File No. 70-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
APPLICATION/DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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New Century Energies, Inc.
Public Service Company of Colorado
Cheyenne Light, Fuel and
Power Company
New Century Services, Inc.
WestGas Interstate Inc.
New Century Enterprises, Inc.
e prime, inc. and its subsidiary companies
PS Colorado Credit Corporation
Natural Fuels Corporation
PSRI Investments, Inc.
Green & Clear Lakes Company
1480 Welton, Inc.
1225 Seventeenth Street
Denver, Colorado 80202
Southwestern Public Service Company
Quixx Corporation and its subsidiary companies
Utility Engineering Corporation and its subsidiary companies
Tyler at Sixth
Amarillo, Texas 79101
(Names of companies filing this statement and
addresses of principal executive offices)
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New Century Energies, Inc.
(Name of top registered holding company parent)
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Richard C. Kelly Doyle R. Bunch II
President and Treasurer Chairman and Secretary
1225 Seventeenth Street Tyler at Sixth
Denver, Colorado 80202 Amarillo, Texas 79101
(Name and address of agents for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application/Declaration to:
Susan A. Marshall, Esq. Gary W. Wolf, Esq.
LeBoeuf, Lamb, Greene & MacRae, Cahill Gordon & Reindel
L.L.P. 80 Pine Street
125 West 55th Street New York, New York 10005
New York, New York 10019
James D. Steinhilper William Lewis
Southwestern Public Service Public Service Company of
Company Colorado
Tyler at Sixth 1225 Seventeenth Street
Amarillo, Texas 79101 Denver, Colorado 80202
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TABLE OF CONTENTS
Page
Item 1. Description of Proposed Transaction......................... 1
A. General.................................................. 1
B. Description of the Parties to the Transaction............ 2
C. Overview of Financing Request............................ 2
D. Parameters for Financing Authorization................... 4
E. Description of Specific Types of Financings.............. 6
1. NCE External Financings............................. 6
a. Capital Stock................................. 7
i. General.................................. 7
ii. Benefit Plans and Open Market Purchases
of Common Stock ............................ 7
iii. Dividend Reinvestment Plan............. 8
b. Short Term Debt............................... 9
c. Interest Rate and Equity Swaps................ 9
d. Other Securities.............................. 11
2. Utility Subsidiary Financings....................... 11
a. Short Term Debt............................... 12
b. Interest Rate Swaps........................... 12
c. Other Securities.............................. 13
3. Non-Utility Subsidiary Financings................... 13
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4. Intra-System Financings...................... 14
a. General................................ 14
b. Guarantees............................. 15
5. Changes in Capital Stock of Subsidiaries..... 15
6. Financing Entities........................... 16
7. Existing Financing Arrangements.............. 16
F. Description of Money Pool Transactions............ 17
1. Utility Money Pool........................... 17
2. Non-Utility Money Pool....................... 20
3. Other Contributions to Money Pool............ 20
4. Operation of the Money Pools and
Administrative Matters....................... 21
5. Authorization Amounts........................ 21
6. Use of Proceeds.............................. 21
G. Financing of EWGs and FUCOs....................... 22
H. Filing of Certificates of Notification............ 22
I. Statement Pursuant to Rule 54..................... 23
Item 2. Fees, Commissions and Expenses.............................. 24
Item 3. Applicable Statutory Provisions............................. 24
Item 4. Regulatory Approvals........................................ 25
Item 5. Procedure................................................... 25
Item 6. Exhibits and Financial Statements........................... 25
A. Exhibits.......................................... 25
B. Financial Statements.............................. 26
Item 7. Information as to Environmental Effects..................... 27
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Item 1. Description of Proposed Transaction
A. General
New Century Energies, Inc. ("NCE"), a Delaware corporation,
has previously filed an Application/Declaration on Form U-1 with the Securities
and Exchange Commission (the "Commission") requesting authorization under
Section 9(a)(2) of the Public Utility Holding Company Act of 1935, as amended
(the "Act"), to acquire all of the outstanding voting securities of Public
Service Company of Colorado, a Colorado corporation and an operating public
utility company ("PSCo"), Southwestern Public Service Company, a New Mexico
corporation and an operating public utility company ("SPS"), and Cheyenne Light,
Fuel and Power Company, a Wyoming corporation and an operating public utility
company ("Cheyenne"), and for other related transactions (File No. 70-8787) (the
"Merger U-1").(1) Following the consummation of the transactions described in
the Merger U-1, NCE will register as a holding company under the Act. Each of
the entities that will be directly and indirectly owned subsidiaries (as defined
in the Act) of NCE upon consummation of the transactions described in the Merger
U-1, is referred to herein individually as a "Subsidiary" and collectively as
"Subsidiaries". The terms "Subsidiary" and "Subsidiaries" shall also include
entities that become subsidiaries of NCE after the consummation of the Merger.
