement and lease by the Navajo Nation, Congress, or the Secretary of the Interior, and the possible invalidity of the Indenture lien against our interest in the easement, lease, and improvements at the Four Corners Page 6 Generating Station. We cannot predict what effect, if any, such possible defects may have on our interest in the Four Corners Generating Station. The first mortgage bond indenture provides that property hereafter acquired (other than excepted kinds noted below) will become subject to the lien of the first mortgage bond indenture. Such property may be subject to prior liens and other encumbrances. Properties excepted from the lien of the first mortgage bond indenture include cash, accounts receivable, deposits, bills and notes, contracts, leases under which we are lessor, securities not specifically required to be pledged, office equipment, vehicles, and all materials, supplies and electric energy acquired or produced for sale, consumption or use in the ordinary conduct of business. Special Trust Fund We are required to deposit in a special trust fund with The Bank of New York Trust Company, N.A., as trustee, on each May 1 and November 1, cash equal to 1 1/2% (subject to redetermination by agreement between us and The Bank of New York Trust Company, N.A., as trustee) of the aggregate principal amount of the first mortgage bonds and underlying bonds then outstanding (excluding certain bonds and underlying bonds, such as bonds called for redemption), less certain amounts paid or credited in respect of underlying bonds. The term "underlying bonds" is defined in the first mortgage bond indenture to mean any bonds or other evidence of indebtedness secured by property subsequently acquired by us. Amounts in the special trust fund may, in general, be paid out for payment, redemption (at the redemption prices, including applicable premiums, set forth in the first mortgage bonds and subject to the limitation on refunding applicable to various series) or purchase of first mortgage or underlying bonds, or to reimburse us for the acquisition of certain additional properties. The foregoing deposit requirement has not affected our cash flow, because the cash deposited has been simultaneously offset by its payment to us to reimburse us for the acquisition of additional properties. Thus, there currently are no funds on deposit in the Special Trust Fund. Issue of Additional Bonds In general, additional Bonds, ranking equally and ratably with the first mortgage bonds, may be issued, subject to certain restrictions and requirements described below, in principal amounts equal to the lesser of (i) the amount authorized under the net earnings test described below and (ii) the sum of the following: a. Certain bonds and underlying bonds acquired, redeemed or otherwise retired. b. Cash deposited to pay or redeem Bonds or underlying bonds. c. 66?% of the net amount of additional property constructed or acquired by us and not theretofore used for other purposes under the first mortgage bond indenture, subject to certain restrictions. d. Cash deposited in an advance construction account with The Bank of New York Trust Company, N.A., as trustee (in certain events with such trustee's consent), to be withdrawn to reimburse us for 66?% of unbonded additional property. As of June 30, 2006, the amount of first mortgage bonds acquired, redeemed or otherwise retired against which bonds might be issued under the first mortgage bond indenture pursuant to clause (a) above was approximately $331 million. The net amount of additional property against which bonds might be issued under the first mortgage bond indenture pursuant to clause (c) above was approximately $12.1 billion, resulting in the ability to issue $8.1 billion of Bonds pursuant to clause (c) (i.e. $12.1 billion x .6666 = $8.1 billion). The aggregate amount of bonds which we could issue under clauses (a) and (c) above would, if other conditions were met, be approximately $8.4 billion. As of June 30, 2006, we had $5.8 billion of our first mortgage bonds outstanding (including the first mortgage bonds issued to secure $927.5 million of pollution control bonds and a $1.7 billion revolving credit facility). Page 7 Furthermore, in addition to the first mortgage bond indenture's bondable property requirement described in clause (c) above, the first mortgage bond indenture also provides that additional first mortgage bonds may not be issued unless our net earnings (as defined) for twelve months shall have been at least two and one-half (2.5x) times our total annual first mortgage bond interest charge. At June 30, 2006, under the net earnings test we could issue $10.4 billion of additional first mortgage bonds (based on net earnings for the year ended June 30, 2006). Notwithstanding the net earnings requirement, additional first mortgage bonds may be issued under the provisions referred to in (a) and (b) above under some circumstances involving, among other things, issuance of bonds not bearing a higher interest rate than the bonds to be retired, issuance of bonds to pay or redeem bonds maturing within two years and issuance of bonds on the basis of acquisition, redemption or other retirement of underlying bonds. Additional first mortgage bonds may not be issued under the provisions referred to in paragraphs (c) and (d) above during any period when indebtedness secured by a prior lien on acquired utility property has not been established as underlying bonds. Other than the security afforded by the lien of the first mortgage bond indenture and restrictions on the issuance of additional bonds described above, there are no provisions of the first mortgage bond indenture which afford holders of the first mortgage bonds protection against us increasing our ratio of total debt to total "bondable" assets. Defaults and Other Provisions The first mortgage bond indenture provides that the following are defaults: o default in payment of principal; o default for 60 days in payment of interest or satisfaction of the special trust fund obligation; o default under our covenants and conditions in the first mortgage bond indenture or in the bonds for 60 days after written notice by The Bank of New York Trust Company, N.A., as trustee; o certain acts of bankruptcy and certain events in bankruptcy, insolvency, receivership or reorganization proceedings; and o our failure to discharge or stay within 60 days any judgment against us for the payment of money in excess of $100,000. A California court may not strictly enforce certain of our covenants contained in the first mortgage bond indenture or the first mortgage bonds or allow acceleration of the due date of the first mortgage bonds if it concludes that such enforcement or acceleration would be unreasonable under the then existing circumstances. However, we believe that acceleration would be available if an event of default occurs as a result of a material breach of a material covenant contained in the first mortgage bond indenture or the first mortgage bonds. The first mortgage bond indenture and the Trust Indenture Act of 1939 require us to file with an indenture trustee documents and reports with respect to the absence of default and compliance with the terms of the first mortgage bond indenture annually and upon the authentication and delivery of additional first mortgage bonds, the release of cash or property, the satisfaction and discharge of the first mortgage bond indenture, or any other action requested to be taken by an indenture trustee at our request. The holders of a majority in principal amount of outstanding first mortgage bonds may require the indenture trustees to enforce the lien of the first mortgage bond indenture upon the happening (and continuance for the prescribed grace period, if any) of any of the defaults referred to above, and upon the indemnification of the indenture trustees to their reasonable satisfaction. Page 8 Concerning the Trustees The Bank of New York Trust Company, N.A., and certain of its affiliates act as trustees for our senior debt securities and certain pollution control bonds issued on our behalf. The Bank of New York Trust Company, N.A., also is the trustee under an indenture under which our parent, Edison International, may issue debt securities in the future. We maintain bank deposits with The Bank of New York and may borrow money from the bank from time to time. Neither by the first mortgage bond indenture nor otherwise are the indenture trustees restricted from dealing in the first mortgage bonds as freely as though they were not indenture trustees. However, the Trust Indenture Act provides that if either indenture trustee acquires or has acquired a conflicting interest, as defined in the Trust Indenture Act, and a default under the first mortgage bond indenture occurs or has occurred, such indenture trustee must within 90 days following the default eliminate such conflict, cure the default or resign. The Trust Indenture Act provides that an indenture trustee with an uncured conflict of interest will not be required to resign if it can show that the conflict will be cured or the default waived within a reasonable time and a stay of its duty to resign is not inconsistent with the interests of the holders of the outstanding bonds. In certain cases, the first mortgage bond indenture and the Trust Indenture Act require an indenture trustee to share the benefit of payments received as a creditor after the beginning of the third month prior to a default. Modification of the Indenture The holders of 80% in principal amount of all first mortgage bonds outstanding may authorize release of trust property, waive defaults and authorize certain modifications of the first mortgage bond indenture proposed by us and consented to by the indenture trustee. However, our obligation to pay principal and interest will continue unimpaired; and such modifications may not include, among other things, modifications giving any bonds preference over other bonds or authorizing any lien prior to that of the first mortgage bond indenture. In addition, modifications of rights of any series require the assent of the holders of 80% in principal amount of the bonds of such series. Global Securities We may issue first mortgage bonds of any series in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement relating to that series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing first mortgage bonds in definitive form, a global security may not be transferred except as a whole by the depositary for that global security to a nominee of that depositary or by a nominee of that depositary to that depositary or another nominee of that depositary or by that depositary or that nominee to a successor of that depositary or a nominee of that successor. We will describe the specific terms of the depositary arrangement for a series of first mortgage bonds in the prospectus supplement relating to that series. DESCRIPTION OF THE DEBT SECURITIES The following description discusses the general terms and provisions of the debt securities other than first mortgage bonds that we may offer by this prospectus in one or more distinct offerings. We may issue the debt securities as senior debt securities or subordinated debt securities. The indebtedness represented by the senior debt securities will rank equally with all other unsecured and unsubordinated debt of Southern California Edison. The indebtedness represented by the subordinated debt securities will rank junior and be subordinate in right of payment to the prior payment in full of the senior debt of Southern California Edison, to the extent and in the manner set forth in the applicable prospectus supplement for the securities. (See "Subordination" below.) Page 9 At June 30, 2006, Southern California Edison had approximately $4.6 billion of senior secured indebtedness that effectively would rank senior to any senior debt securities and approximately $625 billion of indebtedness that would be pari passu with any senior debt securities. The amount of senior secured indebtedness included $4.1 billion of first mortgage bonds (including the first mortgage bonds issued to secure $927.5 million of pollution control bonds and excluding the first mortgage bonds issued to secure a $1.7 billion revolving credit facility) and $376 million of rate reduction notes previously issued by or on behalf of Southern California Edison. As described above under "Description of the First Mortgage Bonds," the first mortgage bonds are issued under and secured by the first mortgage bond indenture, which creates a lien on substantially all the properties of Southern California Edison for the benefit of the holders of the first mortgage bonds. The rate reduction notes are secured by a right to receive certain charges from electricity customers of Southern California Edison. The debt securities other than first mortgage bonds that we are offering by this prospectus are not secured by any assets or property of Southern California Edison. The unsecured indentures give us broad authority to set the particular terms of each series of debt securities, including the right to modify certain of the terms contained in the indentures. The particular terms of a series of debt securities and the extent, if any, to which the particular terms of the issue modify the terms of the unsecured indenture will be described in the prospectus supplement relating to the debt securities. Each unsecured indenture contains the full legal text of the matters described in this section. Because this section is a summary, it does not describe every aspect of the debt securities or the applicable indenture. This summary is subject to and qualified by all the provisions of the applicable indenture, including definitions of terms used in any such indenture. Therefore, you should read carefully the detailed provisions of the unsecured indentures, which we have incorporated by reference as exhibits to the registration statement that includes this prospectus. This summary also is subject to and qualified by the description of the particular terms of the debt securities in the applicable prospectus supplement. General We may issue an unlimited amount of debt securities under each unsecured indenture in one or more series, up to the aggregate principal amounts that may be authorized by us from time to time. The debt securities will be unsecured obligations of Southern California Edison. Before issuing each series of debt securities, we will specify the terms of that series through a board resolution, officers' certificate or supplemental indenture. The applicable prospectus supplement will contain a description of the following terms, among others, of each series of debt securities: o the title of the debt securities; o any limit on the aggregate principal amount of the debt securities of that series; o the price at which the debt securities will be issued; o the date or dates on which principal will be payable or how to determine the dates; o the rate or rates or method of determining interest; the date or dates from which interest will accrue; the dates on which interest will be payable, which we refer to as the "interest payment dates;" any record dates for the interest payable on the interest payment dates; and any special provisions for the payment of additional amounts with respect to the debt securities; o the place or places where payments on the debt securities will be made; Page 10 o any obligation or option on our part to redeem, purchase or repay debt securities; any option of the holder to require us to redeem or repurchase debt securities; and the terms and conditions upon which the debt securities will be redeemed, purchased or repaid; o any provision for deferral of interest payments; o the denominations in which the debt securities will be issued (if other than denominations of $1,000 and any integral multiple thereof); o whether the debt securities are to be issued in whole or in part in the form of one or more global debt securities and, if so, the identity of the depositary for the global debt securities; o whether the debt securities may be issued in the form of bearer securities or registered securities, or both, and provisions related thereto; o if bearer securities are issuable, the terms and conditions upon which (a) interest payments will be credited to the persons entitled to them, (b) interests in a temporary global security may be exchanged for interests in a definitive global security or for definitive debt securities, and (c) interests in any definitive global security may be exchanged for definitive debt securities; o if other than United States dollars, the currency or currencies in which the debt securities will be denominated and principal and interest will be payable; o any index used to determine the amount of payments of principal of and any premium and interest on the debt securities; o any deletions, modifications or additions to the covenants or events of default provided for the debt securities; o whether the debt securities are subject to discharge and defeasance at our option; and o any other terms of the debt securities. In addition, we will set forth in the prospectus supplement for any offering of subordinated debt securities the following terms to the extent they are applicable: o any right to extend the interest payment periods; o whether the series of subordinated debt securities will be junior in right of payment to any other series; and o any changes in the subordination provisions of the subordinated indenture with respect to the series. We may also issue debt securities as original issue discount securities to be offered and sold at a substantial discount below their stated principal amount. We will describe in a prospectus supplement the federal income tax consequences and other special considerations applicable to any original issue discount securities. Form of Debt Securities We may issue the senior debt securities as registered securities, bearer securities or both. We may issue the subordinated debt securities only as registered securities, unless we enter into a supplemental indenture that provides for bearer securities. We also may issue the debt securities of a series in whole or in part in the form of one or more global securities, as described below under the heading "Global Securities." Unless we specify otherwise in a prospectus supplement, registered securities denominated in United States dollars will be issued only in the denominations of $1,000 and any integral multiple thereof and bearer securities denominated in United States dollars will be issued Page 11 only in denominations of $1,000, $10,000, and $100,000. All debt securities of any one series will be substantially identical except as to denomination and as otherwise provided by a board resolution, officer's certificate or supplemental indenture. For any series of debt securities denominated in a foreign or composite currency, we will specify the denominations and any special United States federal income tax and other related considerations in a prospectus supplement. No service charge will be made for any transfer or exchange of debt securities, but we may require payment of a sum sufficient to cover any applicable tax or other governmental charge. Payment of Debt Securities Registered Securities. Unless we state otherwise in a prospectus supplement, we will make payments with respect to debt securities that are in registered form as follows: o We will pay interest on each interest payment date to the person in whose name the debt security is registered at the close of business on the regular record date for the interest payment. At our option, we may pay interest by mailing a check to each holder's registered address or by wire transfer to an account designated by the holder under an arrangement that is satisfactory to the indenture trustee and us. o We will pay principal of and any premium on registered securities at their stated maturity, upon redemption or when otherwise due, upon presentation of the debt securities at the corporate trust office of the indenture trustee in Chicago, Illinois. Bearer Securities. Unless we state otherwise in a prospectus supplement, we will make payments in the designated currency with respect to senior debt securities that are in bearer form as follows: o We will pay interest on each interest payment date only upon presentation of the coupon for the interest payment at a paying agency outside the United States designated by us. o We will pay principal of and any premium on bearer securities at their stated maturity, upon redemption or when otherwise due, upon presentation of the debt securities at a paying agency outside the United States designated by us. o At the option of a holder of bearer debt securities, we will also pay any principal, premium or interest by mailing a check or by wire transfer to an account with a bank located outside the United States. Unless we state otherwise in a prospectus supplement, we will not make any payment with respect to a bearer senior debt security within the United States (including payment at the corporate trust office of the indenture trustee or any other paying agency in the United States, by transfer to an account in the United States, or by mail to an address in the United States), except if payment at all paying agencies outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions. In that case, we will pay principal of and premium, if any, and interest on bearer senior debt securities in United States dollars at the corporate trust office of the indenture trustee in Chicago, Illinois. Paying Agents. In a prospectus supplement, we will name any paying agents other than the indenture trustee that we have initially appointed for a series of debt securities. We may terminate the appointment of any of the paying agents at any time, except that we will maintain at least one paying agent in Chicago, Illinois for registered senior debt securities and at least one paying agent in a city outside the United States so long as any bearer senior debt securities are outstanding. In addition, we will maintain a paying agent in London or Luxembourg or any city outside the United States, if that is required by a stock exchange on which a series of senior debt securities is listed. Any money we provide to a paying agent for the payment of principal, premium or interest that remains unclaimed at the end of two years after the payment became due and payable will be repaid to us. Thereafter, the holder of debt securities entitled to such payment must look only to us for payment. Page 12 Exchanges and Transfers of Debt Securities Subject to the provisions of the applicable indenture and prospectus supplement, you may exchange your debt securities (other than debt securities represented by a global security, except as set forth below) for other debt securities of the same series with the same interest rate, maturity and total principal amount, as described in this section. You may have your debt securities divided or combined into smaller or larger authorized denominations. If you hold bearer senior debt securities, you may exchange them (with the remaining coupons) for registered senior debt securities or other bearer senior debt securities, but the exchange must be made outside the United States. If you hold registered securities, you may not exchange them for bearer securities. You may exchange or transfer your registered debt securities, other than debt securities represented by a global security, at the office of the indenture trustee or another transfer agent designated by us and named in a prospectus supplement. We have appointed the indenture trustee to act as the security registrar for registering debt securities in the names of holders and transferring debt securities. We may appoint, remove or add additional transfer agents and change their locations. If we issue bearer debt securities, we will maintain a transfer agent outside the United States where they may be exchanged. If you hold bearer senior debt securities, you may transfer them by delivering the certificate to the new holder. There will be no service charge for transfer or exchange of your debt securities, but you may be required to pay for any related taxes and other governmental charges. In the event of any redemption, we are not required to: o issue, register the transfer of or exchange the debt securities during a period of 15 days before giving any notice of redemption; o register the transfer of or exchange any registered security selected for redemption in whole or in part, except the unredeemed portion of any registered security being redeemed in part; o exchange any bearer senior debt security selected for redemption, except that a bearer senior debt security may be exchanged for a registered senior debt security of the same series if the debt securities of the series are issuable as registered securities; or o register the transfer of or exchange any debt security if the holder of the debt security has expressed the right, if any, to require us to repurchase the debt security in whole or in part, except that portion of the debt security not required to be repurchased, provided that the debt security shall be immediately surrendered for redemption with written instructions for payment consistent with the provisions of the indenture. Redemption of Debt Securities We will set forth any terms for the redemption of debt securities in a prospectus supplement. Unless we indicate differently in a prospectus supplement, and except for debt securities redeemable at the option of the registered holder, we may redeem debt securities upon notice by mail between 30 and 60 days before the redemption date. If we choose to redeem less than all of the debt securities of any series or tranche of a series, the indenture trustee will select the debt securities to be redeemed. The indenture trustee will choose a method of selection it deems fair and appropriate unless another method has been specified in accordance with the indenture. Debt securities will cease to bear interest on the redemption date. We will pay the redemption price and any accrued interest once you surrender the debt security for redemption (along with any remaining coupons in the case of bearer senior debt securities). If only part of a debt security is redeemed and you have surrendered the debt security, the indenture trustee will deliver to you a new debt security of the same series for the remaining portion without charge. Page 13 Global Securities We may issue debt securities of any series in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement relating to that series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing first mortgage bonds in definitive form, a global security may not be transferred except as a whole by the depositary for that global security to a nominee of that depositary or by a nominee of that depositary to that depositary or another nominee of that depositary or by that depositary or that nominee to a successor of that depositary or a nominee of that successor. We will describe the specific terms of the depositary arrangement for a series of debt securities in the prospectus supplement relating to that series. Events of Default and Remedies for Senior Debt Securities This section contains descriptions of the events of default and remedies specified in the senior indenture for the senior debt securities. The corresponding provisions for the subordinated debt securities, which differ in some material respects, are described in the next following section under the heading "Events of Default and Remedies for Subordinated Debt Securities." Defaults. An "event of default" under the senior indenture occurs with respect to any series of senior debt securities if: o we do not pay any installment of interest on senior debt securities of the series within 30 days of when it is due; o we do not pay principal or premium on any senior debt securities of the series when it is due; o we do not pay any sinking fund installment on senior debt securities of the series when it is due; o we remain in breach of any other covenant or agreement in the senior indenture for 60 days after receiving notice from the indenture trustee or the holders of 25 percent in principal amount of all the outstanding senior debt securities; o we fail to pay any indebtedness of more than $10,000,000 when it is finally due and do not fully cure the failure within 30 days after receiving of notice from the indenture trustee or the holders of 25 percent in principal amount of all the outstanding senior debt securities; or o we file for bankruptcy or become subject to specified proceedings involving bankruptcy, insolvency or reorganization. An event of default with respect to one series of senior debt securities does not necessarily constitute an event of default with respect to any other series of senior debt securities. We are required to file with the indenture trustee an annual officer's certificate indicating whether we are in default under the senior indenture. Acceleration. If an event of default occurs and is continuing with respect to any series of senior debt securities, either the indenture trustee or the holders of 25 percent in principal amount of the senior debt securities of the series (or in the case of defaults described in the last three bulleted clauses under "Defaults" above, the holders of 25 percent in principal amount of all the senior debt securities) may declare the principal amount of the senior debt securities of that series (or of all the senior debt securities, as the case may be) to be immediately due and payable. After a declaration of acceleration has been made and before the indenture trustee has obtained a judgment or decree for payment of the money due, the holders of a majority in principal amount of senior debt securities of that series or of all of the senior debt securities, as the case may be, may rescind and annul the acceleration if we have paid any past due payments of principal, premium or interest and met certain other conditions. In certain cases, the holders of a majority in principal Page 14 amount of the senior debt securities of any series or of all the senior debt securities, as the case may be, may waive any past default or event of default. Actions by Indenture Trustee and Holders. The senior indenture contains the following provisions regarding the actions of the indenture trustee and the holders of the senior debt securities after an event of default: o The indenture trustee must give notice of a default to the holders of senior debt securities of the affected series within 90 days after a default occurs that is known to the indenture trustee, if the default is not cured or waived. However, the indenture trustee may withhold the notice if it determines in good faith that it is in the interests of the holders to do so, except in the case of a default in the payment of principal, premium or interest. o Subject to its duty to act with the required standard of care during a default, the indenture trustee is entitled to be indemnified by the holders of the senior debt securities of a series before exercising any right or power under the senior indenture with respect to the series at the request of the holders. o No holder of senior debt securities of a series may institute proceedings to enforce the senior indenture except, among other things, where the indenture trustee has failed to act for 60 days after it has been given notice of a default and holders of 25 percent in principal amount of the senior debt securities of the series (or in the case of defaults described in the last three bulleted clauses under "Defaults" above, the holders of 25 percent in principal amount of all the senior debt securities) have requested the indenture trustee to enforce the senior indenture and offered reasonable indemnity to the indenture trustee. o Each holder of senior debt securities has an absolute and unconditional right to receive payment of principal, premium and interest when due and to bring a suit to enforce that right. o The holders of a majority in principal amount of the senior debt securities of a series or of all the senior debt securities, as the case may be, may direct the time, method and place of conducting any proceedings for any remedy available to the indenture trustee or exercising any trust or power conferred on it with respect to the senior debt securities of the series, as long as the direction does not conflict with any law or the senior indenture or expose the indenture trustee to personal liability. The indenture trustee may take any other action it deems proper that is not inconsistent with the direction of the holders. Events of Default and Remedies for Subordinated Debt Securities This section contains descriptions of the events of default and remedies specified in the subordinated indenture for the subordinated debt securities. The corresponding provisions for the senior debt securities, which differ in some material respects, are described in the preceding section under the heading "Events of Default and Remedies for Senior Debt Securities." Defaults. An "event of default" under the subordinated indenture occurs with respect to any series of subordinated debt securities if: o we do not pay any installment of interest on subordinated debt securities of the series within 30 days of when it is due (following any deferral allowed under the terms of the subordinated debt securities and elected by us); o we do not pay principal or premium on any subordinated debt securities of the series when it is due; o we do not pay any sinking fund installment on subordinated debt securities of the series within 60 days of when it is due; Page 15 o we remain in breach of any other covenant or agreement in the subordinated indenture for 90 days after receiving notice from the indenture trustee or the holders of 25 percent in principal amount of the outstanding subordinated debt securities of the series; o we file for bankruptcy or become subject to specified proceedings involving bankruptcy, insolvency or reorganization; or o any other event of default specified in the prospectus supplement occurs. An event of default with respect to one series of subordinated debt securities does not necessarily constitute an event of default with respect to any other series of subordinated debt securities. We are required to file with the indenture trustee an annual officer's certificate indicating whether we are in default under the subordinated indenture. Acceleration. If an event of default occurs and is continuing with respect to any series of subordinated debt securities, either the indenture trustee or the holders of 25 percent in principal amount of the subordinated debt securities of the series (or, if any subordinated debt securities of that series are original issue discount securities, such portion of the principal amount as may be specified in such securities) may declare the principal amount of the subordinated debt securities of that series to be immediately due and payable. After a declaration of acceleration has been made and before the indenture trustee has obtained a judgment or decree for payment of the money due, the holders of a majority in principal amount of subordinated debt securities of that series may rescind and annul the acceleration if we have paid any past due payments of principal, premium or interest and met certain other conditions. In certain cases, the holders of a majority in principal amount of the subordinated debt securities of all affected series, voting as one class, may waive any past default or event of default. Actions by Indenture Trustee and Holders. The subordinated indenture contains the following provisions regarding the actions of the indenture trustee and the holders of the subordinated debt securities after an event of default: o The indenture trustee must give notice of a default to the holders of subordinated debt securities of the affected series as provided by the Trust Indenture Act. o Subject to its duty to act with the required standard of care during a default, the indenture trustee is entitled to be indemnified by the holders of the subordinated debt securities of a series before exercising any right or power under the subordinated indenture with respect to the series at the request of the holders. o No holder of subordinated debt securities of a series may institute proceedings to enforce the subordinated indenture except, among other things, where the indenture trustee has failed to act for 60 days after it has been given notice of a default and holders of 25 percent in principal amount of the subordinated debt securities of all affected series, considered as one class (or in the case of defaults in the payment of principal, premium or interest, an affected series) have requested the indenture trustee to enforce the subordinated indenture and offered reasonable indemnity to the indenture trustee. o Each holder of subordinated debt securities has an absolute and unconditional right to receive payment of principal, premium and interest when due and to bring a suit to enforce that right. o The holders of a majority in principal amount of the subordinated debt securities of an affected series (or of all the subordinated debt securities, in the case of a default as to all series) may direct the time, method and place of conducting any proceedings for any remedy available to the indenture trustee or exercising any trust or power conferred on it with respect to the subordinated debt securities of the series, as long as the direction does not conflict with any law or the subordinated indenture or involve the indenture trustee in personal liability. Page 16 The indenture trustee may take any other action it deems proper that is not inconsistent with the direction of the holders. Modification of the Indenture Without Consent of Holders. Without the consent of any holders of debt securities, we and the indenture trustees may enter into supplemental indentures to: o evidence the succession of another entity to take our place and assume our covenants; o add to our covenants for the benefit of the holders of all or any series of the debt securities, or surrender any right or power conferred upon us; o add any additional events of default for all or any series of the debt securities; o add to or change certain provisions for issuing, exchanging or registering bearer securities, as specified in the senior indenture or the subordinated indenture; o add to, change or eliminate any provisions of the applicable indenture, but those modifications will not apply to debt securities of any series that was created before the modifications; o establish the form or terms of debt securities of any series as permitted by the unsecured indentures; o evidence and provide for a successor or additional indenture trustee; o provide security for the debt securities of any series; o cure any ambiguity, defect or inconsistency or make any other changes that do not adversely affect the interests of the holders of debt securities; or o evidence any changes in the disqualification and eligibility requirements applicable to the indenture trustee under the senior indenture, as permitted by the senior indenture, or effect any change to qualify the senior indenture under the Trust Indenture Act of 1939. With Consent of Holders. We may enter into supplemental indentures with the indenture trustees to modify the unsecured indentures or the rights of holders of the debt securities, if we obtain the consent of the holders of at least a majority in principal amount of the debt securities affected by the modification. However, without the consent of all affected holders of debt securities, no supplemental indenture may: o change the stated maturity of the principal or interest on any debt security, reduce the principal amount or interest payable, reduce any premium payable upon redemption, reduce the amount of principal of an original issue discount security payable upon its acceleration, change the currency in which any debt security is payable, change any right of redemption or repurchase, or impair the right to bring suit to enforce any payment; o reduce the percentages of holders whose consent is required for any supplemental indenture or waiver or reduce the requirements for quorum and voting under the indentures; or o modify certain provisions in the unsecured indentures relating to supplemental indentures and waivers of covenants and past defaults. A supplemental indenture that changes or eliminates any provision of the unsecured indentures expressly included solely for the benefit of holders of debt securities of one or more particular series will be deemed not to affect the rights of the holders of debt securities of any other series. Page 17 Consolidation, Merger and Sale of Assets; No Financial Covenants Subject to the provisions described in the next paragraph, we will preserve our corporate existence. We have agreed not to consolidate with or merge into any other entity and not to convey, transfer or lease our properties and assets substantially as an entirety to any entity, unless: o the entity formed by the consolidation or merger, or which acquires or leases our property and assets substantially as an entirety, is organized and existing under the laws of the United States or any state or the District of Columbia, and expressly assumes, by a supplemental indenture in form satisfactory to the indenture trustees, the due and punctual payment of the principal, premium and interest on all the debt securities and the performance of all of our covenants under the unsecured indentures; o immediately after giving effect to the transactions, no event of default, and no event which after notice or lapse of time or both would become an event of default, will have happened and be continuing; and o we have given the indenture trustees an officers' certificate and legal opinion that all conditions in the unsecured indentures relating to the transactions have been complied with. The unsecured indentures contain no financial or other similar restrictive covenants. Any such covenants with respect to any particular series of debt securities will be set forth in the applicable prospectus supplement. There are no provisions of the unsecured indentures that protect holders of the debt securities in the event of a highly leveraged transaction involving Southern California Edison. However, management of Southern California Edison believes that required regulatory approvals of a highly leveraged transaction would be unlikely to be obtained. Discharge and Defeasance There are significant differences between the provisions of the senior indenture and the subordinated indenture for defeasance of debt securities and discharge of our obligations. The respective provisions are discussed separately below. Defeasance of Senior Debt Securities. When we issue a series of senior debt securities, we may specify that we will be discharged from any and all obligations in respect of those senior debt securities (except as described below) upon the irrevocable deposit with the indenture trustee of money and/or government obligations which will provide money in an amount sufficient to pay principal, premium and interest on the senior debt securities when due in accordance with the terms of the senior indenture and the senior debt securities. We must also satisfy conditions that: o the deposit will not cause the indenture trustee to have a conflicting interest; o there is no event of default under the senior indenture within 91 days after the deposit; o the deposit will not result in breach or violation of any applicable laws, the senior indenture or any other agreement by which we are bound; o the deposit will not result in a trust that is an investment company subject to the Investment Company Act of 1940, or such trust will be qualified or exempt from the Investment Company Act of 1940; and o we have delivered to the indenture trustee an officer's certificate and an opinion of counsel each stating that all conditions in the senior indenture to the defeasance and discharge have been complied with. Page 18 The discharge of our obligations does not include certain obligations to register the transfer or exchange of senior debt securities, replace stolen, lost or mutilated senior debt securities, maintain paying agencies and hold monies for payment in trust and, if so specified as to the senior debt securities of a series, to pay the principal, premium and interest on those senior debt securities. We may specify as to the senior debt securities of a series that the deposit of money described above will be made only if it will not cause the senior debt securities listed on any nationally recognized securities exchange to be de-listed. We may also specify as to a series of senior debt securities that the deposit will be conditioned on our giving to the indenture trustee an opinion of counsel (who may be our counsel) to the effect that, based upon applicable United States federal income tax laws or a ruling published by the United States Internal Revenue Service, the deposit and discharge will not be a taxable event for the holders of the senior debt securities. Defeasance of Subordinated Debt Securities. The subordinated indenture provides, unless the terms of the particular series of subordinated debt securities provide otherwise, that upon satisfying several conditions we may cause ourselves to be: o discharged from our obligations, with some exceptions, as to any series of subordinated debt securities, which we refer to as "defeasance;" and o released from our obligations under specified covenants as to any series of subordinated debt securities, which we refer to as "covenant defeasance." The conditions that we must satisfy for either a defeasance or a covenant defeasance of a series of subordinated debt securities include: o the irrevocable deposit with the indenture trustee, in trust, of money and/or government obligations which, through the scheduled payment of principal and interest on those obligations, would provide sufficient moneys to pay principal, premium and interest on the subordinated debt securities on the maturity dates of the payments or upon redemption; o there is no event of default under the subordinated indenture at the time of such deposit or, as to defaults related to bankruptcy or similar proceedings, within 90 days after the deposit; o notice of redemption of the subordinated debt securities has been given or provided for, if the subordinated debt securities are to be redeemed before their stated maturity (other than from mandatory sinking fund payments or analogous payments); and o we have delivered to the indenture trustee an officer's certificate and an opinion of counsel each stating that all conditions to the defeasance or covenant defeasance have been complied with. The discharge of our obligations through a defeasance or covenant defeasance does not discharge the rights of the holders of the defeased subordinated debt securities to receive payments of principal, premium and interest from the trust funds when due, or our obligations to register the transfer or exchange of subordinated debt securities, replace stolen, lost or mutilated subordinated debt securities, maintain paying agencies and hold monies for payment in trust. The subordinated indenture permits defeasance as to any series of subordinated debt securities even if a prior covenant defeasance has occurred as to the subordinated debt securities of that series. Following a defeasance, payment of the subordinated debt securities defeased may not be accelerated because of an event of default. Following a covenant defeasance, payment of the subordinated debt securities may not be accelerated because of a breach of the specified covenants affected by the covenant defeasance. However, if an acceleration were to occur, the realizable value at the acceleration date of the money and government obligations in the defeasance trust could be less than the principal and interest Page 19 then due on the subordinated debt securities defeased, since the required deposit in the defeasance trust would be based upon scheduled cash flows rather than market value, which would vary depending upon interest rates and other factors. Tax Effects of Defeasance of Debt Securities. Under current United States federal income tax law, the defeasance of either senior or subordinated debt securities as described in the preceding paragraphs would be treated as an exchange of the relevant debt securities in which holders of the debt securities might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would be required after the defeasance to include in income might be different from that which would be includible in the absence of the defeasance. You should consult your own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than United States federal income tax laws. Under current United States federal income tax laws, unless accompanied by other changes in the terms of the subordinated debt securities, covenant defeasance of subordinated debt securities generally should not be treated as a taxable exchange. Subordination Subject to the provisions of the subordinated indenture and prospectus supplement, each series of subordinated debt securities will be subordinate and junior in right of payment to all Senior Indebtedness as defined below. If: o we make a payment or distribution of any of our assets to creditors upon our dissolution, winding-up, liquidation or reorganization, whether in bankruptcy, insolvency or otherwise; o a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness; or o the maturity of Senior Indebtedness has been accelerated because of a default on that Senior Indebtedness, then the holders of Senior Indebtedness generally will have the right to receive payment, in the case of the first instance, of all amounts due or to become due upon that Senior Indebtedness, and, in the case of the second and third instances, of all amounts due on that Senior Indebtedness, or we will make provision for those payments, before the holders of any subordinated debt securities have the right to receive any payments of principal or interest on their subordinated debt securities. Senior Indebtedness means, with respect to any series of subordinated debt securities, the principal premium, interest and any other payment in respect of any of the following: o all of our current and future indebtedness for borrowed or purchase money whether or not evidenced by notes, debentures, bonds or other similar written instruments; o our obligations under synthetic leases, finance leases and capitalized leases; o our obligations for reimbursement under letters of credit, banker's acceptances, security purchase facilities or similar facilities issued for our account; o any of our other indebtedness or obligations with respect to derivative contracts, including commodity contracts, interest rate, commodity and currency swap agreements forward contracts and other similar agreements or arrangements; and o all indebtedness of others of the kinds described in the preceding categories which we have assumed or guaranteed. Senior Indebtedness will not include trade accounts payable, accrued liabilities arising in the ordinary course of business or indebtedness to our subsidiaries. Page 20 Senior Indebtedness will be entitled to the benefits of the subordination provisions in the subordinated indenture irrespective of the amendment, modification or waiver of any term of the Senior Indebtedness. We may not amend the subordinated indenture to change the subordination of any outstanding Senior Indebtedness without the consent of each holder of Senior Indebtedness that the amendment would adversely affect. The subordinated indenture does not limit the amount of Senior Indebtedness that we may issue. Concerning the Indenture Trustee The Bank of New York Trust Company, N.A., and certain of its affiliates act as trustees for our first and refunding mortgage bonds and certain pollution control bonds issued on our behalf. The Bank of New York Trust Company, N.A., also is the trustee under an indenture under which our parent, Edison International, may issue debt securities in the future. We maintain bank deposits with The Bank of New York and may borrow money from the bank from time to time. Limitations on Issuance of Bearer Securities Senior debt securities may be issued in the form of bearer securities. Subordinated debt securities may not be issued in bearer form unless the subordinated indenture is amended to provide for bearer securities. In compliance with United States federal tax laws and regulations, bearer securities generally may not be offered or sold during a restricted period to a person within the United States or its possessions or to or for the account or benefit of a United States person. However, subject to certain restrictions and limitations, offers or sales may be made to: o the United States office of an international organization (as defined in Section 7701(a)(18) of the Internal Revenue Code of 1986 and the regulations thereunder); o the United States office of a foreign central bank (as defined in Section 895 of the Internal Revenue Code of 1986 and the regulations thereunder); and o United States persons that are (a) foreign branches of United States financial institutions (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)), which are purchasing for their own account or for resale, or (b) persons that acquire and hold bearer securities through a foreign branch of a U.S. financial institution, and in either case, the financial institution agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986. Definitive bearer securities will not be delivered during the same restricted period within the United States and will not be delivered in any event unless the beneficial owner of the bearer securities provides the required certification as to non-United States beneficial ownership. The restricted period for these purposes is the period beginning upon the earlier of the issue date of any bearer securities or the date on which those bearer securities are first offered and ending 40 days after the issue date or later date in the case of any unsold original allotment or subscription. Bearer securities will bear the following legend on their face and on any interest coupons which may be detached or, if the obligation is evidenced by a book entry, in the book of record in which the book entry is made: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the United States Internal Revenue Code." The sections referred to in the legend provide that a United States person who holds a bearer security will not be allowed to deduct any loss realized on the sale, exchange or redemption of the bearer security and any gain (which might otherwise be characterized as capital gain) recognized on the sale, exchange or redemption will be treated as ordinary income. Page 21 As used herein, "United States person" means an individual who is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, or any estate or trust the income of which is subject to United States federal income taxation regardless of its source. Governing Law The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York. DESCRIPTION OF THE PREFERRED STOCK AND PREFERENCE STOCK The following description of Southern California Edison's preferred stock and preference stock is a summary, and it does not describe every aspect of the preferred stock and preference stock. Southern California Edison's restated articles of incorporation, which are referred to in this prospectus as the "articles of incorporation," contain the full legal text of the matters described in this section. This summary is subject to and qualified by the articles of incorporation. Therefore, you should read carefully the detailed provisions of the articles of incorporation, which we have incorporated by reference as an exhibit to the registration statement that includes this prospectus. This summary also is subject to and qualified by the description of the particular terms of the preferred stock and preference stock in the applicable prospectus supplement. General The rights, preferences and privileges of the preferred stock or preference stock are established by the articles of incorporation. Whenever we offer and sell preferred stock or preference stock, our board of directors or a committee of the board of directors will adopt, and we will file with the California Secretary of State, a new certificate of determination of preferences to establish the terms of each new series of preferred stock or preference stock. We will also set forth the terms in a prospectus supplement. Southern California Edison's authorized capital stock consists of the following classes of shares of stock with the following number of shares per class: o cumulative preferred stock - 24,000,000 shares with a par value of $25 per share; o $100 cumulative preferred stock - 12,000,000 shares with a par value of $100 per share; o preference stock - 50,000,000 shares with no par value; and o common stock - 560,000,000 shares with no par value. As of June 30, 2006, Southern California Edison had issued and outstanding 5,150,198 shares of cumulative preferred stock, no shares of $100 cumulative preferred stock, 8,000,000 shares of preference stock, and 434,888,104 shares of common stock. All of the outstanding shares of common stock are owned by Edison International, our corporate parent. Preferred Stock The Southern California Edison board of directors or a committee of our board of directors may authorize the preferred stock to be issued from time to time as one or more series of cumulative preferred stock or $100 cumulative preferred stock. For each new series of preferred stock, the board of directors or a committee of our board of directors, within the limitations and restrictions stated in Article Sixth of the articles of incorporation, may fix the number of shares, dividend rights, dividend rate, including fixed and variable rates, conversion rights, voting rights (in addition to the voting rights provided in the articles of incorporation), rights and terms of redemption (including sinking fund provisions), redemption price or prices and voluntary liquidation preferences. We will set forth in a prospectus supplement the terms of each series of preferred stock offered through this prospectus. Page 22 Preference Stock The articles of incorporation authorize our board of directors or a committee of our board of directors, from time to time, in one or more series, and without further shareholder action, to provide for the issuance of up to 50,000,000 shares of preference stock, no par value. For each new series of preference stock, the board of directors or a committee of our board of directors may fix the number of shares, dividend rights, dividend rate, including fixed and variable rates, conversion rights, voting rights (if any), rights and terms of redemption (including sinking fund provisions), redemption price or prices and voluntary liquidation preferences. We will set forth in a prospectus supplement the following terms of each series of preference stock offered through this prospectus: o the designation of the series; o the total number of shares being offered; o the general or special voting rights of such shares, if any; o the price or prices at which shares will be offered and sold; o the dividend rate (including any step-up or step-down), period and payment date or method of calculation applicable to the preference stock; o the date from which dividends on the preference stock accumulate, if applicable o whether the dividend rate is fixed or variable; o any mandatory or optional sinking fund, purchase fund or similar provisions, if any; o the terms and conditions, if applicable, upon which the preference stock will be convertible into common stock, including the conversion price (or manner of calculation) o the dates, prices and other terms of any optional or mandatory redemption; o the relative ranking and preferences of the preference stock as to dividend rights and rights upon liquidation (whether voluntary or involuntary), dissolution or winding up of our affairs; o any liquidation preferences; o the procedures for auction and remarketing, if any, of the shares; o any listing of the shares on a securities exchange; and o any other specific terms, preferences, rights, limitations or restrictions. Rank of the Preference Stock Unless we state otherwise in a prospectus supplement, all series of preference stock will rank equally as to dividends and payments upon liquidation, dissolution or winding up. The preference stock ranks junior to all of the preferred stock and senior to all common stock. Distribution Rights A prospectus supplement will describe the circumstances relating to distributions on our preference stock. Holders of our preference stock of each series will be entitled to receive distributions, when, as, and if declared by our board of directors, out of our assets legally available for payment to shareholders. These distributions may be cash distributions, or distributions in kind or in other property. The prospectus supplement will describe the rates of the distributions and the dates we will make distributions. Each distribution shall be payable to holders of record on such record date as shall be fixed Page 23 by our board of directors. Dividends on any series of preference stock being offered may be cumulative or non-cumulative. Distributions on any series of preference stock, if cumulative, will be cumulative from and after the date set forth in the applicable prospectus supplement. Whenever dividends on any shares of the preferred stock are in default, we may not: o pay or declare any dividend on the preference stock or common stock, except a dividend payable in preference stock or common stock; or o purchase or redeem any shares of preference stock or common stock, except with the proceeds of any sale of shares of preference stock or common stock. The first mortgage bond indenture securing Southern California Edison's first mortgage bonds provides, in substance, that Southern California Edison cannot pay any cash dividends except out of surplus at December 31, 1921, and out of earnings since then. None of Southern California Edison's present earnings reinvested in the business are restricted by this provision. Southern California Edison does not expect this provision to have any adverse effect on its ability to pay dividends on the preference stock. Voting Rights Holders of preference stock will not have any voting rights, except as required by law or as indicated in the applicable prospectus supplement. Liquidation Rights If we liquidate, dissolve or wind up our affairs, then, before we make distributions to holders of common stock or any other class or series of shares of our capital stock ranking junior to the preference stock in the distribution of assets, the holders of each series of preference stock shall be entitled to receive liquidating distributions out of our assets legally available for distribution to shareholders. We will make liquidating distributions in the amount of the liquidation preference set forth in the applicable prospectus supplement plus an amount equal to all accumulated and unpaid distributions. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of shares of preference stock will have no right or claim to any of our remaining assets. If we liquidate, dissolve or wind up and we do not have enough legally available assets to pay the amount of the liquidating distributions on all outstanding shares of preference stock and other classes of capital stock ranking equally with the preference stock in the distribution of assets, then the holders of the preference stock and all other such classes or series of shares of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. Redemption A prospectus supplement may provide that the preference stock will be subject to mandatory redemption or redemption at our option, in whole or in part. The prospectus supplement will describe the terms, the times and the redemption prices of the preference stock. Other Provisions Holders of shares of preference stock will not have any preemptive rights. The preference stock, when issued, will be fully paid and nonassessable. Registration and Transfer We will select a transfer agent and registrar for the preference stock that we issue at the time of issuance. Page 24 EXPERTS The financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2005 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. VALIDITY OF THE SECURITIES The validity of the first mortgage bonds, debt securities, preferred stock and preference stock offered by this prospectus will be passed upon for Southern California Edison by Stephen E. Pickett, its Senior Vice President and General Counsel, or Barbara E. Mathews, its Vice President, Associate General Counsel, Chief Governance Officer and Corporate Secretary, and for any underwriters by their counsel. Mr. Pickett and Ms. Mathews are salaried employees of Southern California Edison and earn stock-based compensation based on Edison International's common stock. Additionally, they may hold Edison International stock-based interests through an employee benefit plan and can participate in an Edison International shareholder dividend reinvestment and stock purchase plan. They own no securities of Southern California Edison or the trusts. WHERE YOU CAN FIND MORE INFORMATION Available Information We file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy these reports and proxy statements and other information at the Public Reference Room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further information on the operation of the Securities and Exchange Commission's Public Reference Room by calling them at 1-800-SEC-0330. The Securities and Exchange Commission also maintains an Internet web site that contains reports, proxy statements and other information about issuers, such as Southern California Edison, that file electronically with the Securities and Exchange Commission. The address of that web site is http://www.sec.gov. You may also review reports, proxy statements and other information about Southern California Edison at our offices at 2244 Walnut Grove Avenue, Rosemead, California 91770. You may view and obtain copies of some of those reports and other information on the web site maintained by Southern California Edison's parent, Edison International, at http://www.edison.com. This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. You may obtain the full registration statement from the Securities and Exchange Commission or us, as indicated below. We filed forms or copies of the articles of incorporation, indentures and other documents establishing the terms of the offered securities as exhibits to the registration statement. Statements in this prospectus or any supplement about these documents are summaries. You should refer to the actual documents for a more complete description of the relevant matters. Page 25 Incorporation by Reference The rules of the Securities and Exchange Commission allow us to "incorporate by reference" into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the Securities and Exchange Commission. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the Securities and Exchange Commission will automatically update and supersede the earlier information. This prospectus incorporates by reference the documents listed below that we have previously filed or may file in the future with the Securities and Exchange Commission. These documents contain important information about Southern California Edison. o Our Annual Report on Form 10-K for the year ended December 31, 2005. o Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006 and June 30, 2006. o Our Current Reports on Form 8-K dated January 20, January 27, February 27, and May 15, 2006. o The "Description of Registrant's Securities to be Registered" on page 2 of our Registration Statement on Form 8-A dated February 13, 1999, which incorporates by reference the material appearing under the headings "Description of the Preferred Stock" in the prospectus dated February 21, 1990, and "Certain Terms of the New Stock" in the prospectus supplement dated January 21, 1992, contained in our registration statement on Form S-3 (Registration Number 33-33406). o All additional documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 between the date of this prospectus and the end of the offering of the securities described in this prospectus. Those documents include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements mailed to our shareholders. Upon request, we will provide a copy of any of these filings without charge to each person to whom a copy of this prospectus has been delivered. You may request a copy of these filings by writing or calling us at: Southern California Edison Company 2244 Walnut Grove Avenue P.O. Box 800 Rosemead, California 91770 Attention: Corporate Governance Telephone (626) 302-2662 Fax (626) 302-2610 Page 26 The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. PROSPECTUS _________________________ SOUTHERN CALIFORNIA EDISON COMPANY Debt Securities, $100 Cumulative Preferred Stock, Cumulative Preferred Stock, Preference Stock and Guarantees SCE TRUST I SCE TRUST II SCE TRUST III Preferred Securities Guaranteed by Southern California Edison Company (to the extent described herein) ________________________ The securities may be offered and sold from time to time in one or more offerings. This prospectus provides you with a general description of the securities that may be offered. Each time securities are sold, a supplement to this prospectus that contains specific information about the offering and the terms of the securities will be provided. The supplement may also add, update or change information contained in this prospectus. You should carefully read this prospectus and any supplement for the specific offering before you invest in any of the securities. The securities may be sold to or through underwriters, dealers or agents or directly to other purchasers. A prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of the securities, the principal amounts of securities to be purchased by them, and the compensation they will receive. Southern California Edison Company may offer and sell debt securities, $100 cumulative preferred stock, cumulative preferred stock, preference stock and guarantees of preferred securities. SCE Trust I, SCE Trust II and SCE Trust III may offer and sell preferred securities, guaranteed by Southern California Edison Company to the extent described herein. ________________________ This prospectus may be used to offer and sell securities only if accompanied by the prospectus supplement for those securities. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. _________________________ The date of this Prospectus is August 8, 2006 Page TABLE OF CONTENTS About This Prospectus........................................................................3 Forward-Looking Statements...................................................................3 Southern California Edison Company...........................................................3 The Trusts...................................................................................4 Use of Proceeds..............................................................................5 Ratio of Earnings to Fixed Charges and Preferred Equity Dividends............................5 Description of the Securities................................................................5 Description of the Debt Securities...........................................................6 Description of the Preferred Stock and Preference Stock.....................................18 Description of Preferred Securities.........................................................21 Description of Preferred Securities Guarantees..............................................28 Relationship Defining The Scope Of The Guarantee............................................30 Experts.....................................................................................31 Validity of the Securities and Preferred Securities Guarantees..............................31 Where You Can Find More Information.........................................................32 Page ABOUT THIS PROSPECTUS This prospectus is provided by Southern California Edison Company, SCE Trust I, SCE Trust II and SCE Trust III. In this prospectus, Southern California Edison Company is sometimes referred to as "Southern California Edison" or by the terms "we," "us" and "our." SCE Trust I, SCE Trust II and SCE Trust III are sometimes referred to together as the "trusts" or each separately as a "trust." We refer to the $100 cumulative preferred stock and cumulative preferred stock together as "preferred stock" and the preferred stock and preference stock together as "preferred equity." This prospectus is part of a "shelf" registration statement filed with the United States Securities and Exchange Commission. By using a shelf registration statement, we and the trusts may sell any combination of the securities described in this prospectus from time to time in one or more offerings. This prospectus only provides you with a general description of the securities that we and the trusts may offer. Each time we and/or the trusts sell securities, we will provide a supplement to this prospectus that contains specific information about the terms of the securities. The supplement may also add, delete, update or change information contained in this prospectus. You should rely on the information in the applicable supplement if this prospectus and the supplement are inconsistent. Before purchasing any securities, you should carefully read both this prospectus and any applicable supplement, together with the additional information described under the heading "Where You Can Find More Information." You should rely only on the information contained or incorporated by reference in this prospectus and in any supplement. Neither we nor the trusts have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor the trusts will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any supplement is accurate only as of the dates on their covers. Our business, financial condition, results of operations and prospects may have changed since that date. FORWARD-LOOKING STATEMENTS This prospectus, any accompanying supplement and the additional information described under the heading "Where You Can Find More Information" may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "probable," "may," "will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or of plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ, or that otherwise could impact us are described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2005, and in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K incorporated by reference into this prospectus. We urge you to read this entire prospectus, including any supplement and the information incorporated by reference, and carefully consider the risks, uncertainties and other factors that affect our business. Forward-looking statements speak only as of the date they are made and we are not obligated to publicly update or revise forward-looking statements. You should review future reports we file with the Securities and Exchange Commission. SOUTHERN CALIFORNIA EDISON COMPANY Southern California Edison is an investor-owned electric utility company, providing retail electric service to 4.5 million business and residential customers over a 50,000 square mile service area in coastal, central, and southern California, excluding the City of Los Angeles and certain other cities. We own and operate transmission and distribution facilities and hydroelectric, coal, and nuclear power Page 3 plants for the purpose of serving our customers' electricity needs. In addition to power provided from our own generating resources, we procure power through long-term contracts from a variety of sources including other utilities, merchant generators, and other non-utility generators, including qualifying facilities. Our customers also receive power purchased on their behalf through contracts signed by the California Department of Water Resources. Based in Rosemead, California, Southern California Edison was incorporated in California in 1909, and had assets of more than $25 billion at June 30, 2006. All of our common stock is owned by Edison International, a holding company with subsidiaries involved in both electric utility and non-electric utility businesses. The mailing address and telephone number of our principal executive offices are P.O. Box 800, Rosemead, CA 91770 and (626) 302-1212. THE TRUSTS Southern California Edison created three Delaware statutory trusts under three separate trust agreements. The trusts are named SCE Trust I, SCE Trust II and SCE Trust III. Southern California Edison plans to enter into an amended and restated trust agreement for each trust, which will state the terms and conditions for each trust to issue and sell its preferred securities and common securities. Forms of the amended and restated trust agreements are filed as exhibits to the registration statement of which this prospectus is a part. Each trust will exist solely to: o ssue and sell its preferred securities (representing undivided beneficial interests in the assets of the trust) to the public; o issue and sell its common securities (representing undivided beneficial interests in the assets of the trust) to Southern California Edison; o use the proceeds from the sale of its preferred and common securities to purchase a series of either Southern California Edison's subordinated debt securities or preferred equity; o distribute the cash payments it received on the subordinated debt securities or preferred owns to the holders of the preferred and common securities; and o engage in other activities that are necessary or incidental to these purposes. Southern California Edison will purchase all of the common securities of each trust. The common securities will represent an aggregate liquidation amount equal to a percentage of each trust's total capitalization, as specified in a prospectus supplement. The preferred securities will represent the remaining percentage of each trust's total capitalization. The common securities will have terms substantially identical to, and will rank equal in priority of payment with, the preferred securities. However, if Southern California Edison defaults on the related subordinated debt securities or preferred stock, then cash distributions and liquidation, redemption and other amounts payable on the common securities will be subordinate in priority of payment to the similar amounts payable on the preferred securities. The preferred securities will be guaranteed by Southern California Edison as described later in this prospectus. Southern California Edison has appointed five trustees to conduct each trust's business and affairs: o The Bank of New York Trust Company, N.A., as the "property trustee;" o The Bank of New York (Delaware), as the "Delaware trustee;" and o Three Southern California Edison officers or employees, as the "regular trustees." Page 4 Except under certain limited circumstances, only Southern California Edison can remove or replace the trustees. Southern California Edison also can increase or decrease the number of trustees. The holders of preferred securities may have the ability to elect additional trustees in the event of a specified payment default. Southern California Edison will pay all fees and expenses related to each trust and each offering of the related preferred securities and will pay all ongoing costs and expenses of each trust, except the respective trust's obligations under the related preferred and common securities. None of the trusts will have any independent operations. Each trust exists solely for the reasons summarized above. The principal offices of each trust are located at 2244 Walnut Grove Avenue, Rosemead, California 91770, and the telephone number of each trust is (626) 302-1930. USE OF PROCEEDS Except as otherwise described in a prospectus supplement, we or the trusts, as applicable, intend for the net proceeds of the offered securities to be used by: o Southern California Edison to redeem, repay or retire outstanding debt or other securities, to finance construction expenditures, for other general corporate purposes, or to reduce short-term debt incurred to finance such activities; and o the trusts to purchase subordinated debt securities or preferred stock of Southern California Edison. RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED EQUITY DIVIDENDS The following table sets forth the ratios of Southern California Edison's earnings to combined fixed charges and preferred stock dividends and to fixed charges, for each year in the five-year period ended December 31, 2005 and for the six months ended June 30, 2006: ------------------------------------- ------------------------------------------ ---------- Year Ended December 31, Six Months Ended June 30, ------------------------------------- ------- -------- -------- ------- -------- ---------- 2001 2002 2003 2004 2005 2006 ------------------------------------- ------- -------- -------- ------- -------- ---------- Ratio of Earnings to Combined 5.87 4.02 3.63 4.16 3.44 3.27 Fixed Charges and Preferred Equity Dividends . . . . . . . . . . . . . ------------------------------------- ------- -------- -------- ------- -------- ---------- Ratio of Earnings to Fixed 6.15 4.21 3.81 4.40 3.79 3.90 Charges . . . . . . . . . . . . . . ------------------------------------- ------- -------- -------- ------- -------- ---------- DESCRIPTION OF THE SECURITIES The following is a general description of the terms and provisions of the securities we and/or the trusts may offer and sell by this prospectus in one or more distinct offerings. These summaries are not meant to be a complete description of each security. This prospectus and any accompanying prospectus supplement will contain the material terms and conditions for each security. The prospectus supplement may add, update or change the terms and conditions of the securities as described in this prospectus. For more information about the securities, please refer to: o the indenture between Southern California Edison and The Bank of New York Trust Company, N.A., as successor trustee, dated as of January 15, 1993, for the issuance of senior debt securities, which we refer to as the "senior indenture" in this prospectus; o Page 5 o the indenture between Southern California Edison and The Bank of New York Trust Company, N.A., as trustee, for the issuance of subordinated debt securities, which we refer to as the "subordinated indenture" in this prospectus; o Southern California Edison's restated articles of incorporation; o the amended and restated trust agreement of each trust, which we refer to as the "trust agreement" in this prospectus; and o the guarantee agreement between Southern California Edison and The Bank of New York Trust Company, N.A., as trustee, relating to Southern California Edison's guarantee of the preferred securities issued by each trust. We and the trusts have filed or incorporated by reference forms or copies of these documents as exhibits to the registration statement. In this prospectus we sometimes refer to the senior indenture and subordinated indenture together as the "unsecured indentures" and each separately as an "unsecured indenture." We refer to each trustee for each indenture as the "indenture trustee." The unsecured indentures are governed by the Trust Indenture Act of 1939 and may be supplemented or amended from time to time. The senior indenture and the subordinated indenture are substantially similar, but differ in some important respects. The material differences between the senior indenture and the subordinated indenture are set forth in the description below under "Description of the Debt Securities." DESCRIPTION OF THE DEBT SECURITIES The following description discusses the general terms and provisions of the debt securities other than first mortgage bonds that we may offer by this prospectus in one or more distinct offerings. We may issue the debt securities as senior debt securities or subordinated debt securities. The indebtedness represented by the senior debt securities will rank equally with all other unsecured and unsubordinated debt of Southern California Edison. The indebtedness represented by the subordinated debt securities will rank junior and be subordinate in right of payment to the prior payment in full of the senior debt of Southern California Edison, to the extent and in the manner set forth in the applicable prospectus supplement for the securities. (See "Subordination" below.) At June 30, 2006, Southern California Edison had approximately $4.6 billion of senior secured indebtedness that effectively would rank senior to any senior debt securities and approximately $625 billion of indebtedness that would be pari passu with any senior debt securities. The amount of senior secured indebtedness included $4.1 billion of first mortgage bonds (including the first mortgage bonds issued to secure $927.5 million of pollution control bonds and excluding the first mortgage bonds issued to secure a $1.7 billion revolving credit facility) and $376 million of rate reduction notes previously issued by or on behalf of Southern California Edison. The first mortgage bonds are issued under and secured by the first mortgage bond indenture, which creates a lien on substantially all the properties of Southern California Edison for the benefit of the holders of the first mortgage bonds. The rate reduction notes are secured by a right to receive certain charges from electricity customers of Southern California Edison. The debt securities other than first mortgage bonds that we are offering by this prospectus are not secured by any assets or property of Southern California Edison. The unsecured indentures give us broad authority to set the particular terms of each series of debt securities, including the right to modify certain of the terms contained in the indentures. The particular terms of a series of debt securities and the extent, if any, to which the particular terms of the issue modify the terms of the unsecured indenture will be described in the prospectus supplement relating to the debt securities. Each unsecured indenture contains the full legal text of the matters described in this section. Because this section is a summary, it does not describe every aspect of the debt securities or the Page 6 applicable indenture. This summary is subject to and qualified by all the provisions of the applicable indenture, including definitions of terms used in any such indenture. Therefore, you should read carefully the detailed provisions of the unsecured indentures, which we have incorporated by reference as exhibits to the registration statement that includes this prospectus. This summary also is subject to and qualified by the description of the particular terms of the debt securities in the applicable prospectus supplement. General We may issue an unlimited amount of debt securities under each unsecured indenture in one or more series, up to the aggregate principal amounts that may be authorized by us from time to time. The debt securities will be unsecured obligations of Southern California Edison. Before issuing each series of debt securities, we will specify the terms of that series through a board resolution, officers' certificate or supplemental indenture. The applicable prospectus supplement will contain a description of the following terms, among others, of each series of debt securities: o the title of the debt securities; o any limit on the aggregate principal amount of the debt securities of that series; o the price at which the debt securities will be issued; o the date or dates on which principal will be payable or how to determine the dates; o the rate or rates or method of determining interest; the date or dates from which interest will accrue; the dates on which interest will be payable, which we refer to as the "interest payment dates;" any record dates for the interest payable on the interest payment dates; and any special provisions for the payment of additional amounts with respect to the debt securities; o the place or places where payments on the debt securities will be made; o any obligation or option on our part to redeem, purchase or repay debt securities; any option of the holder to require us to redeem or repurchase debt securities; and the terms and conditions upon which the debt securities will be redeemed, purchased or repaid; o any provision for deferral of interest payments; o the denominations in which the debt securities will be issued (if other than denominations of $1,000 and any integral multiple thereof); o whether the debt securities are to be issued in whole or in part in the form of one or more global debt securities and, if so, the identity of the depositary for the global debt securities; o whether the debt securities may be issued in the form of bearer securities or registered securities, or both, and provisions related thereto; o if bearer securities are issuable, the terms and conditions upon which (a) interest payments will be credited to the persons entitled to them, (b) interests in a temporary global security may be exchanged for interests in a definitive global security or for definitive debt securities, and (c) interests in any definitive global security may be exchanged for definitive debt securities; o if other than United States dollars, the currency or currencies in which the debt securities will be denominated and principal and interest will be payable; o any index used to determine the amount of payments of principal of and any premium and interest on the debt securities; Page 7 o any deletions, modifications or additions to the covenants or events of default provided for the debt securities; o whether the debt securities are subject to discharge and defeasance at our option; and o any other terms of the debt securities. In addition, we will set forth in the prospectus supplement for any offering of subordinated debt securities the following terms to the extent they are applicable: o any right to extend the interest payment periods; o whether the series of subordinated debt securities will be junior in right of payment to any other series; and o any changes in the subordination provisions of the subordinated indenture with respect to the series. We may also issue debt securities as original issue discount securities to be offered and sold at a substantial discount below their stated principal amount. We will describe in a prospectus supplement the federal income tax consequences and other special considerations applicable to any original issue discount securities. Form of Debt Securities We may issue the senior debt securities as registered securities, bearer securities or both. We may issue the subordinated debt securities only as registered securities, unless we enter into a supplemental indenture that provides for bearer securities. We also may issue the debt securities of a series in whole or in part in the form of one or more global securities, as described below under the heading "Global Securities." Unless we specify otherwise in a prospectus supplement, registered securities denominated in United States dollars will be issued only in the denominations of $1,000 and any integral multiple thereof and bearer securities denominated in United States dollars will be issued only in denominations of $1,000, $10,000, and $100,000. All debt securities of any one series will be substantially identical except as to denomination and as otherwise provided by a board resolution, officer's certificate or supplemental indenture. For any series of debt securities denominated in a foreign or composite currency, we will specify the denominations and any special United States federal income tax and other related considerations in a prospectus supplement. No service charge will be made for any transfer or exchange of debt securities, but we may require payment of a sum sufficient to cover any applicable tax or other governmental charge. Payment of Debt Securities Registered Securities. Unless we state otherwise in a prospectus supplement, we will make payments with respect to debt securities that are in registered form as follows: o We will pay interest on each interest payment date to the person in whose name the debt security is registered at the close of business on the regular record date for the interest payment. At our option, we may pay interest by mailing a check to each holder's registered address or by wire transfer to an account designated by the holder under an arrangement that is satisfactory to the indenture trustee and us. o We will pay principal of and any premium on registered securities at their stated maturity, upon redemption or when otherwise due, upon presentation of the debt securities at the corporate trust office of the indenture trustee in Chicago, Illinois. Bearer Securities. Unless we state otherwise in a prospectus supplement, we will make payments in the designated currency with respect to senior debt securities that are in bearer form as follows: Page 8 o We will pay interest on each interest payment date only upon presentation of the coupon for the interest payment at a paying agency outside the United States designated by us. o We will pay principal of and any premium on bearer securities at their stated maturity, upon redemption or when otherwise due, upon presentation of the debt securities at a paying agency outside the United States designated by us. o At the option of a holder of bearer debt securities, we will also pay any principal, premium or interest by mailing a check or by wire transfer to an account with a bank located outside the United States. Unless we state otherwise in a prospectus supplement, we will not make any payment with respect to a bearer senior debt security within the United States (including payment at the corporate trust office of the indenture trustee or any other paying agency in the United States, by transfer to an account in the United States, or by mail to an address in the United States), except if payment at all paying agencies outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions. In that case, we will pay principal of and premium, if any, and interest on bearer senior debt securities in United States dollars at the corporate trust office of the indenture trustee in Chicago, Illinois. Paying Agents. In a prospectus supplement, we will name any paying agents other than the indenture trustee that we have initially appointed for a series of debt securities. We may terminate the appointment of any of the paying agents at any time, except that we will maintain at least one paying agent in Chicago, Illinois for registered senior debt securities and at least one paying agent in a city outside the United States so long as any bearer senior debt securities are outstanding. In addition, we will maintain a paying agent in London or Luxembourg or any city outside the United States, if that is required by a stock exchange on which a series of senior debt securities is listed. Any money we provide to a paying agent for the payment of principal, premium or interest that remains unclaimed at the end of two years after the payment became due and payable will be repaid to us. Thereafter, the holder of debt securities entitled to such payment must look only to us for payment. Exchanges and Transfers of Debt Securities Subject to the provisions of the applicable indenture and prospectus supplement, you may exchange your debt securities (other than debt securities represented by a global security, except as set forth below) for other debt securities of the same series with the same interest rate, maturity and total principal amount, as described in this section. You may have your debt securities divided or combined into smaller or larger authorized denominations. If you hold bearer senior debt securities, you may exchange them (with the remaining coupons) for registered senior debt securities or other bearer senior debt securities, but the exchange must be made outside the United States. If you hold registered securities, you may not exchange them for bearer securities. You may exchange or transfer your registered debt securities, other than debt securities represented by a global security, at the office of the indenture trustee or another transfer agent designated by us and named in a prospectus supplement. We have appointed the indenture trustee to act as the security registrar for registering debt securities in the names of holders and transferring debt securities. We may appoint, remove or add additional transfer agents and change their locations. If we issue bearer debt securities, we will maintain a transfer agent outside the United States where they may be exchanged. If you hold bearer senior debt securities, you may transfer them by delivering the certificate to the new holder. There will be no service charge for transfer or exchange of your debt securities, but you may be required to pay for any related taxes and other governmental charges. In the event of any redemption, we are not required to: o issue, register the transfer of or exchange the debt securities during a period of 15 days before giving any notice of redemption; Page 9 o register the transfer of or exchange any registered security selected for redemption in whole or in part, except the unredeemed portion of any registered security being redeemed in part; o exchange any bearer senior debt security selected for redemption, except that a bearer senior debt security may be exchanged for a registered senior debt security of the same series if the debt securities of the series are issuable as registered securities; or o register the transfer of or exchange any debt security if the holder of the debt security has expressed the right, if any, to require us to repurchase the debt security in whole or in part, except that portion of the debt security not required to be repurchased, provided that the debt security shall be immediately surrendered for redemption with written instructions for payment consistent with the provisions of the indenture. Redemption of Debt Securities We will set forth any terms for the redemption of debt securities in a prospectus supplement. Unless we indicate differently in a prospectus supplement, and except for debt securities redeemable at the option of the registered holder, we may redeem debt securities upon notice by mail between 30 and 60 days before the redemption date. If we choose to redeem less than all of the debt securities of any series or tranche of a series, the indenture trustee will select the debt securities to be redeemed. The indenture trustee will choose a method of selection it deems fair and appropriate unless another method has been specified in accordance with the indenture. Debt securities will cease to bear interest on the redemption date. We will pay the redemption price and any accrued interest once you surrender the debt security for redemption (along with any remaining coupons in the case of bearer senior debt securities). If only part of a debt security is redeemed and you have surrendered the debt security, the indenture trustee will deliver to you a new debt security of the same series for the remaining portion without charge. Global Securities We may issue debt securities of any series in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement relating to that series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing first mortgage bonds in definitive form, a global security may not be transferred except as a whole by the depositary for that global security to a nominee of that depositary or by a nominee of that depositary to that depositary or another nominee of that depositary or by that depositary or that nominee to a successor of that depositary or a nominee of that successor. We will describe the specific terms of the depositary arrangement for a series of debt securities in the prospectus supplement relating to that series. Events of Default and Remedies for Senior Debt Securities This section contains descriptions of the events of default and remedies specified in the senior indenture for the senior debt securities. The corresponding provisions for the subordinated debt securities, which differ in some material respects, are described in the next following section under the heading "Events of Default and Remedies for Subordinated Debt Securities." Defaults. An "event of default" under the senior indenture occurs with respect to any series of senior debt securities if: o we do not pay any installment of interest on senior debt securities of the series within 30 days of when it is due; o we do not pay principal or premium on any senior debt securities of the series when it is due; Page 10 o we do not pay any sinking fund installment on senior debt securities of the series when it is due; o we remain in breach of any other covenant or agreement in the senior indenture for 60 days after receiving notice from the indenture trustee or the holders of 25 percent in principal amount of all the outstanding senior debt securities; o we fail to pay any indebtedness of more than $10,000,000 when it is finally due and do not fully cure the failure within 30 days after receiving of notice from the indenture trustee or the holders of 25 percent in principal amount of all the outstanding senior debt securities; or o we file for bankruptcy or become subject to specified proceedings involving bankruptcy, insolvency or reorganization. An event of default with respect to one series of senior debt securities does not necessarily constitute an event of default with respect to any other series of senior debt securities. We are required to file with the indenture trustee an annual officer's certificate indicating whether we are in default under the senior indenture. Acceleration. If an event of default occurs and is continuing with respect to any series of senior debt securities, either the indenture trustee or the holders of 25 percent in principal amount of the senior debt securities of the series (or in the case of defaults described in the last three bulleted clauses under "Defaults" above, the holders of 25 percent in principal amount of all the senior debt securities) may declare the principal amount of the senior debt securities of that series (or of all the senior debt securities, as the case may be) to be immediately due and payable. After a declaration of acceleration has been made and before the indenture trustee has obtained a judgment or decree for payment of the money due, the holders of a majority in principal amount of senior debt securities of that series or of all of the senior debt securities, as the case may be, may rescind and annul the acceleration if we have paid any past due payments of principal, premium or interest and met certain other conditions. In certain cases, the holders of a majority in principal amount of the senior debt securities of any series or of all the senior debt securities, as the case may be, may waive any past default or event of default. Actions by Indenture Trustee and Holders. The senior indenture contains the following provisions regarding the actions of the indenture trustee and the holders of the senior debt securities after an event of default: o The indenture trustee must give notice of a default to the holders of senior debt securities of the affected series within 90 days after a default occurs that is known to the indenture trustee, if the default is not cured or waived. However, the indenture trustee may withhold the notice if it determines in good faith that it is in the interests of the holders to do so, except in the case of a default in the payment of principal, premium or interest. o Subject to its duty to act with the required standard of care during a default, the indenture trustee is entitled to be indemnified by the holders of the senior debt securities of a series before exercising any right or power under the senior indenture with respect to the series at the request of the holders. o No holder of senior debt securities of a series may institute proceedings to enforce the senior indenture except, among other things, where the indenture trustee has failed to act for 60 days after it has been given notice of a default and holders of 25 percent in principal amount of the senior debt securities of the series (or in the case of defaults described in the last three bulleted clauses under "Defaults" above, the holders of 25 percent in principal amount of all the senior debt securities) have requested the indenture trustee to enforce the senior indenture and offered reasonable indemnity to the indenture trustee. Page 11 o Each holder of senior debt securities has an absolute and unconditional right to receive payment of principal, premium and interest when due and to bring a suit to enforce that right. o The holders of a majority in principal amount of the senior debt securities of a series or of all the senior debt securities, as the case may be, may direct the time, method and place of conducting any proceedings for any remedy available to the indenture trustee or exercising any trust or power conferred on it with respect to the senior debt securities of the series, as long as the direction does not conflict with any law or the senior indenture or expose the indenture trustee to personal liability. The indenture trustee may take any other action it deems proper that is not inconsistent with the direction of the holders. Events of Default and Remedies for Subordinated Debt Securities This section contains descriptions of the events of default and remedies specified in the subordinated indenture for the subordinated debt securities. The corresponding provisions for the senior debt securities, which differ in some material respects, are described in the preceding section under the heading "Events of Default and Remedies for Senior Debt Securities." Defaults. An "event of default" under the subordinated indenture occurs with respect to any series of subordinated debt securities if: o we do not pay any installment of interest on subordinated debt securities of the series within 30 days of when it is due (following any deferral allowed under the terms of the subordinated debt securities and elected by us); o we do not pay principal or premium on any subordinated debt securities of the series when it is due; o we do not pay any sinking fund installment on subordinated debt securities of the series within 60 days of when it is due; o we remain in breach of any other covenant or agreement in the subordinated indenture for 90 days after receiving notice from the indenture trustee or the holders of 25 percent in principal amount of the outstanding subordinated debt securities of the series; o we file for bankruptcy or become subject to specified proceedings involving bankruptcy, insolvency or reorganization; or o any other event of default specified in the prospectus supplement occurs. An event of default with respect to one series of subordinated debt securities does not necessarily constitute an event of default with respect to any other series of subordinated debt securities. We are required to file with the indenture trustee an annual officer's certificate indicating whether we are in default under the subordinated indenture. Acceleration. If an event of default occurs and is continuing with respect to any series of subordinated debt securities, either the indenture trustee or the holders of 25 percent in principal amount of the subordinated debt securities of the series (or, if any subordinated debt securities of that series are original issue discount securities, such portion of the principal amount as may be specified in such securities) may declare the principal amount of the subordinated debt securities of that series to be immediately due and payable. After a declaration of acceleration has been made and before the indenture trustee has obtained a judgment or decree for payment of the money due, the holders of a majority in principal amount of subordinated debt securities of that series may rescind and annul the acceleration if we have paid any past due payments of principal, premium or interest and met certain other conditions. In certain cases, the holders of a majority in principal amount of the subordinated debt securities of all affected series, voting as one class, may waive any past default or event of default. Page 12 Actions by Indenture Trustee and Holders. The subordinated indenture contains the following provisions regarding the actions of the indenture trustee and the holders of the subordinated debt securities after an event of default: o The indenture trustee must give notice of a default to the holders of subordinated debt securities of the affected series as provided by the Trust Indenture Act. o Subject to its duty to act with the required standard of care during a default, the indenture trustee is entitled to be indemnified by the holders of the subordinated debt securities of a series before exercising any right or power under the subordinated indenture with respect to the series at the request of the holders. o No holder of subordinated debt securities of a series may institute proceedings to enforce the subordinated indenture except, among other things, where the indenture trustee has failed to act for 60 days after it has been given notice of a default and holders of 25 percent in principal amount of the subordinated debt securities of all affected series, considered as one class (or in the case of defaults in the payment of principal, premium or interest, an affected series) have requested the indenture trustee to enforce the subordinated indenture and offered reasonable indemnity to the indenture trustee. o Each holder of subordinated debt securities has an absolute and unconditional right to receive payment of principal, premium and interest when due and to bring a suit to enforce that right. o The holders of a majority in principal amount of the subordinated debt securities of an affected series (or of all the subordinated debt securities, in the case of a default as to all series) may direct the time, method and place of conducting any proceedings for any remedy available to the indenture trustee or exercising any trust or power conferred on it with respect to the subordinated debt securities of the series, as long as the direction does not conflict with any law or the subordinated indenture or involve the indenture trustee in personal liability. The indenture trustee may take any other action it deems proper that is not inconsistent with the direction of the holders. Modification of the Indenture Without Consent of Holders. Without the consent of any holders of debt securities, we and the indenture trustees may enter into supplemental indentures to: o evidence the succession of another entity to take our place and assume our covenants; o add to our covenants for the benefit of the holders of all or any series of the debt securities, or surrender any right or power conferred upon us; o add any additional events of default for all or any series of the debt securities; o add to or change certain provisions for issuing, exchanging or registering bearer securities, as specified in the senior indenture or the subordinated indenture; o add to, change or eliminate any provisions of the applicable indenture, but those modifications will not apply to debt securities of any series that was created before the modifications; o establish the form or terms of debt securities of any series as permitted by the unsecured indentures; o evidence and provide for a successor or additional indenture trustee; o provide security for the debt securities of any series; Page 13 o cure any ambiguity, defect or inconsistency or make any other changes that do not adversely affect the interests of the holders of debt securities; or o evidence any changes in the disqualification and eligibility requirements applicable to the indenture trustee under the senior indenture, as permitted by the senior indenture, or effect any change to qualify the senior indenture under the Trust Indenture Act of 1939. With Consent of Holders. We may enter into supplemental indentures with the indenture trustees to modify the unsecured indentures or the rights of holders of the debt securities, if we obtain the consent of the holders of at least a majority in principal amount of the debt securities affected by the modification. However, without the consent of all affected holders of debt securities, no supplemental indenture may: o change the stated maturity of the principal or interest on any debt security, reduce the principal amount or interest payable, reduce any premium payable upon redemption, reduce the amount of principal of an original issue discount security payable upon its acceleration, change the currency in which any debt security is payable, change any right of redemption or repurchase, or impair the right to bring suit to enforce any payment; o reduce the percentages of holders whose consent is required for any supplemental indenture or waiver or reduce the requirements for quorum and voting under the indentures; or o modify certain provisions in the unsecured indentures relating to supplemental indentures and waivers of covenants and past defaults. A supplemental indenture that changes or eliminates any provision of the unsecured indentures expressly included solely for the benefit of holders of debt securities of one or more particular series will be deemed not to affect the rights of the holders of debt securities of any other series. Consolidation, Merger and Sale of Assets; No Financial Covenants Subject to the provisions described in the next paragraph, we will preserve our corporate existence. We have agreed not to consolidate with or merge into any other entity and not to convey, transfer or lease our properties and assets substantially as an entirety to any entity, unless: o the entity formed by the consolidation or merger, or which acquires or leases our property and assets substantially as an entirety, is organized and existing under the laws of the United States or any state or the District of Columbia, and expressly assumes, by a supplemental indenture in form satisfactory to the indenture trustees, the due and punctual payment of the principal, premium and interest on all the debt securities and the performance of all of our covenants under the unsecured indentures; o immediately after giving effect to the transactions, no event of default, and no event which after notice or lapse of time or both would become an event of default, will have happened and be continuing; and o we have given the indenture trustees an officers' certificate and legal opinion that all conditions in the unsecured indentures relating to the transactions have been complied with. The unsecured indentures contain no financial or other similar restrictive covenants. Any such covenants with respect to any particular series of debt securities will be set forth in the applicable prospectus supplement. There are no provisions of the unsecured indentures that protect holders of the debt securities in the event of a highly leveraged transaction involving Southern California Edison. Page 14 However, management of Southern California Edison believes that required regulatory approvals of a highly leveraged transaction would be unlikely to be obtained. Discharge and Defeasance There are significant differences between the provisions of the senior indenture and the subordinated indenture for defeasance of debt securities and discharge of our obligations. The respective provisions are discussed separately below. Defeasance of Senior Debt Securities. When we issue a series of senior debt securities, we may specify that we will be discharged from any and all obligations in respect of those senior debt securities (except as described below) upon the irrevocable deposit with the indenture trustee of money and/or government obligations which will provide money in an amount sufficient to pay principal, premium and interest on the senior debt securities when due in accordance with the terms of the senior indenture and the senior debt securities. We must also satisfy conditions that: o the deposit will not cause the indenture trustee to have a conflicting interest; o there is no event of default under the senior indenture within 91 days after the deposit; o the deposit will not result in breach or violation of any applicable laws, the senior indenture or any other agreement by which we are bound; o the deposit will not result in a trust that is an investment company subject to the Investment Company Act of 1940, or such trust will be qualified or exempt from the Investment Company Act of 1940; and o we have delivered to the indenture trustee an officer's certificate and an opinion of counsel each stating that all conditions in the senior indenture to the defeasance and discharge have been complied with. The discharge of our obligations does not include certain obligations to register the transfer or exchange of senior debt securities, replace stolen, lost or mutilated senior debt securities, maintain paying agencies and hold monies for payment in trust and, if so specified as to the senior debt securities of a series, to pay the principal, premium and interest on those senior debt securities. We may specify as to the senior debt securities of a series that the deposit of money described above will be made only if it will not cause the senior debt securities listed on any nationally recognized securities exchange to be de-listed. We may also specify as to a series of senior debt securities that the deposit will be conditioned on our giving to the indenture trustee an opinion of counsel (who may be our counsel) to the effect that, based upon applicable United States federal income tax laws or a ruling published by the United States Internal Revenue Service, the deposit and discharge will not be a taxable event for the holders of the senior debt securities. Defeasance of Subordinated Debt Securities. The subordinated indenture provides, unless the terms of the particular series of subordinated debt securities provide otherwise, that upon satisfying several conditions we may cause ourselves to be: o discharged from our obligations, with some exceptions, as to any series of subordinated debt securities, which we refer to as "defeasance;" and o released from our obligations under specified covenants as to any series of subordinated debt securities, which we refer to as "covenant defeasance." The conditions that we must satisfy for either a defeasance or a covenant defeasance of a series of subordinated debt securities include: o Page 15 o the irrevocable deposit with the indenture trustee, in trust, of money and/or government obligations which, through the scheduled payment of principal and interest on those obligations, would provide sufficient moneys to pay principal, premium and interest on the subordinated debt securities on the maturity dates of the payments or upon redemption; o there is no event of default under the subordinated indenture at the time of such deposit or, as to defaults related to bankruptcy or similar proceedings, within 90 days after the deposit; o notice of redemption of the subordinated debt securities has been given or provided for, if the subordinated debt securities are to be redeemed before their stated maturity (other than from mandatory sinking fund payments or analogous payments); and o we have delivered to the indenture trustee an officer's certificate and an opinion of counsel each stating that all conditions to the defeasance or covenant defeasance have been complied with. The discharge of our obligations through a defeasance or covenant defeasance does not discharge the rights of the holders of the defeased subordinated debt securities to receive payments of principal, premium and interest from the trust funds when due, or our obligations to register the transfer or exchange of subordinated debt securities, replace stolen, lost or mutilated subordinated debt securities, maintain paying agencies and hold monies for payment in trust. The subordinated indenture permits defeasance as to any series of subordinated debt securities even if a prior covenant defeasance has occurred as to the subordinated debt securities of that series. Following a defeasance, payment of the subordinated debt securities defeased may not be accelerated because of an event of default. Following a covenant defeasance, payment of the subordinated debt securities may not be accelerated because of a breach of the specified covenants affected by the covenant defeasance. However, if an acceleration were to occur, the realizable value at the acceleration date of the money and government obligations in the defeasance trust could be less than the principal and interest then due on the subordinated debt securities defeased, since the required deposit in the defeasance trust would be based upon scheduled cash flows rather than market value, which would vary depending upon interest rates and other factors. Tax Effects of Defeasance of Debt Securities. Under current United States federal income tax law, the defeasance of either senior or subordinated debt securities as described in the preceding paragraphs would be treated as an exchange of the relevant debt securities in which holders of the debt securities might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would be required after the defeasance to include in income might be different from that which would be includible in the absence of the defeasance. You should consult your own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than United States federal income tax laws. Under current United States federal income tax laws, unless accompanied by other changes in the terms of the subordinated debt securities, covenant defeasance of subordinated debt securities generally should not be treated as a taxable exchange. Subordination Subject to the provisions of the subordinated indenture and prospectus supplement, each series of subordinated debt securities will be subordinate and junior in right of payment to all Senior Indebtedness as defined below. If: o we make a payment or distribution of any of our assets to creditors upon our dissolution, winding-up, liquidation or reorganization, whether in bankruptcy, insolvency or otherwise; Page 16 o a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness; or o the maturity of Senior Indebtedness has been accelerated because of a default on that Senior Indebtedness, then the holders of Senior Indebtedness generally will have the right to receive payment, in the case of the first instance, of all amounts due or to become due upon that Senior Indebtedness, and, in the case of the second and third instances, of all amounts due on that Senior Indebtedness, or we will make provision for those payments, before the holders of any subordinated debt securities have the right to receive any payments of principal or interest on their subordinated debt securities. Senior Indebtedness means, with respect to any series of subordinated debt securities, the principal premium, interest and any other payment in respect of any of the following: o all of our current and future indebtedness for borrowed or purchase money whether or not evidenced by notes, debentures, bonds or other similar written instruments; o our obligations under synthetic leases, finance leases and capitalized leases; o our obligations for reimbursement under letters of credit, banker's acceptances, security purchase facilities or similar facilities issued for our account; o any of our other indebtedness or obligations with respect to derivative contracts, including commodity contracts, interest rate, commodity and currency swap agreements forward contracts and other similar agreements or arrangements; and o all indebtedness of others of the kinds described in the preceding categories which we have assumed or guaranteed. Senior Indebtedness will not include trade accounts payable, accrued liabilities arising in the ordinary course of business or indebtedness to our subsidiaries. Senior Indebtedness will be entitled to the benefits of the subordination provisions in the subordinated indenture irrespective of the amendment, modification or waiver of any term of the Senior Indebtedness. We may not amend the subordinated indenture to change the subordination of any outstanding Senior Indebtedness without the consent of each holder of Senior Indebtedness that the amendment would adversely affect. The subordinated indenture does not limit the amount of Senior Indebtedness that we may issue. Concerning the Indenture Trustee The Bank of New York Trust Company, N.A., and certain of its affiliates act as trustees for our first and refunding mortgage bonds and certain pollution control bonds issued on our behalf. The Bank of New York Trust Company, N.A., also is the trustee under an indenture under which our parent, Edison International, may issue debt securities in the future. We maintain bank deposits with The Bank of New York and may borrow money from the bank from time to time. Limitations on Issuance of Bearer Securities Senior debt securities may be issued in the form of bearer securities. Subordinated debt securities may not be issued in bearer form unless the subordinated indenture is amended to provide for bearer securities. In compliance with United States federal tax laws and regulations, bearer securities generally may not be offered or sold during a restricted period to a person within the United States or its possessions or to or for the account or benefit of a United States person. However, subject to certain restrictions and limitations, offers or sales may be made to: Page 17 o the United States office of an international organization (as defined in Section 7701(a)(18) of the Internal Revenue Code of 1986 and the regulations thereunder); o the United States office of a foreign central bank (as defined in Section 895 of the Internal Revenue Code of 1986 and the regulations thereunder); and o United States persons that are (a) foreign branches of United States financial institutions (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)), which are purchasing for their own account or for resale, or (b) persons that acquire and hold bearer securities through a foreign branch of a U.S. financial institution, and in either case, the financial institution agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986. Definitive bearer securities will not be delivered during the same restricted period within the United States and will not be delivered in any event unless the beneficial owner of the bearer securities provides the required certification as to non-United States beneficial ownership. The restricted period for these purposes is the period beginning upon the earlier of the issue date of any bearer securities or the date on which those bearer securities are first offered and ending 40 days after the issue date or later date in the case of any unsold original allotment or subscription. Bearer securities will bear the following legend on their face and on any interest coupons which may be detached or, if the obligation is evidenced by a book entry, in the book of record in which the book entry is made: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the United States Internal Revenue Code." The sections referred to in the legend provide that a United States person who holds a bearer security will not be allowed to deduct any loss realized on the sale, exchange or redemption of the bearer security and any gain (which might otherwise be characterized as capital gain) recognized on the sale, exchange or redemption will be treated as ordinary income. As used herein, "United States person" means an individual who is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, or any estate or trust the income of which is subject to United States federal income taxation regardless of its source. Governing Law The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York. DESCRIPTION OF THE PREFERRED STOCK AND PREFERENCE STOCK The following description of Southern California Edison's preferred stock and preference stock is a summary, and it does not describe every aspect of the preferred stock and preference stock. Southern California Edison's restated articles of incorporation, which are referred to in this prospectus as the "articles of incorporation," contain the full legal text of the matters described in this section. This summary is subject to and qualified by the articles of incorporation. Therefore, you should read carefully the detailed provisions of the articles of incorporation, which we have incorporated by reference as an exhibit to the registration statement that includes this prospectus. This summary also is subject to and qualified by the description of the particular terms of the preferred stock and preference stock in the applicable prospectus supplement. General The rights, preferences and privileges of the preferred stock or preference stock are established by the articles of incorporation. Whenever we offer and sell preferred stock or preference stock, our board of directors or a committee of the board of directors will adopt, and we will file with the California Page 18 Secretary of State, a new certificate of determination of preferences to establish the terms of each new series of preferred stock or preference stock. We will also set forth the terms in a prospectus supplement. Southern California Edison's authorized capital stock consists of the following classes of shares of stock with the following number of shares per class: o cumulative preferred stock - 24,000,000 shares with a par value of $25 per share; o $100 cumulative preferred stock - 12,000,000 shares with a par value of $100 per share; o preference stock - 50,000,000 shares with no par value; and o common stock - 560,000,000 shares with no par value. As of June 30, 2006, Southern California Edison had issued and outstanding 5,150,198 shares of cumulative preferred stock, no shares of $100 cumulative preferred stock, 8,000,000 shares of preference stock, and 434,888,104 shares of common stock. All of the outstanding shares of common stock are owned by Edison International, our corporate parent. Preferred Stock The Southern California Edison board of directors or a committee of the board of directors may authorize the preferred stock to be issued from time to time as one or more series of cumulative preferred stock or $100 cumulative preferred stock. For each new series of preferred stock, the board of directors or a committee of the board of directors, within the limitations and restrictions stated in Article Sixth of the articles of incorporation, may fix the number of shares, dividend rights, dividend rate, including fixed and variable rates, conversion rights, voting rights (in addition to the voting rights provided in the articles of incorporation), rights and terms of redemption (including sinking fund provisions), redemption price or prices and voluntary liquidation preferences. We will set forth in a prospectus supplement the terms of each series of preferred stock offered through this prospectus. Preference Stock The articles of incorporation authorize our board of directors or a committee of our board of directors, from time to time, in one or more series, and without further shareholder action, to provide for the issuance of up to 50,000,000 shares of preference stock, no par value. For each new series of preference stock, the board of directors or a committee of our board of directors may fix the number of shares, dividend rights, dividend rate, including fixed and variable rates, conversion rights, voting rights (if any), rights and terms of redemption (including sinking fund provisions), redemption price or prices and voluntary liquidation preferences. We will set forth in a prospectus supplement the following terms of each series of preference stock offered through this prospectus: o the designation of the series; o the total number of shares being offered; o the general or special voting rights of such shares, if any; o the price or prices at which shares will be offered and sold; o the dividend rate (including any step-up or step-down), period and payment date or method of calculation applicable to the preference stock; o the date from which dividends on the preference stock accumulate, if applicable o whether the dividend rate is fixed or variable; o any mandatory or optional sinking fund, purchase fund or similar provisions, if any; Page 19 o the terms and conditions, if applicable, upon which the preference stock will be convertible into common stock, including the conversion price (or manner of calculation) o the dates, prices and other terms of any optional or mandatory redemption; o the relative ranking and preferences of the preference stock as to dividend rights and rights upon liquidation (whether voluntary or involuntary), dissolution or winding up of our affairs; o any liquidation preferences; o the procedures for auction and remarketing, if any, of the shares; o any listing of the shares on a securities exchange; and o any other specific terms, preferences, rights, limitations or restrictions. Rank of the Preference Stock Unless we state otherwise in a prospectus supplement, all series of preference stock will rank equally as to dividends and payments upon liquidation, dissolution or winding up. The preference stock ranks junior to all of the preferred stock and senior to all common stock. Distribution Rights A prospectus supplement will describe the circumstances relating to distributions on our preference stock. Holders of our preference stock of each series will be entitled to receive distributions, when, as, and if declared by our board of directors, out of our assets legally available for payment to shareholders. These distributions may be cash distributions, or distributions in kind or in other property. The prospectus supplement will describe the rates of the distributions and the dates we will make distributions. Each distribution shall be payable to holders of record on such record date as shall be fixed by our board of directors. Dividends on any series of preference stock being offered may be cumulative or non-cumulative. Distributions on any series of preference stock, if cumulative, will be cumulative from and after the date set forth in the applicable prospectus supplement. Whenever dividends on any shares of the preferred stock are in default, we may not: o pay or declare any dividend on the preference stock or common stock, except a dividend payable in preference stock or common stock; or o purchase or redeem any shares of preference stock or common stock, except with the proceeds of any sale of shares of preference stock or common stock. The first mortgage bond indenture securing Southern California Edison's first mortgage bonds provides, in substance, that Southern California Edison cannot pay any cash dividends except out of surplus at December 31, 1921, and out of earnings since then. None of Southern California Edison's present earnings reinvested in the business are restricted by this provision. Southern California Edison does not expect this provision to have any adverse effect on its ability to pay dividends on the preference stock. Voting Rights Holders of preference stock will not have any voting rights, except as required by law or as indicated in the applicable prospectus supplement. Liquidation Rights If we liquidate, dissolve or wind up our affairs, then, before we make distributions to holders of common stock or any other class or series of shares of our capital stock ranking junior to the preference Page 20 stock in the distribution of assets, the holders of each series of preference stock shall be entitled to receive liquidating distributions out of our assets legally available for distribution to shareholders. We will make liquidating distributions in the amount of the liquidation preference set forth in the applicable prospectus supplement plus an amount equal to all accumulated and unpaid distributions. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of shares of preference stock will have no right or claim to any of our remaining assets. If we liquidate, dissolve or wind up and we do not have enough legally available assets to pay the amount of the liquidating distributions on all outstanding shares of preference stock and other classes of capital stock ranking equally with the preference stock in the distribution of assets, then the holders of the preference stock and all other such classes or series of shares of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. Redemption A prospectus supplement may provide that the preference stock will be subject to mandatory redemption or redemption at our option, in whole or in part. The prospectus supplement will describe the terms, the times and the redemption prices of the preference stock. Other Provisions Holders of shares of preference stock will not have any preemptive rights. The preference stock, when issued, will be fully paid and nonassessable. Registration and Transfer We will select a transfer agent and registrar for the preference stock that we issue at the time of issuance. DESCRIPTION OF PREFERRED SECURITIES This section and following sections discuss the general terms and conditions of the preferred securities that we and the trusts may offer through this prospectus, as well as provisions of the related forms of trust agreements and guarantee agreements to be entered into by Southern California Edison. Those agreements contain the full legal text of the matters described in this and following sections. Because these sections are summaries, they do not describe every aspect of the preferred securities or the related agreements. These summaries are subject to and qualified by all the provisions of the applicable agreements, including definitions of terms used in the agreements. Therefore, you should read carefully the detailed provisions of the applicable agreements, which will be incorporated by reference as exhibits to the registration statement that includes this prospectus. These summaries also are subject to and qualified by the description of the particular terms of the preferred securities in the applicable prospectus supplement. Page 21 General Southern California Edison will enter into an amended and restated trust agreement (referred to as a "trust agreement" in this prospectus) for each of SCE Trust I, SCE Trust II and SCE Trust III before each trust issues any preferred securities. Each trust agreement will authorize the regular trustees to issue on behalf of each trust one series of preferred securities that will have the terms described in a prospectus supplement. The proceeds from the sale of a trust's preferred and common securities will be used by the trust to purchase a series of either subordinated debt securities or preferred equity issued by Southern California Edison. The subordinated debt securities or preferred equity to be purchased by the trust are referred to in this prospectus as "intercompany securities." The terms of the intercompany securities will in most respects mirror the terms of the preferred securities. The intercompany securities will be held in trust by the property trustee for the benefit of the holders of the preferred and common securities. Southern California Edison also will enter into a guarantee agreement (referred to as a "preferred securities guarantee" in this prospectus) with each trust, under which Southern California Edison will agree to make payments of distributions and payments on redemption or liquidation with respect to a trust's preferred securities, but only to the extent the trust has funds available to make those payments and has not made the payments. See "Description of Preferred Securities Guarantees" below. The assets of a trust available for distribution to the holders of its preferred securities will be limited to payments from Southern California Edison under the series of intercompany securities held by the trust. If Southern California Edison fails to make a payment on the intercompany securities, the trust will not have sufficient funds to make related payments, including distributions, on its preferred securities. Each preferred securities guarantee, when taken together with Southern California Edison's obligations under the related series of intercompany securities, the subordinated indenture, the related trust agreement and the related expense agreement (as described below), and the articles of incorporation, as relevant, will provide a full and unconditional guarantee by Southern California Edison of amounts due on the preferred securities issued by a trust. Each trust agreement will be qualified as an indenture under the Trust Indenture Act of 1939. Each property trustee will act as indenture trustee for the preferred securities to be issued by the applicable trust, in order to comply with the provisions of the Trust Indenture Act of 1939. Each series of preferred securities will have the terms, including those regarding distributions, redemption, voting, liquidation rights and the other preferred, deferred or other special rights or other restrictions, as described in the relevant trust agreement or made part of the trust agreement by the Trust Indenture Act of 1939 or the Delaware Statutory Trust Act. The terms of the preferred securities will in most respects mirror the terms of the intercompany securities held by the trust. The prospectus supplement relating to the preferred securities of a trust will describe the specific terms of the preferred securities, including: o the name of the preferred securities; o the dollar amount and number of securities issued; o any provision relating to deferral of distribution payments; o the annual distribution rate(s), or method of determining the rate(s), the payment date(s) and the record dates used to determine the holders who are to receive distributions; o the date from which distributions will be cumulative, if applicable; Page 22 o the optional redemption provisions, if any, including the prices, time periods and other terms and conditions for which the preferred securities will be purchased or redeemed, in whole or in part; o the terms and conditions, if any, upon which the applicable series of intercompany securities may be distributed to holders of the preferred securities; o the voting rights, if any, of holders of the preferred securities; o any securities exchange on which the preferred securities will be listed; o whether the preferred securities are to be issued in book-entry form and represented by one or more global certificates and, if so, the depository for the global certificates and the specific terms of the depositary arrangements; and o any other relevant rights, preferences, privileges, limitations or restrictions of the preferred securities. In connection with the issuance of preferred securities, each trust will issue one series of common securities having the terms (including distributions, redemption, voting, liquidation rights or such restrictions) as will be set forth in the prospectus supplement. Except for voting rights, the terms of the common securities will be substantially identical to the terms of the preferred securities. The common securities will rank equally, and payments will be made on the common securities pro rata, with the preferred securities, except that, upon an event of default, the rights of the holders of the common securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the preferred securities. Unless an event of default has occurred and is continuing, the common securities of a trust carry the right to vote and to appoint, remove or replace any of the trustees of that trust. All of the common securities of each trust will be directly or indirectly owned by Southern California Edison. Each prospectus supplement will describe various United States federal income tax considerations applicable to the purchase, holding and disposition of the series of preferred securities covered by the prospectus supplement. Liquidation Distribution Upon Dissolution Unless otherwise specified in an applicable prospectus supplement, each trust agreement states that the related trust shall be dissolved: o on the expiration of the term of the trust; o upon the bankruptcy, dissolution or liquidation of Southern California Edison; o upon direction by Southern California Edison to the property trustee to dissolve the trust and distribute the related intercompany securities directly to the holders of the preferred and common securities of the trust; o upon the redemption of all of the preferred securities of the trust in connection with the redemption of all of the related intercompany securities; or o upon entry of a court order for the dissolution of the trust. Unless otherwise specified in an applicable prospectus supplement, in the event of a dissolution other than as described in the fourth bullet point above, after the trust satisfies all liabilities to its creditors as provided by applicable law, each holder of the preferred or common securities will be entitled to receive: Page 23 o the related intercompany securities in an aggregate principal amount or par value equal to the aggregate liquidation amount of the preferred or common securities held by the holder; or o if such a distribution of related intercompany securities is determined by the property trustee not to be practical, cash equal to the aggregate liquidation amount or par value of the preferred or common securities held by the holder, plus accumulated and unpaid distributions to the date of payment. If the trust cannot pay the full amount due on its preferred and common securities because insufficient assets are available for payment, then the amounts payable by the trust on its preferred and common securities will be paid on a pro rata basis. However, if an event of default under the related subordinated indenture or the certificate of determination has occurred and is continuing, the total amounts due on the preferred securities will be paid before any distribution on the common securities. Events of Default An "event of default" under a trust agreement occurs if: o an event of default occurs under the subordinated indenture relating to a series of subordinated debt securities (see "Description of Debt Securities--Events of Default and Remedies for Subordinated Debt Securities" above); o the trust does not pay any distribution on its preferred or common securities within 30 days of when it is due; o the trust does not pay any redemption payment on its preferred or common securities when it is due; o the trustees remain in breach of any other covenant or warranty in the trust agreement for 90 days after receiving notice from the holders of at least 25 percent in aggregate liquidation amount of the outstanding preferred securities; or o the property trustee files for bankruptcy or becomes subject to specified proceedings involving bankruptcy, insolvency or reorganization, and we fail to appoint a successor property trustee within 60 days. Southern California Edison and the regular trustees of a trust must file annually with the property trustee for the trust a certificate stating whether or not they are in compliance with all the applicable conditions and covenants under the related trust agreement. If an event of default occurs under the subordinated indenture, and the indenture trustee and the holders of not less than 25 percent in principal amount of the related subordinated debt securities outstanding fail to declare the principal of all of such subordinated debt securities to be immediately due and payable, the holders of at least 25 percent in aggregate liquidation amount of the outstanding preferred securities of the applicable trust will have the right to declare such principal immediately due and payable, by providing notice in writing to Southern California Edison and the indenture trustee. If Southern California Edison fails to pay principal, premium, if any, interest, redemption price or dividend on a series of intercompany securities when payable, then a holder of the related preferred securities may directly sue Southern California Edison, to the fullest extent permitted by law, to collect its pro rata share of payments owed. Consolidation, Merger or Amalgamation of the Trusts A trust 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 body, except as described below or as described above under the heading "Liquidation Distribution Upon Page 24 Dissolution." A trust may, with the consent of the holders of at least a majority in aggregate liquidation amount of its outstanding preferred securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to another trust, if: o the successor entity either o expressly assumes all of the obligations of the trust relating to its preferred securities; or o substitutes for the trust's preferred securities other securities having substantially the same terms as the preferred securities, so long as those successor securities rank the same as the preferred securities for distributions and payments upon liquidation, redemption and otherwise; o Southern California Edison expressly appoints a trustee of the successor entity who has substantially the same powers and duties as the property trustee of the trust as the holder of the particular series of intercompany securities; o the preferred securities are listed or traded, or any successor securities will be listed upon notice of issuance, on the same national securities exchange or other organization on which the preferred securities are then listed or traded; o the transaction does not cause the preferred securities or any successor securities to be downgraded by any national rating agency; o the transaction does not adversely affect the rights, preferences and privileges of the holders of the preferred securities or any successor securities in any material way; o the successor entity has a purpose substantially identical to that of the trust; o Southern California Edison owns all of the common securities of the successor entity and guarantees the obligations of the successor entity under the successor securities at least to the extent provided under the applicable preferred securities guarantee. o prior to the transaction, Southern California Edison has received an opinion of counsel from a nationally recognized law firm stating that: o the transaction does not adversely affect the rights, preferences and privileges of the holders of the trust's preferred securities or any successor securities in any material way; and o following the transaction, neither the trust nor the successor entity will be required to register as an investment company under the Investment Company Act of 1940; and o Southern California Edison owns all of the common securities of the successor entity and guarantees the obligations of the successor entity under the successor securities at least to the extent provided under the applicable preferred securities guarantee. In addition, unless all of the holders of the preferred securities approve otherwise, a trust 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 other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if the transaction would cause the trust or the successor entity to be classified other than as a grantor trust for United States federal income tax purposes. Voting Rights; Amendment of Trust Agreement Unless otherwise specified in an applicable prospectus supplement, the holders of preferred securities will have no voting rights except as discussed below and under the headings "Consolidation, Page 25 Merger or Amalgamation of the Trusts" and "Description of the Preferred Securities Guarantees--Amendments and Assignment" above, and as otherwise required by law and the trust agreement for the trust. On any matter as to which voting rights exist, the holders of preferred securities will be entitled to one vote for each liquidation amount (as provided in the applicable trust agreement) of preferred securities they hold. If any proposed amendment to the trust agreement of a trust provides for, or the regular trustees of the trust otherwise propose to effect: o any action that would adversely affect the powers, preferences or special rights of the trust's preferred securities in any material respect, whether by way of amendment to the trust agreement or otherwise; or o the dissolution, winding-up or termination of the trust other than pursuant to the terms of its trust agreement, then the holders of the trust's preferred securities as a class will be entitled to vote on the amendment or proposal. In that case, the amendment or proposal will be effective only if approved by the holders of at least a majority in aggregate liquidation amount of the preferred securities. The trust agreement of a trust may be amended from time to time by Southern California Edison and the regular trustees of the trust, without the consent of the holders of preferred securities of the trust, to: o cure any ambiguity, correct or supplement any provision which may be inconsistent with any other provision, or make provisions not inconsistent with any other provisions with respect to matters or questions arising under the trust agreement, in each case to the extent that the amendment does not adversely affect the interests of any holder of preferred securities of the trust in any material respect; or o modify, eliminate or add to any provisions to the extent necessary to ensure that the trust will not be classified as other than a grantor trust for United States federal income tax purposes or to ensure that the trust will not be required to register as an "investment company" under the Investment Company Act of 1940. Except as provided in the next paragraph, other amendments to the trust agreement of a trust may be made by Southern California Edison and the trustees of the trust upon: o approval of the holders of a majority in aggregate liquidation amount of the outstanding preferred securities of the trust; and o receipt by the trustees of the trust of an opinion of counsel to the effect that such amendment will not affect the trust's status as a grantor trust for United States federal income tax purposes or the trust's exemption from the Investment Company Act of 1940. Notwithstanding the foregoing, without the consent of each affected holder of common or preferred securities of a trust, the trust agreement of the trust may not be amended to: o change the amount or timing of any distribution on the common or preferred securities of the trust or otherwise adversely affect the amount of any distribution required to be made in respect of such securities as of a specified date; or o restrict the right of a holder of any such securities to institute suit for the enforcement of any such payment on or after such date. In addition, no amendment may be made to a trust agreement if the amendment would: Page 26 o cause the related trust to be characterized as other than a grantor trust for United States federal income tax purposes; o cause the related trust to be deemed to be an "investment company" which is required to be registered under the Investment Company Act of 1940; or o impose any additional obligation on Southern California Edison, the property trustee or the Delaware trustee without its consent. Neither the property trustee nor the Delaware trustee is required to enter into any amendment to a trust agreement that affects its own rights, duties and immunities under the trust agreement. The property trustee is entitled to receive an opinion of counsel and an officer's certificate stating that any amendment complies with the trust agreement and any conditions precedent to the amendment have been satisfied. Without obtaining the prior approval of the holders of a majority in aggregate liquidation amount of the preferred securities of a trust, the trustees of the trust may not: o direct the time, method and place of conducting any proceeding for any remedy available to the indenture trustee for any subordinated debt securities held by the trust or executing any trust or power conferred on the property trustee with respect to the intercompany securities; o waive any default that is waivable under the terms of the intercompany securities; o cancel an acceleration of the principal or liquidation value of the intercompany securities or exercise any right to rescind or annul a declaration that the principal of all of the intercompany securities shall be due and payable; or o consent to any amendment, modification or termination of the subordinated indenture or the subordinated debt securities where such consent is required or consent to any amendment to the articles of incorporation where such consent is required. However, if a consent under the subordinated indenture or the articles of incorporation requires the consent of each affected holder of subordinated debt securities or preferred stock, then the property trustee must obtain the prior consent of each holder of preferred securities. The trustees of the trust may not revoke any action previously authorized by a vote of the holders of the preferred securities except by a subsequent vote of the holders of the preferred securities. In addition, before taking any of the foregoing actions, the property trustee must obtain an opinion of counsel stating that the action will not cause the trust to be classified as other than a grantor trust for United States federal income tax purposes. The property trustee of a trust will notify all preferred securities holders of the trust of any notice of default received from the indenture trustee with respect to the subordinated debt securities held by the trust. Removal and Replacement of Trustees The holder of a trust's common securities may remove or replace any of the regular trustees and, unless an event of default has occurred and is continuing under the subordinated indenture or the articles of incorporation, the property and Delaware trustees of the trust. If such an event of default has occurred and is continuing, only the holders of a majority in aggregate liquidation amount of the trust's preferred securities may remove or replace the property and Delaware trustees. The resignation or removal of any trustee of the trusts will be effective only on the acceptance of appointment by the successor trustee in accordance with the provisions of the trust agreement for the trust. Information Concerning the Property Trustees For matters relating to compliance with the Trust Indenture Act of 1939, the property trustee of each trust will have all of the duties and responsibilities of an indenture trustee under the Trust Indenture Page 27 Act of 1939. Each property trustee, other than during the occurrence and continuance of a default under the applicable trust agreement, undertakes to perform only the duties as are specifically set forth in the applicable trust agreement and, after a default, must use the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, a property trustee is under no obligation to exercise any of the powers given it by the applicable trust agreement at the request of any holder of preferred securities unless it is offered reasonable security or indemnity against the costs, expenses and liabilities that it might incur. If the property trustee is required to decide between alternative courses of action, construe ambiguous provisions in the applicable trust agreement or is unsure of the application of any provision of the applicable trust agreement, and the matter is not one on which the holders of preferred securities are entitled to vote, then the property trustee will take such action as it deems advisable and in the best interests of the holders of the preferred and common securities. In this event, the property trustee will have no liability except for its own bad faith, negligence or willful misconduct. The property trustee for each of the trusts is the same entity and will also serve as the indenture trustee under the subordinated indenture and the guarantee trustee under each of the guarantee agreements. Southern California Edison and certain of its affiliates maintain deposit accounts and banking relationships with the property trustee. Miscellaneous The trustees of each trust are authorized and directed to conduct the affairs of and to operate the trust in such a way that: o it will not be deemed to be an "investment company" required to be registered under the Investment Company Act of 1940; o it will be classified as a grantor trust for United States federal income tax purposes; and o the subordinated debt securities held by it will be treated as indebtedness of Southern California Edison for United States federal income tax purposes. Southern California Edison and the trustees of each trust are authorized to take any action (so long as it is consistent with applicable law or the applicable certificate of trust or trust agreement) that Southern California Edison and the trustees of the trust determine to be necessary or desirable for such purposes. Registered holders of preferred securities have no preemptive or similar rights. A trust may not borrow money, issue debt, execute mortgages or pledge any of its assets. Governing Law Each trust agreement and the related preferred securities will be governed by and construed in accordance with the laws of the State of Delaware. DESCRIPTION OF PREFERRED SECURITIES GUARANTEES General Southern California Edison will execute a guarantee agreement, referred to herein as a "preferred securities guarantee," for the benefit of the holders of preferred securities, at the time that a trust issues those preferred securities. Each preferred securities guarantee will be qualified as an indenture under the Trust Indenture Act of 1939. The Bank of New York Trust Company, N.A., or another trustee selected by us, will act as indenture trustee, referred to herein as the "guarantee trustee," under each preferred securities guarantee for the purposes of compliance with the Trust Indenture Act of 1939. Page 28 The guarantee trustee will hold each preferred securities guarantee for the benefit of the preferred securities holders of the applicable trust. Southern California Edison will irrevocably agree, as described in each preferred securities guarantee, to pay in full, to the holders of the preferred securities issued by the applicable trust, the preferred securities guarantee payments (as defined below), except to the extent previously paid, when and as due, regardless of any defense, right of set-off or counterclaim which the trust may have or assert. The following payments, to the extent not paid by a trust, referred to herein as "preferred securities guarantee payments," will be covered by the applicable preferred securities guarantee: o any accumulated and unpaid distributions required to be paid on the applicable preferred securities, to the extent that the trust has funds available to make the payment; o the redemption price, to the extent that the trust has funds available to make the payment; and o upon a voluntary or involuntary dissolution, termination, winding-up or liquidation of the trust (other than in connection with a distribution of intercompany securities to holders of the preferred securities), the lesser of: o the aggregate of the liquidation amounts specified in the prospectus supplement for each preferred security plus all accumulated and unpaid distributions on the preferred security to the date of payment, to the extent the trust has funds available to make the payment; and o the amount of assets of the trust remaining available for distribution to holders of its preferred securities upon liquidation of the trust. Southern California Edison's obligation to make a preferred securities guarantee payment may be satisfied by directly paying the required amounts to the holders of the preferred securities or by causing the trust to pay the amounts to the holders. Status of the Preferred Securities Guarantees Each preferred securities guarantee will constitute an unsecured obligation of Southern California Edison and will rank either: o with respect to subordinated debt securities, subordinate and junior in right of payment to all of Southern California Edison's other liabilities except those that rank equally or are subordinate by their terms; or o with respect to preferred stock, equally with all other Southern California Edison preferred stock; and o equal with any other preferred securities guarantee now or hereafter issued by Southern California Edison on behalf of the holders of preferred securities issued by any other trust. Each preferred securities guarantee will constitute a guarantee of payment and not of collection (in other words, the holder of the guaranteed security may sue Southern California Edison, or seek other remedies, to enforce its rights under the preferred securities guarantee without first suing any other person or entity). A preferred securities guarantee will not be discharged except by payment of the preferred securities guarantee payments in full to the extent not otherwise paid or upon distribution to the applicable preferred securities holders of the related intercompany securities pursuant to the applicable trust agreement. Page 29 Amendments and Assignment Except with respect to any changes which do not adversely affect the rights of holders of preferred securities in any material respect (in which case no consent of the holders will be required), a preferred securities guarantee may be amended only with the prior approval of the holders of at least a majority in aggregate liquidation amount of the preferred securities. A description of the way to obtain any approval appears under the heading "Description of Preferred Securities--Voting Rights; Amendment of Trust Agreements" above. All guarantees and agreements contained in a preferred securities guarantee will be binding on Southern California Edison's successors, assigns, receivers, trustees and representatives and are for the benefit of the holders of the applicable preferred securities. Events of Default An event of default under a preferred securities guarantee occurs if Southern California Edison fails to make any of its required payments when due or fails to perform any of its other obligations under the preferred securities guarantee for more than 30 days. The holders of at least a majority in aggregate liquidation amount of the preferred securities relating to each preferred securities guarantee will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee relating to the preferred securities guarantee or to direct the exercise of any trust or power given to the guarantee trustee under the preferred securities guarantee. In addition, any holder of preferred securities may bring a legal proceeding directly against Southern California Edison to enforce its rights under the preferred securities guarantee, without first taking legal action against the guarantee trustee, the trust or any other person. Information Concerning Guarantee Trustees The guarantee trustee under a preferred securities guarantee, other than during the occurrence and continuance of a default under the preferred securities guarantee, will perform only the duties that are specifically described in the preferred securities guarantee. After such a default, the guarantee trustee will exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, a guarantee trustee is under no obligation to exercise any of its powers as described in the applicable preferred securities guarantee at the request of any holder of covered preferred securities unless it is offered security and indemnity satisfactory to it against the costs, expenses and liabilities that it might incur. Termination of the Preferred Securities Guarantees Each preferred securities guarantee will terminate upon full payment of the redemption price of all the applicable preferred securities, distribution of the related intercompany debt securities to the holders of the preferred securities, or full payment of the amounts payable in accordance with the applicable trust agreement upon liquidation of the applicable trust. Each preferred securities guarantee will continue to be effective or will be reinstated if at any time any holder of preferred securities issued by the applicable trust must restore payment of any sums paid under the preferred securities or the preferred securities guarantee. Governing Law The preferred securities guarantees will be governed by and construed in accordance with the laws of the State of California, except that the rights, duties, immunities and indemnities of the guarantee trustee shall be governed by the laws of the State of New York. RELATIONSHIP DEFINING THE SCOPE OF THE GUARANTEE Payments of distributions and redemption and liquidation payments due on each series of preferred securities (to the extent the applicable trust has funds available for the payments) will be guaranteed by Southern California Edison to the extent described under the heading "Description of Preferred Securities Guarantees" above. No single document executed by Southern California Edison in connection with the issuance of any series of preferred securities will provide for its full, irrevocable and Page 30 unconditional guarantee of the preferred securities. It is only the combined operation of Southern California Edison's obligations under the applicable preferred securities guarantee, trust agreement, subordinated indenture, subordinated debt securities, expense agreement and articles of incorporation, as relevant, that has the effect of providing a full, irrevocable and unconditional guarantee of a trust's obligations under its preferred securities. As long as Southern California Edison makes payments of dividends, interest and other payments when due on the intercompany securities held by a trust, the payments will be sufficient to cover the payment of distributions and redemption and liquidation payments due on the preferred securities issued by that trust, primarily because: o the aggregate principal amount or the par value of the intercompany securities will be equal to the sum of the aggregate liquidation amounts of the preferred and common securities; o the interest rate or dividends and interest and other payment dates on the intercompany securities will match the distribution rate and distribution and other payment dates for the preferred securities; o Southern California Edison has agreed to pay for any and all costs, expenses and liabilities of each trust except the trust's obligations under its preferred securities; and o each trust agreement provides that the related trust will not engage in any activity that is not consistent with the limited purposes of the trust. If and to the extent that Southern California Edison does not make payments on the intercompany securities, the trust will not have funds available to make payments of distributions or other amounts due on its preferred securities. In those circumstances, a holder of preferred securities of the trust will not be able to rely upon the preferred securities guarantee for payment of these amounts. Instead, the holder may directly sue Southern California Edison or seek other remedies to collect its pro rata share of payments owed. If a holder sues Southern California Edison to collect payment, then Southern California Edison will assume the holder's rights as a holder of preferred securities under the trust's trust agreement to the extent Southern California Edison makes a payment to the holder in any legal action. A holder of any preferred security may sue Southern California Edison, or seek other remedies, to enforce its rights under the applicable preferred securities guarantee without first suing the applicable guarantee trustee, the trust which issued the preferred security or any other person or entity. EXPERTS The financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2005 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. VALIDITY OF THE SECURITIES AND PREFERRED SECURITIES GUARANTEES The validity of the debt securities, preferred stock, preference stock, preferred securities and preferred securities guarantees offered by this prospectus will be passed upon for Southern California Edison by Stephen E. Pickett, its Senior Vice President and General Counsel, or Barbara E. Mathews, its Vice President, Associate General Counsel, Chief Governance Officer and Corporate Secretary, and for any underwriters by their counsel. The validity of the preferred securities under Delaware law will be passed upon by Richards, Layton & Finger, P.A., special Delaware counsel for Southern California Edison, the trusts and the Delaware trustee. Mr. Pickett and Ms. Mathews are salaried employees of Southern California Edison and earn stock-based compensation based on Edison International's common stock. Additionally, they may hold Page 31 Edison International stock-based interests through an employee benefit plan and can participate in an Edison International shareholder dividend reinvestment and stock purchase plan. They own no securities of Southern California Edison or the trusts. WHERE YOU CAN FIND MORE INFORMATION Available Information We file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy these reports and proxy statements and other information at the Public Reference Room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further information on the operation of the Securities and Exchange Commission's Public Reference Room by calling them at 1-800-SEC-0330. The Securities and Exchange Commission also maintains an Internet web site that contains reports, proxy statements and other information about issuers, such as Southern California Edison, that file electronically with the Securities and Exchange Commission. The address of that web site is http://www.sec.gov. You may also review reports, proxy statements and other information about Southern California Edison at our offices at 2244 Walnut Grove Avenue, Rosemead, California 91770. You may view and obtain copies of some of those reports and other information on the web site maintained by Southern California Edison's parent, Edison International, at http://www.edison.com. This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. You may obtain the full registration statement from the Securities and Exchange Commission or us, as indicated below. We filed forms or copies of the articles of incorporation, indentures and other documents establishing the terms of the offered securities as exhibits to the registration statement. Statements in this prospectus or any supplement about these documents are summaries. You should refer to the actual documents for a more complete description of the relevant matters. Incorporation by Reference The rules of the Securities and Exchange Commission allow us to "incorporate by reference" into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the Securities and Exchange Commission. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the Securities and Exchange Commission will automatically update and supersede the earlier information. This prospectus incorporates by reference the documents listed below that we have previously filed or may file in the future with the Securities and Exchange Commission. These documents contain important information about Southern California Edison. o Our Annual Report on Form 10-K for the year ended December 31, 2005. o Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006 and June 30, 2006. o Our Current Reports on Form 8-K dated January 20, January 27, February 27, and May 15, 2006. o The "Description of Registrant's Securities to be Registered" on page 2 of our Registration Statement on Form 8-A dated February 13, 1999, which incorporates by reference the material appearing under the headings "Description of the Preferred Stock" in the prospectus dated February 21, 1990, and "Certain Terms of the New Stock" in the Page 32 prospectus supplement dated January 21, 1992, contained in our registration statement on Form S-3 (Registration Number 33-33406). o All additional documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 between the date of this prospectus and the end of the offering of the securities described in this prospectus. Those documents include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements mailed to our shareholders. Upon request, we will provide a copy of any of these filings without charge to each person to whom a copy of this prospectus has been delivered. You may request a copy of these filings by writing or calling us at: Southern California Edison Company 2244 Walnut Grove Avenue P.O. Box 800 Rosemead, California 91770 Attention: Corporate Governance Telephone (626) 302-2662 Fax (626) 302-2610 Page 33 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. An estimate of the expenses in connection with the sale and distribution of the securities being offered will be included in the applicable prospectus supplement. Item 15. Indemnification of Directors and Officers. Section 317 of the California Corporations Code provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding or action by reason of the fact that he or she is or was a director, officer, employee or other agent of such corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise. Section 317 also grants authority to a corporation to include in its articles of incorporation indemnification provisions in excess of that permitted in Section 317, subject to certain limitations. Article Eighth of the Restated Articles of Incorporation of Southern California Edison Company authorizes Southern California Edison Company to provide indemnification of directors, officers, employees, and other agents through bylaw provisions, agreements with agents, votes of shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Corporations Code, subject only to the applicable limits set forth in Section 204 of the California Corporations Code. Article VI of the Amended Bylaws of Southern California Edison Company contains provisions implementing the authority granted in Article Eighth of the Restated Articles of Incorporation. The Amended Bylaws provide for the indemnification of any director or officer of Southern California Edison Company, or any person acting at the request of Southern California Edison Company as a director, officer, employee or agent of another corporation or other enterprise, for any threatened, pending or completed action, suit or proceeding to the fullest extent permissible under California law and the Restated Articles of Incorporation of Southern California Edison Company, subject to the terms of any agreement between Southern California Edison Company and such a person; provided that, no such person shall be indemnified: (i) except to the extent that the aggregate of losses to be indemnified exceeds the amount of such losses for which the director or officer is paid pursuant to any directors' or officers' liability insurance policy maintained by Southern California Edison Company; (ii) on account of any suit in which judgment is rendered for an accounting of profits made from the purchase or sale of securities of Southern California Edison Company pursuant to Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; (iii) if a court of competent jurisdiction finally determines that the indemnification is unlawful; (iv) for acts or omissions involving intentional misconduct or knowing and culpable violation of law; (v) for acts or omissions that the director or officer believes to be contrary to the best interests of Southern California Edison Company or its shareholders, or that involve the absence of good faith; (vi) for any transaction from which the director or officer derived an improper personal benefit; (vii) for acts or omissions that show a reckless disregard for the director's or officer's duty to Southern California Edison Company or its shareholders in circumstances in which the director or officer was aware, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to Southern California Edison Company; (viii) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's or officer's duties to Southern California Edison Company or its shareholders; (ix) for costs, charges, expenses, liabilities and losses arising under Section 310 or 316 of the California Corporations Code; or (x) as to circumstances in which indemnity is expressly prohibited by Section 317 of the California Corporations Code. The exclusions set forth in clauses (iv) through (ix) above shall apply only to indemnification with regard to any action brought by or in the right of Southern California Edison Company for breach of duty to Southern California Edison Company or its shareholders. The Amended Bylaws of Southern California Edison Company also provide that Southern California Edison Company shall indemnify any director or officer in connection with (a) a proceeding (or part thereof) initiated by him or her only if such proceeding (or part thereof) was authorized by the Board of Directors of Southern California Edison Company or (b) a proceeding (or part thereof) other than a proceeding by or in the name of Southern California Edison Company to procure a judgment in its favor, only if any settlement of such Page II-1 a proceeding is approved in writing by Southern California Edison Company. Indemnification shall cover all costs, charges, expenses, liabilities and losses, including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties and amounts paid or to be paid in settlement, reasonably incurred or suffered by the director or officer. Southern California Edison Company has directors' and officers' liability insurance policies in force insuring directors and officers of Southern California Edison Company and its subsidiaries. Southern California Edison Company has also entered into written agreements with each of its directors incorporating the indemnification provisions of its Amended Bylaws. Item 16. Exhibits. See Exhibit Index. Item 17. Undertakings. (a) The undersigned registrants hereby undertake: (1) 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective 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; provided, however, that paragraphs (a) (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such 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. (3) 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. (4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: Page II-2 (i) Each prospectus filed by a registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at the date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. (5) That, for the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: Each undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of an undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of an undersigned registrant or used or referred to by the undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and (iv) Any other communication that is an offer in the offering made by an undersigned registrant to the purchaser. (6) 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 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (7) To (i) use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters and dealers, a reasonable number of copies of a prospectus which at that time meets the requirements of Section 10(a) of the Securities Act of 1933, and relating to any securities offered at competitive bidding, as contained in the registration statement, together with any supplements thereto, and (ii) file an amendment to the registration statement reflecting the results of bidding, the terms of the reoffering and related matters to the extent required by the applicable form, not later than the first use, Page II-3 authorized by the registrant after the opening of bids, of a prospectus relating to any securities offered at competitive bidding, unless no further public offering of such securities by the registrant and no reoffering of such securities by the purchasers is proposed to be made. (8) To file an application for the purpose of determining the eligibility of the trustees to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Trust Indenture Act of 1939. (9) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. (10) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. (b) 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 provisions described in Item 15 above, 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 Securities Act of 1933 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 in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. Page II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Southern California Edison Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rosemead, State of California on the 8th day of August, 2006. SOUTHERN CALIFORNIA EDISON COMPANY By /s/ Mary C. Simpson --------------------------------- Mary C. Simpson Assistant Treasurer 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 Principal Executive Officer: Alan J. Fohrer* Chief Executive Officer August 8, 2006 Principal Financial Officer: Thomas M. Noonan* Senior Vice President and August 8, 2006 Chief Financial Officer Principal Accounting Officer: Linda G. Sullivan* Vice President and Controller August 8, 2006 Majority of Board of Directors: John E. Bryson* Director August 8, 2006 Alan J. Fohrer* Director August 8, 2006 France A. Cordova* Director August 8, 2006 Bradford M. Freeman* Director August 8, 2006 Bruce Karatz* Director August 8, 2006 Luis G. Nogales* Director August 8, 2006 Ronald L. Olson* Director August 8, 2006 James M. Rosser* Director August 8, 2006 Richard T. Schlosberg, III* Director August 8, 2006 Robert H. Smith * Director August 8, 2006 Thomas C. Sutton * Director August 8, 2006 *By /s/ Mary C. Simpson ----------------------------------- (Mary C. Simpson, Attorney-in-Fact) Page II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SCE Trust I certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rosemead, State of California on the 8th day of August, 2006. SCE TRUST I By: SOUTHERN CALIFORNIA EDISON COMPANY, as Depositor By /s/ Mary C. Simpson ------------------------ Mary C. Simpson Page II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SCE Trust II certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rosemead, State of California on the 8th day of August, 2006. SCE TRUST II By: SOUTHERN CALIFORNIA EDISON COMPANY, as Depositor By /s/ Mary C. Simpson ----------------------- Mary C. Simpson Page II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SCE Trust III certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rosemead, State of California on the 8th day of August, 2006. SCE TRUST III By: SOUTHERN CALIFORNIA EDISON COMPANY, as Depositor By /s/ Mary C. Simpson -------------------------- Mary C. Simpson Page II-8EXHIBIT INDEX Exhibit Number Description 1.1 Form of Underwriting Agreement (First Mortgage Bonds)+ 1.2 Form of Underwriting Agreement (Senior Debt Securities)+ 1.3 Form of Underwriting Agreement (Subordinated Debt Securities)+ 1.4 Form of Underwriting Agreement (Preferred Stock and Preference Stock)+ 1.5 Form of Underwriting Agreement (Preferred Securities)+ 3.1 Certificate of Restated Articles of Incorporation of Southern California Edison Company, effective March 2, 2006 (File No. 1-2313, filed as Exhibit 3.1 to Form 10-K for the year ended December 31, 2005)* 3.4 Amended Bylaws of Southern California Edison Company, effective December 20, 2005 (File No. 1-2313, Form 8-K dated October 26, 2005)* 3.5 Certificate of Trust of SCE Trust I (Registration No. 333-44778)* 3.6 Certificate of Amendment to Certificate of Trust of SCE Trust I 3.7 Certificate of Trust of SCE Trust II (Registration No. 333-44778)* 3.8 Certificate of Amendment to Certificate of Trust of SCE Trust II 3.9 Certificate of Trust of SCE Trust III (Registration No. 333-121192)* 3.10 Certificate of Amendment to Certificate of Trust of SCE Trust III 4.1 SCE First Mortgage Bond Trust Indenture, dated as of October 1, 1923 (Registration No. 2-1369)* 4.2 Supplemental Indenture, dated as of March 1, 1927 (Registration No. 2-1369)* 4.3 Third Supplemental Indenture, dated as of June 24, 1935 (Registration No. 2-1602)* 4.4 Fourth Supplemental Indenture, dated as of September 1, 1935 (Registration No. 2-4522)* 4.5 Fifth Supplemental Indenture, dated as of August 15, 1939 (Registration No. 2-4522)* 4.6 Sixth Supplemental Indenture, dated as of September 1, 1940 (Registration No. 2-4522)* 4.7 Eighth Supplemental Indenture, dated as of August 15, 1948 (Registration No. 2-7610)* 4.8 Twenty-Fourth Supplemental Indenture, dated as of February 15, 1964 (Registration No. 2-22056)* 4.9 Eighty-Eighth Supplemental Indenture, dated as of July 15, 1992 (File No. 1-2313, Form 8-K dated July 22, 1992)* 4.10 Form of New Supplemental Indenture+ 4.11 Form of First Mortgage Bond+ 4.12 Indenture for Senior Debt Securities (File No. 1-2313, Form 8-K dated January 28, 1993)* 4.13 Form of Senior Debt Security (included in Exhibit 4.12)* 4.14 Form of Indenture for Subordinated Debt Securities 4.15 Form of Subordinated Debt Security (included in Exhibit 4.14) 4.16 Trust Agreement of SCE Trust I (Registration No. 333-44778)* 4.17 Amendment to Trust Agreement of SCE Trust I (Registration No. 333-121192)* 4.18 Trust Agreement of SCE Trust II (Registration No. 333-44778)* 4.19 Amendment to Trust Agreement of SCE Trust II (Registration No. 333-121192)* 4.20 Trust Agreement of SCE Trust III (Registration No. 333-121192)* 4.21 Form of Amended and Restated Trust Agreement for each of SCE Trust I, SCE Trust II and SCE Trust III relating to subordinated debt securities 4.22 Form of Amended and Restated Trust Agreement for each of SCE Trust I, SCE Trust II and SCE Trust III relating to preferred stock Page II-9 4.23 Form of Preferred Security (included in Exhibits 4.19 and 4.20)* 4.24 Form of Guarantee Agreement relating to subordinated debt securities 4.25 Form of Guarantee Agreement relating to preferred stock 5.1 Opinion of Barbara E. Mathews as to legality of the securities being registered 5.2 Opinion of Richards, Layton & Finger, P.A. relating to SCE Trust I, SCE Trust II and SCE Trust III 12.1 Statement regarding Computation of Ratios of Earnings to Fixed Charges and Preferred Equity Dividends 12.2 Statement regarding Computation of Ratios of Earnings to Fixed Charges 23.1 Consents of Stephen E. Pickett and Barbara E. Mathews 23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2) 23.3 Consent of PricewaterhouseCoopers LLP 24.1 Power of Attorney as to Southern California Edison Company 25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Trustee under the Indenture (First Mortgage Bonds). 25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Trustee under the Indenture (Senior Debt Securities). 25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Trustee under the Indenture (Subordinated Debt Securities). 25.4 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Property Trustee--SCE Trust I 25.5 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Property Trustee--SCE Trust II 25.6 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Property Trustee--SCE Trust III 25.7 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Guarantee Trustee--SCE Trust I 25.8 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Guarantee Trustee--SCE Trust II 25.9 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of The Bank of New York Trust Company, N.A., as Guarantee Trustee--SCE Trust III __________________ + To be filed by amendment or by incorporation by reference in connection with the offering of the securities. * Incorporated by reference pursuant to Rule 411. Page II-10
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
SCE TRUST I
THIS Certificate of Amendment to Certificate of Trust of SCE Trust I (the "Trust"), dated as of
August 2, 2006, is being duly executed and filed by the undersigned trustee to amend the Certificate of
Trust of the Trust.
1. Name. The name of the statutory trust is SCE Trust I.
2. Amendment of Trust. The Certificate of Trust of the Trust is hereby amended by changing the name and
business address of the trustee with a principal place of business in Delaware to The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Amendment shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned trustee of the Trust has executed this Certificate of
Amendment as of the date and year first above written.
The Bank of New York (Delaware), not in its individual
capacity but solely as trustee
By: /s/ Kristine K. Gullo
Name: Krinstine K. Gullo
Title: Vice President
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
SCE TRUST II
THIS Certificate of Amendment to Certificate of Trust of SCE Trust II (the "Trust"), dated as
of August 2, 2006, is being duly executed and filed by the undersigned trustee to amend the Certificate of
Trust of the Trust.
1. Name. The name of the statutory trust is SCE Trust II.
2. Amendment of Trust. The Certificate of Trust of the Trust is hereby amended by changing the name and
business address of the trustee with a principal place of business in Delaware to The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Amendment shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned trustee of the Trust has executed this Certificate of
Amendment as of the date and year first above written.
The Bank of New York (Delaware), not in its individual
capacity but solely as trustee
By: /s/ Kristine K. Gullo
Name: Kristine K. Gullo
Title: Vice President
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
SCE TRUST III
THIS Certificate of Amendment to Certificate of Trust of SCE Trust III (the "Trust"), dated as
of August 2, 2006, is being duly executed and filed by the undersigned trustee to amend the Certificate of
Trust of the Trust.
1. Name. The name of the statutory trust is SCE Trust III.
2. Amendment of Trust. The Certificate of Trust of the Trust is hereby amended by changing the name and
business address of the trustee with a principal place of business in Delaware to The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Amendment shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned trustee of the Trust has executed this Certificate of
Amendment as of the date and year first above written.
The Bank of New York (Delaware), not in its individual
capacity but solely as trustee
By: /s/ Kristine K. Gullo
Name: Kristine K. Gullo
Title: Vice President
____________________________________________
SOUTHERN CALIFORNIA EDISON COMPANY
TO
THE BANK OF NEW YORK TRUST COMPANY, N.A.
Trustee
____________________________________________
SUBORDINATED INDENTURE
Dated as of ____________, 20__
____________________________________________
Page
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310
THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1)..................................................... 609
(a)(2).................................................... 609
(a)(3).................................................... Not Applicable
(a)(4).................................................... Not Applicable
(b)....................................................... 608
610
Section 311(a)........................................................ 613
(b)....................................................... 613
Section 312(a)........................................................ 701
702
(b)....................................................... 702
(c)....................................................... 702
Section 313(a)........................................................ 703
(b)....................................................... 703
(c)....................................................... 703
(d)....................................................... 703
Section 314(a)........................................................ 704
(a)(4).................................................... 101
.......................................................... 1005
(b)....................................................... Not Applicable
(c)(1).................................................... 102
(c)(2).................................................... 102
(c)(3).................................................... Not Applicable
(d)....................................................... Not Applicable
(e)....................................................... 102
Section 315(a)........................................................ 601
(b)....................................................... 602
(c)....................................................... 601
(d)....................................................... 601
(e)....................................................... 514
Section 316(a)........................................................ 101
(a)(1)(A)................................................. 502
.......................................................... 512
(a)(1)(B)................................................. 513
(a)(2).................................................... Not Applicable
(b)....................................................... 508
(c)....................................................... 104
Section 317(a)(1)..................................................... 503
(a)(2).................................................... 504
(b)....................................................... 1003
Section 318(a)........................................................ 107
_____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
i
TABLE OF CONTENTS
Page
Parties......................................................................................1
Recitals of the Corporation..................................................................1
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..........................1
Section 101. Definitions............................................................1
Section 102. Compliance Certificates and Opinions...................................7
Section 103. Form of Documents Delivered to Trustee.................................8
Section 104. Acts of Holders; Record Dates..........................................8
Section 105. Notices, Etc., to Trustee and Corporation.............................11
Section 106. Notice to Holders; Waiver.............................................11
Section 107. Conflict with Trust Indenture Act.....................................11
Section 108. Effect of Headings and Table of Contents..............................12
Section 109. Successors and Assigns................................................12
Section 110. Separability Clause...................................................12
Section 111. Benefits of Indenture.................................................12
Section 112. Governing Law.........................................................12
Section 113. Legal Holidays........................................................12
Section 114. No Security Interest Created..........................................12
ARTICLE II. SECURITY FORMS.................................................................13
Section 201. Forms of Securities...................................................13
Section 202. Form of Legend for Global Securities..................................13
Section 203. Form of Trustee's Certificate of Authentication.......................13
ARTICLE III. THE SECURITIES................................................................14
Section 301. Amount Unlimited; Issuable in Series..................................14
Section 302. Denominations.........................................................17
Section 303. Execution, Authentication, Delivery and Dating........................17
Section 304. Temporary Securities..................................................19
Section 305. Registration, Registration of Transfer and Exchange...................19
Section 306. Mutilated, Destroyed, Lost and Stolen Securities......................21
Section 307. Payment of Interest; Interest Rights Preserved........................22
Section 308. Persons Deemed Owners.................................................23
Section 309. Cancellation..........................................................23
Section 310. Computation of Interest...............................................24
Section 311. CUSIP Numbers.........................................................24
Section 312. Agreed Tax Treatment..................................................24
ii
ARTICLE IV. SATISFACTION AND DISCHARGE.....................................................24
Section 401. Satisfaction and Discharge of Indenture...............................24
Section 402. Application of Trust Money............................................25
ARTICLE V. REMEDIES........................................................................26
Section 501. Events of Default.....................................................26
Section 502. Acceleration of Maturity; Rescission and Annulment....................27
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.......28
Section 504. Trustee May File Proofs of Claim......................................29
Section 505. Trustee May Enforce Claims Without Possession of Securities...........29
Section 506. Application of Money Collected........................................30
Section 507. Limitation on Suits...................................................30
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest..........................................................31
Section 509. Restoration of Rights and Remedies....................................31
Section 510. Rights and Remedies Cumulative........................................31
Section 511. Delay or Omission Not Waiver..........................................31
Section 512. Control By Holders....................................................32
Section 513. Waiver of Past Defaults...............................................32
Section 514. Undertaking for Costs.................................................33
Section 515. Waiver of Stay or Extension Laws......................................33
ARTICLE VI. THE TRUSTEE....................................................................33
Section 601. Certain Duties and Responsibilities...................................33
Section 602. Notice of Defaults....................................................33
Section 603. Certain Rights of Trustee.............................................34
Section 604. Not Responsible for Recitals or Issuance of Securities................35
Section 605. May Hold Securities...................................................35
Section 606. Money Held in Trust...................................................35
Section 607. Compensation and Reimbursement........................................35
Section 608. Conflicting Interests.................................................36
Section 609. Corporate Trustee Required; Eligibility...............................36
Section 610. Resignation and Removal; Appointment of Successor.....................37
Section 611. Acceptance of Appointment by Successor................................38
Section 612. Merger, Conversion, Consolidation or Succession to Business...........39
Section 613. Preferential Collection of Claims Against Corporation.................39
Section 614. Appointment of Authenticating Agent...................................39
Section 615. Trustee's Application for Instructions from the Corporation...........41
iii
ARTICLE VII. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND CORPORATION.........................41
Section 701. Corporation to Furnish Trustee Names and Addresses of Holders.........41
Section 702. Preservation of Information; Communications to Holders................41
Section 703. Reports by Trustee....................................................42
Section 704. Reports by Corporation................................................42
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER................................43
Section 801. Corporation May Consolidate, Etc., Only on Certain Terms..............43
Section 802. Successor Substituted.................................................43
ARTICLE IX. SUPPLEMENTAL INDENTURES........................................................44
Section 901. Supplemental Indentures Without Consent of Holders....................44
Section 902. Supplemental Indentures With Consent of Holders.......................45
Section 903. Execution of Supplemental Indentures..................................46
Section 904. Effect of Supplemental Indentures.....................................46
Section 905. Conformity with Trust Indenture Act...................................47
Section 906. Reference in Securities to Supplemental Indentures....................47
Section 907. Subordination Unimpaired..............................................47
ARTICLE X. COVENANTS.......................................................................47
Section 1001. Payment of Principal, Premium and Interest............................47
Section 1002. Maintenance of Office or Agency.......................................47
Section 1003. Money for Securities Payments to Be Held in Trust.....................48
Section 1004. Corporate Existence...................................................49
Section 1005. Statement by Officers as to Default...................................49
Section 1006. Waiver of Certain Covenants...........................................49
Section 1007. Calculation of Original Issue Discount................................50
ARTICLE XI. REDEMPTION OF SECURITIES.......................................................50
Section 1101. Applicability of Article..............................................50
Section 1102. Election to Redeem; Notice to Trustee.................................50
Section 1103. Selection by Trustee of Securities to Be Redeemed.....................50
Section 1104. Notice of Redemption..................................................51
Section 1105. Deposit of Redemption Price...........................................52
Section 1106. Securities Payable on Redemption Date.................................52
Section 1107. Securities Redeemed in Part...........................................53
ARTICLE XII. SINKING FUNDS.................................................................53
Section 1201. Applicability of Article..............................................53
Section 1202. Satisfaction of Sinking Fund Payments with Securities.................53
Section 1203. Redemption of Securities for Sinking Fund.............................54
iv
ARTICLE XIII. DEFEASANCE AND COVENANT DEFEASANCE...........................................54
Section 1301. Applicability of Article..............................................54
Section 1302. Defeasance and Discharge..............................................54
Section 1303. Covenant Defeasance...................................................55
Section 1304. Conditions to Defeasance or Covenant Defeasance.......................55
Section 1305. Deposited Money and Government Obligations to Be Held in Trust;
Miscellaneous Provisions..............................................56
ARTICLE XIV. SUBORDINATION.................................................................57
Section 1401. Agreement to Subordinate..............................................57
Section 1402. Obligation of the Corporation Unconditional...........................59
Section 1403. Limitations on Duties to Holders of Senior Indebtedness
of the Corporation....................................................59
Section 1404. Notice to Trustee of Facts Prohibiting Payment........................59
Section 1405. Application by Trustee of Moneys Deposited with It....................60
Section 1406. Subrogation...........................................................60
Section 1407. Subordination Rights Not Impaired by Acts or Omissions
of Corporation or Holders of Senior Indebtedness of the
Corporation...........................................................60
Section 1408. Authorization of Trustee to Effectuate Subordination of Securities....61
Section 1409. No Payment When Senior Indebtedness in Default........................61
Section 1410. Right of Trustee to Hold Senior Indebtedness of the Corporation.......62
Section 1411. Article Fourteen Not to Prevent Defaults..............................62
ARTICLE XV. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS................62
Section 1501. Indenture and Securities Solely Corporate Obligations.................62
Testimonium.................................................................................63
Signatures and Seals........................................................................63
v
INDENTURE, dated as of ___________, 20__, between Southern California Edison Company, a corporation
duly organized and existing under the laws of the State of California (herein called the "Corporation"),
having its principal office at 2244 Walnut Grove Avenue, Rosemead, California 91770, and The Bank of New York
Trust Company, N.A., a national banking association, as Trustee (herein called the "Trustee").
RECITALS OF THE CORPORATION
The Corporation has duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the "Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Corporation, in accordance with
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it
is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article
and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect to any computation required
or permitted hereunder shall mean such accounting principles as are generally accepted in the United
States of America;
(4) unless the context otherwise requires, any reference to an "Article" or a "Section"
refers to an Article or a Section, as the case may be, of this Indenture; and
Page 1
(5) the words "herein," "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 614 to act on
behalf of the Trustee to authenticate Securities of one or more series.
"Board of Directors" means either the board of directors of the Corporation or any duly authorized
committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary
of the Corporation to have been duly adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means a day other than (i) a Saturday
or a Sunday, (ii) a day on which banking institutions in that Place of Payment or Los Angeles, California,
are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate
Trust Office of the Trustee is closed for business.
"Commission" means the Securities and Exchange Commission, from time to time constituted, created
under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing
such duties at such time.
"Corporation" means the Person named as the "Corporation" in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Corporation" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order signed in the name of the
Corporation by any one of its Chairman of the Board, its President, its Chief Financial Officer, any Vice
President, its Treasurer or any Assistant Treasurer, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate
trust business shall be principally administered, which office at the date hereof is located at 700 South
Flower Street, Suite 500, Los Angeles, California, 90071, or at any other time at such address as the Trustee
may designate from time to time.