In order to ensure that NCE and its Subsidiaries (the
"Applicants") are able to meet their capital requirements upon registration and
plan their future financing accurately, the Applicants are hereby requesting
authorization for (1) financ-
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1 No authority for the issuance or acquisition of any stock or debt
security is sought in the Merger U-1 except: (i) the issuance of NCE
stock in connection with the business combination, and in exchange for
the stock, of PSCo, SPS and Cheyenne, (ii) the issuance of stock to NCE
by New Century Enterprises, Inc. ("Enterprises"), New Century Services,
Inc. and West Gas Interstate, Inc., (iii) the acquisition by
Enterprises of the outstanding voting securities of all of SPS's, and
certain of PSCo's, non-utility subsidiaries and (iv) the issuance by
Enterprises of debt to SPS to acquire SPS's subsidiaries. Those
transactions for which authority is sought in the Merger U-1 are not
covered hereby.
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ing transactions for the period beginning with the effective date of an order
issued in this proceeding through December 31, 2002 (the "Authorization Period")
and (2) the establishment of two money pool arrangements through December 31,
2002: the Utility Money Pool and the Non-Utility Money Pool.
B. Description of the Parties to the Transaction
Following the consummation of the merger of PSCo and SPS (the
"Merger"), NCE will register as a holding company under the Act and will have
three operating utility subsidiaries (the "Utility Subsidiaries"): PSCo, an
electric and gas utility company providing service in an area having an
estimated population of 2.8 million in Colorado; SPS, an electric utility
company providing service to an area with a population of approximately one
million in the Panhandle and south plains of Texas, eastern and southeastern New
Mexico, the Oklahoma Panhandle and southwestern Kansas; and Cheyenne, an
electric and gas utility operating principally in Cheyenne, Wyoming. NCE's other
direct Subsidiaries will include New Century Services, Inc. ("NC Services"),
West Gas Interstate Inc. ("WGI"), PS Colorado Credit Corporation (together with
its successor, if any, "PSCCC") and New Century Enterprises, Inc.
("Enterprises"), an intermediate holding company. All of NCE's directly and
indirectly owned subsidiaries, other than the utility subsidiaries, are herein
called the "Non-Utility Subsidiaries".
Additional information about the Applicants and their
businesses is set forth in the Merger U-1 and the exhibits thereto.
C. Overview of Financing Request
The Applicants hereby request authorization to engage in the
financing transactions set forth herein during the Authorization Period. The
Applicants also request that any authorization with respect to this
Application/Declaration (the "Application") include financings by newly formed
Subsidiaries of NCE that are formed in accordance with the provisions of the
Act, as the Applicants shall from time to time notify the Commission. The
Application is intended to serve as a "shelf" application similar to a shelf
registration permitted under Rule 415 promulgated under the Securities Act of
1933, as amended (the "1933 Act"), whereby the Applicants will be authorized to
issue specified types of securities at any time, or from time to time, during
the Authorization Period, with the details of each issuance and provisions of
the securities to be determined
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by the Applicants at the time of issuance within certain pre-established
parameters and would not be limited by any of the Commission's "policies" with
respect thereto. This type of Application is consistent with the recommendation
of the staff of the Division of Investment Management that the Commission
modernize its administration of the Act, particularly with respect to financing
authorizations, in order to "reduce significantly the number of applications
requiring SEC approval and to provide more flexibility for registered holding
companies and their Subsidiaries"(2) by issuing "orders covering blocks of
securities to be sold at one time or from time to time over periods of up to
five years."(3) The shelf approach will give the Applicants flexibility that
will allow them to respond quickly and efficiently to their financing needs and
to changes in market conditions, which, in turn, should make them more
competitive with other utility companies that are not subject to the
jurisdiction of the Act. At the same time, the Commission will continue to
have oversight over financings by the Applicants through the regular disclosures
under the 1933 Act and the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and through the notification system established pursuant to this
Application. Finally, this form of financing authorization under the Act is
consistent with existing Commission precedent. See, e.g., Columbia Gas Systems,
Inc., et al., HCAR No. 26634 (December 23, 1996); Consolidated Natural Gas
Company, HCAR No. 26500, File 70-8667 (March 28, 1996); Mississippi Power
Company, HCAR No. 26491 (March 13, 1996); Gulf States Utilities Company, HCAR
No. 26451 (January 16, 1996).
The Applicants also hereby request authorization to deviate
from the Commission's statements of policy with respect to first mortgage bonds
and preferred stock in connection with the securities proposed to be issued and
sold pursuant to this Application.
The authorization requested herein relates to (i) external
issues of capital stock, short term debt, interest rate and equity swaps and
other securities by NCE;
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2 Division of Investment Management, The Regulation of Public-Utility Holding
Companies (June 1995) (the "1995 Report") at 50.
3 1995 Report at 54.
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(ii) external issuances of capital stock and debt securities not subject to the
Rule 52 safe harbor, including short term debt and interest rate swaps, by the
Utility Subsidiaries, (iii) external issuances of capital stock and debt
securities not subject to the Rule 52 safe harbor by Non-Utility Subsidiaries,
(iv) intrasystem financing between NCE and its Subsidiaries, including the
issuance of intrasystem guarantees, (v) the ability of the Subsidiaries to alter
their legal capitalization in order to engage in financing with their parent
company, (vi) the ability of NCE and its Subsidiaries to acquire, redeem or
retire its securities to the extent not covered by the exemption provided in
Rule 42, (vii) the formation and issuances of securities by newly formed
financing entities, including intrasystem guarantees of such securities, (viii)
the retention of existing financing entities, (ix) certain existing financings
and (x) financing investments in exempt wholesale generators of ("EWGs") and
foreign utility companies ("FUCOs").
This Application also constitutes a request by the Applicants
for approval under the Act to solicit proxies, consents or authorizations to
obtain shareholder approval which may be required under Section 12(e) of the Act
and Rule 62 thereunder; provided that the solicitation shall be within the
exemption provided by Rule 65.
D. Parameters for Financing Authorization
This Application requests authority to engage in financing
transactions during the Authorization Period for which the specific terms and
conditions are not at this time known, and which are not covered by Rule 52,
without further prior approval by the Commission. Accordingly, it is appropriate
that NCE and the Utility Subsidiaries meet certain financial tests as a
precondition to such financing transactions. The general preconditions for
engaging in authorized financing transactions without further Commission
approval are set forth directly below; further limitations on specific types of
financings are set forth further herein.
1. Maintenance of Equity Ratio. NCE's (and each Utility
Subsidiary's) common equity (as reflected in their most recent Forms 10-K or
Forms 10-Q filed with the Commission pursuant to the 1934 Act, as the case may
be or, if such Forms are not filed, as set forth in their most recent quarterly
or annual financial statements prepared in accordance with generally accepted
accounting principles) is at least 30% of its consolidated capitalization, as
adjusted to reflect subsequent events that affect capitalization;
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2. Investment Grade Debt. Any long-term debt issued to
unaffiliated parties pursuant to the authority requested hereby and not exempt
under Rule 52 is rated or meets the qualifications for being rated investment
grade by a nationally recognized statistical rating organization (as that term
is used in Rule 15c3-1(c)2(vi)(F) under the 1934 Act);
3. Effective Cost of Money on Borrowings. The effective cost
of money on long-term debt financings authorized by this Application does not
exceed 300 basis points over the interest rate borne by comparable term U.S.
Treasury securities and the effective cost of money on short-term debt
financings authorized by this Application does not exceed 300 basis points over
the London interbank offered rate (LIBOR);
4. Effective Cost of Money on Other Approved Securities. The
effective cost of money on preferred stock and other fixed income oriented
securities does not exceed 500 basis points over the interest rate borne by 30
year term U.S. Treasury securities;
5. Maturity of Debt. The maturity of authorized indebtedness will
not exceed 50 years;
6. Issuance Expenses. The underwriting fees, commissions and
other similar remunerations paid in connection with the non-competitive issue,
sale or distribution of a security pursuant to this Application does not exceed
5% of the principal or total amount of the financing;
7. Aggregate Dollar Limit. The aggregate amount of outstanding
external financing effected by NCE and its Subsidiaries pursuant to any
authorization granted hereunder during the Authorization Period does not exceed
$10 billion; provided, that in calculating the amount of external financing
effected with respect to short term debt and revolving credit arrangements, only
outstanding amounts of such debt and under such arrangements will be counted.