Page 2
"corporation" means a corporation, association, company, joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in whole or in part in the form
of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to
act as Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each
case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the Securities of any series which is
issued to a Depositary or a nominee thereof for such series in accordance with Section 301(17).
"Government Obligation" has the meaning specified in Section 1304.
"Holder" means a Person in whose name a Security is registered in the Security Register.
"Indenture" means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series
of Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount Security which by its terms bears
interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the Stated Maturity of an
installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any statute successor thereto,
in each case as amended from time to time.
"Maturity," when used with respect to any Security, means the date on which the principal of such
Security or an installment of principal becomes due and payable as therein or
Page 3
herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Notice of Default" means a written notice of the kind specified in Section 501(4).
"Officer's Certificate" means a certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, any
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or any Assistant Secretary, of
the Corporation, and delivered to the Trustee. One of the officers signing an Officer's Certificate given
pursuant to Section 1005 shall be the principal executive, financial or accounting officer of the Corporation.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Corporation, or
other counsel.
"Original Issue Discount Security" means any Security which provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;
(2) Securities for whose payment or redemption the necessary amount of money or money's
worth has been theretofore deposited with the Trustee or any Paying Agent (other than the Corporation)
in trust or set aside and segregated in trust by the Corporation (if the Corporation shall act as its
own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Corporation;
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice,
consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which
would be due and payable as of such date upon
Page 4
acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of
such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign
currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined
as provided in such Clause), and (D) Securities owned by the Corporation or any other obligor upon the
Securities or any Affiliate of the Corporation or of such other obligor, whether of record or beneficially,
shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or
other action, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Corporation or any other obligor upon the Securities or any
Affiliate of the Corporation or of such other obligor.
"Paying Agent" means any Person authorized by the Corporation to pay the principal of or any premium
or interest on any Securities on behalf of the Corporation.
"Periodic Offering" means an offering of Securities of a series from time to time the specific terms
of which Securities, including without limitation the rate or rates of interest or formula for determining
the rate or rates of interest thereon, if any, the Stated Maturity or Maturities thereof and the redemption
provisions, if any, with respect thereto, are to be determined by the Corporation upon the issuance of such
Securities.
"Person" means any individual, corporation, partnership, limited liability company or corporation,
joint venture, trust, unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment," when used with respect to the Securities of any series, means the place or places
where the principal of and any premium and interest on the Securities of that series are payable as specified
as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for
such redemption by or pursuant to this Indenture.
Page 5
"Redemption Price," when used with respect to any Security to be redeemed, means the price at which it
is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any
series means the date specified for that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means any vice president, assistant vice
president, managing director, assistant secretary, assistant treasurer, senior trust officer, assistant trust
officer, trust officer, or other officer associated with the corporate trust department of the Trustee
customarily performing functions similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred
because of such person's knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture and more particularly means
any Securities authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute successor thereto, in each case as
amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings specified in Section 305.
"Senior Indebtedness" means (i) any current or future indebtedness of the Corporation for borrowed or
purchased money, whether or not evidenced by bonds, debenture, notes or other similar written instruments,
(ii) obligations of the Corporation under synthetic leases, finance leases and capitalized leases, (iii)
obligations of the Corporation for reimbursement under letters of credit, banker's acceptances, security
purchase facilities or similar facilities issued for the account of the Corporation, (iv) any indebtedness or
obligations of the Corporation with respect to derivative contracts, including but not limited to commodity
contracts, interest rate, commodity or currency swap agreements, forward contracts, and other similar
agreements or arrangements designed to protect against fluctuations in commodity prices, currency exchange or
interest rates, and (v) any guarantees, endorsements, assumptions (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) or other similar contingent obligations in
respect of obligations of others of a type described in (i), (ii), (iii) or (iv) above, whether or not such
obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted
accounting principles in each case listed in (i), (ii), (iii), (iv) and (v) above whether outstanding on the
date of execution of this Indenture or thereafter incurred, other than obligations ranking on a parity with
the Securities or ranking junior to the Securities; provided, however, that Senior Indebtedness does not
include (a) trade accounts payable, (b) accrued liabilities arising in the ordinary course of business or (c)
any indebtedness of the Corporation to any of its subsidiaries.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 307.
Page 6
"Stated Maturity," when used with respect to any Security or any installment of principal thereof or
interest thereon, means the date specified in such Security as the date on which the principal of such
Security or such installment of principal or interest is due and payable, in the case of such principal, as
such date may be advanced or extended as provided pursuant to the terms of such Security and this Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" shall mean, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a
successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.
"Vice President," when used with respect to the Corporation or the Trustee, means any vice president,
whether or not designated by a number or a word or words added before or after the title "vice president."
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Corporation to the Trustee to take any action under any
provision of this Indenture, the Corporation shall furnish to the Trustee such certificates and opinions as
may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of
an Officer's Certificate, if to be given by an officer of the Corporation, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include
(1) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or she has made such
examination or investigation as is necessary to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
Page 7
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Corporation may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows,
or in the exercise of reasonable care should know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate
or opinion of, or representations by, an officer or officers of the Corporation stating that the information
with respect to such factual matters is in the possession of the Corporation, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board Resolution, Officer's Certificate,
Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or
unintentional error or omission shall be discovered therein, a new document or instrument may be substituted
therefor in corrected form with the same force and effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document
or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with
respect to the document or instrument for which it is substituted. Anything in this Indenture to the contrary
notwithstanding, if any such corrective document or instrument indicates that action has been taken by or at
the request of the Corporation which could not have been taken had the original document or instrument not
contained such error or omission, the action so taken shall not be invalidated or otherwise rendered
ineffective but shall be and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or instrument shall nevertheless be the valid
obligations of the Corporation entitled to the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
Section 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be embodied
Page 8
in and evidenced by one or more written instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such written instrument or instruments are delivered to the Trustee and, where it
is hereby expressly required, to the Corporation. Such written instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing
such written instrument or instruments. Proof of execution of any such written instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Corporation, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such written instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such
written instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than the signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of the signer's authority. The fact and date of the execution of any such written
instrument or writing, or the authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of
any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Corporation in reliance thereon, whether or not notation
of such action is made upon such Security.
The Corporation may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders of Securities of such series; provided that the Corporation may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date,
and no other Holders, shall be entitled to take or revoke the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be effective hereunder unless taken
on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the
Corporation from setting a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action
by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders
Page 9
of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the Corporation, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to
be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set
forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512, in each case with respect to
Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be entitled to join in such
notice, declaration, request or direction or to revoke the same, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective hereunder unless taken on or prior to
the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such
action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the
Corporation's expense, shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be sent to the Corporation in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party hereto which sets such record
date may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to
any earlier or later day; provided that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the
relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant to this Section, the party
hereto which set such record date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date
as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard
to any particular Security may do so with regard to all or any part of the principal amount of such Security
or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to
all or any part of such principal amount.
Page 10
Section 105. Notices, Etc., to Trustee and Corporation.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Corporation shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing (which may be made via facsimile) to or with
the Trustee at its Corporate Trust Office, Attention: Capital Markets Fiduciary Services, or
(2) the Corporation by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage
prepaid, to the Corporation addressed to it at the address of its principal office specified in the
first paragraph of this instrument, Attention: Treasurer, or at any other address previously furnished
in writing to the Trustee by the Corporation.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act
which is required under such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Page 11
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Corporation shall bind its successors and
assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
Unless otherwise specified pursuant to Section 301 with respect to the Securities of any series,
nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the
parties hereto, their successors hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in accordance with the laws of
the State of New York, without regard to conflicts of laws principles thereof.
Section 113. Legal Holidays.
Unless otherwise specified pursuant to Section 301 with respect to the Securities of any series, in
any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of the Securities (other than a
provision of any Security which specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the
next succeeding Business Day, unless that Business Day is in a different calendar year, in which case the
payment will be made on the preceding Business Day, in each case, with the same force and effect as if made
on the Interest Payment Date or Redemption Date, or at the Stated Maturity.
Section 114. No Security Interest Created.
Nothing in this Indenture or in the Securities expressed or implied, shall be construed to constitute
a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and
in effect in any jurisdiction where property of the Corporation or its subsidiaries is located.
Page 12
ARTICLE II.
SECURITY FORMS
Section 201. Forms of Securities
The Securities of each series shall be substantially of the tenor and terms as shall be authorized in or
pursuant to a Board Resolution and set forth in an Officer's Certificate, or set forth in an indenture or
indentures supplemental hereto in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements thereon as the Corporation may deem
appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange or automated quotation system on which the Securities may be listed, or to conform to
usage. If the form of Securities of any series is authorized by action taken pursuant to a Board Resolution,
a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary
of the Corporation and delivered to the Trustee at or prior to the delivery of the Officer's Certificate
contemplated by Section 301 setting forth the terms of the series.
The Securities may be printed, lithographed or fully or partly engraved.
Section 202. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every
Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR
IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
Section 203. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the following form:
Page 13
This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.
Dated: _____________________ The Bank of New York Trust Company, N.A.,
As Trustee
By:___________________________
Authorized Signatory
ARTICLE III.
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series with the Securities issued hereunder being
expressly subordinated in right of payment, to the extent and in the manner set forth in Article Fourteen, to
all Senior Indebtedness of the Corporation. There shall be established in or pursuant to a Board Resolution
and, subject to Section 303, set forth, or determined in the manner provided, in an Officer's Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of
the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the series which may
be authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 906 or 1106 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the series is payable or
the method by which such date shall be determined and the right, if any, to shorten or extend the date
on which the principal of any Securities of the series is payable and the conditions to any such
change;
Page 14
(5) the rate or rates at which any Securities of the series shall bear interest, if any, or
the method by which such rate or rates shall be determined; the date or dates from which any such
interest shall accrue; the Interest Payment Dates on which any such interest shall be payable; the
manner (if any) of determination of such Interest Payment Dates; and the Regular Record Date, if any,
for any such interest payable on any Interest Payment Date;
(6) the right, if any, to extend the interest payment periods and the terms of such
extension or extensions;
(7) the place or places where the principal of and any premium and interest on any
Securities of the series shall be payable and whether, if acceptable to the Trustee, any principal of
such Securities shall be payable without presentation or surrender thereof;
(8) the period or periods within which, or the date or dates on which, the price or prices
at which and the terms and conditions upon which any Securities of the series may be redeemed, in
whole or in part, at the option of the Corporation and, if other than by a Board Resolution, the
manner in which any election by the Corporation to redeem the Securities shall be evidenced;
(9) the obligation, if any, of the Corporation to redeem or purchase any Securities of the
series pursuant to any sinking fund, purchase fund or analogous provisions or at the option of the
Holder thereof and the period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;
(11) if the amount of principal of or any premium or interest on any Securities of the
series may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined;
(12) if other than the currency of the United States of America, the currency, currencies or
currency units in which the principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition of "Outstanding" in
Section 101;
(13) if the principal of or any premium or interest on any Securities of the series is to be
payable, at the election of the Corporation or the Holder thereof, in one or more currencies or
currency units other than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any premium or interest on such
Securities as to which such election is made shall be payable, the periods within which and the terms
and conditions upon which such election is to be
Page 15
made and the amount so payable (or the manner in which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion of the principal amount
of any Securities of the series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(15) if the principal amount payable at the Stated Maturity of any Securities of the series
will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which
shall be deemed to be the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be due and payable upon
any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date
prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(16) if either or both of Sections 1302 and 1303 do not apply to any Securities of the
series;
(17) if applicable, that any Securities of the series shall be issuable in whole or in part
in the form of one or more Global Securities and, in such case, the respective Depositary or
Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any
such Global Security in addition to or in lieu of that set forth in Section 204 and any circumstances
in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 in
which any such Global Security may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Security or a nominee thereof;
(18) any addition, modification or deletion of any Events of Default or covenants provided
with respect to any Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant
to Section 502;
(19) any addition to or change in the covenants set forth in Article Ten which applies to
Securities of the series;
(20) the subordination of the Securities of such series to any other indebtedness of the
Corporation, including, without limitation, the Securities of any other series; and
(21) any other terms of the series.
All Securities of any one series shall be substantially identical except as to denomination and except
as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officer's Certificate referred to above or in
any such indenture supplemental hereto.
Page 16
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of
the Corporation and delivered to the Trustee at or prior to the delivery of the Officer's Certificate setting
forth the terms or the manner of determining the terms of the series.
With respect to Securities of a series offered in a Periodic Offering, the Board Resolution (or action
taken pursuant thereto), Officer's Certificate or supplemental indenture referred to above may provide
general terms or parameters for Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Company Order or that such terms shall be
determined by the Corporation in accordance with other procedures specified in a Company Order as
contemplated by the third paragraph of Section 303.
Notwithstanding Section 301(2) herein and unless otherwise expressly provided with respect to a series
of Securities, the aggregate principal amount of a series of Securities may be increased and additional
Securities of such series may be issued up to the maximum aggregate principal amount authorized with respect
to such series as increased.
Section 302. Denominations.
The Securities of each series shall be issuable only in fully registered form without coupons and only
in such denominations as shall be specified as contemplated by Section 301. In the absence of any such
specified denomination with respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Corporation by its Chairman of the Board, its Chief
Executive Officer, its President, a Vice President or the Treasurer, under its corporate seal reproduced
thereon (which may be by facsimile) attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper
officers of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold
such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Corporation
may deliver Securities of any series executed by the Corporation to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities, provided, however, that in the case of
Securities offered in a Periodic Offering, the Trustee shall authenticate and deliver such Securities from
time to time in accordance with such other procedures (including, without limitation, the receipt by the
Trustee of electronic
Page 17
instructions from the Corporation or its duly authorized agents, promptly confirmed in writing) acceptable to
the Trustee as may be specified by or pursuant to a Company Order delivered to the Trustee prior to the time
of the first authentication of Securities of such series. If the form or terms of the Securities of the
series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and
301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to Board Resolution
as permitted by Section 201, that such form has been established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities have been, or in the case of Securities of a series
offered in a Periodic Offering, will be, established by or pursuant to Board Resolution as permitted
by Section 301, that such terms have been, or in the case of Securities of a series offered in a
Periodic Offering, will be, established in conformity with the provisions of this Indenture, subject,
in the case of Securities of a series offered in a Periodic Offering, to any conditions specified in
such Opinion of Counsel; and
(3) that such Securities, when issued and executed by the Corporation and when
authenticated and delivered by the Trustee in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding obligations of the Corporation
enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a
series are not to be originally issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the authentication of each Security of such
series if such documents are delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
With respect to Securities of a series offered in a Periodic Offering, the Trustee may rely, as to the
authorization by the Corporation of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of Counsel and the other documents
delivered pursuant to Sections 201 and 301 and this Section, as applicable, in connection with the first
authentication of Securities of such series.
Page 18
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the Corporation, and the Corporation
shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Corporation may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Corporation will cause definitive Securities of
that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for definitive Securities of such
series upon surrender of the temporary Securities of such series at the office or agency of the Corporation
in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Corporation shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any
authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Corporation shall cause to be kept at the Corporate Trust Office of the Trustee a register (the
register maintained in such office or in any other office or agency of the Corporation in a Place of Payment
being herein sometimes referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Corporation shall provide for the registration of Securities and of
transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at the office or agency of the
Corporation in a Place of Payment for that series, the Corporation shall execute,
Page 19
and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one
or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of the
same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for
exchange, the Corporation shall execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the legal,
valid and binding obligations of the Corporation, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so
required by the Corporation or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Corporation and the Security Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the
Corporation may require payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1106 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed, the
Corporation shall not be required (A) to issue, register the transfer of or exchange any Securities of that
series (or of that series and specified tenor, as the case may be) during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected
for redemption and ending at the close of business on the day of such mailing, or (B) to register the
transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name
of the Depositary designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute
a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Security may be
exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole
or in part may be registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such
Page 20
Depositary has notified the Corporation that it is unwilling or unable to continue as Depositary for
such Global Security and a successor Depositary has not been appointed by the Corporation within 90
days of receipt by the Corporation of such notification, (B) if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be
so registered to act as such Depositary and no successor Depositary shall have been appointed by the
Corporation within 90 days after it became aware of such cessation, or (C) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this
purpose as contemplated by Section 301. Notwithstanding the foregoing, the Corporation may at any time
in its sole discretion determine that Securities issued in the form of a Global Security shall no
longer be represented in whole or in part by such Global Security, and the Trustee, upon receipt of a
Company Order therefor, shall authenticate and deliver definitive Securities in exchange in whole or
in part for such Global Security.
(3) Subject to Clause (2) above, any exchange or transfer of a Global Security for other
Securities may be made in whole or in part, and all Securities issued in exchange for or upon transfer
of a Global Security or any portion thereof shall be registered in such names as the Depositary for
such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this
Section, Section 304, 306, 906 or 1106 or otherwise, shall be authenticated and delivered in the form
of, and shall be, a Global Security, unless such Security is registered in the name of a Person other
than the Depositary for such Global Security or a nominee thereof.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Corporation and the Trustee (i) evidence to their satisfaction of
the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in the absence of written notice to the
Corporation or the Trustee that such Security has been acquired by a bona fide purchaser, the Corporation
shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due
and payable, the Corporation in its discretion may, instead of issuing a new Security, pay such Security.
Page 21
Upon the issuance of any new Security under this Section, the Corporation may require the payment of a
sum sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee and its agents and counsel)
connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security shall constitute an original additional contractual obligation of the Corporation, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities,
interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such interest.
Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities,
any interest on any Security of any series which is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Corporation, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Corporation may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities of such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Corporation shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Corporation shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Corporation of
such Special Record Date and, in the name and at the expense of the Corporation, shall cause notice of
Page 22
the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to
each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Corporation may make payment of any Defaulted Interest on the Securities of any
series in any other lawful manner not inconsistent with the requirements of any securities exchange,
if any, on which such Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Corporation to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Corporation, the Trustee and
any agent of the Corporation or the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject
to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Corporation, the Trustee nor any agent of the Corporation or the Trustee
shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit
against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to
the Trustee and shall be promptly canceled by it. The Corporation may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder which the Corporation may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder which the Corporation has not
issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be
disposed of in its customary manner or as directed by a Company Order; provided, however, that the Trustee
shall not be required to destroy such canceled Securities.
Page 23
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on
the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Corporation in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
Section 312. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Corporation and, by its acceptance of a Security
or a beneficial interest therein, the holder of, and any Person that acquires a beneficial interest in, such
Security agree that for United States federal, state and local tax purposes it is intended that such Security
constitute indebtedness.
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee,
at the expense of the Corporation, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Corporation and thereafter repaid to
the Corporation or discharged from such trust, as provided in Section 1003) have been delivered
to the Trustee for cancellation; or
Page 24
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Corporation,
and the Corporation, in the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose (i) money in an amount, (ii)
Government Obligations (as defined in Section 1304) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will provide, not
later than the due date of any payment, money in an amount, or (iii) a combination thereof,
sufficient, in the case of (ii) or (iii), in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee to pay and discharge,
the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Corporation has paid or caused to be paid all other sums payable hereunder by the
Corporation; and
(3) the Corporation has delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Corporation
to the Trustee under Section 607, the obligations of the Corporation to any Authenticating Agent under
Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1)
of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003
shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the
Corporation acting as its own Paying Agent), to the Persons entitled
Page 25
thereto, of the principal and any premium and interest for whose payment such money has been deposited with
the Trustee.
ARTICLE V.
REMEDIES
Section 501. Events of Default.
"Event of Default," wherever used herein with respect to Securities of any series, means any one of
the following events (whatever the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body), unless it is inapplicable to a
particular series or is specifically deleted or modified in the Board Resolution (or action taken pursuant
thereto), Officer's Certificate or supplemental indenture under which such series of Securities is issued or
has been deleted or modified in an indenture supplemental hereto:
(1) default in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; provided, however, that if
the Corporation is permitted by the terms of the Securities of such series to defer the payment in
question, the date on which such payment is due and payable shall be the date on which the Corporation
is required to make payment following such deferral, if such deferral has been elected pursuant to the
terms of the Securities; or
(2) default in the payment of the principal of or any premium on any Security of that
series at its Maturity; or
(3) default in the making of any sinking fund payment, when and as due by the terms of a
Security of that series, and continuance of such default for a period of 60 days; or
(4) default in the performance, or breach, of any covenant of the Corporation in this
Indenture (other than a covenant a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series), and continuance of such default or breach for
a period of 90 days after there has been given, by registered or certified mail, to the Corporation by
the Trustee or to the Corporation and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder, unless
the Trustee, or the Trustee and the Holders of a principal amount of Securities of such series not
less than the principal amount of Securities the Holders of which gave such notice, as the case may
be, shall agree in writing to an extension of such period prior to its expiration; provided, however,
that the Trustee, or the Trustee and the Holders of such
Page 26
principal amount of Securities of such series, as the case may be, shall be deemed to have agreed to
an extension of such period if corrective action is initiated by the Corporation within such period
and is being diligently pursued; or
(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Corporation in an involuntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Corporation a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the Corporation under any
applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Corporation or of any substantial part of its property,
or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(6) the commencement by the Corporation of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Corporation in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under any applicable federal or
state law, or the consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Corporation or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of any such action by the Board of Directors;
or
(7) any other Event of Default provided with respect to Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof) to be due and payable
immediately, by a notice in writing to the Corporation (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become immediately due and payable.
Page 27
At any time after such a declaration of acceleration with respect to Securities of any series has been
made and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding
Securities of such series, by written notice to the Corporation and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Corporation has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which
have become due otherwise than by such declaration of acceleration and any interest thereon at
the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Corporation covenants that if
(1) default is made in the payment of any interest on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any
Security at the Maturity thereof,
the Corporation will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and any premium and
interest and, to the extent that payment of such interest shall be legally enforceable, interest on
any overdue principal and premium and on any overdue interest, at the rate or rates prescribed
therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of
Page 28
collection, including the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Corporation fails to pay such amounts forthwith upon such demand, the Trustee, in its own name
and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against
the Corporation or any other obligor upon such Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Corporation or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee
may proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Corporation (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in
such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order
to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced
by the Trustee without the possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall
Page 29
be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of
which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of
principal or any premium or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 607;
Second: Subject to Article XIV, to the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Securities for principal and any premium and interest,
respectively; and
Third: To the payment of the balance, if any, to the Corporation.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of
all affected series, considered as one class, or, in the case of an Event of Default of the character
specified above in Section 501(1), (2) or (3), that series, shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity satisfactory to it against
the costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in principal amount of the
Page 30
Outstanding Securities of all affected series, considered as one class, or, in the case of an Event of
Default of the character specified above in Section 501(1), (2) and (3), that series,
it being understood and intended that no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such
proceeding, the Corporation, the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein.
Page 31
Every right and remedy given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
Section 512. Control By Holders.
The Holders of a majority in principal amount of the Outstanding Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such
series; provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have the right to decline
to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers
of the Trustee, determine that the proceeding so directed would involve the Trustee in personal
liability.
If an Event of Default is continuing with respect to all Outstanding Securities, the Holders of a
majority in principal amount of all the Outstanding Securities, considered as one class, shall have the right
to make such direction, and not the Holders of Securities of any one series.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of all
series with respect to which any default under the Indenture shall have occurred and be continuing (voting as
one class) may, on behalf of the Holders of all Securities of all such series, waive such past default under
the Indenture and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any Security of such
series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each Outstanding Security of the series
affected.
Upon any such waiver, such default shall cease to exist and be deemed not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Page 32
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs, including legal fees and expenses of such
suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or to make such an assessment in (i) any suit instituted
by the Trustee, (ii) any suit instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or (iii) any suit instituted by any
Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any
Security on or after the respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
The Corporation covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Corporation (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI.
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment
of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the
Holders of Securities of such series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the character
Page 33
specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both would become, an Event of Default
with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Corporation mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order or as otherwise expressly provided herein, and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, conclusively rely upon an Officer's Certificate and such Officer's Certificate shall be
full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof;
(4) the Trustee may consult with counsel of its selection and the advice of such counsel or
any Opinion of Counsel with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested
in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document;
(7) the Trustee shall not be liable for the observance as a Business Day of a day on which
banking institutions in Los Angeles, California (but not the banking institutions in the Place of
Payment), are authorized or obligated by law or executive order to remain closed if a Responsible
Officer of the Trustee does not have actual
Page 34
knowledge that banking institutions in Los Angeles, California, are authorized or obligated by law or
executive order to remain closed on such day; and
(8) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys, custodians or nominees and the Trustee
shall not be responsible for any misconduct or negligence on the part of any agent, attorney,
custodian or nominee appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Corporation, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the Corporation of Securities or the
proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of
the Corporation, in its individual or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Corporation with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Corporation.
Section 607. Compensation and Reimbursement.
The Corporation agrees
(1) to pay to the Trustee from time to time such compensation as shall be agreed to in
writing between the Corporation and the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all expenses, disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad faith; and
Page 35
(3) to indemnify and defend the Trustee and its officers, directors, employees,
representatives and agents for, and to hold it harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of the Trustee) of whatever
kind or nature regardless of their merit incurred without negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself against any claim whether
asserted by the Corporation, a Holder or any other Person and all reasonable attorneys fees,
consultants fees, expenses and court costs or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all property and funds held by it hereunder
for any amount owing it or any predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under applicable law, when the Trustee incurs
expenses or renders services in connection with an Event of Default specified in Section 501(5) or Section
501(6), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for
the services are intended to constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this Indenture and the earlier
resignation or removal of the Trustee.
Section 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by
such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Securities of more than one series.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with respect to the Securities of each series, which
may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the purposes of this Section and to the
extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Page 36
Section 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the successor Trustee in accordance
with the applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or more series by giving
written notice thereof to the Corporation. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition, at the expense of the Corporation, any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
The Trustee may be removed at any time with respect to the Securities of any series by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Corporation. Upon such removal, the Corporation may petition, at its expense, any court
of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the
Corporation or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after
written request therefor by the Corporation or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Corporation by a Board Resolution may remove the Trustee with respect to all
Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, with respect to the Securities of one or more series, the Corporation,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may be appointed with respect to
the Securities of one or more or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the applicable requirements of
Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such
vacancy, a
Page 37
successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series delivered to the Corporation and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the
Corporation. If no successor Trustee with respect to the Securities of any series shall have been so
appointed by the Corporation or the Holders and accepted appointment in the manner required by Section 611,
any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such series.
The Corporation shall give notice of each resignation and each removal of the Trustee with respect to
the Securities of any series and each appointment of a successor Trustee with respect to the Securities of
any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such
successor Trustee so appointed shall execute, acknowledge and deliver to the Corporation and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of
the Corporation or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or
more (but not all) series, the Corporation, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee
Page 38
of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Corporation or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Corporation shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be
otherwise qualified and eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Corporation.
If and when the Trustee shall be or become a creditor of the Corporation (or any other obligor upon
the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Corporation (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable to the Corporation with respect
to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever
reference is made in this
Page 39
Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by
an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Corporation and shall at all
times be a corporation organized and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by
federal or state authority. If such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the
corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided that such corporation shall be otherwise eligible under this Section, without
the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to
the Corporation. The Trustee may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Corporation. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Corporation and shall give notice of such appointment
in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such
Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Corporation agrees to pay to each Authenticating Agent from time to time reasonable compensation
for its services under this Section.
If an appointment with respect to one or more series is made pursuant to this Section, the Securities
of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.
Page 40
Dated: ____________________ The Bank of New York Trust Company, N.A.,
As Trustee
By:____________________________
As Authenticating Agent
By:____________________________
Authorized Signatory
Section 615. Trustee's Application for Instructions from the Corporation.
Any application by the Trustee for written instructions from the Corporation may, at the option of the
Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture
and the date on and/or after which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable to the Corporation for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any officer of the Corporation actually
receives such application, unless any such officer shall have consented in writing to any earlier date)
unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying the action to be taken or
omitted.
ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND CORPORATION
Section 701. Corporation to Furnish Trustee Names and Addresses of Holders.
The Corporation will furnish or cause to be furnished to the Trustee
(1) 15 days after each Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities of each series as of such
Regular Record Date, and
(2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Corporation of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as Security
Registrar.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses
of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Page 41
Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt
of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as
provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Corporation and the
Trustee that neither the Corporation nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within 60 days
after each May 15 following the date of this Indenture, deliver to Holders a brief report, dated as of such
May 15, which complies with the provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which any Securities are listed, with the Commission and with the Corporation.
The Corporation will promptly notify the Trustee when any Securities are listed on any stock exchange or any
delisting thereof.
Section 704. Reports by Corporation.
The Corporation shall file with the Trustee and the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed
with the Commission. Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including the Corporation's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).
Page 42
ARTICLE VIII.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Section 801. Corporation May Consolidate, Etc., Only on Certain Terms.
The Corporation shall not consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, and no Person shall consolidate with or
merge into the Corporation or convey, transfer or lease its properties and assets substantially as an
entirety to the Corporation, unless:
(1) in case the Corporation shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Corporation is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of the Corporation substantially as
an entirety shall be a corporation, partnership, limited liability company or trust organized and
existing under the laws of the United States of America or any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest on all the Securities and the performance of every covenant of this
Indenture on the part of the Corporation to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of Default, and no event
which, after notice of lapse of time, or both, would become an Event of Default, shall have occurred
and be continuing;
(3) such other conditions as may be specified pursuant to Section 301 with respect to the
Securities of any series shall have been satisfied; and
(4) the Corporation shall deliver to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance or transfer and, if a supplemental
indenture is required in connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such transaction have been complied
with; and the Trustee, subject to Section 601, may rely upon such Officer's Certificate and Opinion of
Counsel as conclusive evidence that such transaction complies with this Section 801.
Section 802. Successor Substituted.
Upon any consolidation of the Corporation with, or merger of the Corporation into, any other Person or
any conveyance or transfer of the properties and assets of the Corporation as an entirety or substantially as
an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which
the Corporation is merged or to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Corporation under this Indenture with the
same effect as if such successor
Page 43
Person had been named as the Corporation herein, and thereafter the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Securities.
Such successor Person may cause to be signed, and may issue either in its own name or in the name of
the Corporation, any or all of the Securities issuable hereunder which theretofore shall not have been signed
by the Corporation and delivered to the Trustee; and, upon the order of such successor Person instead of the
Corporation, and subject to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Corporation to the Trustee for authentication pursuant to such provisions
and any Securities which such successor Person thereafter shall cause to be signed and delivered to the
Trustee on its behalf for the purpose pursuant to such provisions. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and
form may be made in the Securities thereafter to be issued as may be appropriate.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Corporation, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in
form reasonably satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Corporation and the assumption by
any such successor of the covenants of the Corporation herein and in the Securities; or
(2) to add to the covenants of the Corporation for the benefit of the Holders of all or any
series of Securities (and if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Corporation; or
(3) to add any additional Events of Default for the benefit of the Holders of all or any
series of Securities (and if such additional Events of Default are to be for the benefit of less than
all series of Securities, stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
Page 44
(4) to add to or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or to facilitate the issuance of
Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture in respect of
one or more series of Securities; provided that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of
any such Security with respect to such provision or (B) shall become effective only when there is no
such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201
and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
(9) to cure any ambiguity, 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 Indenture; provided that such action pursuant to
this Clause (9) shall not adversely affect the interests of the Holders of Securities of any series in
any material respect.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding
Securities of all series affected by such supplemental indenture (voting as one class), by Act of said
Holders delivered to the Corporation and the Trustee, the Corporation, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture, or modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security (other than pursuant to the terms of such Security), or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount Security or any other Security which
would be due and
Page 45
payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502 or change
the coin or currency in which any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series,
the consent of whose Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section 1006, except to
increase any such percentage or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Security affected thereby;
provided, however, that this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in this Section and
Section 1006, or the deletion of this proviso, in accordance with the requirements of Sections 611 and
901(8).
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by
this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in conclusively relying upon, an
Opinion of Counsel and an Officer's Certificate stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and all, if any, conditions precedent have been complied with. The
Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of this
Page 46
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the Corporation shall so determine,
new Securities of any series so modified as to conform, in the opinion of the Trustee and the Corporation, to
any such supplemental indenture may be prepared and executed by the Corporation and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
Section 907. Subordination Unimpaired.
This Indenture may not be amended to alter the subordination of any of the Outstanding Securities
without the written consent of each holder of Senior Indebtedness then outstanding that would be adversely
affected thereby.
ARTICLE X.
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Corporation covenants and agrees for the benefit of each series of Securities that it will duly
and punctually pay the principal of and any premium and interest on the Securities of that series in
accordance with the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Corporation will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange and where notices and demands to or upon
the Corporation in respect of the Securities of that series and this Indenture may be served. The Corporation
will give prompt written notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Corporation shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and the Corporation hereby
appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
Page 47
The Corporation may also from time to time designate one or more other offices or agencies where the
Securities of one or more series may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that no such designation or rescission shall in
any manner relieve the Corporation of its obligation to maintain an office or agency in each Place of Payment
for Securities of any series for such purposes. The Corporation will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other office or
agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Corporation shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of or any premium or interest on any of the
Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action
or failure so to act.
Whenever the Corporation shall have one or more Paying Agents for any series of Securities, it will,
on or prior to each due date of the principal of or any premium or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Corporation will promptly notify the Trustee
of its action or failure so to act.
The Corporation will cause each Paying Agent for any series of Securities other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will (1) hold all sums held by it for the
payment of the principal of (and premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, (2) give the Trustee notice of any default by the Corporation (or any other obligor upon the
Securities) in the making of any payment of principal (and premium, if any) or interest, (3) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (4) during the continuance of
any default by the Corporation (or any other obligor upon the Securities of that series) in the making of any
payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay
to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that
series.
The Corporation may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust hereunder by the Corporation or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Corporation or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Page 48
Any money deposited with the Trustee or any Paying Agent, or then held by the Corporation, in trust
for the payment of the principal of or any premium or interest on any Security of any series and remaining
unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to
the Corporation on Company Request, or (if then held by the Corporation) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the
Corporation for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Corporation as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the
expense of the Corporation cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City
of New York, New York, notice that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Corporation.
Section 1004. Corporate Existence.
Subject to Article Eight, the Corporation will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises.
Section 1005. Statement by Officers as to Default.
The Corporation will deliver to the Trustee, on or before October 15 of each calendar year or on or
before such other day in each calendar year as the Corporation and the Trustee may from time to time agree
upon, an Officer's Certificate, stating whether or not to the best knowledge of the signers thereof the
Corporation is in default in the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if
the Corporation shall be in default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
Section 1006. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities of such series, the
Corporation may, with respect to the Securities of any series, omit in any particular instance to comply with
any term, provision or condition set forth in any covenant provided pursuant to Section 301(19), 901(2) or
901(7) for the benefit of the Holders of such series if before the time for such compliance the Holders of
not less than a majority in principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term, provision or condition except
to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the
Corporation and the duties of the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
Page 49
Section 1007. Calculation of Original Issue Discount.
The Corporation shall file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued
on Outstanding Securities as of the end of such year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from
time to time.
ARTICLE XI.
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such
Securities) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Corporation to redeem any Securities shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption at
the election of the Corporation, the Corporation shall, at least 45 days prior to the Redemption Date fixed
by the Corporation (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of
the tenor of the Securities to be redeemed. In the case of any redemption of Securities (A) prior to the
expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in
this Indenture, or (B) pursuant to an election of the Corporation which is subject to a condition specified
in the terms of such Securities or elsewhere in this Indenture, the Corporation shall furnish the Trustee
with an Officer's Certificate evidencing compliance with such restriction or condition.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all the Securities of such
series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security),
the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption
of a portion of the principal amount of any Security of such series; provided that the unredeemed portion of
the principal amount of any Security shall be in an authorized denomination (which shall not be less than the
minimum authorized denomination) for such Security. If less than all the Securities of such series and of a
specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Page 50
Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Corporation in writing of the Securities selected for redemption
as aforesaid and, in the case of any Securities selected for partial redemption as aforesaid, the principal
amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of
any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed (including CUSIP number(s)) and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series and of a specified tenor
consisting of more than a single Security are to be redeemed, the identification (and, in the case of
partial redemption of any such Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series and of a specified tenor
consisting of a single Security are to be redeemed, the principal amount of the particular Security to
be redeemed;
(4) that on the Redemption Date the Redemption Price, together with accrued interest, if
any, to the Redemption Date, will become due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after said date;
(5) the place or places where each such Security is to be surrendered for payment of the
Redemption Price and accrued interest, if any, unless it shall have been specified as contemplated by
Section 301 with respect to such Securities that such surrender shall not be required;
Page 51
(6) that the redemption is for a sinking fund, if such is the case; and
(7) such other matters as the Corporation shall deem desirable or appropriate.
Unless otherwise specified with respect to any Securities in accordance with Section 301, with respect
to any redemption of Securities at the election of the Corporation, unless, upon the giving of notice of such
redemption, Defeasance shall have been effected with respect to such Securities pursuant to Section 1302,
such notice may state that such redemption shall be conditional upon the receipt by the Trustee or the Paying
Agent(s) for such Securities, on or prior to the date fixed for such redemption, of money sufficient to pay
the principal of and any premium and interest on such Securities and that if such money shall not have been
so received such notice shall be of no force or effect and the Corporation shall not be required to redeem
such Securities. In the event that such notice of redemption contains such a condition and such money is not
so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given,
in the manner in which the notice of redemption was given, that such money was not so received and such
redemption was not required to be made, and the Trustee or Paying Agent(s) for the Securities otherwise to
have been redeemed shall promptly return to the Holders thereof any of such Securities which had been
surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of the Corporation, and any notice
of non-satisfaction of redemption as aforesaid, shall be given by the Corporation or, at the Corporation's
written request, by the Trustee in the name and at the expense of the Corporation. Subject to the preceding
paragraph, any such notice of redemption shall be irrevocable.
Section 1105. Deposit of Redemption Price.
On or prior to the Redemption Date specified in the notice of redemption given as provided in Section
1104, the Corporation will deposit with the Trustee or with one or more Paying Agents (or if the Corporation
is acting as its own Paying Agent, the Corporation will segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and any accrued interest on, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such
notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless,
in the case of an unconditional notice of redemption, the Corporation shall default in the payment of the
Redemption Price and accrued interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said
notice, such Security or portion thereof shall be paid by the Corporation at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that no such surrender shall be a
Page 52
condition to such payment if so specified as contemplated by Section 301 with respect to such Security, and
provided further that, unless otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the
principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Corporation or the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Corporation and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Corporation shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII.
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein
referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of such Securities is herein referred to as an "optional sinking fund payment." If provided
for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Corporation (1) may deliver Outstanding Securities of a series (other than any previously called
for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the
election of the Corporation pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all
or any part of any sinking fund payment with
Page 53
respect to any Securities of such series required to be made pursuant to the terms of such Securities as and
to the extent provided for by the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any Securities, the Corporation will
deliver to the Trustee an Officer's Certificate specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering
and crediting Securities pursuant to Section 1202 and stating the basis for such credit and that such
Securities have not been previously so credited and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to each such sinking fund payment date, the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the expense of the Corporation in
the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1105 and 1106.
ARTICLE XIII.
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. Applicability of Article.
Unless, pursuant to Section 301, provision is made that either or both of (A) defeasance of any
Securities or any series of Securities under Section 1302 and (B) covenant defeasance of any Securities or
any series of Securities under Section 1303 shall not apply to such Securities of a series, then the
provisions of either or both of Sections 1302 and Section 1303, as the case may be, together with Sections
1304 and 1305, shall be applicable to the Outstanding Securities of such series upon compliance with the
conditions set forth below in this Article.
Section 1302. Defeasance and Discharge.
The Corporation may cause itself to be discharged from its obligations with respect to any Securities
or any series of Securities on and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that the Corporation shall be
deemed to have paid and discharged the entire indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Corporation, shall execute proper instruments acknowledging
the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304
and as more
Page 54
fully set forth in such Section, payments in respect of the principal of and any premium and interest on such
Securities when payments are due, (2) the Corporation's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003 and with respect to the Trustee under Section 607, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance
with this Article, Defeasance with respect to any Securities or any series of Securities by the Corporation
is permitted under this Section 1302 notwithstanding the prior exercise by the Corporation of its rights
under Section 1303 with respect to such Securities. Following a Defeasance, payment of such Securities may
not be accelerated because of an Event of Default.
Section 1303. Covenant Defeasance.
The Corporation may cause itself to be released from its obligations under any covenants provided
pursuant to Section 301(19), 901(2), 901(6) or 901(7) with respect to any Securities or any series of
Securities for the benefit of the Holders of such Securities and the occurrence of any event specified in
Sections 501(4) (with respect to any such covenants provided pursuant to Section 301(19), 901(2), 901(6) or
901(7)) or 501(7) shall be deemed not to be or result in an Event of Default with respect to such Securities
as provided in this Section, in each case on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that,
with respect to such Securities, the Corporation may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified Section (to the extent so
specified in the case of Section 501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to any other provision herein or
in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302 or Section 1303 to any
Securities or any series of Securities, as the case may be:
(1) The Corporation shall irrevocably have deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) money in
an amount, or (B) Government Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide, not later than the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient, in the case of (B) or (C), in
the opinion of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee to pay and discharge, the principal of and any premium and interest on such Securities on
the respective Stated Maturities or on any Redemption Date established pursuant to Clause (3) below,
in accordance with the terms of this Indenture and such Securities. As used herein, "Government
Obligation" means (x) any security which is (i) a direct obligation of the United States of America or
the government
Page 55
which issued the foreign currency in which such Securities are payable, for the payment of which its
full faith and credit is pledged or (ii) an obligation of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America or such government which issued
the foreign currency in which such Securities are payable, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America or such other
government, which, in either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any Government Obligation which is specified in clause
(x) above and held by such bank for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any Government Obligation which is so
specified and held, provided that (except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Government Obligation or the specific payment of principal
or interest evidenced by such depositary receipt.
(2) No event which is, or after notice or lapse of time or both would become, an Event of
Default with respect to such Securities or any other Securities shall have occurred and be continuing
at the time of such deposit or, with regard to any such event specified in Sections 501(5) and (6), at
any time on or prior to the 90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).
(3) If the Securities are to be redeemed prior to Stated Maturity (other than from
mandatory sinking fund payments or analogous payments), notice of such redemption shall have been duly
given pursuant to this Indenture or provision therefor satisfactory to the Trustee shall have been
made.
(4) The Corporation shall have delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or
Covenant Defeasance have been complied with.
Section 1305. Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations
(including the proceeds thereof) deposited with the Trustee pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including
the Corporation acting as its own Paying Agent), to the Holders of such Securities, of all sums due and to
become due thereon in respect of principal and any premium and interest, but money so held in trust need not
be segregated from other funds except to the extent required by law.
Page 56
The Corporation shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the Government Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which by law is for the account of
the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the
Corporation from time to time upon Company Request any money or Government Obligations held by it as provided
in Section 1304 with respect to any Securities which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to such Securities.
ARTICLE XIV.
SUBORDINATION
Section 1401. Agreement to Subordinate.
The Corporation, for itself, is successors and assigns, covenants and agrees, and each holder of a
Security of any series likewise covenants and agrees by his acceptance thereof, that the obligation of the
Corporation to make any payment on account of the principal of and interest on each and all of the Securities
of any series shall be subordinate and junior in right of payment to the Corporation's obligations to the
holders of Senior Indebtedness of the Corporation.
In the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshaling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating
to the Corporation as a whole, whether voluntary or involuntary, all obligations of the Corporation to
holders of Senior Indebtedness of the Corporation shall be entitled to be paid in full before any payment
shall be made on account of the principal of or interest on any of the Securities. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior Indebtedness of the Corporation,
the holders of the Securities of each series, together with the holders of any obligations of the Corporation
ranking on a parity with the Securities, shall be entitled to be paid from the remaining assets of the
Corporation the amounts at the time due and owing on account of unpaid principal of and interest on the
Securities of any series before any payment or other distribution, whether in cash, property or otherwise,
shall be made on account of any capital stock or any obligations of the Corporation ranking junior to the
Securities. In addition, in the event of any such proceeding, if any payment or distribution of assets of the
Corporation of any kind or character whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the
Corporation being subordinated to the payment of the Securities of any series shall be received by the
Trustee or the holders of the Securities of any series before all Senior Indebtedness of the Corporation is
paid in full, such payment or distribution shall be held in trust for the benefit of and shall be paid over
to the holders of such Senior Indebtedness of the Corporation or their representative or representatives or
to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior
Page 57
Indebtedness of the Corporation may have been issued, ratably, for application to the payment of all Senior
Indebtedness of the Corporation remaining unpaid until all such Senior Indebtedness of the Corporation shall
have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness of the Corporation. The obligations of the Corporation in respect of the Securities of
all series shall rank on a parity with any obligations of the Corporation ranking on a parity with the
Securities. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 607.
The subordination provisions of the foregoing paragraph and Section 1409 shall not be applicable to
amounts at the time due and owing on the Securities of any series on account of the unpaid principal of or
interest on the Securities of such series for the payment of which funds have been deposited in trust with
the Trustee or any Paying Agent or have been set aside by the Corporation in trust in accordance with the
provisions of this Indenture; nor shall such provisions impair any rights, interests, or powers of any
secured creditor of the Corporation in respect of any security the creation of which is not prohibited by the
provisions of this Indenture.
The Corporation shall give written notice to the Trustee within 10 Business Days after the occurrence
of (i) any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshaling of
assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the
Corporation as a whole, whether voluntary or involuntary, (ii) any Event of Default described in Section
501(5) or (6), or (iii) any event specified in Section 1409. The Trustee, subject to the provisions of
Section 601, shall be entitled to assume that, and may act as if, no such event referred to in the preceding
sentence has occurred unless a Responsible Officer of the Trustee assigned to the Trustee's corporate trust
department has received at the principal office of the Trustee from the Corporation or any one or more
holders of Senior Indebtedness of the Corporation or any trustee or representative therefor (who shall have
been certified or otherwise established to the satisfaction of the Trustee to be such a holder or trustee or
representative) written notice thereof. Upon any distribution of assets of the Corporation referred to in
this Article, the Trustee and holders of the Securities of each series shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which proceedings relating to any event specified in
the first sentence of this paragraph are pending for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness of the Corporation, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon, and all other facts pertinent
thereto or to this Article, and the Trustee, subject to the provisions of Article Six, and the holders of the
Securities of each series shall be entitled to rely upon a certificate of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the holders of the Securities of each series for
the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness of the Corporation, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article. In the absence of any such
liquidating trustee, agent or other person, the Trustee shall be entitled to rely upon a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the Corporation (or a trustee or
representative on behalf of such holder) as evidence that such Person is a holder of such Senior Indebtedness
(or is such a trustee or representative). In the event that the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person, as a holder of Senior Indebtedness of
the Corporation, to participate in any payment
Page 58
or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, as
to the extent to which such Person is entitled to participation in such payment or distribution, and as to
other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 1402. Obligation of the Corporation Unconditional.
Nothing contained in this Article or elsewhere in this Indenture is intended to or shall impair, as
between the Corporation and the holders of the Securities of each series, the obligation of the Corporation,
which is absolute and unconditional, to pay to such holders the principal of and interest on such Securities
of each series when, where and as the same shall become due and payable, all in accordance with the terms of
such Securities, or is intended to or shall affect the relative rights of such holders and creditors of the
Corporation other than the holders of the Senior Indebtedness of the Corporation, nor shall anything herein
or therein prevent the Trustee or the holder of any Security from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness of the Corporation in respect of cash, property, or securities of the
Corporation received upon the exercise of any such remedy.
Section 1403. Limitations on Duties to Holders of Senior Indebtedness of the Corporation.
With respect to the holders of Senior Indebtedness of the Corporation, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are specifically set forth in this
Article, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the
Corporation shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Corporation, except with respect to moneys held
in trust pursuant to the first paragraph of Section 1401.
Section 1404. Notice to Trustee of Facts Prohibiting Payment.
Notwithstanding any of the provisions of this Article or any other provisions of this Indenture, the
Trustee shall not at any time be charged with knowledge of the existence of any facts which would prohibit
the making of any payment of moneys to or by the Trustee unless and until a Responsible Officer of the
Trustee assigned to its corporate trust department shall have received at the principal office of the Trustee
written notice thereof from the Corporation or from one or more holders of Senior Indebtedness of the
Corporation or from any trustee therefor or representative thereof who shall have been certified by the
Corporation or otherwise established to the reasonable satisfaction of the Trustee to be such a holder or
trustee or representative; and, prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the date upon which by the terms hereof any such
moneys may become payable for any purpose, or in the event of the execution of an instrument pursuant to
Section 401, 1302 or 1303 acknowledging satisfaction and discharge of
Page 59
this Indenture or acknowledging a defeasance or in the event of a deposit under Section 1304(i) with respect
to a covenant defeasance, then, if prior to the second Business Day preceding the date of such execution or
deposit, as the case may be, the Trustee shall not have received with respect to such moneys or the moneys
and/or Governmental Obligations deposited pursuant to Section 1304 the notice provided for in this Section,
then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such moneys and/or Governmental Obligations and/or apply the same to the purpose for
which they were received, and shall not be affected by any notice to the contrary which may be received by it
on or after such date; provided, however, no such application shall affect the obligations under this Article
of the Persons receiving such moneys from the Trustee.