Further, credit support of underlying subsidiary obligations (because the same
would be subject to a separate $4 billion limitation relating to intrasystem
guarantees and credit support discussed in the next paragraph) would not be
included in the calculation. Interest and equity swaps will relate only to
investments or obligations already existing at the time of the swap transaction.
The aggregate amount of outstanding securities issued by the
Subsidiaries to NCE or to other Subsidiaries pursuant to any authorization
granted hereunder does not exceed $4 billion
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and the aggregate amount of intrasystem guarantees and other credit support
obligations outstanding at any one time pursuant to any authorization granted
hereunder does not exceed $4 billion.
8. Use of Proceeds. The proceeds from the financings
authorized by the Commission pursuant to this Application will be used for
general and corporate purposes, including (i) financing, in part, capital
expenditures of NCE and its Subsidiaries, (ii) the repayment, redemption,
refunding or purchase of debt and capital stock of NCE or its Subsidiaries
without the need for prior Commission approval pursuant to Rule 42 or a
successor rule, (iii) financing working capital requirements and capital
spending of the NCE system and (iv) other lawful general purposes.
The authorization requested herein to engage in external or
intrasystem financing without additional Commission approval does not apply in
the case of any financing (other than through the use of internally generated
funds and/or consolidated retained earnings) for the purpose of investing in an
EWG or FUCO as defined in Sections 32 and 33 of the Act, respectively unless
such investment is in compliance with Rules 53 and 54 (as described below).
E. Description of Specific Types of Financings
1. NCE External Financings
NCE may obtain funds externally through short-term debt
financing, including commercial paper sales, and sales of capital stock. Debt
and capital stock financings may be issued and sold pursuant to underwriting
agreements of a type generally standard in the industry. Public distributions
may be pursuant to private negotiation with underwriters, dealers or agents as
discussed below or effected through competitive bidding among underwriters. In
addition, sales may be made through private placements or other non-public
offerings to one or more persons. All such debt and capital stock sales will be
at rates or prices and under conditions negotiated or based upon, or otherwise
determined by, competitive capital markets. Common stock may also be sold
pursuant to various existing PSCo or SPS employee benefit plans or new NCE
employee benefit plans and the NCE dividend reinvestment plan. In addition, NCE
may issue and sell income preferred securities.
NCE may sell securities covered by this Application in any of
the following ways: (i) through underwriters or
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dealers; (ii) through agents; (iii) directly to a limited number of purchasers
or a single purchaser; or (iv) directly to employees (or to trusts established
for their benefit) and other shareholders through its employee benefit plans or
its dividend reinvestment plan. If underwriters are used in the sale of the
securities, such securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The securities may be offered to
the public either through underwriting syndicates (which may be represented by a
managing underwriter or underwriters designated by NCE) or directly by one or
more underwriters acting alone. The securities may be sold directly by NCE or
through agents designated by NCE from time to time. If dealers are utilized in
the sale of any of the securities, NCE will sell such securities to the dealers,
as principal. Any dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. If equity
securities are being sold in an underwriting offering, NCE may grant the
underwriters thereof a "green shoe" option permitting the purchase from NCE at
the same price additional equity securities then being offered solely for the
purpose of covering over allotments.
If debt securities are being sold, they may be sold pursuant
to "delayed delivery contracts" which permit the underwriters to locate buyers
who will agree with NCE to buy the debt at the same price but at a later date
than the date of the closing of the sale to the underwriters.
a. Capital Stock
i. General
NCE may issue and sell common or preferred stock, income
preferred securities or rights, options and warrants convertible into common or
preferred stock and issue stock upon the exercise of convertible debt or equity
securities or pursuant to rights, options, warrants and similar securities. NCE
may also buy back shares of such stock or such other Securities during the
Authorization Period.
ii. Benefit Plans and Open Market Purchases of
Common Stock
PSCo and SPS currently have 6 employee benefit plans pursuant
to which they issue and/or sell common stock to their
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employees. Pursuant to the terms of the Agreement and Plan of Reorganization
dated as of August 22, 1995, as amended, among NCE, PSCo and SPS, following the
effective time of the Merger, 4 of these plans will provide for the issuance
and/or sale of NCE common stock and the remaining 2 plans will be terminated. On
or prior to the consummation of the mergers, NCE will adopt a plan which will
provide for the issuance and/or sale of NCE common stock and stock options. NCE
may issue shares of its common stock under the authorization, and within the
limitations, set forth herein in order to satisfy its obligations under such
plans. Attached hereto as Exhibit B-4 is a summary of the terms of these plans.
To the extent that following consummation of the mergers NCE adopts its own
employee benefit plans that provide for the issuance of NCE common stock, NCE
may issue shares of its common stock under the authorization and within the
limitations set forth herein, provided that NCE will provide the Commission with
a summary of the terms of any such NCE employee benefit plan prior to issuing
any shares pursuant to any authorization provided in this proceeding. Shares of
common stock for use under any employee benefit plans may either be newly issued
shares, treasury shares or shares purchased in the open market. NCE hereby seeks
authority for its open market purchase of these shares in accordance with the
terms of or in connection with the operation of the plans. NCE may also acquire
treasury shares through other open market purchases. NCE also proposes to issue
and/or sell shares of common stock pursuant to these existing plans and similar
plans or plan funding arrangements hereafter adopted, and to engage in other
sales of its treasury shares for general business purposes, without any
additional prior Commission order. Stock transactions of this variety would thus
be treated the same as other stock transactions permitted pursuant to this
Application.
The Applicants also hereby request authority for NCE to
solicit proxies, authorizations or consents through a proxy statement, filed
under and meeting the standards of the 1934 Act, requesting shareholder approval
or ratification of amendments to, and/or requesting shareholder approval or
ratification of, employee benefit plans for employees of NCE or its
Subsidiaries. Such solicitations will be within the exemption provided by Rule
65.
iii. Dividend Reinvestment Plan
In connection with the Merger, an NCE Dividend Reinvestment
Plan substantially in the form attached hereto as Exhibit B-5 will become
effective. NCE may issue and/or sell
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shares of its common stock under the authorization, and within the limitations
set forth herein, in connection with the operation of the NCE Dividend
Reinvestment Plan. Shares of common stock for use under the plan may either be
newly issued shares, treasury shares or shares purchased in the open market. NCE
hereby seeks authority for the issuance and sale or open market purchases and
sales of its shares in accordance with the NCE Dividend Reinvestment Plan.
b. Short-Term Debt
To provide financing for general corporate purposes, other
working capital requirements and construction spending until long term financing
can be obtained, NCE may sell commercial paper, from time to time, in
established domestic or European commercial paper markets. Such commercial paper
would be sold to dealers at the discount rate per annum prevailing at the date
of issuance for commercial paper of comparable quality and maturities sold to
commercial paper dealers generally. It is expected that the dealers acquiring
commercial paper from NCE will reoffer such paper at a discount to corporate,
institutional and, with respect to European commercial paper, individual
investors. It is anticipated that NCE's commercial paper will be reoffered to
investors such as commercial banks, insurance companies, pension funds,
investment trusts, foundations, colleges and universities, finance companies and
nonfinancial corporations.
Back-up bank lines of credit for 100% of the outstanding
commercial paper are required by credit rating agencies. To satisfy this
requirement, NCE proposes to establish back-up bank lines in an aggregate
principal amount not to exceed the amount of authorized commercial paper. NCE
would borrow, repay and reborrow under these lines from time to time, without
collateral, to the extent that it becomes impracticable to sell commercial paper
due to market conditions or otherwise. Loans under these lines will have a
maturity date not more than one year from the date of each borrowing. NCE may
engage in other types of short-term financing generally available to borrowers
with investment grade credit ratings as it may deem appropriate in light of its
needs and market conditions at the time of issuance. NCE may contribute the
proceeds of any such short-term debt to the Money Pools.
c. Interest Rate and Equity Swaps
NCE requests authority to enter into, perform, purchase and
sell financial instruments intended to manage the
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volatility of interest rates, including but not limited to interest rate swaps,
caps, floors, collars and forward agreements or any other similar agreements.