Section 1405. Application by Trustee of Moneys Deposited with It.
Anything in this Indenture to the contrary notwithstanding, any deposit of moneys by the Corporation
with the Trustee or any agent (whether or not in trust) for any payment of the principal of or interest on
any Securities shall, except as provided in Section 1404, be subject to the provisions of Section 1401.
Section 1406. Subrogation.
Subject to the payment in full of all Senior Indebtedness of the Corporation, the holders of the
Securities of each series shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of assets of the Corporation applicable to such Senior Indebtedness until
the Securities shall be paid in full, and none of the payments or distributions to the holders of such Senior
Indebtedness to which the holders of the Securities of any series or the Trustee would be entitled except for
the provisions of this Article or of payments over pursuant to the provisions of this Article to the holders
of such Senior Indebtedness by the holders of such Securities or the Trustee shall, as among the Corporation,
its creditors other than the holders of such Senior Indebtedness, and the holders of such Securities, be
deemed to be a payment by the Corporation to or on account of such Senior Indebtedness; it being understood
that the provisions of this Article are and are intended solely for the purpose of defining the relative
rights of the holders of such Securities, on the one hand, and the holders of the Senior Indebtedness of the
Corporation, on the other hand.
Section 1407. Subordination Rights Not Impaired by Acts or Omissions of Corporation or Holders of Senior
Indebtedness of the Corporation.
No right of any present or future holders of any Senior Indebtedness of the Corporation to enforce
subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Corporation or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Corporation with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof with which any such holder may have or be otherwise charged. The holders
of Senior Indebtedness of the Corporation may, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment, change or extend the time of payment of, or renew
or alter, any such Senior Indebtedness of the Corporation, or amend or supplement any instrument pursuant to
which any
Page 60
such Senior Indebtedness of the Corporation is issued or by which it may be secured, or release any security
therefor, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness of
the Corporation including, without limitation, the waiver of default thereunder, all without notice to or
assent from the holders of the Securities of each series or the Trustee and without affecting the obligations
of the Corporation, the Trustee or the holders of such Securities under this Article.
Section 1408. Authorization of Trustee to Effectuate Subordination of Securities.
Each holder of a Security of any series, by his acceptance thereof, authorizes and expressly directs
the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate, as between
the holders of such Securities and the holders of Senior Indebtedness of the Corporation, the subordination
provided in this Article. If, in the event of any proceeding or other action relating to the Corporation
referred to in the second paragraph of Section 1401, a proper claim or proof of debt in the form required in
such proceeding or action is not filed by or on behalf of the holders of the Securities of any series prior
to fifteen days before the expiration of the time to file such claim or claims, then the holder or holders of
Senior Indebtedness of the Corporation shall have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the holders of such Securities.
Section 1409. No Payment When Senior Indebtedness in Default.
In the event and during the continuation of any default in the payment of principal of or interest on
any Senior Indebtedness, or in the event that any event of default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have become due and payable, unless
and until such event of default shall have been cured, waived or remedied or shall have ceased to exist and
such acceleration shall have been rescinded or annulled or all amounts due on such Senior Indebtedness are
paid in full in cash or other permitted consideration, or in the event any judicial proceeding shall be
pending with respect to any such default in payment or such event or default (unless and until all amounts
due on such Senior Indebtedness are paid in full in cash or other permitted consideration), then no payment
or distribution of any kind or character, whether in cash, properties or securities shall be made by the
Corporation on account of principal of (or premium, if any) or interest if any, on the Securities or on
account of the purchase or other acquisition of Securities by the Corporation or any Subsidiary.
In the event that, notwithstanding the foregoing, the Corporation shall make any payment to the
Trustee or the holder of any Security prohibited by the foregoing provisions of this Section, and if such
fact shall, at or prior to the time of such payment, have been made known to the Trustee or, as the case may
be, such holder, then and in such event payment shall be paid over and delivered forthwith to the Corporation.
Page 61
Section 1410. Right of Trustee to Hold Senior Indebtedness of the Corporation.
The Trustee shall be entitled to all of the rights set forth in this Article in respect of any Senior
Indebtedness of the Corporation at any time held by it in its individual capacity to the same extent as any
other holder of such Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Section 1411. Article Fourteen Not to Prevent Defaults.
The failure of the Corporation to make a payment pursuant to the terms of Securities of any series by
reason of any provision in this Article shall not be construed as preventing the occurrence of an Event of
Default under this Indenture.
ARTICLE XV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 1501. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or any premium or interest on any Security, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant
or agreement of the Corporation in this Indenture or in any supplemental indenture, or in any Security, or
because of the creation of any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the Corporation or of any successor
corporation, either directly or through the Corporation or any successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issue of the Securities.
Page 62
This instrument may be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
In Witness Whereof, the parties hereto have caused this Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and attested, all as of the day and year first above
written.
SOUTHERN CALIFORNIA EDISON
COMPANY
By ______________________________
Attest:
_____________________________________
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
as Trustee
By _______________________________
Authorized Signatory
Attest:
_____________________________________
AMENDED AND RESTATED
TRUST AGREEMENT
among
SOUTHERN CALIFORNIA EDISON COMPANY
as Depositor,
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
THE REGULAR TRUSTEES NAMED HEREIN,
and
THE SEVERAL HOLDERS, AS DEFINED HEREIN
Dated as of ___________, 20__
SCE TRUST [__]
Page
SCE TRUST [__]
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act Trust Agreement
Section Section
------------------ --------------------
(S) 310 (a)(1) ................................................8.7
(a)(2) ................................................8.7
(a)(3) ................................................8.9
(a)(4) ................................................2.7(a)(ii)
(b) ................................................8.8
(S) 311 (a) ................................................8.13
(b) ................................................8.13
(S) 312 (a) ................................................5.7
(b) ................................................5.7
(c) ................................................5.7
(S) 313 (a) ................................................8.14(a)
(a)(4) ................................................8.14(b)
(b) ................................................8.14(b)
(c) ................................................10.8
(d) ................................................8.14(c)
(S) 314 (a) ................................................8.15
(b) ................................................Not Applicable
(c)(1) ................................................8.16
(c)(2) ................................................8.16
(c)(3) ................................................Not Applicable
(d) ................................................Not Applicable
(e) ................................................1.1, 8.16
(S) 315 (a) ................................................8.1(a), 8.3(a)
(b) ................................................8.2, 10.8
(c) ................................................8.1(a)
(d) ................................................8.1, 8.3
(e) ................................................Not Applicable
(S) 316 (a) ................................................Not Applicable
(a)(1)(A) ................................................Not Applicable
(a)(1)(B) ................................................Not Applicable
(a)(2) ................................................Not Applicable
(b) ................................................5.14
(c) ................................................6.7
(S) 317 (a)(1) ................................................Not Applicable
(a)(2) ................................................Not Applicable
(b) ................................................5.9
(S) 318 (a) ................................................10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Trust
Agreement.
i
Page
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS..............................................................1
SECTION 1.1. Definitions........................................................1
ARTICLE II ESTABLISHMENT OF THE TRUST...............................................10
SECTION 2.1. Name..............................................................10
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.......10
SECTION 2.3. Organizational Expenses...........................................11
SECTION 2.4. Issuance of the Preferred Securities..............................11
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Notes. ............................................ 11
SECTION 2.6. Declaration of Trust..............................................12
SECTION 2.7. Authorization to Enter into Certain Transactions..................12
SECTION 2.8. Assets of Trust...................................................16
SECTION 2.9. Title to Trust Property...........................................16
ARTICLE III PAYMENT ACCOUNT.........................................................16
SECTION 3.1. Payment Account...................................................16
ARTICLE IV DISTRIBUTIONS; REDEMPTION................................................17
SECTION 4.1. Distributions.....................................................17
SECTION 4.2. Redemption........................................................18
SECTION 4.3. Subordination of Common Securities................................20
SECTION 4.4. Payment Procedures................................................20
SECTION 4.5. Tax Returns and Reports...........................................21
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.......................21
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions............21
ARTICLE V TRUST SECURITIES CERTIFICATES.............................................21
SECTION 5.1. Initial Ownership.................................................21
SECTION 5.2. Trust Securities Certificates.....................................22
SECTION 5.3. Execution and Delivery of Trust Securities Certificates...........22
i
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates...........................................22
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates......................................................23
SECTION 5.6. Persons Deemed Securityholders....................................23
SECTION 5.7. Access to List of Securityholders' Names and Addresses............24
SECTION 5.8. Maintenance of Office or Agency...................................24
SECTION 5.9. Appointment of Paying Agent.......................................24
SECTION 5.10. Ownership of Common Securities by Depositor.......................25
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate............................................25
SECTION 5.12. Notices to Clearing Agency........................................26
SECTION 5.13. Definitive Preferred Securities Certificates......................26
SECTION 5.14. Rights of Securityholders.........................................27
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING................................29
SECTION 6.1. Limitations on Voting Rights......................................29
SECTION 6.2. Notice of Meetings................................................30
SECTION 6.3. Meetings of Preferred Securityholders.............................30
SECTION 6.4. Voting Rights.....................................................31
SECTION 6.5. Proxies, etc......................................................31
SECTION 6.6. Securityholder Action by Written Consent..........................31
SECTION 6.7. Record Date for Voting and Other Purposes.........................31
SECTION 6.8. Acts of Securityholders...........................................31
SECTION 6.9. Inspection of Records.............................................33
ARTICLE VII REPRESENTATIONS AND WARRANTIES..........................................33
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee..........................................33
SECTION 7.2. Representations and Warranties of Depositor.......................34
ii
ARTICLE VIII THE TRUSTEES...........................................................34
SECTION 8.1. Certain Duties and Responsibilities...............................34
SECTION 8.2. Certain Notices...................................................36
SECTION 8.3. Certain Rights of Property Trustee................................36
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities............38
SECTION 8.5. May Hold Securities...............................................38
SECTION 8.6. Compensation; Indemnity; Fees.....................................38
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees......39
SECTION 8.8. Conflicting Interests.............................................40
SECTION 8.9. Co-Trustees and Separate Trustee..................................40
SECTION 8.10. Resignation and Removal; Appointment of Successor.................41
SECTION 8.11. Acceptance of Appointment by Successor............................43
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.......43
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust......44
SECTION 8.14. Reports by Property Trustee.......................................44
SECTION 8.15. Reports to the Property Trustee...................................45
SECTION 8.16. Evidence of Compliance with Conditions Precedent..................45
SECTION 8.17. Number of Trustees................................................45
SECTION 8.18. Delegation of Power...............................................46
SECTION 8.19. Delaware Trustee..................................................46
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER......................................46
SECTION 9.1. Termination Upon Expiration Date..................................46
SECTION 9.2. Early Termination.................................................47
SECTION 9.3. Termination.......................................................47
SECTION 9.4. Liquidation.......................................................47
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Trust......................................................49
ARTICLE X MISCELLANEOUS PROVISIONS..................................................50
SECTION 10.1. Limitation of Rights of Securityholders...........................50
iii
SECTION 10.2. Amendment.........................................................50
SECTION 10.3. Separability......................................................51
SECTION 10.4. Governing Law.....................................................51
SECTION 10.5. Payments Due on Non-Business Day..................................51
SECTION 10.6. Successors........................................................52
SECTION 10.7. Headings..........................................................52
SECTION 10.8. Reports, Notices and Demands......................................52
SECTION 10.9. Agreement Not to Petition.........................................53
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act............53
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture...53
iv
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _______________, 20__, among (i) SOUTHERN
CALIFORNIA EDISON COMPANY, a California corporation (including any successors or assigns, the "Depositor"),
(ii) THE BANK OF NEW YORK TRUST COMPANY, N.A., as property trustee (in such capacity, the "Property Trustee"
and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) THE
BANK OF NEW YORK (DELAWARE), as Delaware trustee (the "Delaware Trustee"), (iv) [Mary C. Simpson, George T.
Tabata and Michael A. Henry], each an officer of the Depositor, as regular trustees (the "Regular Trustees")
(the Property Trustee, the Delaware Trustee and the Regular Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business Trust Act by the entering into
that certain Trust Agreement, dated as of August 22, 2000 (the "Original Trust Agreement"), and by the
execution and filing with the Secretary of State of the State of Delaware of the Certificate of Trust, filed
on August 22, 2000, [attached as Exhibit A]; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the
Common Securities by the Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities by
the Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Notes and (iv) the appointment of the Regular Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in this Article and include the
plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
Page 1
(c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an
Article or a Section, as the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust
Agreement as a whole and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given Liquidation Amount
and/or a given period, the amount of Additional Interest (as defined in the Supplemental Indenture) paid by
the Depositor on a Like Amount of Notes for such period.
"Additional Sums" has the meaning specified in Section 2.9 of the Supplemental Indenture.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a
bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any substantial part of its property or
ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar
official) of such Person or of any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
Page 2
pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors, or such committee
of the Board of Directors or officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of such certification, and
delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest in the Preferred
Securities Certificates, ownership and transfers of which shall be evidenced through book entries by a
Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on which banking
institutions in The City of New York or Los Angeles, California are authorized or required by law or
executive order to remain closed, or (c) a day on which the Property Trustee's Corporate Trust Office or the
Corporate Trust Office of the Indenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the Depositor and The
Depository Trust Company, as the initial Clearing Agency, dated as of the Closing Date, relating to the Trust
Securities Certificates, substantially in the form required by the Depository Trust Company for
book-entry-only equity security issues, as the same may be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section
17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial
Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial institution or
other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" means the "First Time of Delivery" as specified in the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
Page 3
"Common Security" means an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $[___] and having the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as provided herein.
"Common Securityholder" means the Holder from time to time of the Common Securities.
"Common Securities Certificate" means a certificate evidencing ownership of Common Securities,
substantially in the form attached as Exhibit B.
"Corporate Trust Office" means (i) when used with respect to the Property Trustee, the
principal office of the Property Trustee located at __________________________________________, and (ii) when
used with respect to the Indenture Trustee, the principal office of the Indenture Trustee located at
__________________________________________.
"Definitive Preferred Securities Certificates" means either or both (as the context requires)
of (a) Preferred Securities Certificates issued as Book-Entry Preferred Securities Certificates as provided
in Section 5.11(a) and (b) Preferred Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
ss.ss.3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in the preamble to
this Trust Agreement solely in its capacity as Delaware Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein
provided.
"Depositor" has the meaning specified in the preamble to this Trust Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) the occurrence of an Indenture Event of Default; or
Page 4
(b) default by the Trust in the payment of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
(c) default by the Trust in the payment of any Redemption Price of any Trust Security when it becomes due
and payable; or
(d) default in the performance, or breach, in any material respect, of any covenant or warranty of the
Trustees in this Trust Agreement (other than a covenant or warranty a default in the performance or breach of
which is dealt with in clause (b) or (c) above) and continuation of such default or breach for a period of 90
days after there has been given, by registered or certified mail, to the defaulting Trustee or Trustees by
the Holders of at least 25% in aggregate liquidation amount of the Outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property Trustee and the failure by the
Depositor to appoint a successor Property Trustee within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities between the Guarantor
and the Trust, substantially in the form attached as Exhibit C, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the Guarantor and The Bank
of New York Trust Company, N.A., as trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the holders of the Preferred Securities, as amended from time to time.
"Guarantor" means Southern California Edison Company, a California corporation, and its
successors and assigns.
"Indenture" means the Subordinated Indenture, dated as of __________, 20__, between the
Depositor and the Indenture Trustee, as trustee, as amended or supplemented from time to time (including by
the Supplemental Indenture).
"Indenture Event of Default" means an "Event of Default," as defined in the Indenture, with
respect to the Notes.
"Indenture Redemption Date" means, with respect to any Notes to be redeemed under the
Indenture, the date fixed for redemption under the Indenture.
"Indenture Trustee" means The Bank of New York Trust Company, N.A., a New York banking
corporation, and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership
interest, hypothecation, assignment, security interest or
Page 5
preference, priority or other security agreement or preferential arrangement of any kind or
nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities, Trust Securities
having a Liquidation Amount equal to the principal amount of Notes to be contemporaneously redeemed in
accordance with the Indenture the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Notes to Holders of Trust Securities in connection with
a dissolution or liquidation of the Trust, Notes having a principal amount equal to the Liquidation Amount of
the Trust Securities of the Holder to whom such Notes are distributed.
"Liquidation Amount" means the stated amount of $[___] per Trust Security.
"Liquidation Date" means the date on which Notes are to be distributed to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notes" means the aggregate principal amount of the Depositor's [____]% Subordinated
[Deferrable Interest] Notes, Series [_], issued pursuant to the Indenture.
"Officer's Certificate" means a certificate signed by any one of the Chairman of the Board,
Chief Executive Officer, President, a Vice President, the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. The officer signing an Officer's Certificate given pursuant to Section 8.15 shall be
the principal executive, financial or accounting officer of the Depositor. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that the officer signing the Officer's Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation undertaken by such
officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such condition or covenant has been
complied with.
Page 6
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the
Property Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of the date of
determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or delivered to the Property Trustee for
cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore
deposited with the Property Trustee or any Paying Agent for the Holders of such Trust Securities; provided
that, if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of which other Preferred
Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however,
that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred
Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in determining whether any Trustee
shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall be so disregarded and (ii) the
foregoing proviso shall not apply at any time when all of the outstanding Preferred Securities are owned by
the Depositor, one or more of the Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Regular Trustees the pledgee's right so to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.
["Over-allotment Option" has the meaning specified in the Underwriting Agreement.]
"Owner" means each Person who is the beneficial owner of a Book-Entry Preferred Securities
Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not
the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.9 and
shall initially be the Bank.
Page 7
"Payment Account" means a segregated non-interest-bearing corporate trust account maintained by
the Property Trustee with the Bank in its trust department for the benefit of the Securityholders in which
all amounts paid in respect of the Notes will be held and from which the Property Trustee, through the Paying
Agent, shall make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership (general or limited), joint venture,
trust, limited liability company or corporation, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $[___] and having the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership of Preferred
Securities, substantially in the form attached as Exhibit D.
"Property Trustee" means the Person identified as the "Property Trustee" in the preamble to
this Trust Agreement solely in its capacity as Property Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor property trustee appointed as
herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for
such redemption by or pursuant to this Trust Agreement; provided that each Indenture Redemption Date and the
stated maturity of the Notes shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the Liquidation Amount of such
Trust Security, plus accumulated and unpaid Distributions to the Redemption Date, allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities.
"Regular Trustees" means each of the Persons identified as a "Regular Trustee" in the preamble
to this Trustee Agreement solely in such Person's capacity as Regular Trustee of the Trust formed and
continued hereunder and not in such Person's individual capacity, or such Regular Trustee's successor in
interest in such capacity, or any successor trustee appointed as herein provided.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" shall mean when used with respect to the Property Trustee any officer
within the Corporate Trust Office including any Vice President, Managing Director, Assistant Vice President,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is referred because of such
officer's knowledge and familiarity with the particular subject.
Page 8
["Second Closing Date" means the "Second Time of Delivery" as specified in the Underwriting
Agreement.]
"Securities Register" and "Securities Registrar" have the respective meanings specified in
Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security or Trust Securities
is registered in the Securities Register, any such Person being a beneficial owner within the meaning of the
Delaware Statutory Trust Act; provided, however, that in determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, then for the
purpose of any such determination, so long as Definitive Preferred Securities Certificates have not been
issued, the term Securityholders or Holders as used herein shall refer to the Owners.
"Supplemental Indenture" means the Supplemental Indenture, dated as of ___________, 20__,
between the Depositor and the Indenture Trustee, as amended or supplemented from time to time.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days after the date of such Opinion of Counsel, subject to United States federal
income tax with respect to income received or accrued on the Notes, (ii) interest payable by the Depositor on
the Notes is not, or within 90 days after the date of such Opinion of Counsel, will not be, deductible by the
Depositor, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will
be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties, assessments or other governmental charges.
"Trust" means the Delaware statutory trust created and continued hereby and identified on the
cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified,
amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits
hereto and (ii) for all purposes of this Trust Agreement and any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and
any such modification, amendment or supplement, respectively.
Page 9
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which
this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Notes, (b) any cash on deposit in, or owing to, the Payment
Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities Certificates or the
Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee and the Regular
Trustees.
"Underwriting Agreement" means the Pricing Agreement (including the Underwriting Agreement
incorporated by reference therein), dated __________, 20__, among the Trust, the Depositor and the
underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 Name.
The Trust continued hereby shall be known as "SCE Trust [_]," as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued.
SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is
______________________________________________________, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the Depositor. The principal executive office of the
Trust is 2244 Walnut Grove Avenue, Rosemead, California 91770.
Page 10
SECTION 2.3 Organizational Expenses.
The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon
request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such expenses.
SECTION 2.4 Issuance of the Preferred Securities.
The Depositor, on behalf of the Trust and pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. On the Closing Date, a Regular Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2, and the Property Trustee shall deliver to the Underwriters
named in the Underwriting Agreement, Preferred Securities Certificates, registered in the name of the nominee
of the initial Clearing Agency, evidencing an aggregate of __________ Preferred Securities having an
aggregate Liquidation Amount of $_____________, against receipt by the Property Trustee of the aggregate
purchase price of such Preferred Securities of $____________. [In the event that the Underwriters shall
exercise their Over-allotment Option, on the Second Closing Date, a Regular Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2, and the Property Trustee shall deliver to the Underwriters
named in the Underwriting Agreement, Preferred Securities Certificates, registered in the name of the nominee
of the initial Clearing Agency, evidencing an aggregate of up to _____________ Preferred Securities having an
aggregate Liquidation Amount of up to $___________, against receipt by the Property Trustee of the aggregate
purchase price of such Preferred Securities in an amount equal to such aggregate Liquidation Amount, all in
accordance with the terms of such exercise.]
SECTION 2.5 Issuance of the Common Securities; Subscription and Purchase of Notes.
On the Closing Date, a Regular Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2, and the Property Trustee shall deliver to the Depositor, Common Securities Certificates,
registered in the name of the Depositor, evidencing an aggregate of ________ Common Securities having an
aggregate Liquidation Amount of $___________ against receipt by the Property Trustee from the Depositor of
such amount. Contemporaneously therewith, a Regular Trustee, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Notes, registered in the name of the Property Trustee (in its capacity as such)
and having an aggregate principal amount equal to $______________, and, in satisfaction of the purchase price
for such Notes, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$____________ (being the sum of the amounts delivered to the Property Trustee pursuant to (i) the second
sentence of Section 2.4 and (ii) the first sentence of this Section 2.5). [In the event that the
Underwriters shall exercise their Over-allotment Option, on the Second Closing Date, a Regular Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2, and the Property Trustee shall deliver to
the Depositor, Common Securities Certificates, registered in the name of the Depositor, evidencing an
aggregate of up to ________ Common Securities having an aggregate Liquidation
Page 11
Amount of up to $_________ (such number and aggregate Liquidation Amount to be equal, unless
otherwise agreed by the Depositor and the Underwriters, to 3/97 of the number and aggregate Liquidation
Amount, respectively, of Preferred Securities to be executed and delivered pursuant to the third sentence of
Section 2.4, rounded (A) in the case of such number, up to the nearest whole number and (B) in the case of
such amount, to the product of such number multiplied by $[__]), against receipt by the Property Trustee from
the Depositor of such amount. Contemporaneously therewith, a Regular Trustee, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Notes, registered in the name of the Property Trustee (in its
capacity as such) and having an aggregate principal amount equal to the sum of the aggregate Liquidation
Amounts of (x) the Preferred Securities to be executed and delivered pursuant to the third sentence of
Section 2.4 and (y) the Common Securities to be executed and delivered pursuant to the third sentence of this
Section 2.5, and, in satisfaction of the purchase price for such Notes, the Property Trustee, on behalf of
the Trust, shall deliver to the Depositor an amount equal to such sum.]
SECTION 2.6 Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell Trust Securities
and use the proceeds from such sale to acquire the Notes, (b) to distribute the cash payments it receives on
the Notes it owns to the Securityholders, and (c) to engage in only those activities necessary, appropriate,
convenient or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such
appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and the Securityholders. The Regular
Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with
respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose
of fulfilling the requirements of Section 3807(a) of the Delaware Statutory Trust Act.
SECTION 2.7 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the
following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and
agreements determined by the Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) Each Regular Trustee, acting singly or collectively, shall have the power and authority to act on
behalf of the Trust with respect to the following matters:
Page 12
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the
Expense Agreement and the Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of the Trust;
(C) assisting in the registration of the Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon such securities exchange or exchanges as
shall be determined by the Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and filing of all periodic and
other reports and other documents pursuant to the foregoing;
(E) assisting in the sending of notices (other than notices of default) and other information regarding
the Trust Securities and the Notes to the Securityholders in accordance with this Trust
Agreement;
(F) consenting to the appointment of a Paying Agent in accordance with this Trust Agreement;
(G) execution of the Trust Securities on behalf of the Trust in accordance with this Trust Agreement;
(H) execution and delivery of closing certificates pursuant to the Underwriting Agreement and application
for a taxpayer identification number for the Trust;
(I) unless otherwise determined by the Depositor, the Property Trustee or the Holders of Preferred
Securities representing more than 50% of the aggregate Liquidation Amount of the Outstanding
Preferred Securities, or as otherwise required by the Delaware Statutory Trust Act or the Trust
Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or
all of the Regular Trustees) any documents that the Regular Trustees have the power to execute
pursuant to this Trust Agreement; and
(J) the taking of any action incidental to the foregoing as the Trustees may from time to time determine
is necessary or advisable to give effect to the terms of this Trust Agreement for the benefit
of the Securityholders (without consideration of the effect of any such action on any
particular Securityholder).
Page 13
(ii) The Property Trustee shall have the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Notes;
(C) the collection of interest, principal and any other payments made in respect of the Notes in the
Payment Account;
(D the distribution through the Paying Agent of amounts owed to the Securityholders in respect of the
Trust Securities;
(E the exercise of all of the rights, powers and privileges of a holder of the Notes;
(F the sending of notices of default and other information regarding the Trust Securities and the Notes
to the Securityholders in accordance with this Trust Agreement;
(G the distribution of the Trust Property in accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, assisting in the winding up of the affairs of and
liquidation of the Trust and the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(I) after an Event of Default (other than under paragraph (b), (c), (d) or (e) of the definition of such
term if such Event of Default is by or with respect to the Property Trustee) the taking of any
action incidental to the foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder); and
(J) any of the duties, liabilities, powers or the authority of the Regular Trustees set forth in Section
2.7(a)(i)(E), (F) and (J); and in the event of a conflict between the actions of the Regular
Trustees and those of the Property Trustee, the actions of the Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the
Trust) shall not undertake any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees (acting on behalf of the Trust) shall not (i) acquire any
investments other than the Notes, (ii) engage in any activities not authorized by this Trust Agreement, (iii)
sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the
Page 14
Trust Property or interests therein, including to Securityholders, except as expressly provided
herein, (iv) take any action that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (v) incur any indebtedness for borrowed money or issue any other
debt or (vi) take or consent to any action that would result in the placement of a Lien on any of the Trust
Property. The Property Trustee shall defend all claims and demands of all Persons at any time claiming any
Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders; provided, however, that (x) all expenses relating to such defense shall be borne
by the Depositor and (y) the Property Trustee shall be fully indemnified by the Depositor for all costs
incurred in connection with such defense.
(c) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right
and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and
any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement
are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and the execution on behalf of the Trust
of a registration statement on the appropriate form in relation to the Preferred Securities, including
any amendments thereto;
(ii) the determination of the States in which to take appropriate action to qualify or register for sale
all or part of the Preferred Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to the Trustees of actions
they must take on behalf of the Trust, and the preparation for execution and filing of any documents
to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such States;
(iii) the preparation for filing by the Trust and execution on behalf of the Trust of an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and the execution on behalf of the Trust
of a registration statement on Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, including any amendments
thereto, if required;
(v) the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
Page 15
(vi) the taking of any other actions necessary or desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Trustees are authorized, and the
Regular Trustees are directed, to conduct the affairs of the Trust and to operate the Trust so that (i) the
Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act, (ii) the
Trust will be classified as a grantor trust for United States Federal income tax purposes and (iii) so that
the Notes will be treated as indebtedness of the Depositor for United States Federal income tax purposes. In
this connection, the Depositor and the Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Trustees
determines in its discretion to be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Trust and
the Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The
Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from
time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to)
any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of
principal of or interest on, and any other payments or proceeds with respect to, the Notes. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending distribution thereof.
Page 16
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions
(including of Additional Amounts) will be made on the Trust Securities at the rate and on the dates that
payments of interest (including of Additional Interest, as defined in the Indenture) are made on the Notes.
Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there
are funds of the Trust available for the payment of Distributions. Distributions shall accrue from
__________, 20__, and, except in the event (and to the extent) that the Depositor exercises its right
to defer the payment of interest on the Notes pursuant to the Indenture, shall be payable [quarterly]
in arrears on [________, _______, _________and _______] of each year, commencing on ___________, 20__.
If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next succeeding day that is a Business
Day (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, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case with the same force and effect as if made on such
date (each date on which distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
(ii) Assuming payments of interest on the Notes are made when due (and before giving effect to Additional
Amounts, if applicable), Distributions on the Trust Securities shall be payable at a rate of _____%
per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for
any full period shall be computed on the basis of a 360-day year of twelve 30-day months. The amount
of Distributions for any partial period shall be computed on the basis of the number of days elapsed
in a 360-day year of twelve 30-day months. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account
and shall be payable on each Distribution Date only to the extent that the Trust has funds then on
hand and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the
Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record
date, which shall be one Business Day prior to such Distribution Date; provided, however, that in the event
that the Preferred Securities
Page 17
do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to the
relevant Distribution Date.
SECTION 4.2. Redemption.
(a) On each Indenture Redemption Date and on the stated maturity of the Notes, the Trust will be required
to redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee at the expense of the Depositor by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date
(or, in the event that the redemption results from acceleration after the occurrence of an Indenture Event of
Default and the Property Trustee is unable to give such notice within such period, as soon as practicable) to
each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total
Liquidation Amount of the particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust
Security to be redeemed and that Distributions thereon will cease to accrue on and after said date,
except as provided in Section 4.2(d).
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with
the proceeds from the contemporaneous redemption of Notes. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by
2:00 p.m., New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will,
so long as the Preferred Securities are in book-entry-only form, irrevocably deposit with the Clearing Agency
for the Preferred Securities funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency instructions with respect to payment of the Redemption Price to the holders of the Preferred
Securities in accordance with the procedures set forth in the applicable agreement between the Property
Trustee and such Clearing Agency. If the Preferred Securities are no longer in book-entry-only form, the
Property Trustee, subject
Page 18
to Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient to pay the
applicable Redemption Price and will give the Paying Agent instructions and authority to pay the Redemption
Price to the Holders thereof upon surrender of their Preferred Securities Certificates in accordance with the
notice of redemption. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date
for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as
they appear on the Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then upon
the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such Securities will cease to be
outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then
payment of the Redemption Price 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 falls in the next 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 date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused
and not paid either by the Trust or by the Guarantor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the Redemption Date originally
established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for purposes of calculating the
Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made to the Securityholders as
they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one
Business Day prior to the relevant Redemption Date; provided, however, that in the event that the Preferred
Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to
the relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a
Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated
on a pro rata basis (based on Liquidation Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities and Common Securities to be redeemed shall be selected on a pro rata
basis (based upon Liquidation Amounts) not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities and Common Securities, respectively, not previously called
for redemption, by such method (including, without limitation, by lot) as the Property Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of portions (equal to $[__] or an
integral multiple of $[__] in excess thereof) of the Liquidation Amount of Preferred Securities and Common
Securities, respectively, of a denomination larger than $[__]. The Property Trustee shall promptly notify the
Security Registrar in writing of the Preferred Securities and Common Securities selected for redemption and,
Page 19
in the case of any Preferred Securities or Common Securities selected for partial redemption,
the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred Securities or Preferred Securities
shall relate, in the case of any Preferred Securities or Common Securities, as applicable, redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of Preferred Securities or Common Securities,
as applicable, that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price
of, the Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date any Event of Default resulting from an Indenture
Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional
Amounts, if applicable) on, or Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or prior thereto, or in the case
of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred
Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee
shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if
applicable) on, or the Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from any Indenture Event of Default,
the Holder of Common Securities will be deemed to have waived any right to act with respect to any such Event
of Default under this Trust Agreement until the effect of all such Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until any such Event of Default under
this Trust Agreement with respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and
not the Holder of the Common Securities, and only the Holders of the Preferred Securities will have the right
to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in respect of the
Preferred Securities shall be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency in immediately available funds, which shall
credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Dates.
Page 20
Payments in respect of the Common Securities shall be made in such manner as shall be mutually
agreed between the Property Trustee and the Common Securityholder. Any Distributions in respect of Preferred
Securities that remain unclaimed for a period of two years following the applicable Distribution Date shall
be paid to the Holder of the Common Securities.
SECTION 4.5. Tax Returns and Reports.
The Regular Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and
file all United States federal, state and local tax and information returns, payee statements and reports
required to be filed by or in respect of the Trust. In this regard, the Regular Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue Service form required to be
filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be
prepared and furnished) to each Securityholder the appropriate Internal Revenue Service form required to be
provided. The Regular Trustees shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees and the Paying Agent shall comply
with United States federal withholding and backup withholding tax laws and information reporting requirements
with respect to any payments to Securityholders under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Notes of Additional Sums, the Property Trustee, pursuant to written
instructions from the Depositor detailing the payments to be made, shall promptly pay at the expense of the
Depositor any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes)
imposed on the Trust by the United States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received pursuant to Section 2.19 of the
Supplemental Indenture or Section 5.14 of this Trust Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and until the issuance of the Trust Securities, and at any time
during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the
Trust.
Page 21
SECTION 5.2. Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum denominations of $[__]
Liquidation Amount and integral multiples of $[__] in excess thereof, and the Common Securities Certificates
shall be issued in minimum denominations of $[__] Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual signature of at least one
Regular Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates
or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject
to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate
in such transferee's name pursuant to Sections 5.4, 5.11 and 5.13.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Date and the Second Closing Date (if any), the Regular Trustees shall cause
Trust Securities Certificates to be executed on behalf of the Trust and delivered by the Property Trustee as
provided in Sections 2.4 and 2.5.
SECTION 5.4. Registration of Transfer and Exchange of Preferred Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency maintained pursuant to
Section 5.8, a register or registers for the purpose of registering Trust Securities Certificates and
transfers and exchanges of Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to such reasonable regulations as
it may prescribe, shall provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 5.10 in the case of the Common Securities Certificates) and
registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Bank
shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities Certificate at the
office or agency maintained pursuant to Section 5.8, the Regular Trustees or any one of them shall execute
and deliver to the Property Trustee, and the Property Trustee shall deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a
like aggregate Liquidation Amount dated the date of execution by such Regular Trustee or Trustees.
The Securities Registrar shall not be required to register the transfer of any Preferred
Securities that have been called for redemption. At the option of a Holder,
Page 22
Preferred Securities Certificates may be exchanged for other Preferred Securities Certificates
in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of
the Preferred Securities Certificates to be exchanged at the office or agency maintained pursuant to Section
5.8.
Every Preferred Securities Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Securities
Registrar duly executed by the Holder or his attorney duly authorized in writing. Each Preferred Securities
Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed
of by the Property Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or exchange of Preferred
Securities Certificates, but the Securities Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities
Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss
or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and
the Regular Trustees such security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Regular Trustees, or any one of them, on behalf of the Trust shall execute and make available
for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the Regular Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this
Section shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Trust,
as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be
found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees or the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the contrary.
Page 23
SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Regular Trustees or the Depositor shall furnish or cause to be furnished to the Property
Trustee (a) semi-annually on or before January 15 and July 15 in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the Securityholders as of the most
recent record date and (b) promptly after receipt by any Regular Trustee or the Depositor of a request for
such list from the Property Trustee in order to enable the Property Trustee to discharge its obligations
under this Trust Agreement, a list of the type referred to in clause (a), in each case to the extent such
information is in the possession or control of the Regular Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property Trustee in its capacity as
Securities Registrar. The rights of Securityholders to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities, and the corresponding rights of the
Property Trustee shall be as provided in the Trust Indenture Act. Each Securityholder and each Owner shall be
deemed to have agreed not to hold the Trust, the Depositor, the Property Trustee or the Regular Trustees
accountable by reason of the disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 5.8. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the Regular Trustees (which consent
shall not be unreasonably withheld), an office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served. The Property Trustee
initially designates its Corporate Trust Office as its office and agency for such purposes. The Property
Trustee shall give prompt written notice to the Depositor and to the Securityholders of any change in the
location of the Securities Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the Payment Account and shall
report the amounts of such distributions to the Property Trustee and the Regular Trustees. Any Paying Agent
shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the
distributions referred to above. The Property Trustee may revoke such power and remove the Paying Agent in
its sole discretion. The Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and reasonably acceptable to the Regular Trustees. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Regular Trustees and the Property Trustee. In
the event that the Bank shall no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Property Trustee shall appoint a successor that is acceptable to the Regular
Trustees to act as Paying Agent (which shall be a bank or trust company). The Property Trustee shall cause
such successor Paying Agent or any
Page 24
additional Paying Agent appointed by the Property Trustee to execute and deliver to the
Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the
Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all
funds in its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall
apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as Paying Agent and, to
the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date and on the Second Closing Date (if any), the Depositor shall acquire and
retain beneficial and record ownership of the Common Securities. To the fullest extent permitted by law,
other than a transfer in connection with a consolidation or merger of the Depositor into another corporation,
or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an
entirety to any Person, pursuant to Section 801 of the Indenture, any attempted transfer of the Common
Securities shall be void. The Regular Trustees shall cause each Common Securities Certificate issued to the
Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN CERTAIN LIMITED
CIRCUMSTANCES SET FORTH IN THE TRUST AGREEMENT (AS DEFINED BELOW)."
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a
typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will
receive a Definitive Preferred Securities Certificate representing such Owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive Preferred Securities Certificates
have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and effect;
(ii) the Securities Registrar, the Depositor and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the
Page 25
payment of the Liquidation Amount of and Distributions or Redemption Price on the Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates and the giving of instructions or
directions to Owners of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates) as the sole Holder of Preferred Securities evidenced by Book-Entry Preferred Securities
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict with any other provisions of this
Trust Agreement, the provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only
through the Clearing Agency and shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are
issued pursuant to Section 5.13, the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such
Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common Securities shall be issued to the
Depositor in the form of a definitive Common Securities Certificate.
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is required under this Trust
Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners
pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the Preferred Securities
Certificates, and the Depositor is unable to locate a qualified successor, (b) the Depositor at its option
advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency
or (c) after the occurrence of an Indenture Event of Default, Owners of Preferred Securities Certificates
representing beneficial interests aggregating at least a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities advise the Regular Trustees in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the Owners of Preferred Securities
Certificates, then the Regular Trustees shall notify the Clearing Agency and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates and the other Trustees of the occurrence of any such event
and of
Page 26
the availability of the Definitive Preferred Securities Certificates to Owners of such class or
classes, as applicable, requesting the same. Upon surrender to the Regular Trustees or the Securities
Registrar of the typewritten Preferred Securities Certificate or Certificates representing the Book Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the
Regular Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in
accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees
shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by
the execution thereof by the Regular Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) he legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity
as such) in accordance with Section 2.9, and the Securityholders shall not have any right or title therein
other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities
and they shall have no right to call for any partition or division of property, profits or rights of the
Trust except as described below. The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or
similar rights and when issued and delivered to Securityholders against payment of the purchase price
therefor will be fully paid and nonassessable by the Trust. The Holders of the Trust Securities, in their
capacities as such, 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.
(b) For so long as any Preferred Securities remain Outstanding, if, upon an Indenture Event of Default,
the Indenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Notes
fail to declare the principal of all of the Notes to be immediately due and payable, the Holders of at least
25% in aggregate Liquidation Amount of the Preferred Securities then Outstanding shall have such right by a
notice in writing to the Depositor and the Indenture Trustee; and upon any such declaration such principal
amount of and the accrued interest on all of the Notes shall become immediately due and payable, provided
that the payment of principal and interest on such Notes shall remain subordinated to the extent provided in
the Indenture.
At any time after such a declaration of acceleration with respect to the Notes has been made
and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as in
the Indenture provided, the Holders of a majority in aggregate Liquidation Amount of the Outstanding
Preferred Securities, by written notice to the Property Trustee, the Depositor and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
Page 27
(i) the Depositor has paid or deposited with the Indenture Trustee a sum sufficient to pay
(A) all overdue installments of interest (including any Additional Interest (as defined in the Indenture))
on all of the Notes,
(B) the principal of any Notes which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Notes, and
(C) all sums paid or advanced by the Indenture Trustee under the Indenture and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and the Property
Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Notes, other than the non-payment of the principal of the
Notes which has become due solely by such acceleration, have been cured or waived as provided in
Section 513 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the Outstanding Preferred
Securities may, on behalf of the Holders of all the Outstanding Preferred Securities, waive any past default
under the Indenture, except a default in the payment of principal or interest on the Notes (unless such
default has been cured and a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Note. No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an acceleration, or
rescission and annulment thereof, by Holders of the Preferred Securities all or part of which is represented
by Book-Entry Preferred Securities Certificates, a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which record date shall be at the close
of business on the day the Property Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such
Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or
rescission and annulment, as the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day which is 90 days after such record date, such notice
of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and
without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence,
Page 28
in which event a new record date shall be established pursuant to the provisions of this
Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the fullest extent permitted by law and
subject to the terms of this Trust Agreement and the Indenture, upon an Indenture Event of Default specified
in Section 501 (1) or (2) of the Indenture, any Holder of Preferred Securities shall have the right to
institute a proceeding directly against the Depositor, pursuant to Section 508 of the Indenture, for
enforcement of payment to such Holder of the principal amount of or interest on Notes having a principal
amount equal to the Liquidation Amount of the Preferred Securities of such Holder (a "Direct Action"). Except
as set forth in Section 5.14(b) and this Section 5.14(c), the Holders of Preferred Securities shall have no
right to exercise directly any right or remedy available to the holders of, or in respect of, the Notes.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 2.7, 5.14, 8.10 and 10.2 and in the Indenture and as
otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner
otherwise control the administration, operation and management of the Trust or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates,
be construed so as to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Notes are held by the Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to such Notes, (ii) waive any past default
which is waivable under Section 513 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Notes, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of a majority in aggregate Liquidation Amount of all
Outstanding Preferred Securities, provided, however, that where a consent under the Indenture would require
the consent of each Holder of Notes affected thereby, no such consent shall be given by the Property Trustee
without the prior written consent of each Holder of Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee shall notify all Holders of the
Preferred Securities of any notice of default received from the Indenture Trustee with respect to the Notes.
In addition to obtaining the foregoing approvals of the Holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect
Page 29
that such action shall not cause the Trust to fail to be classified as a grantor trust for
United States Federal income tax purposes.
(c) If any proposed amendment to this Trust Agreement provides for, or the Trustees otherwise propose to
effect, (i) any action that would adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to this Trust Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective except with the approval of the
Holders of at least a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities.
Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made
if, as a result of such amendment, it would cause the Trust to fail to be classified as a grantor trust for
United States Federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of
the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Preferred Securityholder
of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any
such meeting, any business properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The Property Trustee, however,
shall call a meeting of Preferred Securityholders to vote on any matter upon the written request of the
Preferred Securityholders of record of 25% or more of the Preferred Securities (based upon their aggregate
Liquidation Amount) and the Regular Trustees or the Property Trustee may, at any time in their discretion,
call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred Securities (based upon
their aggregate Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting
of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of
record present, in person or by proxy, holding a majority of the Preferred Securities (based upon their
aggregate Liquidation Amount) held by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Preferred Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
Page 30
SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $[__] of Liquidation Amount represented
by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by
proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the
Property Trustee, or with such other officer or agent of the Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such
joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received
in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder
shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken without a meeting
and without prior notice if Securityholders holding a majority of all Outstanding Trust Securities (based
upon their Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof
as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to notice of and to vote
at any meeting or to act by written consent, or to participate in any distribution on the Trust Securities in
respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Regular Trustees or the Property Trustee may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or the payment of a distribution or other
action, as the case may be, as a record date for the determination of the identity of the Securityholders of
record for such purposes.
SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided
or permitted by this Trust Agreement to be given, made or taken by Securityholders or Owners may be embodied
in and evidenced by one or more written
Page 31
instruments of substantially similar tenor signed by such Securityholders or Owners in person
or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action
shall become effective when such written instrument or instruments are delivered to the Property Trustee.
Such written instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders or Owners signing such written instrument or
instruments. Proof of execution of any such written instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be proved in any other manner which any Trustee
receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and
the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or
the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take any action
hereunder with regard to any particular Trust Security may do so with regard to all or any part of the
Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such liquidation amount.
If any dispute arises between the Securityholders and the Property Trustee or among such
Securityholders or the Trustees with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this
Article VI, then the determination of such matter by the Property Trustee shall be conclusive and binding
with respect to such matter.
Page 32
SECTION 6.9. Inspection of Records.
Upon reasonable written notice to the Regular Trustees and the Property Trustee, the records of
the Trust shall be open to inspection by Securityholders during normal business hours for any purpose
reasonably related to such Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself,
hereby represents and warrants for the benefit of the Depositor and the Securityholders that:
(a) the Property Trustee is a national association validly existing and in good standing under the laws of
the United States of America;
(b) the Property Trustee has the requisite power and authority to execute, deliver and perform its
obligations under this Trust Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation duly organized, validly existing and in good
standing;
(d) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and
perform its obligations under this Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the
Delaware Trustee and constitutes the valid and legally binding agreement of each of the Property Trustee and
the Delaware Trustee enforceable against each of them in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and does not
require any approval of stockholders of the Property Trustee or the Delaware Trustee;
Page 33
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants that:
(a) this Trust Agreement has been duly authorized, executed and delivered by the Depositor and constitutes
the valid and legally binding agreement of the Depositor enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general equity principles;
(b) the Trust Securities Certificates issued on the Closing Date and the Second Closing Date (if any) on
behalf of the Trust have been duly authorized and will have been duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements
of, this Trust Agreement and the Securityholders will be, as of each such date, entitled to the benefits of
this Trust Agreement; and
(c) there are no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf
of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Property Trustee or the Delaware Trustee, as the case may be,
of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in
the case of the Property Trustee, subject to the Trust Indenture Act and no implied covenants or obligations
shall be read into this Trust Agreement against the Property Trustee. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require the Trustees to expend or risk their own funds or otherwise
incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any
of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured to them. Whether or not
therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting
the liability of or affording protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release a Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct. To the extent that, at law or in
equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Trustee shall not be liable to the Trust or to any Securityholder for such
Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the Trustees otherwise existing at
law
Page 34
or in equity, are agreed by the Depositor and the Securityholders to replace such other duties
and liabilities of the Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall
be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to
make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the Trustees are not personally liable
to it for any amount distributable in respect of any Trust Security or for any other liability in respect of
any Trust Security. This Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) The Property Trustee shall not be liable for any error of judgment made in good faith by an authorized
officer of the Property Trustee, unless it shall be conclusively proved by a court of competent
jurisdiction that the Property Trustee was negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of not less than a majority in aggregate
Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation
of the Notes and the Payment Account shall be to deal with such Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may
otherwise agree with the Depositor in writing; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the Payment Account maintained by the
Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the compliance by the Regular Trustees or
the Depositor with their respective duties
Page 35
under this Trust Agreement, nor shall the Property Trustee be liable for the default or
misconduct of the Regular Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within 90 days after the occurrence of any Event of Default actually known to a Responsible
Officer of the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the Securityholders, the Regular Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of written notice of the Depositor's exercise of
its right to defer the payment of interest on the Notes pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of such exercise to the
Securityholders and the Regular Trustees, unless such exercise shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from
acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or presented by the proper party or
parties;
(b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide
between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii)
the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as
to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall take such action, or refrain from taking such action, not inconsistent
with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful
misconduct;
(c) any direction or act of the Depositor or the Regular Trustees contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable
that a matter be proved or established before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is
Page 36
herein specifically prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officer's Certificate which, upon receipt of such request, shall be promptly delivered by the
Depositor or the Regular Trustees;
(e) the Property Trustee shall have no duty to see to any recording, filing or registration of any
instrument (including any financing or continuation statement or any filing under tax or securities laws) or
any rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be counsel to the Depositor or any of
its Affiliates, and may include any of its employees) and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the
Property Trustee shall have the right at any time to seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it
by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Securityholders;
(i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, custodians or nominees provided that the Property Trustee
shall be responsible for its own negligence or recklessness with respect to selection of any agent, attorney,
custodian or nominee appointed by it hereunder in due care;
(j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request written instructions from the Holders of the Trust Securities which written
instructions may only be given by the Holders of the same proportion in aggregate Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities
in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such written instructions are received, and (iii) shall be protected in acting in
accordance with such written instructions; and
Page 37
(k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be
under any obligation to take any action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the
Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise
any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall be taken as the
statements of the Depositor, and the Trustees do not assume any responsibility for their correctness. The
Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Notes.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its individual or any other
capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13 and
except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for all services rendered by them
hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Trustee,
(ii) any Affiliate of any Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee, and (iv) any employee or agent of the Trust or its Affiliates, (referred to herein as
an "Indemnified Person") from and against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by reason of the creation,
Page 38
operation or termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified Person by this Trust Agreement,
except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
The provisions of this Section 8.6 shall survive the termination of this Trust Agreement or the
resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a result of any amount due
pursuant to this Section 8.6.