NCE proposes to employ interest rate swaps as a means of prudently managing the
risk associated with any of its outstanding debt by, in effect, synthetically
(i) converting variable rate debt to fixed rate debt, (ii) converting fixed rate
debt to variable rate debt, (iii) limiting the impact of changes in interest
rates resulting from variable rate debt and (iv) providing an option to enter
into interest rate swap transactions in future periods for planned issuances of
debt securities. In no case will the notional principal amount of any interest
rate swap exceed that of the underlying debt instrument and related interest
rate exposure, i.e., NCE will not engage in "leveraged" or "speculative"
transactions. The underlying interest rate indices of such interest rate swaps
will closely correspond to the underlying interest rate indices of NCE's debt to
which such interest rate swap relates. NCE will only enter into interest rate
swap agreements with counterparties whose senior secured debt ratings, as
published by Standard & Poor's Corporation, are greater than or equal to "BBB+",
or an equivalent rating from Moody's Investor Service, Inc., Fitch Investor
Service or Duff & Phelps.
NCE also seeks authority to engage in equity swaps. An equity
swap is one in which two counterparts exchange the rate of return of an equity
investment for the rate of return of a non-equity investment or another equity
investment. Typically, an investor will swap either fixed or floating rate
interest payments for payments indexed on the performance of a broad-based stock
index in a domestic or foreign market. An equity swap may also allow the
exchange of one equity market risk (such as a fixed sum based on the S&P index)
for another market risk (such as a sum based on a foreign equity market index).
The use of equity swaps could be used by NCE to hedge earnings from domestic or
international investments it or its Subsidiaries may own, but would not be used
in any way to transfer title to the equity securities owned by it which are used
in the swap transaction. NCE requests reservation of jurisdiction over the use
of equity swaps pending completion of the record as to the exact form of
transactions. NCE also undertakes to file a post-effective amendment in this
proceeding which will describe the general terms of each such equity swap and
request a supplemental order of the Commission authorizing the issuance thereof
by NCE. NCE further requests that each supplemental order be issued by the
Commission without further public notice.
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d. Other Securities
In addition to the specific securities for which authorization
is sought herein, NCE also proposes to issue other types of securities that it
deems appropriate at any time and from time to time during the Authorization
Period. NCE requests that the Commission reserve jurisdiction over the issuance
of additional types of securities. NCE also undertakes to file a post-effective
amendment in this proceeding which will describe the general terms of each such
security and request a supplemental order of the Commission authorizing the
issuance thereof by NCE. NCE further requests that each supplemental order be
issued by the Commission without further public notice.
2. Utility Subsidiary Financings
In June 1995, the Commission promulgated an amendment to Rule
52 under the Act to provide an exemption from the prior authorization
requirements of the Act for the issuance and sale of "common stock, preferred
stock, bond, note or other form of indebtedness" by a public utility subsidiary
of a registered holding company, provided, among other things, (i) the issue and
sale of such securities are solely for the purpose of financing the business of
such public utility subsidiary company; (ii) the issue and sale of such
securities have been expressly authorized by the state commission of the state
in which such subsidiary company is organized and doing business; and (iii) the
interest rates and maturity dates of any debt security issued to an associate
company are designed to parallel the effective cost of capital of that associate
company.(4) Most common and preferred stock, medium-term notes, long-term debt,
including mortgage bonds, pollution control bonds and similar financings by the
Utility Subsidiaries will qualify for, the Rule 52 exemption as they will have
been approved by the Colorado Public Utility Commission ("CPUC") in the case of
PSCo, the New
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4 Rule 52 also provides an exemption for issuances of the same types of
securities by non-utility subsidiaries of a registered holding company
provided the issuance is solely for the purpose of financing the
existing business of such subsidiary and the interest rates and
maturity dates of any debt security issued to an associate company is
designed to parallel the effective cost of capital of that associate
company.