The Depositor and any Trustee (subject to Section 8.8) may engage in or possess an interest in
other business ventures of any nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Trust Securities shall have no rights by virtue
of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. Neither the Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to
the Trust, could be taken by the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or
its Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder. The Property Trustee shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the Property Trustee with respect
to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article.
(b) There shall at all times be one or more Regular Trustees hereunder. Each Regular Trustee shall be a
natural person at least 21 years of age who is an officer of the Depositor.
Page 39
(c) There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with
its principal place of business in the State of Delaware and that otherwise meets the requirements of
applicable Delaware law that shall act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Indenture and the Guarantee are hereby excluded for purposes of Section 310(b)(1) of the Trust
Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Depositor and the Regular Trustees, by agreed action of
the majority of such Trustees, shall have power to appoint, and upon the written request of the Regular
Trustees, the Depositor shall for such purpose join with the Regular Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15
days after the receipt by it of a request so to do, or in case an Indenture Event of Default has occurred and
is continuing, the Property Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its principal place of business
in the United States that shall act through one or more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any co-trustee or separate
trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title,
right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent
only, be appointed subject to the following terms, namely:
Page 40
(a) The Trust Securities shall be executed and delivered and all rights, powers, duties, and obligations
hereunder in respect of the custody of securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustees specified hereunder shall be exercised solely by such Trustees and
not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in
respect of any property covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly,
as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee
shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed by it, with the written
concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Indenture Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or
omission of the Property Trustee or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each
such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a
successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time by
giving written notice thereof to the Securityholders and the other Trustees. If the instrument of acceptance
by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee
within 30 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the
Page 41
Trust, any court of competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless an Indenture Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by Act of the Common Securityholder. If an Indenture Event of Default shall have occurred
and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time
by Act of the Holders of a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). A Regular Trustee
may be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as Trustee, or if a
vacancy shall occur in the office of any Trustee for any cause, at a time when no Indenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees, which successor
Trustee shall be domiciled outside of the State of California, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be
removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when an Indenture Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in aggregate Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and such successor Trustee shall comply with the applicable requirements of
Section 8.11. If a Regular Trustee shall resign, be removed or become incapable of acting as Regular
Trustee, at a time when an Indenture Event of Default shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the Regular Trustee shall promptly appoint a
successor Regular Trustee and such successor Regular Trustee shall comply with the applicable requirements of
Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Common Securityholder or
the Preferred Securityholders and accepted appointment in the manner required by Section 8.11, any
Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent jurisdiction for the appointment
of a successor Relevant Trustee.
The Property Trustee shall, at the expense of the Depositor, give notice of each resignation
and each removal of the Property Trustee or the Delaware Trustee and each appointment of a successor to the
Property Trustee or the DelawareTrustee to all Securityholders in the manner provided in Section 10.8 and
shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and
the address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any
Regular Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the
Page 42
vacancy created by such death, incompetence or incapacity may be filled by (a) the unanimous
act of the remaining Regular Trustees if there are at least two of them or (b) otherwise by the Depositor
(with the successor in each case being a Person who satisfies the eligibility requirement for Regular Trustee
or Delaware Trustee, as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, each successor Relevant
Trustee with respect to the Trust Securities shall execute an amendment hereto wherein each successor
Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the
rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust Agreement as shall be necessary
to provide for or facilitate the administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees and
upon the execution of such amendment the resignation or removal of the retiring Relevant Trustee shall become
effective to the extent provided therein and each such successor Relevant Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all
such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the time of such
acceptance such successor Relevant Trustee shall be qualified and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of such Trustee, shall be the successor of such Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
Page 43
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the
Trust or any other obligor upon the Trust Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions on the Trust Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether
the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding
or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the
Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to
the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts
due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or
compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 8.14. Reports by Property Trustee.
(a) Not later than 60 days following May 15 of each year commencing with __________, 20__, the Property
Trustee shall transmit to all Securityholders in accordance with Section 10.8, and to the Depositor, a brief
report dated as of such May 15 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to the best of its knowledge it has
continued to be eligible under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its possession as Property Trustee since the date of its last
report and any action taken by the Property
Page 44
Trustee in the performance of its duties hereunder which it has not previously reported and
which in its opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders such reports concerning the
Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Property Trustee with each national stock exchange, the NASDAQ National Market or such other interdealer
quotation system or self-regulatory organization upon which the Trust Securities are listed or traded
(information regarding each such listing to be provided to the Property Trustee by the Depositor), with the
Commission and with the Depositor.
SECTION 8.15. Reports to the Property Trustee.
The Depositor and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if
any) and the compliance certificate required by Section 314(a) of the Trust Indenture Act in the form, in the
manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this
Trust Agreement that relate to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act shall be given in the form of an Officer's Certificate.
SECTION 8.17. Number of Trustees.
(a) The number of Trustees shall initially be five, provided that the Holder of all of the Common
Securities by written instrument may increase or decrease the number of Regular Trustees. The Property
Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and, if such Trustee is a Regular Trustee, the
number of Regular Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is
increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur,
Page 45
until such vacancy is filled by the appointment of a Regular Trustee or Regular Trustees in
accordance with Section 8.10, the Regular Trustees in office, regardless of their number (and notwithstanding
any other provision of this Agreement), shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Trust Agreement.
SECTION 8.18. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in
Section 2.7(a); and
(b) The Regular Trustees shall have power to delegate from time to time to such of their number or to the
Depositor the doing of such things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement, as set
forth herein.
SECTION 8.19. Delaware Trustee.
It is expressly understood and agreed by the parties hereto that, in fulfilling its obligations
as Delaware Trustee hereunder on behalf of the Trust, (i) any agreements or instruments executed and
delivered by The Bank of New York (Delaware) are executed and delivered not in its individual capacity but
solely as Delaware Trustee under this Trust Agreement in exercise of the powers and authority conferred and
vested in it, (ii) each of the representations, undertakings and agreements herein made by The Bank of New
York (Delaware) on the part of the Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by The Bank of New York (Delaware) in its individual capacity but is made and
intended for the purpose of binding only the Trust, and (iii) under no circumstances shall The Bank of New
York (Delaware) in its individual capacity be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due
to any negligence or willful misconduct of the Delaware Trustee.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on ____________, _____ (the
"Expiration Date"), and the Trust Property shall be distributed in accordance with Section 9.4.
Page 46
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination Event", upon the
occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the
Depositor;
(b) the written direction to the Property Trustee from the Depositor at any time to dissolve the Trust and
distribute Notes to Securityholders in exchange for the Preferred Securities (which direction is optional and
wholly within the discretion of the Depositor);
(c) the redemption of all of the Preferred Securities in connection with the redemption of all the Notes;
and
(d) the entry of an order for dissolution of the Trust by a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the Trust created and
continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the
Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust;
and (c) the discharge of all administrative duties of the Regular Trustees, including the performance of any
tax reporting obligations with respect to the Trust or the Securityholders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the
Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously as the Trustees determine to
be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, to each Securityholder a Like Amount of Notes, subject to Section 9.4(d). Notice of
liquidation shall be given by the Property Trustee at the expense of the Depositor by first-class mail,
postage prepaid mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder
of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation
shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates
Page 47
not surrendered for exchange will be deemed to represent a Like Amount of Notes; and
(iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities
Certificates for Notes, or if Section 9.4(d) applies, receive a Liquidation Distribution.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Trust and
distribution of the Notes to Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be (i) one Business Day prior to the Liquidation Date or (ii) in the event that the
Preferred Securities are not in book-entry form, the date 15 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Notes in exchange for the Outstanding
Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities
will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Notes will be
issued to holders of Trust Securities Certificates, upon surrender of such certificates to the Property
Trustee or its agent for exchange, (iii) the Depositor shall use its best efforts to have the Notes listed on
the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory
organization as the Preferred Securities are then listed, (iv) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of Notes, accruing interest at the rate
provided for in the Notes from the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates
with respect to such Notes) and (v) all rights of Securityholders holding Trust Securities will cease, except
the right of such Securityholders to receive Notes upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section 9.4, whether because of an
order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Notes in
the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property
shall be liquidated, and the Trust shall be wound-up by the Property Trustee in such manner as the Property
Trustee determines. In such event, Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such winding up, the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the
next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive
Liquidation
Page 48
Distributions upon any such winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if an Indenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any Person, except pursuant to
this Section 9.5 or Section 9.4. At the request of the Depositor, with the consent of the Holders of at
least a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that
(i) such successor entity either (x) expressly assumes all of the obligations of the Trust with respect to
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 the same as the Preferred Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a trustee of
such successor entity possessing substantially the same powers and duties as the Property Trustee as the
holder of the Notes, (iii) the Preferred Securities are listed or traded, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange or other organization on which the
Preferred Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including any Successor Securities) in
any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (x) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges
of the Holders of the Preferred Securities (including any Successor Securities) in any material respect, and
(y) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an investment company under the 1940 Act
and (viii) the Depositor owns all of the common securities of such successor entity and the Guarantor
guarantees the obligations of such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust
Page 49
or the successor entity to be classified as other than a grantor trust for United States
Federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Securityholders.
Except as otherwise provided in Section 9.2, the death, dissolution, termination, bankruptcy or
incapacity of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate
to terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor entitle the legal
successors, representatives or heirs of such Person or any Securityholder for such Person, to claim an
accounting, take any action or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
SECTION 10.2. Amendment.
(a) In addition to amendments contemplated by Section 8.11, this Trust Agreement may be amended from
time to time by the Regular Trustees and the Depositor, without the consent of any Securityholders, (i) to cure
any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States Federal income tax purposes as a grantor trust at
all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to
register as an investment company under the 1940 Act; provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any Securityholder, and any such
amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended
by the Trustees and the Depositor with (i) the consent of Securityholders representing a majority (based upon
aggregate Liquidation Amount) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect the Trust's status as a grantor trust for United States
Federal income tax purposes or the Trust's exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent
of each affected Securityholder, this Trust Agreement may not be amended to (i) change the amount or timing of
any Distribution on the Trust
Page 50
Securities or otherwise adversely affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after such date; notwithstanding any other
provision herein, without the unanimous consent of the Securityholders, this paragraph (c) of this Section
10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or
consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an investment company under the 1940 Act or fail or cease to be classified as a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor, the Property Trustee or the
Delaware Trustee without the consent of the Depositor, the Property Trustee or the Delaware Trustee, as the
case may be.
(f) In the event that any amendment to this Trust Agreement is made, the Regular Trustees shall promptly
provide to the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment
to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an Officer's Certificate stating that
any amendment to this Trust Agreement is in compliance with this Trust Agreement and that all conditions
precedent, if any, to such amendment have been complied with.
SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST
AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that is not a Business
Day, then such payment need not be made on such date but may be
Page 51
made on the next succeeding day that is a Business Day (except as otherwise provided in
Sections 4.1(a) and 4.2(d)), with the same force and effect as though made on the date fixed for such
payment, and no interest shall accrue thereon for the period after such date.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to
the Depositor, the Trust or the Relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger, sale or other transaction involving the Depositor that is permitted
under Article Eight of the Indenture and pursuant to which the assignee agrees in writing to perform the
Depositor's obligations hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not affect the construction
of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may
be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail,
hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Preferred
Securityholder, to such Preferred Securityholder as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Common Securityholder or the Depositor, to Southern
California Edison Company, 2244 Walnut Grove Avenue, Rosemead, California 91770, Attention: Corporate
Secretary, facsimile no.: 626-302-2662. Any notice to Preferred Securityholders shall also be given to such
owners as have, within two years preceding the giving of such notice, filed their names and addresses with
the Property Trustee for that purpose. Such notice, demand or other communication to or upon a Securityholder
shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon the Trust, the Property Trustee, the Delaware Trustee
or the Regular Trustees shall be given in writing addressed (until another address is published by the Trust)
as follows: (a) with respect to the Property Trustee to The Bank of New York Trust Company, N.A., at its
[Corporate Trust Office], Attention: ___________________; (b) with respect to the Delaware Trustee, to The
Bank of New York (Delaware), _________________________________________, (c) with respect to the Regular
Trustees, to them c/o Southern California Edison Company, 2244 Walnut Grove Avenue, Rosemead, California
91770, marked "Attention Regular Trustees of SCE Trust [__]"; and (d) with respect to the Trust, to its
principal office specified in Section 2.1, with a copy to the Property Trustee. Such notice, demand or other
communication to or upon the
Page 52
Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the Securityholders that, until
at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall
not file, or join in the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust
under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense of the Depositor, it shall
file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the
Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Trustee or the Trust may assert. The provisions of this Section 10.9
shall survive the termination of this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required
to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust
Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required
to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or excludes any provision of the
Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to
this Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the
Securities as equity securities representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A
SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL
CONSTITUTE THE UNCONDITIONAL
Page 53
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION
PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
THE DEPOSITOR, THE TRUST AND EACH HOLDER AND BENEFICIAL OWNER OF A PREFERRED SECURITY (BY ITS
ACCEPTANCE OF AN INTEREST THEREIN) SHALL BE DEEMED TO HAVE AGREED TO TREAT THE NOTES AS INDEBTEDNESS FOR ALL
U.S. TAX PURPOSES AND THE PREFERRED SECURITY AS EVIDENCE OF AN INDIRECT BENEFICIAL OWNERSHIP INTEREST IN THE
NOTES.
Page 54
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust Agreement to be
duly executed, all as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By: ________________________________________
Name: _____________________________________
Title: _____________________________________
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Property Trustee
By: ________________________________________
Name: ______________________________________
Title: ____________________________________
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
[MARY C. SIMPSON],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: ____________________________________
Page 55
[GEORGE T. TABATA],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
[MICHAEL A. HENRY],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Page 56
EXHIBIT A
[CERTIFICATE OF TRUST
OF
SCE TRUST [__]
THIS Certificate of Trust of SCE Trust [__] (the "Trust"), dated August 22, 2000, is being duly
executed and filed by the undersigned, as trustees of the Trust, with the Secretary of State of the State of
Delaware to form a business trust under the Delaware Statutory Trust Act (12 Del. C.ss.3801 et seq.).
1. Name. The name of the business trust formed hereby is SCE Trust [__].
2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of
business in the State of Delaware are The Bank of New York (Delaware),
_________________________________________.
3. Effective Date. This Certificate of Trust shall be effective upon filing with the Secretary of State
of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE), as trustee
By: ______________________________________
Name: _____________________________________
Title: ____________________________________
THE BANK OF NEW YORK TRUST COMPANY, N.A., as
trustee
By: _______________________________________
Name: ______________________________________
Title: _____________________________________
A-1
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT IN CERTAIN LIMITED CIRCUMSTANCES
SET FORTH IN THE TRUST AGREEMENT
(AS DEFINED BELOW).
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
C-1
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
SCE TRUST [__]
_____% COMMON SECURITIES
(LIQUIDATION AMOUNT $[__] PER COMMON SECURITY)
SCE Trust [__], a statutory business trust created under the laws of the State of Delaware (the
"Trust"), hereby certifies that Southern California Edison Company (the "Holder") is the registered owner of
the number set forth above of common securities of the Trust representing beneficial interests of the Trust
and designated the _____% Common Securities (liquidation amount $[__] per Common Security) (the "Common
Securities"). Except as provided in Section 5.10 of the Trust Agreement (as defined below), the Common
Securities are not transferable and any attempted transfer hereof shall, to the fullest extent permitted by
law, be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions
of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of _________, 20__, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to
the benefits thereunder.
IN WITNESS WHEREOF, one of the Regular Trustees of the Trust has executed this certificate this
______ day of ___________________, _______.
By: ________________________________________
Name: ______________________________________
Title: Regular Trustee
B-1
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ___________, 20__, between Southern California Edison Company, a
California corporation, and SCE Trust [__], a Delaware business trust (the "Trust"). Capitalized terms used
but not defined herein have the meanings ascribed to such terms in the Trust Agreement (as defined below).
WHEREAS, the Trust intends to issue its Common Securities (the "Common Securities") to and
receive Notes from Southern California Edison Company and to issue and sell _____% [________ Preferred
Securities], Series [__] (the "Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of
___________, 20__, as the same may be amended from time to time (the "Trust Agreement");
WHEREAS, Southern California Edison Company will directly or indirectly own all of the Common
Securities of the Trust and will issue the Notes;
NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred Securities,
which purchase Southern California Edison Company hereby agrees shall benefit Southern California Edison
Company and which purchase Southern California Edison Company acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Southern California Edison Company and the Trust hereby agree as
follows:
ARTICLE I
SECTION 1.1. Guarantee by Southern California Edison Company
Subject to the terms and conditions hereof, Southern California Edison Company hereby
irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
C-1
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon the later of (a) the
date on which full payment has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, exchange or otherwise) and (b) the date on which there are
no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of Preferred Securities or any Beneficiary must
restore payment of any sums paid under the Preferred Securities, under any Obligation, under the Guarantee
Agreement dated as of the date hereof between Southern California Edison Company and The Bank of New York
Trust Company, N.A., as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement
is continuing, irrevocable, unconditional and absolute.
SECTION 1.3. Waiver of Notice.
Southern California Edison Company hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and Southern California Edison Company hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of Southern California Edison Company under
this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the extension of time for the payment by the Trust of all or any portion of the Obligations
or for the performance of any other obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to
enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of,
Southern California Edison Company with respect to the happening of any of the foregoing.
C-2
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Southern California Edison Company
and Southern California Edison Company waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against Southern California Edison Company.
SECTION 1.6. Subrogation.
Southern California Edison Company shall be subrogated to all (if any) rights of any
Beneficiary against the Trust, in respect of any amounts paid to the Beneficiaries by Southern California
Edison Company under this Agreement; provided, however, that Southern California Edison Company shall not
(except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire against the Trust by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of Southern California Edison Company and shall inure to the benefit
of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any series are
outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to
the holders of the Preferred Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be given hereunder shall be
given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by
mail) or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when
mailed or upon receipt of a confirmation, if sent by facsimile):
SCE Trust [__]
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-1930
Attention: Corporate Governance
C-3
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-2662
Attention: Corporate Secretary
SECTION 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS AGREEMENT is executed as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By:___________________________
Name:_________________________
Title:________________________
SCE TRUST [__]
By:___________________________
Name:_________________________
Title: Regular Trustee
C-4
EXHIBIT D
IF THE PREFERRED SECURITY IS TO BE EVIDENCED BY A GLOBAL CERTIFICATE, INSERT--This Preferred
Securities Certificate is a Book-Entry Preferred Securities Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the
"Depositary") or a nominee of the Depositary. This Preferred Securities Certificate is exchangeable for
Preferred Securities Certificates registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Trust Agreement and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary, except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York) to SCE Trust [__] or its agent for registration of transfer,
exchange or payment, and any Preferred Securities Certificate issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
P-
CUSIP NO.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
SCE TRUST [__]
____% [____________ PREFERRED SECURITIES, SERIES [__]
(LIQUIDATION AMOUNT $[__] PER PREFERRED SECURITY)
SCE Trust [__], a statutory business trust created under the laws of the State of Delaware (the
"Trust"), hereby certifies that ___________________ (the "Holder") is the registered owner of the number set
forth above of preferred securities of the Trust representing an undivided beneficial interest in the assets
of the Trust and designated the SCE Trust [__] _____% [_______________] Preferred Securities, Series [__]
(liquidation amount $[__] per Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.4 of the
Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Trust Agreement of the Trust dated as of ____________, 20__, as the same may be
amended from time to time (the "Trust Agreement") including the designation of the terms of Preferred
Securities as set forth therein. The Holder is
D-1
entitled to the benefits of the Guarantee Agreement dated as of ___________, 20__, between
Southern California Edison Company, a California corporation, and The Bank of New York Trust Company, N.A.,
as guarantee trustee (as the same may be amended from time to time, the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge
upon written request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to
the benefits thereunder.
IN WITNESS WHEREOF, one of the Regular Trustees of the Trust has executed this certificate this
_____ day of ________, ____.
SCE TRUST [__]
By: ________________________________
Name: ______________________________
Title: Regular Trustee
D-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to:
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
(Insert assignee's social security or tax identification number)
__________________________________________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
agent to transfer this Preferred Securities Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________
Signature:
__________________________________________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Preferred Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and
loan associations and credit unions with membership in an approved signature guarantee medallion program),
pursuant to SEC Rule 17Ad-15.
D-3
AMENDED AND RESTATED
TRUST AGREEMENT
among
SOUTHERN CALIFORNIA EDISON COMPANY
as Depositor,
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee,
THE REGULAR TRUSTEES NAMED HEREIN,
and
THE SEVERAL HOLDERS, AS DEFINED HEREIN
Dated as of ___________, 20__
SCE TRUST [__]
Page
SCE TRUST [__]
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Act Trust Agreement
Section Section
------------------ ---------------
(S) 310 (a)(1) ................................................8.7
(a)(2) ................................................8.7
(a)(3) ................................................8.9
(a)(4) ................................................2.7(a)(ii)
(b) ................................................8.8
(S) 311 (a) ................................................8.13
(b) ................................................8.13
(S) 312 (a) ................................................5.7
(b) ................................................5.7
(c) ................................................5.7
(S) 313 (a) ................................................8.14(a)
(a)(4) ................................................8.14(b)
(b) ................................................8.14(b)
(c) ................................................10.8
(d) ................................................8.14(c)
(S) 314 (a) ................................................8.15
(b) ................................................Not Applicable
(c)(1) ................................................8.16
(c)(2) ................................................8.16
(c)(3) ................................................Not Applicable
(d) ................................................Not Applicable
(e) ................................................1.1, 8.16
(S) 315 (a) ................................................8.1(a), 8.3(a)
(b) ................................................8.2, 10.8
(c) ................................................8.1(a)
(d) ................................................8.1, 8.3
(e) ................................................Not Applicable
(S) 316 (a) ................................................Not Applicable
(a)(1)(A) ................................................Not Applicable
(a)(1)(B) ................................................Not Applicable
(a)(2) ................................................Not Applicable
(b) ................................................5.14
(c) ................................................6.7
(S) 317 (a)(1) ................................................Not Applicable
(a)(2) ................................................Not Applicable
(b) ................................................5.9
(S) 318 (a) ................................................10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Trust
Agreement.
Page
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS..............................................................1
SECTION 1.1. Definitions........................................................1
ARTICLE II ESTABLISHMENT OF THE TRUST...............................................10
SECTION 2.1. Name..............................................................10
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.......10
SECTION 2.3. Organizational Expenses...........................................10
SECTION 2.4. Issuance of the Preferred Securities..............................10
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Shares................................................11
SECTION 2.6. Declaration of Trust..............................................12
SECTION 2.7. Authorization to Enter into Certain Transactions..................12
SECTION 2.8. Assets of Trust...................................................16
SECTION 2.9. Title to Trust Property...........................................16
ARTICLE III PAYMENT ACCOUNT.........................................................16
SECTION 3.1. Payment Account...................................................16
ARTICLE IV DISTRIBUTIONS; REDEMPTION................................................16
SECTION 4.1. Distributions.....................................................16
SECTION 4.2. Redemption........................................................17
SECTION 4.3. Subordination of Common Securities................................19
SECTION 4.4. Payment Procedures................................................20
SECTION 4.5. Tax Returns and Reports...........................................20
SECTION 4.6. Intentionally Omitted.............................................21
SECTION 4.7. Payments under Certificate of Determination or Pursuant to
Direct Actions....................................................21
ARTICLE V TRUST SECURITIES CERTIFICATES.............................................21
SECTION 5.1. Initial Ownership.................................................21
SECTION 5.2. Trust Securities Certificates.....................................21
SECTION 5.3. Execution and Delivery of Trust Securities Certificates...........21
i
SECTION 5.4. Registration of Transfer and Exchange of Preferred
Securities Certificates. ........................................ 22
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates......................................................22
SECTION 5.6. Persons Deemed Securityholders....................................23
SECTION 5.7. Access to List of Securityholders' Names and Addresses............23
SECTION 5.8. Maintenance of Office or Agency...................................23
SECTION 5.9. Appointment of Paying Agent.......................................24
SECTION 5.10. Ownership of Common Securities by Depositor.......................24
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate............................................25
SECTION 5.12. Notices to Clearing Agency........................................26
SECTION 5.13. Definitive Preferred Securities Certificates......................26
SECTION 5.14. Rights of Securityholders.........................................26
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING................................28
SECTION 6.1. Limitations on Voting Rights......................................28
SECTION 6.2. Notice of Meetings................................................29
SECTION 6.3. Meetings of Preferred Securityholders.............................30
SECTION 6.4. Voting Rights.....................................................30
SECTION 6.5. Proxies, etc......................................................30
SECTION 6.6. Securityholder Action by Written Consent..........................31
SECTION 6.7. Record Date for Voting and Other Purposes.........................31
SECTION 6.8. Acts of Securityholders...........................................31
SECTION 6.9. Inspection of Records.............................................32
ARTICLE VII REPRESENTATIONS AND WARRANTIES..........................................32
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee....................................... 32
SECTION 7.2. Representations and Warranties of Depositor.......................33
ii
ARTICLE VIII THE TRUSTEES...........................................................33
SECTION 8.1. Certain Duties and Responsibilities...............................33
SECTION 8.2. Certain Notices...................................................35
SECTION 8.3. Certain Rights of Property Trustee................................35
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities............37
SECTION 8.5. May Hold Securities...............................................37
SECTION 8.6. Compensation; Indemnity; Fees.....................................37
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees......39
SECTION 8.8. Conflicting Interests.............................................39
SECTION 8.9. Co-Trustees and Separate Trustee..................................39
SECTION 8.10. Resignation and Removal; Appointment of Successor.................41
SECTION 8.11. Acceptance of Appointment by Successor............................42
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.......43
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust......43
SECTION 8.14. Reports by Property Trustee.......................................44
SECTION 8.15. Reports to the Property Trustee...................................44
SECTION 8.16. Evidence of Compliance with Conditions Precedent..................44
SECTION 8.17. Number of Trustees................................................45
SECTION 8.18. Delegation of Power...............................................45
SECTION 8.19. Delaware Trustee..................................................45
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER......................................46
SECTION 9.1. Termination Upon Expiration Date..................................46
SECTION 9.2. Early Termination.................................................46
SECTION 9.3. Termination.......................................................46
SECTION 9.4. Liquidation.......................................................47
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements
of the Trust..................................................... 48
ARTICLE X MISCELLANEOUS PROVISIONS..................................................49
SECTION 10.1. Limitation of Rights of Securityholders...........................49
iii
SECTION 10.2. Amendment.........................................................49
SECTION 10.3. Separability......................................................50
SECTION 10.4. Governing Law.....................................................51
SECTION 10.5. Payments Due on Non-Business Day..................................51
SECTION 10.6. Successors........................................................51
SECTION 10.7. Headings..........................................................51
SECTION 10.8. Reports, Notices and Demands......................................51
SECTION 10.9. Agreement Not to Petition.........................................52
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act............52
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Certificate of Determination..................................... 53
iv
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _______________, 20__, among (i) SOUTHERN
CALIFORNIA EDISON COMPANY, a California corporation (including any successors or assigns, the "Depositor"),
(ii) THE BANK OF NEW YORK TRUST COMPANY, N.A., as property trustee (in such capacity, the "Property Trustee"
and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) THE
BANK OF NEW YORK (DELAWARE), as Delaware trustee (the "Delaware Trustee"), (iv) [Mary C. Simpson, George T.
Tabata and Michael A. Henry], each an officer of the Depositor, as regular trustees (the "Regular Trustees")
(the Property Trustee, the Delaware Trustee and the Regular Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee have heretofore duly
declared and established a statutory trust pursuant to the Delaware Statutory Trust Act by the entering into
that certain Trust Agreement, dated as of [____________] (the "Original Trust Agreement"), and by the
execution and filing with the Secretary of State of the State of Delaware of the Certificate of Trust, filed
on [____________], [attached as Exhibit A]; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the
Common Securities by the Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities by
the Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Shares and (iv) the appointment of the Regular Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in this Article and include
the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
Page 1
(c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an
Article or a Section, as the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust
Agreement as a whole and not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a
bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement,
adjudication or composition of or in respect of such Person under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or of any substantial part of its property or
ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar
official) of such Person or of any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such
Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Depositor to have been duly adopted by the Depositor's
Page 2
Board of Directors, or such committee of the Board of Directors or officers of the Depositor to
which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest in the Preferred
Securities Certificates, ownership and transfers of which shall be evidenced through book entries by a
Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on which banking
institutions in The City of New York or Los Angeles, California are authorized or required by law or
executive order to remain closed, or (c) a day on which the Property Trustee's Corporate Trust Office or the
Corporate Trust Office of the Indenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the Depositor and The
Depository Trust Company, as the initial Clearing Agency, dated as of the Closing Date, relating to the Trust
Securities Certificates, substantially in the form required by the Depository Trust Company for
book-entry-only equity security issues, as the same may be amended and supplemented from time to time.
"Certificate of Determination" means the certificate of determination of rights, preferences,
privileges and restrictions filed with the California Secretary of State with respect to the Shares.
"Certificate of Determination Redemption Date" means, with respect to any Shares to be redeemed
under the Certificate of Determination, the date fixed for redemption under the Certificate of Determination.
"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section
17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial
Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial institution or
other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" means the "First Time of Delivery" as specified in the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
Page 3
"Common Security" means an undivided beneficial interest in the assets of the Trust, having a
Liquidation Amount of $[___] and having the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as provided herein.
"Common Securityholder" means the Holder from time to time of the Common Securities.
"Common Securities Certificate" means a certificate evidencing ownership of Common Securities,
substantially in the form attached as Exhibit B.
"Corporate Trust Office" means (i) when used with respect to the Property Trustee, the
principal office of the Property Trustee located at _______________________, and (ii) when used with respect
to the Indenture Trustee, the principal office of the Indenture Trustee located at ________________________.
"Definitive Preferred Securities Certificates" means either or both (as the context requires)
of (a) Preferred Securities Certificates issued as Book-Entry Preferred Securities Certificates as provided
in Section 5.11(a) and (b) Preferred Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
ss.ss.3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware Trustee" in the preamble to
this Trust Agreement solely in its capacity as Delaware Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein
provided.
"Depositor" has the meaning specified in the preamble to this Trust Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) [the occurrence of a Stock Event of Default]; or
(b) default by the Trust in the payment of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days; or
Page 4
(c) default by the Trust in the payment of any Redemption Price of any Trust Security when it
becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any covenant or warranty of the
Trustees in this Trust Agreement (other than a covenant or warranty a default in the performance or breach of
which is dealt with in clause (b) or (c) above) and continuation of such default or breach for a period of 90
days after there has been given, by registered or certified mail, to the defaulting Trustee or Trustees by
the Holders of at least 25% in aggregate liquidation amount of the Outstanding Preferred Securities a written
notice specifying such default or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property Trustee and the failure by the
Depositor to appoint a successor Property Trustee within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities between the Guarantor
and the Trust, substantially in the form attached as Exhibit C, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the Guarantor and The Bank
of New York Trust Company, N.A., as trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the holders of the Preferred Securities, as amended from time to time.
"Guarantor" means Southern California Edison Company, a California corporation, and its
successors and assigns.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership
interest, hypothecation, assignment, security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities, Trust Securities
having a Liquidation Amount equal to the par value of Shares to be contemporaneously redeemed in accordance
with the Certificate of Determination the proceeds of which will be used to pay the Redemption Price of such
Trust Securities, and (b) with respect to a distribution of Shares to Holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Shares having a par value equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Shares are distributed.
"Liquidation Amount" means the stated amount of $[___] per Trust Security.
Page 5
"Liquidation Date" means the date on which Shares are to be distributed to Holders of Trust
Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officer's Certificate" means a certificate signed by any one of the Chairman of the Board,
Chief Executive Officer, President, a Vice President, the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. The officer signing an Officer's Certificate given pursuant to Section 8.15 shall be
the principal executive, financial or accounting officer of the Depositor. Any Officer's Certificate
delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that the officer signing the Officer's Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation undertaken by such
officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such condition or covenant has been
complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the
Property Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of the date of
determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or delivered to the Property Trustee for
cancellation;
(b) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore
deposited with the Property Trustee or any Paying Agent for the Holders of such Trust Securities; provided
that, if such Trust Securities are
Page 6
to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and
(c) Trust Securities which have been paid or in exchange for or in lieu of which other Preferred
Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however,
that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred
Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in determining whether any Trustee
shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall be so disregarded and (ii) the
foregoing proviso shall not apply at any time when all of the outstanding Preferred Securities are owned by
the Depositor, one or more of the Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Regular Trustees the pledgee's right so to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.
["Over-allotment Option" has the meaning specified in the Underwriting Agreement.]
"Owner" means each Person who is the beneficial owner of a Book-Entry Preferred Securities
Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not
the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.9 and
shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust account maintained by
the Property Trustee with the Bank in its trust department for the benefit of the Securityholders in which
all amounts paid in respect of the Shares will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership (general or limited), joint venture,
trust, limited liability company or corporation, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $[___] and having the rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as provided herein.
Page 7
"Preferred Securities Certificate" means a certificate evidencing ownership of Preferred
Securities, substantially in the form attached as Exhibit D.
"Property Trustee" means the Person identified as the "Property Trustee" in the preamble to
this Trust Agreement solely in its capacity as Property Trustee of the Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor property trustee appointed as
herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for
such redemption by or pursuant to this Trust Agreement; provided that each Certificate of Determination
Redemption Date [and the stated mandatory redemption date of the Shares] shall be a Redemption Date for a
Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the Liquidation Amount of such
Trust Security, plus accumulated and unpaid Distributions to the Redemption Date, allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities.
"Regular Trustees" means each of the Persons identified as a "Regular Trustee" in the preamble
to this Trustee Agreement solely in such Person's capacity as Regular Trustee of the Trust and not in such
Person's individual capacity, or such Regular Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer" shall mean when used with respect to the Property Trustee any officer
within the Corporate Trust Office including any Vice President, Managing Director, Assistant Vice President,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is referred because of such
officer's knowledge and familiarity with the particular subject.
["Second Closing Date" means the "Second Time of Delivery" as specified in the Underwriting
Agreement.]
"Securities Register" and "Securities Registrar" have the respective meanings specified in
Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security or Trust Securities
is registered in the Securities Register, any such Person being a beneficial owner within the meaning of the
Delaware Statutory Trust Act; provided, however, that in determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in this Trust Agreement, then for the
purpose of any such determination, so long as Definitive Preferred Securities Certificates
Page 8
have not been issued, the term Securityholders or Holders as used herein shall refer to the Owners.
"Shares" means the aggregate principal amount of the Depositor's [____]% Subordinated
[Deferrable Interest] Shares, Series [_], issued pursuant to the Certificate of Determination.
["Stock Event of Default" means an "Event of Default," as defined in the Certificate of
Determination, with respect to the Shares.]
"Tax Event" means the receipt by the Trust of an Opinion of Counsel from counsel experienced in
such matters to the effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days after the date of such Opinion of Counsel, subject to United States federal
income tax with respect to income received or accrued on the Shares, (ii) interest payable by the Depositor
on the Shares is not, or within 90 days after the date of such Opinion of Counsel, will not be, deductible by
the Depositor, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or
will be within 90 days after the date of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties, assessments or other governmental charges.
"Trust" means the Delaware statutory trust continued hereby and identified on the cover page to
this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified,
amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits
hereto and (ii) for all purposes of this Trust Agreement and any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Trust Agreement and
any such modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which
this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Shares, (b) any cash on deposit in, or owing to, the Payment
Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
Page 9
"Trust Security" means any one of the Common Securities or the Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities Certificates or the
Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware Trustee and the Regular
Trustees.
"Underwriting Agreement" means the Pricing Agreement (including the Underwriting Agreement
incorporated by reference therein), dated __________, 20__, among the Trust, the Depositor and the
underwriters named therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 Name.
The Trust continued hereby shall be known as "SCE Trust [_]," as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued.
SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is
___________________________________________________________________, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the Depositor. The principal executive
office of the Trust is 2244 Walnut Grove Avenue, Rosemead, California 91770.
SECTION 2.3 Organizational Expenses.
The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon
request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such expenses.
SECTION 2.4 Issuance of the Preferred Securities.
The Depositor, on behalf of the Trust and pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. On the Closing Date, a Regular Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2, and the Property Trustee shall deliver to the Underwriters
named in the Underwriting
Page 10
Agreement, Preferred Securities Certificates, registered in the name of the nominee of the
initial Clearing Agency, evidencing an aggregate of __________ Preferred Securities having an aggregate
Liquidation Amount of $_____________, against receipt by the Property Trustee of the aggregate purchase price
of such Preferred Securities of $____________. [In the event that the Underwriters shall exercise their
Over-allotment Option, on the Second Closing Date, a Regular Trustee, on behalf of the Trust, shall execute
in accordance with Section 5.2, and the Property Trustee shall deliver to the Underwriters named in the
Underwriting Agreement, Preferred Securities Certificates, registered in the name of the nominee of the
initial Clearing Agency, evidencing an aggregate of up to _____________ Preferred Securities having an
aggregate Liquidation Amount of up to $___________, against receipt by the Property Trustee of the aggregate
purchase price of such Preferred Securities in an amount equal to such aggregate Liquidation Amount, all in
accordance with the terms of such exercise.]
SECTION 2.5 Issuance of the Common Securities; Subscription and Purchase of Shares.
On the Closing Date, a Regular Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2, and the Property Trustee shall deliver to the Depositor, Common Securities Certificates,
registered in the name of the Depositor, evidencing an aggregate of ________ Common Securities having an
aggregate Liquidation Amount of $___________ against receipt by the Property Trustee from the Depositor of
such amount. Contemporaneously therewith, a Regular Trustee, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Shares, registered in the name of the Property Trustee (in its capacity as such)
and having an aggregate principal amount equal to $______________, and, in satisfaction of the purchase price
for such Shares, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of
$____________ (being the sum of the amounts delivered to the Property Trustee pursuant to (i) the second
sentence of Section 2.4 and (ii) the first sentence of this Section 2.5). [In the event that the
Underwriters shall exercise their Over-allotment Option, on the Second Closing Date, a Regular Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2, and the Property Trustee shall deliver to
the Depositor, Common Securities Certificates, registered in the name of the Depositor, evidencing an
aggregate of up to ________ Common Securities having an aggregate Liquidation Amount of up to $_________
(such number and aggregate Liquidation Amount to be equal, unless otherwise agreed by the Depositor and the
Underwriters, to 3/97 of the number and aggregate Liquidation Amount, respectively, of Preferred Securities
to be executed and delivered pursuant to the third sentence of Section 2.4, rounded (A) in the case of such
number, up to the nearest whole number and (B) in the case of such amount, to the product of such number
multiplied by $[__]), against receipt by the Property Trustee from the Depositor of such amount.
Contemporaneously therewith, a Regular Trustee, on behalf of the Trust, shall subscribe to and purchase from
the Depositor Shares, registered in the name of the Property Trustee (in its capacity as such) and having an
aggregate principal amount equal to the sum of the aggregate Liquidation Amounts of (x) the Preferred
Securities to be executed and delivered pursuant to the third sentence of Section 2.4 and (y) the Common
Securities to be executed and delivered pursuant to the third sentence of this Section 2.5, and, in
satisfaction of the purchase price for such
Page 11
Shares, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor an amount
equal to such sum.]
SECTION 2.6 Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell Trust Securities
and use the proceeds from such sale to acquire the Shares, (b) to distribute the cash payments it receives on
the Shares it owns to the Securityholders, and (c) to engage in only those activities necessary, appropriate,
convenient or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such
appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and the Securityholders. The Regular
Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with
respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose
of fulfilling the requirements of Section 3807(a) of the Delaware Statutory Trust Act.
SECTION 2.7 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the
following provisions (i) and (ii), the Trustees shall have the authority to enter into all transactions and
agreements determined by the Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) Each Regular Trustee, acting singly or collectively, shall have the power and authority to act on
behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the
Expense Agreement and the Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of the Trust;
(C) assisting in the registration of the Preferred Securities under the Securities Act of 1933, as
amended, and under state securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
Page 12
(D) assisting in the listing of the Preferred Securities upon such securities exchange or exchanges as
shall be determined by the Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and filing of all periodic and
other reports and other documents pursuant to the foregoing;
(E) assisting in the sending of notices (other than notices of default) and other information regarding
the Trust Securities and the Shares to the Securityholders in accordance with this Trust
Agreement;
(F) consenting to the appointment of a Paying Agent in accordance with this Trust Agreement;
(G) execution of the Trust Securities on behalf of the Trust in accordance with this Trust Agreement;
(H) execution and delivery of closing certificates pursuant to the Underwriting Agreement and application
for a taxpayer identification number for the Trust;
(I) unless otherwise determined by the Depositor, the Property Trustee or the Holders of Preferred
Securities representing more than 50% of the aggregate Liquidation Amount of the Outstanding
Preferred Securities, or as otherwise required by the Delaware Statutory Trust Act or the Trust
Indenture Act, to execute on behalf of the Trust (either acting alone or together with any or
all of the Regular Trustees) any documents that the Regular Trustees have the power to execute
pursuant to this Trust Agreement; and
(J) the taking of any action incidental to the foregoing as the Trustees may from time to time determine
is necessary or advisable to give effect to the terms of this Trust Agreement for the benefit
of the Securityholders (without consideration of the effect of any such action on any
particular Securityholder).
(ii) The Property Trustee shall have the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Shares;
(C) the collection of interest, principal and any other payments made in respect of the Shares in the
Payment Account;
(D) the distribution through the Paying Agent of amounts owed to the Securityholders in respect of the
Trust Securities;
Page 13
(E) the exercise of all of the rights, powers and privileges of a holder of the Shares;
(F) the sending of notices of default and other information regarding the Trust Securities and the Shares
to the Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, assisting in the winding up of the affairs of and
liquidation of the Trust and the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware;
(I) after an Event of Default (other than under paragraph (b), (c), (d) or (e) of the definition of such
term if such Event of Default is by or with respect to the Property Trustee) the taking of any
action incidental to the foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder); and
(J) any of the duties, liabilities, powers or the authority of the Regular Trustees set forth in Section
2.7(a)(i)(E), (F) and (J); and in the event of a conflict between the actions of the Regular
Trustees and those of the Property Trustee, the actions of the Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the
Trust) shall not undertake any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees (acting on behalf of the Trust) shall not (i) acquire any
investments other than the Shares, (ii) engage in any activities not authorized by this Trust Agreement,
(iii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust
Property or interests therein, including to Securityholders, except as expressly provided herein, (iv) take
any action that would cause the Trust to fail or cease to qualify as a "grantor trust" for United States
federal income tax purposes, (v) incur any indebtedness for borrowed money or issue any other debt or (vi)
take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The
Property Trustee shall defend all claims and demands of all Persons at any time claiming any Lien on any of
the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as
Securityholders; provided, however, that (x) all expenses relating to such defense shall be borne by the
Depositor and (y) the Property Trustee shall be fully indemnified by the Depositor for all costs incurred in
connection with such defense.
Page 14
(c) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right
and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and
any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement
are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and the execution on behalf of the Trust
of a registration statement on the appropriate form in relation to the Preferred Securities, including
any amendments thereto;
(ii) the determination of the States in which to take appropriate action to qualify or register for sale
all or part of the Preferred Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to the Trustees of actions
they must take on behalf of the Trust, and the preparation for execution and filing of any documents
to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such States;
(iii) the preparation for filing by the Trust and execution on behalf of the Trust of an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and the execution on behalf of the Trust
of a registration statement on Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, including any amendments
thereto, if required;
(v) the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Trustees are authorized, and the
Regular Trustees are directed, to conduct the affairs of the Trust and to operate the Trust so that (i) the
Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act, (ii) the
Trust will be classified as a grantor trust for United States Federal income tax purposes [and (iii) so that
the Shares will be treated as indebtedness of the Depositor for United States Federal income tax purposes.]
In this connection, the Depositor and the Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Trustees
determines in its discretion to be
Page 15
necessary or desirable for such purposes, as long as such action does not adversely affect in
any material respect the interests of the Holders of the Preferred Securities.
SECTION 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Trust and
the Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The
Property Trustee and any agent of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from
time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to)
any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all dividend
and other payments on, and any other payments or proceeds with respect to, the Shares. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions
will be made on the Trust Securities at the rate and on the dates that payments of dividends are made on the
Shares. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there
are funds of the Trust available for the payment of Distributions. Distributions shall accrue from
__________, 20__, and, except in the event (and to the extent) that the Depositor exercises its right
to defer the
Page 16
payment of dividends on the Shares pursuant to the Certificate of Determination, shall be
payable [quarterly] in arrears on [________, _______, _________and _______] of each year, commencing
on ___________, 20__. If any date on which a Distribution is otherwise payable on the Trust Securities
is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day
that is a Business Day (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, payment of such Distribution shall
be made on the immediately preceding Business Day, in each case with the same force and effect as if
made on such date (each date on which distributions are payable in accordance with this Section
4.1(a), a "Distribution Date").
(ii) Assuming dividend payments on the Shares are made when due, Distributions on the Trust Securities
shall be payable at a rate of _____% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any full period shall be computed on the basis of a 360-day year
of twelve 30-day months. The amount of Distributions for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months. The amount of
Distributions payable for any period shall include the Additional Amounts, if any.
(iii) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account
and shall be payable on each Distribution Date only to the extent that the Trust has funds then on
hand and available in the Payment Account for the payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the
Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record
date, which shall be one Business Day prior to such Distribution Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the
date 15 days prior to the relevant Distribution Date.
SECTION 4.2. Redemption.
(a) On each Certificate of Determination Redemption Date and on the stated maturity of the Shares, the
Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee at the expense of the Depositor by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date
(or, in the event that the redemption results from acceleration after the occurrence of a Stock Event of
Default and the Property Trustee is unable to give such notice within such period, as soon as practicable) to
each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
Page 17
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total
Liquidation Amount of the particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust
Security to be redeemed and that Distributions thereon will cease to accrue on and after said date,
except as provided in Section 4.2(d).
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with
the proceeds from the contemporaneous redemption of Shares. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then,
by 2:00 p.m., New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will,
so long as the Preferred Securities are in book-entry-only form, irrevocably deposit with the Clearing Agency
for the Preferred Securities funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency instructions with respect to payment of the Redemption Price to the holders of the Preferred
Securities in accordance with the procedures set forth in the applicable agreement between the Property
Trustee and such Clearing Agency. If the Preferred Securities are no longer in book-entry-only form, the
Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying Agent funds sufficient
to pay the applicable Redemption Price and will give the Paying Agent instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their Preferred Securities Certificates in
accordance with the notice of redemption. Notwithstanding the foregoing, Distributions payable on or prior to
the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Register for the Trust Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given and funds deposited as required,
then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without interest, and such Securities will cease
to be outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price 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
Page 18
falls in the next 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 date. In the event that payment
of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Guarantor pursuant to the Guarantee, Distributions on such
Trust Securities will continue to accrue, at the then applicable rate, from the Redemption Date originally
established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for purposes of calculating the
Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made to the Securityholders as
they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one
Business Day prior to the relevant Redemption Date; provided, however, that in the event that the Preferred
Securities do not remain in book-entry-only form, the relevant record date shall be the date 15 days prior to
the relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed
on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated
on a pro rata basis (based on Liquidation Amounts) among the Common Securities and the Preferred Securities.
The particular Preferred Securities and Common Securities to be redeemed shall be selected on a pro rata
basis (based upon Liquidation Amounts) not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities and Common Securities, respectively, not previously called
for redemption, by such method (including, without limitation, by lot) as the Property Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of portions (equal to $[__] or an
integral multiple of $[__] in excess thereof) of the Liquidation Amount of Preferred Securities and Common
Securities, respectively, of a denomination larger than $[__]. The Property Trustee shall promptly notify the
Security Registrar in writing of the Preferred Securities and Common Securities selected for redemption and,
in the case of any Preferred Securities or Common Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred Securities or Preferred Securities shall
relate, in the case of any Preferred Securities or Common Securities, as applicable, redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of Preferred Securities or Common Securities,
as applicable, that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price
of, the Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the Trust Securities; [provided,
however, that if on any Distribution Date or Redemption Date any Event of Default resulting from a Stock
Event of Default shall have occurred and be continuing, no payment of any
Page 19
Distribution on, or Redemption Price of, any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all Outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the
full amount of such Redemption Price on all Outstanding Preferred Securities, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or the Redemption Price of, Preferred Securities then due
and payable].