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Mexico Public Service Commission ("NMPSC") in the case of SPS and
the Wyoming Public Service Commission ("WPSC") in the case of Cheyenne. Copies
of the current state commission financing authorizations of PSCo, SPS and
Cheyenne that relate to financing activities that are not subject to an
exemption under the Act are attached hereto as Exhibits D-1, D-2 and D-3,
respectively. However, certain external financings by the Utility Subsidiaries
for which authorization is requested herein may be outside the scope of the Rule
52 exemption. The following securities may be issued without the approval of the
applicable State Commission and, if not so approved, would be outside the scope
of the Rule 52 exemption: for PSCo, debt securities with maturities of less than
12 months, for SPS, debt securities with maturities of less than 18 months and
for Cheyenne, debt securities with maturities of less than 12 months.
a. Short Term Debt
To provide financing for general corporate purposes and other
working capital requirements, the Utility Subsidiaries may sell commercial
paper, from time to time, in established domestic or European commercial paper
markets in a manner similar to NCE as discussed in Item 1.E.1.b. above. The
Utility Subsidiaries may also maintain backup lines of credit in aggregate
principal amount not to exceed the amount of authorized commercial paper. The
Utility Subsidiaries would borrow, repay and reborrow under such lines from time
to time, without collateral, to the extent that it becomes impracticable to sell
commercial paper due to market conditions or otherwise. Loans under these lines
shall have a maturity date not more than one year from the date of each
borrowing. Each Utility Subsidiary may engage in other types of short-term
financing as it may deem appropriate in light of its needs and market conditions
at the time of issuance. Such short-term financing could include, without
limitation, bank lines and debt securities issued under their respective
indentures and note programs. The Utility Subsidiaries may contribute the
proceeds of any such short term debt financing to the Utility Money Pool as
described in Item 1.F. below.
b. Interest Rate Swaps
Each Utility Subsidiary may engage in interest swaps to the
same extent, and under the same conditions, discussed with respect to NCE in
Item 1.E.1.c. above.
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c. Other Securities
In addition to the specific securities for which authorization
is sought herein, the Utility Subsidiaries may issue other types of securities
during the Authorization Period that are not exempt from prior Commission
approval. The Utility Subsidiaries request that the Commission reserve
jurisdiction over the issuance of such additional types of securities except to
the extent the same are exempt pursuant to Rule 52. Each Utility Subsidiary also
undertakes to have a post-effective amendment filed in this proceeding that will
describe the general terms of each such security of such Utility Subsidiary and
request a supplemental order of the Commission authorizing the issuance thereof.
The Utility Subsidiaries further request that each supplemental order be issued
by the Commission without further public notice.
3. Non-Utility Subsidiary Financings
The Non-Utility Subsidiaries are expected to be active in the
development and expansion of energy-related or otherwise functionally related,
non-utility businesses in the NCE holding company system. They will be competing
with large, well-capitalized companies in different sectors of the energy and
other industries. In order to accomplish investments in such competitive arenas,
it will be necessary for the Non-Utility Subsidiaries to have the ability to
engage in financing transactions which are commonly accepted for such types of
investments. The majority of such financings will be exempt from prior
Commission authorization pursuant to Rule 52.
The Non-Utility Subsidiaries may, however, engage in types of
security financing with non-affiliates that are not exempt from prior Commission
approval. The Non-Utility Subsidiaries therefore request that the Commission
reserve jurisdiction over the issuance of such additional types of securities.
They also undertake to cause a post-effective amendment to be filed in this
proceeding which will describe the general terms of each such security and
request a supplemental order of the Commission authorizing the issuance thereof
by the subject Non-Utility Subsidiary. The Non-Utility Subsidiaries further
request that each supplemental order be issued by the Commission without further
public notice.
<PAGE>
14
4. Intra-System Financings
a. General
NCE may finance certain of its Subsidiaries and certain
Subsidiaries may finance other Subsidiaries in an aggregate amount not exceeding
$4 billion during the Authorization Period. The $4 billion excludes financing
that is exempt pursuant to Rules 45 and 52. Such financings would generally be
in the form of open account advances, long-term loans and/or capital stock
purchases, as requested by the chief financial officer or treasurer or designee
thereof of each such Subsidiary and agreed to by NCE or the lending Subsidiary,
as the case may be. Open account advances will provide funds for general
corporate purposes and other working capital requirements and temporarily for
capital expenditures until long-term financing is obtained and/or cash is
generated internally. NCE or the lending Subsidiary will determine, at its
discretion, how much financing to give each borrowing Subsidiary as its needs
dictate during the Authorization Period. Generally, NCE's or the lending
Subsidiary's long-term loans to, and purchase of capital stock from, such
borrowing Subsidiaries will provide financing for their capital expenditures,
and will be exempt transactions under Rule 52. The Subsidiaries may also from
time to time as deemed appropriate by them, buy back shares of their respective
common stock or preferred stock from their respective parent companies.