(b) [In the case of the occurrence of any Event of Default resulting from any Stock Event of Default,
the Holder of Common Securities will be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until any such Event of Default under
this Trust Agreement with respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and
not the Holder of the Common Securities, and only the Holders of the Preferred Securities will have the right
to direct the Property Trustee to act on their behalf.]
SECTION 4.4. Payment Procedures.
Payments of Distributions in respect of the Preferred Securities shall be made by check mailed
to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if
the Preferred Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, which shall credit the relevant Persons' accounts at such Clearing
Agency on the applicable Distribution Dates. Payments in respect of the Common Securities shall be made in
such manner as shall be mutually agreed between the Property Trustee and the Common Securityholder. Any
Distributions in respect of Preferred Securities that remain unclaimed for a period of two years following
the applicable Distribution Date shall be paid to the Holder of the Common Securities.
SECTION 4.5. Tax Returns and Reports.
The Regular Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and
file all United States federal, state and local tax and information returns, payee statements and reports
required to be filed by or in respect of the Trust. In this regard, the Regular Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue Service form required to be
filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be
prepared and furnished) to each Securityholder the appropriate Internal Revenue Service form required to be
provided. The Regular Trustees shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees and the Paying Agent shall comply
with United States federal
Page 20
withholding and backup withholding tax laws and information reporting requirements with respect
to any payments to Securityholders under the Trust Securities.
SECTION 4.6. Intentionally Omitted.
SECTION 4.7. Payments under Certificate of Determination or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received pursuant to _________________ or
Section 5.14 of this Trust Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the formation of the Trust and until the issuance of the Trust Securities, and at any time
during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the
Trust.
SECTION 5.2. Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum denominations of $[__]
Liquidation Amount and integral multiples of $[__] in excess thereof, and the Common Securities Certificates
shall be issued in minimum denominations of $[__] Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual signature of at least one
Regular Trustee. Trust Securities Certificates bearing the manual signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates
or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject
to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate
in such transferee's name pursuant to Sections 5.4, 5.11 and 5.13.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Closing Date [and the Second Closing Date (if any)], the Regular Trustees shall cause
Trust Securities Certificates to be executed on behalf of the Trust and delivered by the Property Trustee as
provided in Sections 2.4 and 2.5.
Page 21
SECTION 5.4. Registration of Transfer and Exchange of Preferred Securities Certificates.
The Depositor shall keep or cause to be kept, at the office or agency maintained pursuant to
Section 5.8, a register or registers for the purpose of registering Trust Securities Certificates and
transfers and exchanges of Preferred Securities Certificates (the "Securities Register") in which the
registrar designated by the Depositor (the "Securities Registrar"), subject to such reasonable regulations as
it may prescribe, shall provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 5.10 in the case of the Common Securities Certificates) and
registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Bank
shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities Certificate at the
office or agency maintained pursuant to Section 5.8, the Regular Trustees or any one of them shall execute
and deliver to the Property Trustee, and the Property Trustee shall deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a
like aggregate Liquidation Amount dated the date of execution by such Regular Trustee or Trustees.
The Securities Registrar shall not be required to register the transfer of any Preferred
Securities that have been called for redemption. At the option of a Holder, Preferred Securities Certificates
may be exchanged for other Preferred Securities Certificates in authorized denominations of the same class
and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section 5.8.
Every Preferred Securities Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Securities
Registrar duly executed by the Holder or his attorney duly authorized in writing. Each Preferred Securities
Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed
of by the Property Trustee in accordance with such Person's customary practice.
No service charge shall be made for any registration of transfer or exchange of Preferred
Securities Certificates, but the Securities Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities
Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss
or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and
the Regular Trustees such security or indemnity
Page 22
as may be required by them to save each of them harmless, then in the absence of notice that
such Trust Securities Certificate shall have been acquired by a protected purchaser, the Regular Trustees, or
any one of them, on behalf of the Trust shall execute and make available for delivery, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities
Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Regular Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.6. Persons Deemed Securityholders.
The Trustees or the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses.
The Regular Trustees or the Depositor shall furnish or cause to be furnished to the Property
Trustee (a) semi-annually on or before January 15 and July 15 in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the Securityholders as of the most
recent record date and (b) promptly after receipt by any Regular Trustee or the Depositor of a request for
such list from the Property Trustee in order to enable the Property Trustee to discharge its obligations
under this Trust Agreement, a list of the type referred to in clause (a), in each case to the extent such
information is in the possession or control of the Regular Trustees or the Depositor and is not identical to
a previously supplied list or has not otherwise been received by the Property Trustee in its capacity as
Securities Registrar. The rights of Securityholders to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities, and the corresponding rights of the
Property Trustee shall be as provided in the Trust Indenture Act. Each Securityholder and each Owner shall be
deemed to have agreed not to hold the Trust, the Depositor, the Property Trustee or the Regular Trustees
accountable by reason of the disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 5.8. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the Regular Trustees (which consent
shall not be unreasonably withheld), an office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or
upon the
Page 23
Trustees in respect of the Trust Securities Certificates may be served. The Property Trustee
initially designates its Corporate Trust Office as its office and agency for such purposes. The Property
Trustee shall give prompt written notice to the Depositor and to the Securityholders of any change in the
location of the Securities Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the Payment Account and shall
report the amounts of such distributions to the Property Trustee and the Regular Trustees. Any Paying Agent
shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the
distributions referred to above. The Property Trustee may revoke such power and remove the Paying Agent in
its sole discretion. The Paying Agent shall initially be the Bank, and any co-paying agent chosen by the
Bank, and reasonably acceptable to the Regular Trustees. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Regular Trustees and the Property Trustee. In
the event that the Bank shall no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Property Trustee shall appoint a successor that is acceptable to the Regular
Trustees to act as Paying Agent (which shall be a bank or trust company). The Property Trustee shall cause
such successor Paying Agent or any additional Paying Agent appointed by the Property Trustee to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.1, 8.3
and 8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as
Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in
this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor.
On the Closing Date [and on the Second Closing Date (if any)], the Depositor shall acquire and
retain beneficial and record ownership of the Common Securities. To the fullest extent permitted by law,
other than a transfer in connection with a consolidation or merger of the Depositor into another corporation,
or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an
entirety to any Person, pursuant to _____________________, any attempted transfer of the Common Securities
shall be void. The Regular Trustees shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN CERTAIN LIMITED CIRCUMSTANCES SET
FORTH IN THE TRUST AGREEMENT (AS DEFINED BELOW)."
Page 24
SECTION 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a
typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will
receive a Definitive Preferred Securities Certificate representing such Owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive Preferred Securities Certificates
have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and effect;
(ii) the Securities Registrar, the Depositor and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount of and Distributions or Redemption Price
on the Preferred Securities evidenced by Book-Entry Preferred Securities Certificates and the giving
of instructions or directions to Owners of Preferred Securities evidenced by Book-Entry Preferred
Securities Certificates) as the sole Holder of Preferred Securities evidenced by Book-Entry Preferred
Securities Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict with any other provisions of this
Trust Agreement, the provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only
through the Clearing Agency and shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are
issued pursuant to Section 5.13, the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such
Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common Securities shall be issued to the
Depositor in the form of a definitive Common Securities Certificate.
Page 25
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is required under this Trust
Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners
pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the Preferred Securities
Certificates, and the Depositor is unable to locate a qualified successor, (b) the Depositor at its option
advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency
or (c) after the occurrence of a Stock Event of Default, Owners of Preferred Securities Certificates
representing beneficial interests aggregating at least a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Securities advise the Regular Trustees in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the Owners of Preferred Securities
Certificates, then the Regular Trustees shall notify the Clearing Agency and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates and the other Trustees of the occurrence of any such event
and of the availability of the Definitive Preferred Securities Certificates to Owners of such class or
classes, as applicable, requesting the same. Upon surrender to the Regular Trustees or the Securities
Registrar of the typewritten Preferred Securities Certificate or Certificates representing the Book Entry
Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the
Regular Trustees, or any one of them, shall execute the Definitive Preferred Securities Certificates in
accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees
shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by
the execution thereof by the Regular Trustees or any one of them.
SECTION 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity
as such) in accordance with Section 2.9, and the Securityholders shall not have any right or title therein
other than the undivided beneficial interest in the assets of the Trust conferred by their Trust Securities
and they shall have no right to call for any partition or division of property, profits or rights of the
Trust except as described below. The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or
similar rights and when issued and delivered to
Page 26
Securityholders against payment of the purchase price therefor will be fully paid and nonassessable
by the Trust. The Holders of the Trust Securities, in their capacities as such, 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.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a Stock Event of Default, the
Indenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Shares
fail to declare the principal of all of the Shares to be immediately due and payable, the Holders of at least
25% in aggregate Liquidation Amount of the Preferred Securities then Outstanding shall have such right by a
notice in writing to the Depositor and the Indenture Trustee; and upon any such declaration such principal
amount of and the accrued interest on all of the Shares shall become immediately due and payable, provided
that the payment of principal and interest on such Shares shall remain subordinated to the extent provided in
the Certificate of Determination.
At any time after such a declaration of acceleration with respect to the Shares has been made
and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as in
the Certificate of Determination provided, the Holders of a majority in aggregate Liquidation Amount of the
Outstanding Preferred Securities, by written notice to the Property Trustee, the Depositor and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Indenture Trustee a sum sufficient to pay
(A) all overdue dividends on all of the Shares,
(B) the principal of any Shares which have become due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Shares, and
(C) all sums paid or advanced by the Indenture Trustee under the Certificate of Determination and the
reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Shares, other than the non-payment of the principal of the
Shares which has become due solely by such acceleration, have been cured or waived as provided in
__________________.
The Holders of a majority in aggregate Liquidation Amount of the Outstanding Preferred
Securities may, on behalf of the Holders of all the Outstanding Preferred Securities, waive any past default
under the Certificate of Determination, except a default in the payment of principal or interest on the
Shares (unless such default has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the Indenture
Page 27
Trustee) or a default in respect of a covenant or provision which under the Certificate of
Determination cannot be modified or amended without the consent of the holder of each outstanding Note. No
such rescission shall affect any subsequent default or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an acceleration, or
rescission and annulment thereof, by Holders of the Preferred Securities all or part of which is represented
by Book-Entry Preferred Securities Certificates, a record date shall be established for determining Holders
of Outstanding Preferred Securities entitled to join in such notice, which record date shall be at the close
of business on the day the Property Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such
Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or
rescission and annulment, as the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day which is 90 days after such record date, such notice
of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and
without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the fullest extent permitted by
law and subject to the terms of this Trust Agreement and the Certificate of Determination, upon a Stock Event of
Default specified in Section ____________ of the Certificate of Determination, any Holder of Preferred
Securities shall have the right to institute a proceeding directly against the Depositor, pursuant to Section
__________ of the Certificate of Determination, for enforcement of payment to such Holder of the principal
amount of or interest on Shares having a principal amount equal to the Liquidation Amount of the Preferred
Securities of such Holder (a "Direct Action"). Except as set forth in Section 5.14(b) and this Section
5.14(c), the Holders of Preferred Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Shares.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section and as otherwise required by law, no Holder of Preferred Securities
shall have any right to vote or in any manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in
the terms of the
Page 28
Trust Securities Certificates, be construed so as to constitute the Securityholders from time
to time as partners or members of an association.
(b) So long as any Shares are held by the Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to such Shares, (ii) waive any past default
which is waivable under Section _____ of the Certificate of Determination, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Shares shall be due and payable or (iv) consent
to any amendment, modification or termination of the Certificate of Determination, where such consent shall
be required, without, in each case, obtaining the prior approval of the Holders of a majority in aggregate
Liquidation Amount of all Outstanding Preferred Securities, provided, however, that where a consent under the
Certificate of Determination would require the consent of each Holder of Shares affected thereby, no such
consent shall be given by the Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities, except by a subsequent vote of the Holders of Preferred Securities. The
Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received from
the Indenture Trustee with respect to the Shares. In addition to obtaining the foregoing approvals of the
Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Trustees shall, at the
expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such
action shall not cause the Trust to fail to be classified as a grantor trust for United States Federal income
tax purposes.
(c) If any proposed amendment to this Trust Agreement provides for, or the Trustees otherwise propose to
effect, (i) any action that would adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to this Trust Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust
Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective except with the approval of the
Holders of at least a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities.
Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made
if, as a result of such amendment, it would cause the Trust to fail to be classified as a grantor trust for
United States Federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of
the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Preferred Securityholder
of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any
such meeting, any business properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without further notice.
Page 29
SECTION 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The Property Trustee, however,
shall call a meeting of Preferred Securityholders to vote on any matter upon the written request of the
Preferred Securityholders of record of 25% or more of the Preferred Securities (based upon their aggregate
Liquidation Amount) and the Regular Trustees or the Property Trustee may, at any time in their discretion,
call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred Securities (based upon
their aggregate Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting
of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of
record present, in person or by proxy, holding a majority of the Preferred Securities (based upon their
aggregate Liquidation Amount) held by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Preferred Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $[__] of Liquidation Amount represented
by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by
proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the
Property Trustee, or with such other officer or agent of the Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such
joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received
in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder
shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.
Page 30
SECTION 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken without a meeting
and without prior notice if Securityholders holding a majority of all Outstanding Trust Securities (based
upon their Liquidation Amount) entitled to vote in respect of such action (or such larger proportion thereof
as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to notice of and to vote
at any meeting or to act by written consent, or to participate in any distribution on the Trust Securities in
respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Regular Trustees or the Property Trustee may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or the payment of a distribution or other
action, as the case may be, as a record date for the determination of the identity of the Securityholders of
record for such purposes.
SECTION 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided
or permitted by this Trust Agreement to be given, made or taken by Securityholders or Owners may be embodied
in and evidenced by one or more written instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such written instrument or instruments are
delivered to the Property Trustee. Such written instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders or Owners signing
such written instrument or instruments. Proof of execution of any such written instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be proved in any other manner which any Trustee
receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities Register.
Page 31
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and
the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or
the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take any action
hereunder with regard to any particular Trust Security may do so with regard to all or any part of the
Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such liquidation amount.
If any dispute arises between the Securityholders and the Property Trustee or among such
Securityholders or the Trustees with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this
Article VI, then the determination of such matter by the Property Trustee shall be conclusive and binding
with respect to such matter.
SECTION 6.9. Inspection of Records.
Upon reasonable written notice to the Regular Trustees and the Property Trustee, the records of
the Trust shall be open to inspection by Securityholders during normal business hours for any purpose
reasonably related to such Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself,
hereby represents and warrants for the benefit of the Depositor and the Securityholders that:
(a) the Property Trustee is a national association validly existing and in good standing under the laws of
the United States of America;
(b) the Property Trustee has the requisite power and authority to execute, deliver and perform its
obligations under this Trust Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation duly organized, validly existing and in good
standing;
Page 32
(d) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and
perform its obligations under this Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and the
Delaware Trustee and constitutes the valid and legally binding agreement of each of the Property Trustee and
the Delaware Trustee enforceable against each of them in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property Trustee and the Delaware Trustee and does not
require any approval of stockholders of the Property Trustee or the Delaware Trustee;
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants that:
(a) this Trust Agreement has been duly authorized, executed and delivered by the Depositor and constitutes
the valid and legally binding agreement of the Depositor enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general equity principles;
(b) the Trust Securities Certificates issued on the Closing Date [and the Second Closing Date (if any)] on
behalf of the Trust have been duly authorized and will have been duly and validly executed, issued and
delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements
of, this Trust Agreement and the Securityholders will be, as of each such date, entitled to the benefits of
this Trust Agreement; and
(c) there are no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf
of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Property Trustee or the Delaware Trustee, as the case may be,
of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in
the case of the Property Trustee, subject to the Trust
Page 33
Indenture Act and no implied covenants or obligations shall be read into this Trust Agreement
against the Property Trustee. Notwithstanding the foregoing, no provision of this Trust Agreement shall
require the Trustees to expend or risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to them. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section. Nothing in this Trust
Agreement shall be construed to release a Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct. To the extent that, at law or in equity, a Trustee
has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the
Securityholders, such Trustee shall not be liable to the Trust or to any Securityholder for such Trustee's
good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the
extent that they restrict the duties and liabilities of the Trustees otherwise existing at law or in equity,
are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of the
Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall
be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to
make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the Trustees are not personally liable
to it for any amount distributable in respect of any Trust Security or for any other liability in respect of
any Trust Security. This Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) The Property Trustee shall not be liable for any error of judgment made in good faith by an authorized
officer of the Property Trustee, unless it shall be conclusively proved by a court of competent
jurisdiction that the Property Trustee was negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of not less than a majority in aggregate
Liquidation Amount of the Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
Page 34
(iii) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation
of the Shares and the Payment Account shall be to deal with such Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any money received by it except as it may
otherwise agree with the Depositor in writing; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the Payment Account maintained by the
Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the compliance by the Regular Trustees or
the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee
be liable for the default or misconduct of the Regular Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within 90 days after the occurrence of any Event of Default actually known to a Responsible
Officer of the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.8, notice of such Event of Default to the Securityholders, the Regular Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of written notice of the Depositor's exercise of
its right to defer the payment of interest on the Shares pursuant to the Certificate of Determination, the
Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such
exercise to the Securityholders and the Regular Trustees, unless such exercise shall have been revoked.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from
acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or presented by the proper party or
parties;
(b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide
between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds the same
Page 35
ambiguous or inconsistent with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter
as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the
Property Trustee shall take such action, or refrain from taking such action, not inconsistent with this Trust
Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the
Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Regular Trustees contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable
that a matter be proved or established before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith
on its part, request and rely upon an Officer's Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Regular Trustees;
(e) the Property Trustee shall have no duty to see to any recording, filing or registration of any
instrument (including any financing or continuation statement or any filing under tax or securities laws) or
any rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be counsel to the Depositor or
any of its Affiliates, and may include any of its employees) and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the
Property Trustee shall have the right at any time to seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested
in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Securityholders;
Page 36
(i) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, custodians or nominees provided that the Property Trustee
shall be responsible for its own negligence or recklessness with respect to selection of any agent, attorney,
custodian or nominee appointed by it hereunder in due care;
(j) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request written instructions from the Holders of the Trust Securities which written
instructions may only be given by the Holders of the same proportion in aggregate Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities
in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such written instructions are received, and (iii) shall be protected in acting in
accordance with such written instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be
under any obligation to take any action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or obligation on the
Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise
any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall be taken as the
statements of the Depositor, and the Trustees do not assume any responsibility for their correctness. The
Trustees shall not be accountable for the use or application by the Depositor of the proceeds of the Shares.
SECTION 8.5. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its individual or any other
capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13 and
except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
Page 37
(a) to pay to the Trustees from time to time reasonable compensation for all services rendered by them
hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Trustee,
(ii) any Affiliate of any Trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any Trustee, and (iv) any employee or agent of the Trust or its Affiliates, (referred to herein as
an "Indemnified Person") from and against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or omitted by such Indemnified Person in good faith
on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of this Trust Agreement or the
resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a result of any amount due
pursuant to this Section 8.6.
The Depositor and any Trustee (subject to Section 8.8) may engage in or possess an interest in
other business ventures of any nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Trust Securities shall have no rights by virtue
of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed
wrongful or improper. Neither the Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to
the Trust, could be taken by the Trust, and the Depositor or any Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or
its Affiliates.
Page 38
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder. The Property Trustee shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the Property Trustee with respect
to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article.
(b) There shall at all times be one or more Regular Trustees hereunder. Each Regular Trustee shall be a
natural person at least 21 years of age who is an officer of the Depositor.
(c) There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with
its principal place of business in the State of Delaware and that otherwise meets the requirements of
applicable Delaware law that shall act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Certificate of Determination and the Guarantee are hereby excluded for purposes of Section
310(b)(1) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Depositor and the Regular Trustees, by agreed action of
the majority of such Trustees, shall have power to appoint, and upon the written request of the Regular
Trustees, the Depositor shall for such purpose join with the Regular Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power
Page 39
deemed necessary or desirable, subject to the other provisions of this Section. If the
Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or
in case a Stock Event of Default has occurred and is continuing, the Property Trustee alone shall have power
to make such appointment. Any co-trustee or separate trustee appointed pursuant to this Section shall either
be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal
entity with its principal place of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Depositor be required by any co-trustee or separate
trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title,
right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent
only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all rights, powers, duties, and obligations
hereunder in respect of the custody of securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustees specified hereunder shall be exercised solely by such Trustees and
not by such co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in
respect of any property covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly,
as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee
shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing executed by it, with the written
concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case a Stock Event of Default has occurred and is continuing, the
Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or
omission of the Property Trustee or any other trustee hereunder.
Page 40
(e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each
such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a
successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time by
giving written notice thereof to the Securityholders and the other Trustees. If the instrument of acceptance
by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee
within 30 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Stock Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by Act of the Common Securityholder. If a Stock Event of Default shall have occurred and
be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). A Regular Trustee
may be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as Trustee, or if a
vacancy shall occur in the office of any Trustee for any cause, at a time when no Stock Event of Default
shall have occurred and be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or Trustees, which successor
Trustee shall be domiciled outside of the State of California, and the retiring Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be
removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when a Stock Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Securityholders of a majority in aggregate Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and such successor Trustee shall comply with the applicable requirements of
Section 8.11. If a Regular Trustee shall resign, be removed or become incapable of acting as Regular
Trustee, at a time when a Stock Event of Default shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the Regular Trustee shall promptly appoint a
successor Regular Trustee and such successor Regular Trustee
Page 41
shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee
shall have been so appointed by the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee shall, at the expense of the Depositor, give notice of each resignation
and each removal of the Property Trustee or the Delaware Trustee and each appointment of a successor to the
Property Trustee or the DelawareTrustee to all Securityholders in the manner provided in Section 10.8 and
shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and
the address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any
Regular Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be
filled by (a) the unanimous act of the remaining Regular Trustees if there are at least two of them or (b)
otherwise by the Depositor (with the successor in each case being a Person who satisfies the eligibility
requirement for Regular Trustee or Delaware Trustee, as the case may be, set forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee, each successor Relevant
Trustee with respect to the Trust Securities shall execute an amendment hereto wherein each successor
Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the
rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust Agreement as shall be necessary
to provide for or facilitate the administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees and
upon the execution of such amendment the resignation or removal of the retiring Relevant Trustee shall become
effective to the extent provided therein and each such successor Relevant Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to
Page 42
such successor Relevant Trustee all such rights, powers and trusts referred to in the first or
second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the time of such
acceptance such successor Relevant Trustee shall be qualified and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of such Trustee, shall be the successor of such Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the
Trust or any other obligor upon the Trust Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions on the Trust Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether
the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding
or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of
the Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to
the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts
due the Property Trustee.
Page 43
Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or
compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 8.14. Reports by Property Trustee.
(a) Not later than 60 days following May 15 of each year commencing with __________, 20__, the Property
Trustee shall transmit to all Securityholders in accordance with Section 10.8, and to the Depositor, a brief
report dated as of such May 15 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to the best of its knowledge it has
continued to be eligible under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its possession as Property Trustee since the date of its last
report and any action taken by the Property Trustee in the performance of its duties hereunder which
it has not previously reported and which in its opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders such reports concerning the
Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Property Trustee with each national stock exchange, the NASDAQ National Market or such other interdealer
quotation system or self-regulatory organization upon which the Trust Securities are listed or traded
(information regarding each such listing to be provided to the Property Trustee by the Depositor), with the
Commission and with the Depositor.
SECTION 8.15. Reports to the Property Trustee.
The Depositor and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if
any) and the compliance certificate required by Section 314(a) of the Trust Indenture Act in the form, in the
manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this
Trust Agreement that relate to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to
Page 44
be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given
in the form of an Officer's Certificate.
SECTION 8.17. Number of Trustees.
(a) The number of Trustees shall initially be five, provided that the Holder of all of the Common
Securities by written instrument may increase or decrease the number of Regular Trustees. The Property
Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and, if such Trustee is a Regular Trustee, the
number of Regular Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is
increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the
duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee
or Regular Trustees in accordance with Section 8.10, the Regular Trustees in office, regardless of their
number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular Trustees by this Trust Agreement.
SECTION 8.18. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in
Section 2.7(a); and
(b) The Regular Trustees shall have power to delegate from time to time to such of their number or to the
Depositor the doing of such things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement, as set
forth herein.
SECTION 8.19. Delaware Trustee.
It is expressly understood and agreed by the parties hereto that, in fulfilling its obligations
as Delaware Trustee hereunder on behalf of the Trust, (i) any agreements or instruments executed and
delivered by The Bank of New York (Delaware) are executed and delivered not in its individual capacity but
solely as Delaware Trustee under this Trust Agreement in exercise of the powers and authority conferred and
vested in it, (ii) each of the representations, undertakings and agreements herein made by The Bank of New
York (Delaware) on the part of the Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by The Bank of
Page 45
New York (Delaware) in its individual capacity but is made and intended for the purpose of
binding only the Trust, and (iii) under no circumstances shall The Bank of New York (Delaware) in its
individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be
liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken
by the Trust under this Trust Agreement, except if such breach or failure is due to any negligence or willful
misconduct of the Delaware Trustee.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on ____________, _____ (the
"Expiration Date"), and the Trust Property shall be distributed in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination Event", upon the
occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the
Depositor;
(b) the written direction to the Property Trustee from the Depositor at any time to dissolve the Trust
and distribute Shares to Securityholders in exchange for the Preferred Securities (which direction is optional
and wholly within the discretion of the Depositor);
(c) the redemption of all of the Preferred Securities in connection with the redemption of all the
Shares; and
(d) the entry of an order for dissolution of the Trust by a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the Trust created and
continued hereby shall terminate upon the latest to occur of the following: (a) the distribution by the
Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust;
and (c) the discharge of all administrative duties of the Regular Trustees, including the performance of any
tax reporting obligations with respect to the Trust or the Securityholders.
Page 46
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the
Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously as the Trustees determine to
be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, to each Securityholder a Like Amount of Shares, subject to Section 9.4(d). Notice of
liquidation shall be given by the Property Trustee at the expense of the Depositor by first-class mail,
postage prepaid mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder
of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation
shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Shares; and
(iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities
Certificates for Shares, or if Section 9.4(d) applies, receive a Liquidation Distribution.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Trust
and distribution of the Shares to Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be (i) one Business Day prior to the Liquidation Date or (ii) in the event that the
Preferred Securities are not in book-entry form, the date 15 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Shares in exchange for the Outstanding
Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Trust Securities
will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Shares will be
issued to holders of Trust Securities Certificates, upon surrender of such certificates to the Property
Trustee or its agent for exchange, (iii) the Depositor shall use its best efforts to have the Shares listed
on the New York Stock Exchange or on such other exchange, interdealer quotation system or self-regulatory
organization as the Preferred Securities are then listed, (iv) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of Shares, accruing interest at the rate
provided for in the Shares from the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates
with respect to such Shares) and (v) all rights of Securityholders holding Trust Securities will cease,
except the right of such Securityholders to receive Shares upon surrender of Trust Securities Certificates.
Page 47
(d) In the event that, notwithstanding the other provisions of this Section 9.4, whether because of an
order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Shares
in the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property
shall be liquidated, and the Trust shall be wound-up by the Property Trustee in such manner as the Property
Trustee determines. In such event, Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such winding up, the Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the
next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive
Liquidation Distributions upon any such winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Stock Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any Person, except pursuant to
this Section 9.5 or Section 9.4. At the request of the Depositor, with the consent of the Holders of at
least a majority in aggregate Liquidation Amount of the Outstanding Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that
(i) such successor entity either (x) expressly assumes all of the obligations of the Trust with respect to
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 the same as the Preferred Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise, (ii) the Depositor expressly appoints a trustee of
such successor entity possessing substantially the same powers and duties as the Property Trustee as the
holder of the Shares, (iii) the Preferred Securities are listed or traded, or any Successor Securities will
be listed upon notification of issuance, on any national securities exchange or other organization on which
the Preferred Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including any Successor Securities) in
any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation, replacement, conveyance,
Page 48
transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (x) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (y) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (viii) the Depositor owns all of the common securities of such
successor entity and the Guarantor guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall
not, except with the consent of holders of 100% in Liquidation Amount of the Preferred Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States Federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Securityholders.
Except as otherwise provided in Section 9.2, the death, dissolution, termination, bankruptcy or
incapacity of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate
to terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor entitle the legal
successors, representatives or heirs of such Person or any Securityholder for such Person, to claim an
accounting, take any action or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
SECTION 10.2. Amendment.
(a) In addition to amendments contemplated by Section 8.11, this Trust Agreement may be amended from
time to time by the Regular Trustees and the Depositor, without the consent of any Securityholders, (i) to cure
any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States Federal income tax purposes as a grantor trust at
all times that any Trust Securities are outstanding or to ensure that the Trust will not be required to
register as an investment company under the 1940 Act; provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any
Page 49
Securityholder, and any such amendments of this Trust Agreement shall become effective when
notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended
by the Trustees and the Depositor with (i) the consent of Securityholders representing a majority (based upon
aggregate Liquidation Amount) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect the Trust's status as a grantor trust for United States
Federal income tax purposes or the Trust's exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent
of each affected Securityholder, this Trust Agreement may not be amended to (i) change the amount or timing of
any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of the Securityholders, this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no Trustee shall enter into or
consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an investment company under the 1940 Act or fail or cease to be classified as a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor, the Property Trustee or the
Delaware Trustee without the consent of the Depositor, the Property Trustee or the Delaware Trustee, as the
case may be.
(f) In the event that any amendment to this Trust Agreement is made, the Regular Trustees shall
promptly provide to the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment
to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an Officer's Certificate stating that
any amendment to this Trust Agreement is in compliance with this Trust Agreement and that all conditions
precedent, if any, to such amendment have been complied with.
SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be
invalid, illegal or unenforceable, the validity, legality and
Page 50
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST
AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that is not a Business
Day, then such payment need not be made on such date but may be made on the next succeeding day that is a
Business Day (except as otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue thereon for the period after
such date.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to
the Depositor, the Trust or the Relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger, sale or other transaction involving the Depositor that is permitted
[under _______] and pursuant to which the assignee agrees in writing to perform the Depositor's obligations
hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not affect the construction
of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may
be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail,
hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Preferred
Securityholder, to such Preferred Securityholder as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Common Securityholder or the Depositor, to Southern
California Edison Company, 2244 Walnut Grove Avenue, Rosemead, California 91770, Attention: Corporate
Secretary, facsimile no.: 626-302-2662. Any notice to Preferred Securityholders shall also be given to such
owners as have, within two years preceding the giving of such notice, filed their names and addresses with
the Property Trustee for that purpose. Such notice, demand or other communication
Page 51
to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this Trust Agreement is
required or permitted to be given or served to or upon the Trust, the Property Trustee, the Delaware Trustee
or the Regular Trustees shall be given in writing addressed (until another address is published by the Trust)
as follows: (a) with respect to the Property Trustee to The Bank of New York Trust Company, N.A., at its
[Corporate Trust Office,] Attention: _____________; (b) with respect to the Delaware Trustee, to The Bank of
New York (Delaware) , _______________________, (c) with respect to the Regular Trustees, to them c/o
Southern California Edison Company, 2244 Walnut Grove Avenue, Rosemead, California 91770, marked "Attention
Regular Trustees of SCE Trust [__]"; and (d) with respect to the Trust, to its principal office specified in
Section 2.1, with a copy to the Property Trustee. Such notice, demand or other communication to or upon the
Trust or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the Securityholders that, until
at least one year and one day after the Trust has been terminated in accordance with Article IX, they shall
not file, or join in the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust
under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense of the Depositor, it shall
file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the
Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Trustee or the Trust may assert. The provisions of this Section 10.9
shall survive the termination of this Trust Agreement.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be
part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust
Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required
to be included in this Trust Agreement by any of the
Page 52
provisions of the Trust Indenture Act, such required provision shall control. If any provision
of this Trust Agreement modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this Trust Agreement as so modified or
excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the
Securities as equity securities representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Certificate of Determination.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A
SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL
CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE CERTIFICATE OF DETERMINATION, AND SHALL
CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER
AND SUCH OTHERS.
THE DEPOSITOR, THE TRUST AND EACH HOLDER AND BENEFICIAL OWNER OF A PREFERRED SECURITY (BY ITS
ACCEPTANCE OF AN INTEREST THEREIN) SHALL BE DEEMED TO HAVE AGREED TO TREAT THE SHARES AS INDEBTEDNESS FOR ALL
U.S. TAX PURPOSES AND THE PREFERRED SECURITY AS EVIDENCE OF AN INDIRECT BENEFICIAL OWNERSHIP INTEREST IN THE
SHARES.
Page 53
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust Agreement to be
duly executed, all as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Property Trustee
By: ________________________________________
Name: _______________________________________
Title: _____________________________________
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
[MARY C. SIMPSON],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Page 54
[GEORGE T. TABATA],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
[MICHAEL A. HENRY],
as Regular Trustee
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Page 55
EXHIBIT A
[CERTIFICATE OF TRUST
OF
SCE TRUST [__]
THIS Certificate of Trust of SCE Trust [__] (the "Trust"), dated ___________, is being duly
executed and filed by the undersigned, as trustees of the Trust, with the Secretary of State of the State of
Delaware to form a [business][statutory] trust under the Delaware [Business][Statutory] Trust Act (12 Del. C.
ss.3801 et seq.).
1. Name. The name of the statutory trust formed hereby is SCE Trust [__].
2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of
business in the State of Delaware are The Bank of New York (Delaware),
[______________________________________]
[____________________________________________________________________].
3. Effective Date. This Certificate of Trust shall be effective upon filing with the Secretary of State
of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE), as trustee
By: __________________________________
Name: ________________________________
Title: ______________________________
[THE BANK OF NEW YORK TRUST COMPANY, N.A.], as
trustee
By: __________________________________
Name: ________________________________
Title: _______________________________
A-1
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT IN CERTAIN LIMITED CIRCUMSTANCES
SET FORTH IN THE TRUST AGREEMENT
(AS DEFINED BELOW).
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
C-1
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
SCE TRUST [__]
_____% COMMON SECURITIES
(LIQUIDATION AMOUNT $[__] PER COMMON SECURITY)
SCE Trust [__], a statutory trust created under the laws of the State of Delaware (the
"Trust"), hereby certifies that Southern California Edison Company (the "Holder") is the registered owner of
the number set forth above of common securities of the Trust representing beneficial interests of the Trust
and designated the _____% Common Securities (liquidation amount $[__] per Common Security) (the "Common
Securities"). Except as provided in Section 5.10 of the Trust Agreement (as defined below), the Common
Securities are not transferable and any attempted transfer hereof shall, to the fullest extent permitted by
law, be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions
of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of _________, 20__, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to
the benefits thereunder.
IN WITNESS WHEREOF, one of the Regular Trustees of the Trust has executed this certificate this
______ day of ___________________, _______.
By: ________________________________________
Name: _____________________________________
Title: Regular Trustee
B-1
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ___________, 20__, between Southern California Edison Company, a
California corporation, and SCE Trust [__], a Delaware statutory trust (the "Trust"). Capitalized terms used
but not defined herein have the meanings ascribed to such terms in the Trust Agreement (as defined below).
WHEREAS, the Trust intends to issue its Common Securities (the "Common Securities") to and
receive Shares from Southern California Edison Company and to issue and sell _____% [________ Preferred
Securities], Series [__] (the "Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of
___________, 20__, as the same may be amended from time to time (the "Trust Agreement");
WHEREAS, Southern California Edison Company will directly or indirectly own all of the Common
Securities of the Trust and will issue the Shares;
NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred Securities,
which purchase Southern California Edison Company hereby agrees shall benefit Southern California Edison
Company and which purchase Southern California Edison Company acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Southern California Edison Company and the Trust hereby agree as
follows:
ARTICLE I
SECTION 1.1. Guarantee by Southern California Edison Company
Subject to the terms and conditions hereof, Southern California Edison Company hereby
irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
C-1
SECTION 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon the later of (a) the
date on which full payment has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, exchange or otherwise) and (b) the date on which there are
no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of Preferred Securities or any Beneficiary must
restore payment of any sums paid under the Preferred Securities, under any Obligation, under the Guarantee
Agreement dated as of the date hereof between Southern California Edison Company and The Bank of New York
Trust Company, N.A., as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement
is continuing, irrevocable, unconditional and absolute.
SECTION 1.3. Waiver of Notice.
Southern California Edison Company hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and Southern California Edison Company hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands.
SECTION 1.4. No Impairment.
The obligations, covenants, agreements and duties of Southern California Edison Company under
this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the extension of time for the payment by the Trust of all or any portion of the Obligations
or for the performance of any other obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to
enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of,
Southern California Edison Company with respect to the happening of any of the foregoing.
C-2
SECTION 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Southern California Edison Company
and Southern California Edison Company waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against Southern California Edison Company.
SECTION 1.6. Subrogation.
Southern California Edison Company shall be subrogated to all (if any) rights of any
Beneficiary against the Trust, in respect of any amounts paid to the Beneficiaries by Southern California
Edison Company under this Agreement; provided, however, that Southern California Edison Company shall not
(except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire against the Trust by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the successors, assigns,
receivers, trustees and representatives of Southern California Edison Company and shall inure to the benefit
of the Beneficiaries.
SECTION 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any series are
outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to
the holders of the Preferred Securities.
SECTION 2.3. Notices.
Any notice, request or other communication required or permitted to be given hereunder shall be
given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by
mail) or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when
mailed or upon receipt of a confirmation, if sent by facsimile):
SCE Trust [__]
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-1930
Attention: Corporate Governance
C-3
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-2662
Attention: Corporate Secretary
SECTION 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS AGREEMENT is executed as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By:________________________________
Name:______________________________
Title:_____________________________
SCE TRUST [__]
By:________________________________
Name:______________________________
Title: Regular Trustee
C-4
EXHIBIT D
IF THE PREFERRED SECURITY IS TO BE EVIDENCED BY A GLOBAL CERTIFICATE, INSERT--This Preferred
Securities Certificate is a Book-Entry Preferred Securities Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The Depository Trust Company (the
"Depositary") or a nominee of the Depositary. This Preferred Securities Certificate is exchangeable for
Preferred Securities Certificates registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Trust Agreement and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary, except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York) to SCE Trust [__] or its agent for registration of transfer,
exchange or payment, and any Preferred Securities Certificate issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
P-
CUSIP NO.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
SCE TRUST [__]
____% [____________ PREFERRED SECURITIES, SERIES [__]
(LIQUIDATION AMOUNT $[__] PER PREFERRED SECURITY)
SCE Trust [__], a statutory trust created under the laws of the State of Delaware (the
"Trust"), hereby certifies that ___________________ (the "Holder") is the registered owner of the number set
forth above of preferred securities of the Trust representing an undivided beneficial interest in the assets
of the Trust and designated the SCE Trust [__] _____% [_______________] Preferred Securities, Series [__]
(liquidation amount $[__] per Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.4 of the
Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Trust Agreement of the Trust dated as of ____________, 20__, as the same may be
amended from time to time (the "Trust Agreement") including the designation of the terms of Preferred
Securities as set forth therein. The Holder is
D-1
entitled to the benefits of the Guarantee Agreement dated as of ___________, 20__, between
Southern California Edison Company, a California corporation, and The Bank of New York Trust Company, N.A.,
as guarantee trustee (as the same may be amended from time to time, the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge
upon written request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to
the benefits thereunder.
IN WITNESS WHEREOF, one of the Regular Trustees of the Trust has executed this certificate this
_____ day of ________, ____.
SCE TRUST [__]
By: ________________________________
Name: ____________________________
Title: Regular Trustee
D-1
`
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to:
________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________________________________________
agent to transfer this Preferred Securities Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________
Signature:
________________________________________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Preferred Securities Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and
loan associations and credit unions with membership in an approved signature guarantee medallion program),
pursuant to SEC Rule 17Ad-15.
GUARANTEE AGREEMENT
Between
SOUTHERN CALIFORNIA EDISON COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.
(as Trustee)
dated as of
_____________________
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a).................................................4.1(a)
310(b..................................................4.1(c), 2.8
310(c).................................................Inapplicable
311(a).................................................2.2(b)
311(b).................................................2.2(b)
311(c).................................................Inapplicable
312(a).................................................2.2(a)
312(b).................................................2.2(b)
313....................................................2.3
314(a).................................................2.4
314(b).................................................Inapplicable
314(c).................................................2.5
314(d).................................................Inapplicable
314(e).................................................1.1, 2.5, 3.2
314(f).................................................2.1, 3.2
315(a).................................................3.1(d)
315(b).................................................2.7
315(c).................................................3.1
315(d).................................................3.1(d)
316(a).................................................1.1, 2.6, 5.4
316(b).................................................5.3
316(c).................................................8.2
317(a).................................................Inapplicable
317(b).................................................Inapplicable
318(a).................................................2.1(b)
318(b).................................................2.1
318(c).................................................2.1(a)
* This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall
not affect the interpretation of any of its terms or provisions.
Page i
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.............................................................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application........................................4
Section 2.2 List of Holders; Preferential Claims....................................4
Section 2.3 Reports by the Guarantee Trustee........................................4
Section 2.4 Periodic Reports to the Guarantee Trustee...............................4
Section 2.5 Evidence of Compliance with Conditions Precedent........................5
Section 2.6 Events of Default; Waiver...............................................5
Section 2.7 Event of Default; Notice................................................5
Section 2.8 Conflicting Interests...................................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee..............................5
Section 3.2 Certain Rights of Guarantee Trustee.....................................7
Section 3.3 Indemnity...............................................................8
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee: Eligibility..........................................9
Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee...........9
ARTICLE V
GUARANTEE
Section 5.1 Guarantee..............................................................10
Section 5.2 Waiver of Notice and Demand............................................10
Section 5.3 Obligations Not Affected...............................................10
Section 5.4 Rights of Holders......................................................11
Page ii
Section 5.5 Guarantee of Payment...................................................11
Section 5.6 Subrogation............................................................11
Section 5.7 Independent Obligations................................................12
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1 Subordination..........................................................12
Section 6.2 Pari Passu Guarantees..................................................12
ARTICLE VII
TERMINATION
Section 7.1 Termination............................................................12
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Successors and Assigns.................................................12
Section 8.2 Amendments.............................................................13
Section 8.3 Notices................................................................13
Section 8.4 Benefit................................................................14
Section 8.5 Interpretation.........................................................14
Section 8.6 Governing Law..........................................................15
Page iii
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT, dated as of __________, entered into between SOUTHERN CALIFORNIA EDISON
COMPANY, a California corporation having its principal office at 2244 Walnut Grove Avenue, Rosemead,
California 91770 (the "Guarantor"), and THE BANK OF NEW YORK TRUST COMPANY, N.A., as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of SCE Trust [__], a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of ______________(the
"Trust Agreement"), among Southern California Edison Company, a California corporation (the "Company"), as
Depositor, the Property Trustee named therein, the Delaware Trustee named therein, the Regular Trustees named
therein and the several Holders as defined therein, the Issuer is issuing up to $[________] aggregate
Liquidation Amount (as defined in the Trust Agreement) of its [______]% [__________] Preferred Securities,
Series [__] (Liquidation Amount $[__] per Preferred Security) (the "Preferred Securities"), representing
undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust
Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the proceeds thereof,
together with the proceeds from the issuance of the Common Securities (as defined in the Trust Agreement),
will be used to purchase the Shares (as defined in the Trust Agreement) of the Company which will be
deposited with The Bank of New York Trust Company, N.A., as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the Preferred Securities.
Page 1
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Guarantee Agreement, the terms set forth below shall, unless the
context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect
on the date hereof.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Event of Default" means (i) a default by the Guarantor on any of its payment obligations under
this Guarantee Agreement and (ii) a default by the Guarantor on any other obligation hereunder that remains
uncured after 30 days from the occurrence thereof.
"Guarantee Payments" means the following payments or distributions, without duplication, with
respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any
accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand available therefor at such time, (ii) the
redemption price, including all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer, unless Notes are distributed to the
Holders, the lesser of (a) the aggregate of the Liquidation Amount of $[__] per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the date of payment, to the extent the
Issuer shall have funds on hand available therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York Trust Company, N.A., until a Successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the Issuer, of any
Preferred Securities; provided, however, that in determining whether the holders of the requisite percentage
of Preferred Securities have given any request, notice,
Page 2
consent or waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee Trustee, or any Affiliate
of the Guarantor or the Guarantee Trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Preferred Securities" means, except as provided by the
Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the
Liquidation Amount of all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a certificate signed by the Chairman
of the Board, Chief Executive Officer, President, a Vice President, the Treasurer, an Associate Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person, and delivered to
the Guarantee Trustee. Any Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's Certificate has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation undertaken
by such officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or investigation as, in such
officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such condition or covenant has
been complied with.
"Person" means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any any Vice President, any
Assistant Vice President, any Managing Director, any Assistant Secretary, any Assistant Treasurer, any Senior
Trust Officer, any Assistant Trust Officer, any Trust Officer or any other officer associated with the
corporate trust department of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications
to act as Guarantee Trustee under Section 4.1.
Page 3
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. (a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 2.2 List of Holders; Preferential Claims. (a) The Guarantor shall furnish or cause to be furnished
to the Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of each year, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of
Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in
each case to the extent such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section 311(a), Section
311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Guarantee Trustee. Not later than 60 days following May 15 of each year,
commencing May 15, ____, the Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
Section 2.4 Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the Guarantee
Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section
314 of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314(a)(4) of
the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee
Trustee such evidence of compliance with such
Page 4
conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to such Section 314(c)(1) may be given in the form of an Officer's Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right consequent therefrom.
Section 2.7 Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default actually known to the Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default, unless such defaults have been cured or
waived before the giving of such notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of
the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice, of such Event of Default.
Section 2.8 Conflicting Interests. The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee. (a) This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.
Page 5
(b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall
enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing
or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee
Trustee from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or waiving of all
such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are specifically set forth
in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
Trustee may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they conform to the requirements
of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith
by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and
Page 6
(iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend
or risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
Section 3.2 Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officer's Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee
shall deem it desirable that a matter be proved or established before taking, suffering or omitting to
take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an
Officer's Certificate which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the written advice or opinion
of such legal counsel with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate security and indemnity satisfactory
to it, against the costs,
Page 7
expenses (including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(v)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document.
(vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until such instructions are
received, and (C) shall be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation
on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority.
Section 3.3 Indemnity. The Guarantor agrees to indemnify the Guarantee Trustee and its officers,
directors, employees, representatives and agents for, and to hold it and such persons harmless against, any
loss, liability or expense of whatever kind or nature regardless of their merit, demanded, asserted or
claimed against the Guarantee Trustee and incurred without negligence or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee
Agreement, including without limitation the costs and expenses of defending itself (including reasonable
attorneys' and consultants' fees and expenses) against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement.
The indemnification provided hereunder shall survive the termination
Page 8
of this Guarantee Agreement and the resignation or removal of the Guarantee Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee: Eligibility. (a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has
a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section and to the extent permitted by the Trust Indenture
Act, 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 condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section
4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture Act.
Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee. (a) Subject to Section 4.2(b),
the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee
Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.
Page 9
(d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as
and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders.
Section 5.2 Waiver of Notice and Demand. 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,
any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands.
Section 5.3 Obligations Not Affected. 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 the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions (other than an extension of time for payment of Distributions that results from the extension
of any interest payment period on the Notes as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of the Holders or the
Guarantee Trustee to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
Page 10
(d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.
Section 5.4 Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the
Guarantee Trustee, the Issuer or any other Person.
Section 5.5 Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of
performance or collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of
Shares to Holders as provided in the Trust Agreement.
Section 5.6 Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against
the Issuer, 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 the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire against the Issuer by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts are 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 hold such
amount in trust for the Holders and to pay over such amount to the Holders.
Page 11
Section 5.7 Independent Obligations. The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as 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 (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1 Subordination. The obligations of the Guarantor under this Guarantee Agreement will constitute
unsecured obligations of the Guarantor and will rank subordinate and junior in right of payment to all other
liabilities of the Guarantor except those made pari passu or subordinate to such obligations expressly by
their terms.
Section 6.2 Pari Passu Guarantees. The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar Guarantee Agreements issued by the
Guarantor on behalf of the holders of preferred securities issued by any other trusts established by Edison
International or its Affiliates.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Guarantee Agreement shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price of all Preferred Securities, (ii) the distribution of Shares to
the Holders in exchange for all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time
any Holder must restore payment of any sums paid with respect to Preferred Securities or this Guarantee
Agreement.
Page 12
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Successors and Assigns. 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 of the Preferred Securities from time to time outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2 Amendments. Except with respect to any changes which do not adversely affect the rights of the
Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee
Agreement may only be amended with the prior written approval of the Holders of a Majority in Liquidation
Amount of Preferred Securities. The provisions of Article VI of the Trust Agreement concerning meetings of
the Holders shall apply to the giving of such approval.
Section 8.3 Notices. Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other address,
facsimile number or to the attention of such other Person as the Guarantor may give notice to the Holders:
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-2662
Attention: Corporate Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the
Guarantee Trustee's) respective addresses set forth below or such other address as the Guarantee Trustee on
behalf of the Issuer may give notice to the Holders:
SCE Trust [__]
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-1930
Attention: Corporate Governance
Page 13
with a copy to:
The Bank of New York Trust Company, N.A.
Facsimile No.:
Attention:
(c) if given to the Guarantee Trustee, at the Guarantee Trustee's address set forth below or
such other address as the Guarantee Trustee may give notice to the Holders:
The Bank of New York Trust Company, N.A.
Facsimile No.:
Attention:
(d) if given to any Holder, at the address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on the date of such refusal or
inability to deliver.
Section 8.4 Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
Section 8.5 Interpretation. In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this
Guarantee Agreement as modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are to Articles and
Sections of this Guarantee Agreement unless otherwise specified;
Page 14
(e) a term defined in the Trust Indenture Act has the same meaning when used in this
Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise
requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.
Section 8.6 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF, EXCEPT THAT THE RIGHTS, DUTIES, IMMUNITIES AND INDEMNITIES OF THE GUARANTEE TRUSTEE SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Page 15
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the same
instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By:_______________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Guarantee Trustee
By:_______________________________
Name:
Title:
Page 16
GUARANTEE AGREEMENT
Between
SOUTHERN CALIFORNIA EDISON COMPANY
(as Guarantor)
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.
(as Trustee)
dated as of
_____________________
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a).................................................4.1(a)
310(b..................................................4.1(c), 2.8
310(c).................................................Inapplicable
311(a).................................................2.2(b)
311(b).................................................2.2(b)
311(c).................................................Inapplicable
312(a).................................................2.2(a)
312(b).................................................2.2(b)
313....................................................2.3
314(a).................................................2.4
314(b).................................................Inapplicable
314(c).................................................2.5
314(d).................................................Inapplicable
314(e).................................................1.1, 2.5, 3.2
314(f).................................................2.1, 3.2
315(a).................................................3.1(d)
315(b).................................................2.7
315(c).................................................3.1
315(d).................................................3.1(d)
316(a).................................................1.1, 2.6, 5.4
316(b).................................................5.3
316(c).................................................8.2
317(a).................................................Inapplicable
317(b).................................................Inapplicable
318(a).................................................2.1(b)
318(b).................................................2.1
318(c).................................................2.1(a)
* This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall
not affect the interpretation of any of its terms or provisions.
Page i
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.............................................................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application........................................4
Section 2.2 List of Holders; Preferential Claims....................................4
Section 2.3 Reports by the Guarantee Trustee........................................4
Section 2.4 Periodic Reports to the Guarantee Trustee...............................4
Section 2.5 Evidence of Compliance with Conditions Precedent........................5
Section 2.6 Events of Default; Waiver...............................................5
Section 2.7 Event of Default; Notice................................................5
Section 2.8 Conflicting Interests...................................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee..............................5
Section 3.2 Certain Rights of Guarantee Trustee.....................................7
Section 3.3 Indemnity...............................................................8
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee: Eligibility..........................................9
Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee...........9
ARTICLE V
GUARANTEE
Section 5.1 Guarantee..............................................................10
Section 5.2 Waiver of Notice and Demand............................................10
Section 5.3 Obligations Not Affected...............................................10
Section 5.4 Rights of Holders......................................................11
Page ii
TABLE OF CONTENTS
(continued)
Page
Section 5.5 Guarantee of Payment...................................................11
Section 5.6 Subrogation............................................................11
Section 5.7 Independent Obligations................................................12
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1 Subordination..........................................................12
Section 6.2 Pari Passu Guarantees..................................................12
ARTICLE VII
TERMINATION
Section 7.1 Termination............................................................12
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Successors and Assigns.................................................12
Section 8.2 Amendments.............................................................13
Section 8.3 Notices................................................................13
Section 8.4 Benefit................................................................14
Section 8.5 Interpretation.........................................................14
Section 8.6 Governing Law..........................................................15
Page iii
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT, dated as of __________, entered into between SOUTHERN CALIFORNIA EDISON
COMPANY, a California corporation having its principal office at 2244 Walnut Grove Avenue, Rosemead,
California 91770 (the "Guarantor"), and THE BANK OF NEW YORK TRUST COMPANY, N.A., as trustee (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of SCE Trust [__], a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of ______________(the
"Trust Agreement"), among Southern California Edison Company, a California corporation (the "Company"), as
Depositor, the Property Trustee named therein, the Delaware Trustee named therein, the Regular Trustees named
therein and the several Holders as defined therein, the Issuer is issuing up to $[________] aggregate
Liquidation Amount (as defined in the Trust Agreement) of its [______]% [__________] Preferred Securities,
Series [__] (Liquidation Amount $[__] per Preferred Security) (the "Preferred Securities"), representing
undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust
Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the proceeds thereof,
together with the proceeds from the issuance of the Common Securities (as defined in the Trust Agreement),
will be used to purchase the Shares (as defined in the Trust Agreement) of the Company which will be
deposited with The Bank of New York Trust Company, N.A., as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the Preferred Securities.
Page 1
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Guarantee Agreement, the terms set forth below shall, unless the
context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect
on the date hereof.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Event of Default" means (i) a default by the Guarantor on any of its payment obligations under
this Guarantee Agreement and (ii) a default by the Guarantor on any other obligation hereunder that remains
uncured after 30 days from the occurrence thereof.
"Guarantee Payments" means the following payments or distributions, without duplication, with
respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any
accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid on the Preferred
Securities, to the extent the Issuer shall have funds on hand available therefor at such time, (ii) the
redemption price, including all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Preferred Securities called for redemption by the Issuer, to the
extent the Issuer shall have funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer, unless Notes are distributed to the
Holders, the lesser of (a) the aggregate of the Liquidation Amount of $[__] per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the date of payment, to the extent the
Issuer shall have funds on hand available therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York Trust Company, N.A., until a Successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the Issuer, of any
Preferred Securities; provided, however, that in determining whether the holders of the requisite percentage
of Preferred Securities have given any request, notice,
Page 2
consent or waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee Trustee, or any
Affiliate of the Guarantor or the Guarantee Trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Preferred Securities" means, except as provided by the
Trust Indenture Act, a vote by the Holder(s), voting separately as a class, of more than 50% of the
Liquidation Amount of all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a certificate signed by the Chairman
of the Board, Chief Executive Officer, President, a Vice President, the Treasurer, an Associate Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of such Person, and delivered to
the Guarantee Trustee. Any Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's Certificate has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or investigation undertaken
by such officer in rendering the Officer's Certificate;
(c) a statement that such officer has made such examination or investigation as, in such
officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such condition or covenant has
been complied with.
"Person" means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any any Vice President, any
Assistant Vice President, any Managing Director, any Assistant Secretary, any Assistant Treasurer, any Senior
Trust Officer, any Assistant Trust Officer, any Trust Officer or any other officer associated with the
corporate trust department of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications
to act as Guarantee Trustee under Section 4.1.
Page 3
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. (a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 2.2 List of Holders; Preferential Claims. (a) The Guarantor shall furnish or cause to be furnished
to the Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of each year, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of
Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished, in
each case to the extent such information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section 311(a), Section
311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Guarantee Trustee. Not later than 60 days following May 15 of each year,
commencing May 15, ____, the Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
Section 2.4 Periodic Reports to the Guarantee Trustee. The Guarantor shall provide to the Guarantee
Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section
314 of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314(a)(4) of
the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee
Trustee such evidence of compliance with such
Page 4
conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to such Section 314(c)(1) may be given in the form of an Officer's Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right consequent therefrom.
Section 2.7 Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default actually known to the Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default, unless such defaults have been cured or
waived before the giving of such notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of
the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice, of such Event of Default.
Section 2.8 Conflicting Interests. The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Guarantee Trustee. (a) This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest
in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.
Page 5
(b) If an Event of Default has occurred and is continuing, the Guarantee Trustee shall
enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing
or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee
Trustee from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or waiving of all
such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are specifically set forth
in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
Trustee may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they conform to the requirements
of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith
by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of
conducting any proceeding for
Page 6
any remedy available to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend
or risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
Section 3.2 Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be
sufficiently evidenced by an Officer's Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee
shall deem it desirable that a matter be proved or established before taking, suffering or omitting to
take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an
Officer's Certificate which, upon receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the written advice or opinion
of such legal counsel with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate security and indemnity satisfactory
to it, against the costs,
Page 7
expenses (including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(v)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document.
(vii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through its agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until such instructions are
received, and (C) shall be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation
on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty to act in accordance with such power and authority.
Section 3.3 Indemnity. The Guarantor agrees to indemnify the Guarantee Trustee and its officers,
directors, employees, representatives and agents for, and to hold it and such persons harmless against, any
loss, liability or expense of whatever kind or nature regardless of their merit, demanded, asserted or
claimed against the Guarantee Trustee and incurred without negligence or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or administration of this Guarantee
Agreement, including without limitation the costs and expenses of defending itself (including reasonable
attorneys' and consultants' fees and expenses) against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it under this Guarantee Agreement.
The indemnification provided hereunder shall survive the
Page 8
termination of this Guarantee Agreement and the resignation or removal of the Guarantee Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 Guarantee Trustee: Eligibility. (a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has
a combined capital and surplus of at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section and to the extent permitted by the Trust Indenture
Act, 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 condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section
4.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture Act.
Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee. (a) Subject to Section 4.2(b),
the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee
Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.
Page 9
(d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.1 Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as
and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders.
Section 5.2 Waiver of Notice and Demand. 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,
any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands.
Section 5.3 Obligations Not Affected. 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 the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions (other than an extension of time for payment of Distributions that results from the extension
of any interest payment period on the Notes as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part of the Holders or the
Guarantee Trustee to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.
Section 5.4 Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the
Guarantee Trustee, the Issuer or any other Person.
Section 5.5 Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of
performance or collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of
Shares to Holders as provided in the Trust Agreement.
Section 5.6 Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against
the Issuer, 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 the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire against the Issuer by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts are 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 hold such
amount in trust for the Holders and to pay over such amount to the Holders.
Page 11
Section 5.7 Independent Obligations. The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as 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 (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1 Subordination. The obligations of the Guarantor under this Guarantee Agreement will constitute
unsecured obligations of the Guarantor and will rank subordinate and junior in right of payment to all other
liabilities of the Guarantor except those made pari passu or subordinate to such obligations expressly by
their terms.
Section 6.2 Pari Passu Guarantees. The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar Guarantee Agreements issued by the
Guarantor on behalf of the holders of preferred securities issued by any other trusts established by Edison
International or its Affiliates.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Guarantee Agreement shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price of all Preferred Securities, (ii) the distribution of Shares to
the Holders in exchange for all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time
any Holder must restore payment of any sums paid with respect to Preferred Securities or this Guarantee
Agreement.
Page 12
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Successors and Assigns. 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 of the Preferred Securities from time to time outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2 Amendments. Except with respect to any changes which do not adversely affect the rights of the
Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee
Agreement may only be amended with the prior written approval of the Holders of a Majority in Liquidation
Amount of Preferred Securities. The provisions of Article VI of the Trust Agreement concerning meetings of
the Holders shall apply to the giving of such approval.
Section 8.3 Notices. Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other address,
facsimile number or to the attention of such other Person as the Guarantor may give notice to the Holders:
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-2662
Attention: Corporate Secretary
(b) if given to the Issuer, in care of the Guarantee Trustee, at the Issuer's (and the
Guarantee Trustee's) respective addresses set forth below or such other address as the Guarantee Trustee on
behalf of the Issuer may give notice to the Holders:
SCE Trust [__]
2244 Walnut Grove Avenue
Rosemead, California 91770
Facsimile No.: 626-302-1930
Attention: Corporate Governance
Page 13
with a copy to:
The Bank of New York Trust Company, N.A.
Facsimile No.:
Attention:
(c) if given to the Guarantee Trustee, at the Guarantee Trustee's address set forth below or
such other address as the Guarantee Trustee may give notice to the Holders:
The Bank of New York Trust Company, N.A.
Facsimile No.:
Attention:
(d) if given to any Holder, at the address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received in person, telecopied
with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on the date of such refusal or
inability to deliver.
Section 8.4 Benefit. This Guarantee Agreement is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
Section 8.5 Interpretation. In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this
Guarantee Agreement as modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are to Articles and
Sections of this Guarantee Agreement unless otherwise specified;
Page 14
(e) a term defined in the Trust Indenture Act has the same meaning when used in this
Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise
requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.
Section 8.6 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF, EXCEPT THAT THE RIGHTS, DUTIES, IMMUNITIES AND INDEMNITIES OF THE GUARANTEE TRUSTEE SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Page 15
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the same
instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
SOUTHERN CALIFORNIA EDISON COMPANY
By:_______________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Guarantee Trustee
By:_______________________________
Name:
Title:
Page 16
SOUTHERN CALIFORNIA EDISON COMPANY Barbara Mathews
LOGO Vice President, Associate
An Edison International Company General Counsel, Chief
Governance Officer and
Corporate Secretary
Barbara.Mathews@SCE.com
August 8, 2006
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Re: Registration Statement on Form S-3 of Southern California
Edison Company, SCE Trust I, SCE Trust II and SCE Trust III
Ladies and Gentlemen:
I am Vice President, Associate General Counsel, Chief Governance
Officer and Corporate Secretary of Southern California Edison Company, a
California corporation ("Edison"). In connection with the registration
statement on Form S-3 filed on August 8, 2006 (the "Registration Statement")
by Edison, SCE Trust I, a Delaware statutory trust, SCE Trust II, a Delaware
statutory trust, and SCE Trust III, a Delaware statutory trust (each a
"Trust," and collectively with Edison, the "Registrants"), with the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"), you have requested my opinion
with respect to the matters set forth below.
I have reviewed the forms of prospectus (the "Prospectus") which
are a part of the Registration Statement. The Prospectus provides that it
will be supplemented in the future by one or more supplements to the
Prospectus (each a "Prospectus Supplement"). The Prospectus, as supplemented
by various Prospectus Supplements, will provide for the registration of
(i) one or more series of First Mortgage Bonds ("First Mortgage Bonds"),
which may be issued by Edison, (ii) one or more series of unsecured senior or
subordinated debt securities (the "Unsecured Debt Securities" and together
with the First Mortgage Bonds, the "Debt Securities"), which may be issued by
Edison, (iii) shares of preferred stock (the "Preferred Stock"), which may be
issued by Edison, (iv) shares of preference stock (the "Preference Stock"),
which may be issued by Edison, (v) preferred securities (the "Preferred
Securities"), which may be issued by each Trust pursuant to its respective
Amended and Restated Trust Agreement (each an "Amended Trust Agreement"), and
(vi) guarantees of the Preferred Securities (the "Preferred Securities
Guarantees"), which may be issued by Edison pursuant to one or more guarantee
agreements (each a "Guarantee Agreement"). The Debt Securities, the
Preferred Stock, the Preference Stock and the Preferred Securities Guarantees
are collectively referred to herein as the "Securities." The Debt Securities
may be issued pursuant to one or more indentures and one or more supplements
thereto (collectively, the "Indentures"), in each case between Edison and a
trustee (each, a "Trustee").
Southern California Edison Company
August 8, 2006
Page 2
In my capacity as Vice President, Associate General Counsel,
Chief Governance Officer and Corporate Secretary, I am generally familiar
with the proceedings taken and proposed to be taken by the Registrants for
the authorization and issuance of the Securities. For purposes of this
opinion, I have assumed that those proceedings will be properly completed, in
accordance with all requirements of applicable federal, Delaware and
California laws, in the manner presently proposed.
I, or attorneys acting under my supervision, have made legal and
factual examinations and inquiries, including an examination of originals and
copies certified or otherwise identified to our satisfaction, of the
documents, corporation records and instruments of the Registrants that we
have deemed necessary or appropriate for purposes of this opinion. In our
examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to me
as copies.
I have been furnished with, and have exclusively relied upon,
certificates of officers of Edison as to certain factual matters. In
addition, I have obtained and relied upon certificates and assurances from
public officials that I have deemed necessary.
I am opining herein as to the effect on the subject transaction
only of the federal securities laws of the United States and the internal
laws of the State of California, and I express no opinion as to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any local
agencies within any state.
Subject to the foregoing and the other qualifications set forth
herein, it is my opinion that, as of the date hereof:
1. When (a) the Debt Securities have been duly established in
accordance with the terms of the applicable Indentures (including, without
limitation, the adoption by the Board of Directors of Edison or an authorized
officer of any necessary further resolutions duly authorizing the issuance
and delivery of the Debt Securities), duly authenticated by the Trustee and
duly executed and delivered on behalf of Edison against payment therefor in
accordance with the terms and provisions of the applicable Indenture and as
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s) and (b) each of the Registration Statement and any
required post-effective amendment thereto have all become effective under the
Securities Act, and assuming that (w) the terms of the Debt Securities as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s); (x) the Debt Securities
as executed and delivered do not violate any law applicable to Edison or
result in a default under or breach of any agreement or instrument binding
upon Edison; (y) the Debt Securities as executed and delivered comply with
all requirements and restrictions, if any, applicable to Edison, whether
imposed by any court or governmental or regulatory body having jurisdiction
over Edison; and (z) the Debt Securities are then issued and sold as
contemplated in the Registration Statement, the Prospectus and the
Southern California Edison Company
August 8, 2006
Page 3
related Prospectus Supplement(s), the Debt Securities will constitute valid
and legally binding obligations of Edison enforceable against Edison in
accordance with the terms of the Debt Securities.
2. With respect to the Preferred Securities Guarantees, when
(i) the trustees of the applicable Trust have taken all necessary action to
adopt the Amended Trust Agreement and to fix and determine the terms of the
applicable Preferred Securities in accordance with the terms of the
applicable Amended Trust Agreement; (ii) the appropriate officers of Edison
have taken all necessary action to fix and determine the terms of the
applicable Preferred Securities Guarantees in accordance with the resolutions
adopted by the Board of Directors of Edison relating to the issuance and
delivery of the Preferred Securities Guarantees; (iii) the terms of the
applicable Preferred Securities and the related Preferred Securities
Guarantee and the issuance and sale thereof have been duly established in
conformity with the applicable Amended Trust Agreement and applicable
Guarantee Agreement, respectively, so as not to violate any applicable law,
the applicable Certificate of Trust, Trust Agreement and Amended Trust
Agreement, and the Articles of Incorporation and Bylaws of Edison, or result
in a default under or breach of any agreement or instrument binding upon the
applicable Trust or Edison; (iv) the Guarantee Agreement has been duly
executed and delivered; (v) the applicable Preferred Securities have been
duly issued and delivered by the applicable Trust as contemplated by the
Registration Statement and the Prospectus Supplement(s) relating thereto;
(vi) certificates representing the applicable Preferred Securities have been
manually authenticated by an authorized officer of the applicable Property
Trustee (as defined in the applicable Amended Trust Agreement) for the
applicable Preferred Securities and registered by such Property Trustee and
delivered to the purchasers thereof; (vii) the applicable Trust receives the
agreed-upon consideration therefor; and (viii) the Guarantee Agreement has
been qualified under the Trust Indenture Act of 1939, as amended, the
applicable Preferred Securities Guarantee will be a valid and binding
obligation of Edison enforceable in accordance with its terms.
3. Edison has the authority pursuant to its Articles of
Incorporation to issue up to 36,000,000 shares of Preferred Stock, comprised
of 24,000,000 shares of Cumulative Preferred Stock, with a par value of $25
per share, and 12,000,000 shares of $100 Cumulative Preferred Stock, with a
par value of $100 per share, and up to 50,000,000 shares of Preference Stock,
no par value. Upon adoption by the Board of Directors of Edison of any
necessary further resolutions and filing of any necessary certificates of
determination, in form and content as required by applicable law, and upon
issuance and delivery of and payment for such shares in the manner
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s) and by such resolutions, such shares of Preferred
Stock and Preference Stock will be validly issued, fully paid and
nonassessable.
The opinions set forth in paragraphs 1 through 3 above are
subject to the following exceptions, limitations and qualifications: (i) the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights and
remedies of creditors; (ii) the effect of general principles of equity,
Southern California Edison Company
August 8, 2006
Page 4
including without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of whether enforcement is
considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought; (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of, or contribution to, a party
with respect to a liability where such indemnification or contribution is
contrary to public policy; (iv) the effect of requirements that a claim with
respect to any Preferred Securities Guarantee denominated other than in
United States dollars (or a judgment denominated other than in United States
dollars in respect of such claim) be converted into United States dollars at
a rate of exchange prevailing on a date determined pursuant to applicable
law; and (v) the effect of governmental authority to limit, delay or prohibit
the making of payments outside the United States or in a foreign currency,
composite currency or current unit. In addition, I express no opinion
concerning the enforceability of any waiver of rights or defenses with
respect to stay, extension or usury laws, or with respect to whether
acceleration of Debt Securities may affect the collectibility of any portion
of the stated principal amount thereof which might be determined to
constitute unearned interest thereon.
I have assumed for purposes of this opinion that (i) the
applicable Indenture constitutes the legally valid, binding and enforceable
obligation of Edison, enforceable against Edison in accordance with its
terms; (ii) the Trustee for each Indenture is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (iii) the Trustee is duly qualified to engage in the activities
contemplated by the applicable Indenture; (iv) the applicable Indenture has
been duly authorized, executed and delivered by the Trustee and constitutes a
legally valid, binding and enforceable obligation of the Trustee, enforceable
against the Trustee in accordance with its terms; (v) the Trustee is in
compliance, generally and with respect to acting as Trustee under the
applicable Indenture, with all applicable laws and regulations; and (vi) the
Trustee has the requisite organizational and legal power and authority to
perform its obligations under the applicable Indenture.
I consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Validity
of the Securities and Preferred Securities Guarantees" in the Prospectus
included therein.
Very truly yours,
/s/ Barbara Mathews
---------------------------------
Barbara Mathews
Vice President, Associate General
Counsel, Chief Governance Officer
and Corporate Secretary
RICHARDS, LAYTON & FINGER, P.A.
A Professional Association
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
(302) 651-7700
Fax (302) 651-7701
www.rlf.com
August 8, 2006
To Each of the Persons Listed
on Schedule A Attached Hereto
Re: SCE Trust I, SCE Trust II and SCE Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Southern California Edison
Company, a California corporation (the "Company"), SCE Trust I, a Delaware statutory
trust ("Trust I"), SCE Trust II, a Delaware statutory trust ("Trust II") and SCE Trust
III, a Delaware statutory trust ("Trust III" and together with Trust I and Trust II,
the "Trusts") in connection with the matters set forth herein. At your request, this
opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or copies of
the following:
(a) The Certificate of Trust of Trust I, dated August 22, 2000 (the "Original Trust
I Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on August 22, 2000;
(b) The Trust Agreement of Trust I, dated as of August 22, 2000, among the Company
and the trustees of Trust I named therein, as amended by the Amendment to Trust
Agreement relating thereto, dated as of December 8, 2004, among the Company and the
trustees of Trust I named therein, as further amended by the Removal and Appointment
of Trustees of Trust I, dated as of August 2, 2006, among the Company and the trustees
of Trust I named therein;
(c) The Certificate of Amendment Pursuant to 3807(e) of the Delaware Business Trust
Act, relating to Trust I, as filed in the office of the Secretary of State on July 9,
2001 (together with the Original Trust I Certificate, the "Amended Trust I
Certificate");
To Each of the Persons Listed
on Schedule A Attached Hereto
August 8, 2006
Page 2
(d) The Certificate of Amendment to Certificate of Trust of Trust I, dated as of
August 2, 2006, as filed in the office of the Secretary of State on August 2, 2006
(together with the Amended Trust I Certificate, the "Trust I Certificate");
(e) The Certificate of Trust of Trust II, dated August 22, 2000 (the "Original
Trust II Certificate"), as filed in the office of the Secretary of State on August 22,
2000;
(f) The Trust Agreement of Trust II, dated as of August 22, 2000, among the Company
and the trustees of Trust II named therein, as amended by the Amendment to Trust
Agreement relating thereto, dated as of December 8, 2004, among the Company and the
trustees of Trust II named therein, as further amended by the Removal and Appointment
of Trustees of Trust II, dated as of August 2, 2006, among the Company and the
trustees of Trust II named therein;
(g) The Certificate of Amendment Pursuant to 3807(e) of the Delaware Business Trust
Act, relating to Trust II, as filed in the office of the Secretary of State on July 9,
2001 (together with the Original Trust II Certificate, the "Amended Trust II
Certificate");
(h) The Certificate of Amendment to Certificate of Trust of Trust II, dated as of
August 2, 2006, as filed in the office of the Secretary of State on August 2, 2006
(together with the Amended Trust II Certificate, the "Trust II Certificate");
(i) The Certificate of Trust of Trust III, dated December 8, 2004, as filed in the
office of the Secretary of State on December 8, 2004, as amended by the Certificate of
Amendment to Certificate of Trust of Trust III, dated as of August 2, 2006, as filed
in the office of the Secretary of State on August 2, 2006 (as so amended, the "Trust
III Certificate");
(j) The Trust Agreement of Trust III, dated as of December 8, 2004, among the
Company and the trustees of Trust III named therein, as amended by the Removal and
Appointment of Trustees of Trust III, dated as of August 2, 2006, among the Company
and the trustees of Trust III named therein;
(k) A form of Amended and Restated Trust Agreement for each of the Trusts
(including Exhibits A, B and D thereto) relating to the purchase of a series of the
Company's subordinated debt securities by the respective Trusts (a "Trust Agreement
Relating to Subordinated Debt Securities"), to be entered into among the Company, the
trustees of the respective Trust named therein, and the holders, from time to time, of
To Each of the Persons Listed
on Schedule A Attached Hereto
August 8, 2006
Page 3
undivided beneficial interests in the assets of the respective Trust, attached as an
exhibit to the Registration Statement (as defined below);
(l) A form of Amended and Restated Trust Agreement for each of the Trusts
(including Exhibits A, B and D thereto) relating to the purchase of a series of the
Company's preferred stock by the respective Trusts (a "Trust Agreement Relating to
Preferred Stock"), to be entered into among the Company, the trustees of the
respective Trust named therein, and the holders, from time to time, of undivided
beneficial interests in the assets of the respective Trust, attached as an exhibit to
the Registration Statement;
(m) The Registration Statement on Form S-3 (the "Registration Statement"),
including a prospectus (the "Prospectus"), relating to the preferred securities of
Trust I, representing undivided beneficial interests in the assets of Trust I (each, a
"Trust I Preferred Security" and collectively, the "Trust I Preferred Securities"), the
preferred securities of Trust II, representing undivided beneficial interests in the
assets of Trust II (each, a "Trust II Preferred Security" and collectively, the "Trust
II Preferred Securities"), and the preferred securities of Trust III, representing
undivided beneficial interests in the assets of Trust III (each, a "Trust III
Preferred Security" and collectively, the "Trust III Preferred Securities"), as
proposed to be filed by the Company, Trust I, Trust II and Trust III with the
Securities and Exchange Commission on or about August 8, 2006;
(n) A Certificate of Good Standing for Trust I obtained from the Secretary of State
on August 7, 2006;
(o) A Certificate of Good Standing for Trust II obtained from the Secretary of
State on August 7, 2006; and
(p) A Certificate of Good Standing for Trust III obtained from the Secretary of
State on August 7, 2006.
Trust I, Trust II and Trust III are sometimes individually referred to
herein as a "Trust." The Trust I Certificate, the Trust II Certificate and the Trust
III Certificate are collectively referred to as the "Certificates."
For purposes of this opinion, we have not reviewed any documents other than the
documents listed in paragraphs (a) through (p) above. In particular, we have not
reviewed any document (other than the documents listed in paragraphs (a) through (p)
above) that is referred to in or incorporated by reference into the documents reviewed
by us. We have assumed that there exists no provision in any document that we have
not reviewed that is inconsistent with the opinions stated herein. We have conducted no
To Each of the Persons Listed
on Schedule A Attached Hereto
August 8, 2006
Page 4
independent factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or forms, and
(iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the governing instrument of
Trust I is either a duly completed Trust Agreement Relating to Subordinated Debt
Securities or a duly completed Trust Agreement Relating to Preferred Stock (in either
case, the "Relevant Trust I Agreement"), (ii) that the governing instrument of Trust
II is either a duly completed Trust Agreement Relating to Subordinated Debt Securities
or a duly completed Trust Agreement Relating to Preferred Stock (in either case, the
"Relevant Trust II Agreement"), and (iii) that the governing instrument of Trust III
is either a duly completed Trust Agreement Relating to Subordinated Debt Securities or
a duly completed Trust Agreement Relating to Preferred Stock (in either case, the
"Relevant Trust III Agreement"), (iv) that the Relevant Trust I Agreement, the
Relevant Trust II Agreement, the Relevant Trust III Agreement and each Certificate is
in full force and effect and has not been amended, (v) except to the extent provided in
paragraph 1 below, that each of the parties to the documents examined by us has been
duly created, organized or formed, as the case may be, and is validly existing in good
standing under the laws of the jurisdiction governing its creation, organization or
formation, (vi) the legal capacity of each natural person is a signatory to the
documents examined by us, (vii) that each of the parties to the documents examined by
us has the power and authority to execute and deliver, and to perform its obligations
under, such documents, (viii) that each of the parties to the documents examined by us
has duly authorized, executed and delivered such documents, (ix) the receipt by each
person or entity to whom a Trust I Preferred Security is to be issued by Trust I
(collectively, the "Trust I Preferred Security Holders") of a Preferred Securities
Certificate (as defined in the Relevant Trust I Agreement) for the Trust I Preferred
Security and the payment for the Trust I Preferred Security acquired by it, in
accordance with the Relevant Trust I Agreement and the Registration Statement, (x) the
receipt by each person or entity to whom a Trust II Preferred Security is to be issued
by Trust II (collectively, the "Trust II Preferred Security Holders") of a Preferred
Securities Certificate (as defined in the Relevant Trust II Agreement) for the Trust
II Preferred Security and the payment for the Trust II Preferred Security acquired by
it, in accordance with the Relevant Trust II Agreement and the Registration Statement,
(xi) the receipt by
To Each of the Persons Listed
on Schedule A Attached Hereto
August 8, 2006
Page 5
each person or entity to whom a Trust III Preferred Security is to be issued by Trust
III (collectively, the "Trust III Preferred Security Holders") of a Preferred
Securities Certificate (as defined in the Relevant Trust III Agreement) for the Trust
III Preferred Security and the payment for the Trust III Preferred Security acquired
by it, in accordance with the Relevant Trust III Agreement and the Registration
Statement, (xii) that the Trust I Preferred Securities are issued and sold to the
Trust I Preferred Security Holders in accordance with the Relevant Trust I Agreement
and the Registration Statement, (xiii) that the Trust II Preferred Securities are
issued and sold to the Trust II Preferred Security Holders in accordance with the
Relevant Trust II Agreement and the Registration Statement, and (xiv) that the Trust
III Preferred Securities are issued and sold to the Trust III Preferred Security
Holders in accordance with the Relevant Trust III Agreement and the Registration
Statement. We have not participated in the preparation of the Registration Statement
and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and express
no opinion on the laws of any other jurisdiction, including federal laws and rules and
regulations relating thereto. Our opinions are rendered only with respect to Delaware
laws and rules, regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. Trust I has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Statutory Trust Act (12 Del. C.ss.3801, et seq.)
(the "Statutory Trust Act"). Trust II has been duly created and is validly existing
in good standing as a statutory trust under the Statutory Trust Act. Trust III has
been duly created and is validly existing in good standing as a statutory trust under
the Statutory Trust Act.
2. The Trust I Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided
beneficial interests in the assets of Trust I. The Trust II Preferred Securities will
represent valid and, subject to the qualifications set forth in paragraph 3 below,
fully paid and nonassessable undivided beneficial interests in the assets of Trust
II. The Trust III Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided
beneficial interests in the assets of Trust III.
To Each of the Persons Listed
on Schedule A Attached Hereto
August 8, 2006
Page 6
3. The Trust I Preferred Security Holders, as beneficial owners of Trust I, will
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. We note that the Trust I Preferred Security Holders may be
obligated to make payments as set forth in the Relevant Trust I Agreement. The Trust
II Preferred Security Holders, as beneficial owners of Trust II, will 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. We note that the Trust II Preferred Security Holders may be obligated to
make payments as set forth in the Relevant Trust II Agreement. The Trust III
Preferred Security Holders, as beneficial owners of Trust III, will 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. We
note that the Trust III Preferred Security Holders may be obligated to make payments
as set forth in the Relevant Trust III Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of the Securities
and Preferred Securities Guarantees" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category of persons or
entities whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this opinion
may not be furnished or quoted to, or relied upon by, any other person or entity for
any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
-----------------------------------
Richards, Layton & Finder, P.A.
BJK/RSM
SCHEDULE A
SCE Trust I
2244 Walnut Grove Avenue
Rosemead, California 91770
SCE Trust II
2244 Walnut Grove Avenue
Rosemead, California 91770
SCE Trust III
2244 Walnut Grove Avenue
Rosemead, California 91770
SOUTHERN CALIFORNIA EDISON COMPANY AND CONSOLIDATED UTILITY-RELATED SUBSIDIARIES
RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED AND PREFERENCE STOCK
(Thousands of Dollars)
Year Ended December 31,
6 Months 12 Months
Ended Ended
2001 2002 2003 2004 2005 06/30/2006 06/30/2006
-----------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES
AND FIXED CHARGES:
Income before interest expense(1) $4,850,848 $2,473,121 $1,727,267 $1,767,449 $1,414,472 $ 815,269 $1,604,633
Add:
Rentals (2) 2,128 1,240 638 776 1,313 888 1,645
Allocable portion of interest
on long-term Contracts for
the purchase of power(3) 1,659 1,616 1,568 1,515 1,457 705 1,426
Amortization of previously
capitalized fixed charges 1,083 1,440 1,638 1,405 1,579 549 1,358
---------- ---------- ---------------------- ---------- ---------- ----------
Total earnings before income
taxes and fixed charges (A) $4,855,718 $2,477,417 $1,731,111 $1,771,145 $1,418,821 $ 817,411 $1,609,062
========== ========== ========== ========== ========== ========== ==========
FIXED CHARGES:
Interest and amortization $ 784,858 $ 584,442 $ 451,792 $ 399,169 $ 370,650 207,157 $ 378,077
Rentals (2) 2,128 1,240 638 776 1,313 888 1,645
Capitalized fixed charges-
nuclear fuel (4) 756 520 97 839 1,075 1,076 1,942
Allocable portion of interest
on long-term contracts
for the purchase of power(3) 1,659 1,616 1,568 1,515 1,457 705 1,426
Preferred and preference
stock dividend requirements-
pre-tax basis 37,907 29,119 22,262 22,962 37,587 39,810 61,753
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges (B) $ 827,308 $ 616,937 $ 476,357 $ 425,261 $ 412,082 $ 249,636 $ 444,843
========== ========== ========== ========== ========== ========== ==========
RATIO OF EARNINGS TO
FIXED CHARGES (A) / (B): 5.87 4.02 3.63 4.16 3.44 3.27 3.62
========== ========== ========== ========== ========== ========== ==========
(1) Includes allowance for funds used during construction and accrual of unbilled revenue.
(2) Rentals include the interest factor relating to certain significant rentals plus one-third of all remaining
annual rentals.
(3) Allocable portion of interest included in annual minimum debt service requirement of supplier.
(4) Includes fixed charges associated with Nuclear Fuel.
SOUTHERN CALIFORNIA EDISON COMPANY AND CONSOLIDATED UTILITY-RELATED SUBSIDIARIES
RATIOS OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
Year Ended December 31,
----------------------------------------------------------------------------------
6 Months 12 Months
Ended Ended
2001 2002 2003 2004 2005 06/30/2006 06/30/2006
----------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES
AND FIXED CHARGES:
Income before interest expense(1) $4,850,848 $2,473,121 $1,727,267 $1,767,449 $1,414,472 $815,269 $1,604,633
Add:
Rentals(2) 2,128 1,240 638 776 1,313 888 1,645
Allocable portion of interest
on long-term Contracts for
the purchase of power(3) 1,659 1,616 1,568 1,515 1,457 705 1,426
Amortization of previously
capitalized fixed charges 1,083 1,440 1,638 1,405 1,579 549 1,358
--------- --------- ---------- --------- --------- ------- ---------
Total earnings before income
taxes and fixed charges(A) $4,855,718 $2,477,417 $1,731,111 $1,771,145 $1,418,821 $817,411 $1,609,062
========= ========= ========== ========= ========= ======= =========
FIXED CHARGES:
Interest and amortization $ 784,858 $ 584,442 $ 451,792 $ 399,169 $ 370,650 $207,157 $ 378,077
Rentals (2) 2,128 1,240 638 776 1,313 888 1,645
Capitalized fixed charges -
nuclear fuel(4) 756 520 97 839 1,075 1,076 1,942
Allocable portion of interest
on long-term contracts for
the purchase of power(3) 1,659 1,616 1,568 1,515 1,457 705 1,426
--------- --------- ---------- --------- --------- ------- ---------
Total fixed charges(B) $ 789,401 $ 587,818 $ 454,095 $ 402,299 $ 374,495 $209,826 $ 383,090
========= ========= ========== ========= ========= ======= =========
RATIO OF EARNINGS TO
FIXED CHARGES (A) / (B): 6.15 4.21 3.81 4.40 3.79 3.90 4.20
========= ========= ========== ========= ========= ======= =========
(1) Includes allowance for funds used during construction and accrual of unbilled revenue.
(2) Rentals include the interest factor relating to certain significant rentals plus one-third of all remaining
annual rentals.
(3) Allocable portion of interest included in annual minimum debt service requirement of supplier.
(4) Includes fixed charges associated with Nuclear Fuel.
EXHIBIT 23.1
CONSENTS
We hereby consent to the references made to us, and to the use of our names, in this Registration
Statement including the prospectus filed as a part thereof.
/s/ Stephen E. Pickett
-----------------------------------
Stephen E. Pickett
/s/ Barbara E. Mathews
-----------------------------------
Barbara E. Mathews
August 8, 2006
EXHIBIT 23.3
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report
dated March 6, 2006 relating to the financial statements, which appears in the 2005 Annual Report, which is
incorporated by reference in Southern California Edison's Annual Report on Form 10-K for the year ended
December 31, 2005. We also consent to the incorporation by reference of our report dated March 6, 2006
relating to the financial statement schedule, which appears in such Annual Report on Form 10-K. We also
consent to the references to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Los Angeles, California
August 8, 2006
SOUTHERN CALIFORNIA EDISON COMPANY
POWER OF ATTORNEY
The undersigned, SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation, and certain of its officers and directors, pursuant to a resolution entitled “Financing Authorizations” adopted August 11, 2005 (the “Resolution”), do each hereby constitute and appoint STEPHEN E. PICKETT, THOMAS M. NOONAN, ROBERT C. BOADA, BEVERLY P. RYDER, MARY C. SIMPSON, LINDA G. SULLIVAN, PAUL ALCALA, GEORGE T. TABATA, BARBARA E. MATHEWS, PAIGE W. R. WHITE, MICHAEL A. HENRY, DARLA F. FORTE, BONITA J. SMITH, EILEEN B. GUERRERO, and POLLY L. GAULT, or any of them, to act severally as attorney-in-fact, for and in their respective names, places, and steads, and on behalf of Southern California Edison Company, to execute, sign, and file or cause to be filed (i) one or more Registration Statements, and any and all exhibits, amendments, and supplements thereto to be filed by Southern California Edison Company with the Securities and Exchange Commission for the purpose of registering under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or both, one or more series of securities as authorized by the Resolution, and for the further purpose of qualifying under the Trust Indenture Act of 1939, as amended, one or more indentures relating to such securities; and (ii) one or more listing applications and any exhibits, amendments, and supplements thereto, and any other required documents, to be filed by Southern California Edison Company with any stock exchange for the purpose of listing any of such securities; and to take any other actions necessary to comply with the laws, rules, or regulations of any governmental or
regulatory entity relating to such securities, granting unto said attorney-in-fact, and each of them, full power and authority to do and perform every act and thing whatsoever necessary or appropriate as fully and to all intents and purposes as the undersigned or any of them might or could do if personally present, hereby ratifying and approving the acts of each of said attorneys-in-fact.
|
|
Executed at San Clemente, California, as of this 11th day of August, 2005. |
|
|
SOUTHERN CALIFORNIA EDISON COMPANY |
|
|
By: |
/s/ ALAN J. FOHRER |
|
|
|
|
ALAN J. FOHRER |
|
||
|
|
Chief Executive Officer |
|||
Attest:
/s/ BEVERLY P. RYDER
BEVERLY P. RYDER
Secretary
Principal Executive Officer and Director:
|
/s/ ALAN H. FOHRER |
Chief Executive Officer and Director |
ALAN J. FOHRER
Principal Financial Officer:
|
/s/ THOMAS M. NOONAN |
Senior Vice President, Chief |
|
|
THOMAS M. NOONAN |
Financial Officer |
|
2
Southern California Edison Company
Power Of Attorney
Financing Authorizations Resolution
August 11, 2005
Controller and Principal Accounting Officer
|
/s/ LINDA G. SULLIVAN |
Vice President and Controller |
|
|
LINDA G. SULLIVAN |
|
|
Additional Directors:
|
/s/ JOHN E. BRYSON |
Director |
/s/ RONALD L. OLSON |
Director |
|
JOHN E. BRYSON
/s/ FRANCE A. CÓRDOVA |
Director |
RONALD L. OLSON
/s/ JAMES M. ROSSER |
Director |
|
france a. cÓrdova
/s/ BRADFORD M. FREEMAN |
Director |
JAMES M. ROSSER
/s/ RICHARD T. SCHLOSBERG, III |
Director |
|
BRADFORD M. FREEMAN
/s/ BRUCE KARATZ |
Director |
RICHARD T. SCHLOSBERG, III
/s/ ROBERT H. SMITH |
Director |
|
BRUCE KARATZ
/s/ LUIS G. NOGALES |
Director |
ROBERT H. SMITH
/s/ THOMAS C. SUTTON |
Director |
|
LUIS G. NOGALES
|
|
THOMAS C. SUTTON
|
|
3
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ First and Refunding Mortgage Bonds (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. --------------------------------------------------------------------------- Name Address --------------------------------------------------------------------------- Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Washington, D.C. 20429 Corporation (b) Whether it is authorized to exercise corporate trust powers.Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 2 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page 3 SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income............................................ 0 LESS: Allowance for loan and lease losses...................................................... 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Senior Debt Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. --------------------------------------------------------------------------- Name Address --------------------------------------------------------------------------- Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Washington, D.C. 20429 Corporation (b) Whether it is authorized to exercise corporate trust powers.Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income...............................................0 LESS: Allowance for loan and lease losses.........................................................0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Subordinated Debt Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. ----------------------------------------------------- ------------------------------------ Name Address ----------------------------------------------------- ------------------------------------ Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Corporation Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income...............................................0 LESS: Allowance for loan and lease losses.........................................................0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ SCE Trust I (Exact name of obligor as specified in its charter) Delaware 95-7104035 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Preferred Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. ----------------------------------------------------- ------------------------------------ Name Address ----------------------------------------------------- ------------------------------------ Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Corporation Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income.............................................. 0 LESS: Allowance for loan and lease losses........................................................ 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ SCE Trust II (Exact name of obligor as specified in its charter) Delaware 95-7104036 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) _____________________________ Preferred Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. ----------------------------------------------------- ------------------------------------ Name Address ----------------------------------------------------- ------------------------------------ Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Corporation Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income.............................................. 0 LESS: Allowance for loan and lease losses........................................................ 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ SCE Trust III (Exact name of obligor as specified in its charter) Delaware 95-7250058 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Preferred Securities (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Page 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. ----------------------------------------------------- ------------------------------------ Name Address ----------------------------------------------------- ------------------------------------ Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Corporation Washington, D.C. 20429 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income.............................................. 0 LESS: Allowance for loan and lease losses........................................................ 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Guarantee of Preferred Securities of SCE Trust I (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =Page 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. --------------------------------------------------------------------------- Name Address --------------------------------------------------------------------------- Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Washington, D.C. 20429 Corporation (b) Whether it is authorized to exercise corporate trust powers.Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income.............................................. 0 LESS: Allowance for loan and lease losses........................................................ 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Guarantee of Preferred Securities of SCE Trust II (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =Page 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. --------------------------------------------------------------------------- Name Address --------------------------------------------------------------------------- Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Washington, D.C. 20429 Corporation (b) Whether it is authorized to exercise corporate trust powers.Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ------------------------------------ Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income..............................................0 LESS: Allowance for loan and lease losses........................................................0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing............................................1,891 Interest-bearing...................................................0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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) |__| ___________________________ THE BANK OF NEW YORK TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) 95-3571558 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 700 South Flower Street Suite 500 Los Angeles, California 90017 (Address of principal executive offices) (Zip code) ___________________________ Southern California Edison Company (Exact name of obligor as specified in its charter) California 95-1240335 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2244 Walnut Grove Avenue Rosemead, California 91770 (Address of principal executive offices) (Zip code) ___________________________ Guarantee of Preferred Securities of SCE Trust III (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =Page 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. --------------------------------------------------------------------------- Name Address --------------------------------------------------------------------------- Comptroller of the Currency United States Department of the Treasury Washington, D.C. 20219 Federal Reserve Bank San Francisco, California 94105 Federal Deposit Insurance Washington, D.C. 20429 Corporation (b) Whether it is authorized to exercise corporate trust powers.Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the articles of association of The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948). 2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948). 3. A copy of the authorization of the trustee to exercise corporate trust powers. (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-121948). 4. A copy of the existing by-laws of the trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121948). Page 6. The consent of the trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-121948). 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. Page SIGNATURE Pursuant to the requirements of the Act, the trustee, The Bank of New York Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of Chicago, and State of Illinois, on the 3rd day of August, 2006. THE BANK OF NEW YORK TRUST COMPANY, N.A. By: /S/ R. ELLWANGER ----------------------------------- Name: R. ELLWANGER Title: ASSISTANT VICE PRESIDENT Page EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK TRUST COMPANY, N.A. of 700 South Flower Street, Suite 200, Los Angeles, CA 90017 At the close of business March 31, 2006, published in accordance with Federal regulatory authority instructions. Dollar Amounts in Thousands ASSETSCash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................................ 3,453 Interest-bearing balances.......................................................... 0 Securities: Held-to-maturity securities........................................................ 63 Available-for-sale securities................................................. 62,137 Federal funds sold and securities purchased under agreements to resell: Federal funds sold ........................................................... 40,800 Securities purchased under agreements to resell.............................. 115,000 Loans and lease financing receivables: Loans and leases held for sale..................................................... 0 Loans and leases, net of unearned income.............................................. 0 LESS: Allowance for loan and lease losses........................................................ 0 Loans and leases, net of unearned income and allowance ............................................................ 0 Trading assets............................................................................. 0 Premises and fixed assets (including capitalized leases)............................................................ 4,043 Other real estate owned................................................................... 0 Investments in unconsolidated subsidiaries and associated companies.......................................................................... 0 Not applicable Intangible assets: Goodwill ......................................................................265,964 Other Intangible Assets ..........................................................15,721 Other assets.......................................................................... 37,548 -------- Total assets......................................................................... $544,729 ======== Page LIABILITIES Deposits: In domestic offices............................................................ 1,891 Noninterest-bearing................................................1,891 Interest-bearing................................................... 0 Not applicable Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased............................................................ 0 Securities sold under agreements to repurchase..................................... 0 Trading liabilities........................................................................ 0 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....................................................................... 58,000 Not applicable Not applicable Subordinated notes and debentures.......................................................... 0 Other liabilities..................................................................... 73,236 Total liabilities.................................................................... 133,127 ======= Minority interest in consolidated subsidiaries............................................. 0 EQUITY CAPITAL Perpetual preferred stock and related surplus................................................0 Common stock........................................................................... 1,000 Surplus (exclude all surplus related to preferred stock)............................. 321,520 Retained earnings..................................................................... 89,351 Accumulated other comprehensive income.......................................................................... -269 Other equity capital components............................................................ 0 Total equity capital................................................................ 411,602 ------- Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28) ............................................. 544,729 ======= I, William J. Winkelmann, Vice President of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. William J. Winkelmann) Vice President We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. Michael K. Klugman, President ) Michael F. McFadden, MD ) Directors (Trustees) Frank P. Sulzberger, Vice President )