Open account advances with interest to the Subsidiaries, which
would not be covered by Rule 45 or Rule 52, may be made, repaid and remade on a
revolving basis, with interest at the same effective rate of interest as the
daily weighted average effective rate of commercial paper, revolving credit
and/or other short-term borrowings of NCE or the lending Subsidiary as the case
may be. If no such borrowings are outstanding then the interest rate shall be
predicated on the Federal Funds' effective rate of interest as quoted daily by
the Federal Reserve Bank of New York. Such advances may be made through the
Money Pools discussed in Item 1.F. below.
The Non-Utility Subsidiaries may issue and NCE or other
Non-Utility Subsidiary may acquire other types of securities which do not
qualify for use of Rule 52 but which are considered appropriate during the
Authorization Period. NCE and the Non-Utility Subsidiaries request that the
Commission reserve jurisdiction over the issuance of such additional types of
securities. They also undertake to cause a post-effective amendment to be filed
in this proceeding which will describe
<PAGE>
15
the general terms of each such security and request a supplemental order of the
Commission authorizing the issuance thereof by the subject Non-Utility
Subsidiary. NCE and the Non-Utility Subsidiaries further request that each
supplemental order be issued by the Commission without further public notice.
b. Guarantees
The Applicants request authorization to enter into guarantees,
obtain letters of credit, enter into expense agreements or otherwise provide
credit support with respect to the obligations of other system companies as may
be appropriate to enable such system companies to carry on in the ordinary
course of their respective businesses, in an aggregate principal amount not to
exceed $4 billion outstanding at any one time, except to the extent the same are
exempt pursuant to Rule 52. The $4 billion limit on guarantees and other credit
support obligations is in addition to the $10 billion limit on the external
financing for NCE and its Subsidiaries and the $4 billion limit on intrasystem
financing requested elsewhere herein. NCE may enter into such arrangements with
respect to any Subsidiary and any Subsidiary may enter into such arrangements
with respect to any other Subsidiaries.
5. Changes in Capital Stock of Subsidiaries
The portion of an individual Subsidiary's aggregate financing
to be effected through the sale of stock to NCE or other immediate parent
company during the Authorization Period cannot be ascertained at this time. It
may happen that the proposed sale of capital stock may in some cases exceed the
then authorized capital stock of such Subsidiary. In addition, the Subsidiary
may choose to use other forms of capital stock. As needed to accommodate such
proposed transactions and to provide for future issues, request is made for
authority to increase the amount or change the terms of any such Subsidiary's
authorized capital stock capitalization by an amount deemed appropriate by NCE
or other immediate parent company in the instant case. A Subsidiary would be
able to change the par value, or change between par and no-par stock, without
additional Commission approval.
The Applicants also seek authority to solicit proxies,
consents or authorizations to obtain shareholder approval regarding changes to
their capital stock which may be required under Section 12(e) of the Act and
Rule 62 thereunder. Such solicitations will be within the exemption provided by
Rule 65.
<PAGE>
16
6. Financing Entities
NCE and the Subsidiaries seek authority to organize new
corporations, trusts, partnerships or other entities created for the purpose of
facilitating financings through their issue to third parties of income preferred
securities or other securities authorized hereby. Request is also made for these
financing entities to issue such securities to third parties in the event such
transactions involving financing by the Applicants are not exempt pursuant to
Rule 52. Additionally, request is made for authorization with respect to (i) the
issuance of debentures or other evidences of indebtedness by any of the
Applicants to a financing entity in return for the proceeds of the financing,
(ii) the acquisition by any of the Applicants of voting interests or equity
securities issued by the financing entity to establish any such Applicant's
ownership of the financing entity (the equity portion of the entity generally
being created through a capital contribution or the purchase of equity
securities, ranging from 1 to 3 percent of the capitalization of the financing
entity) and (iii) the guarantee by the Applicants of such financing entity's
obligations in connection therewith. Each of the Applicants and the Subsidiaries
also request authorization to enter into expense agreements with its respective
financing entity, pursuant to which it would agree to pay all expenses of such
entity. Any amounts issued by such financing entities to third parties pursuant
to this authorization will be included in the overall external financing
limitation authorized herein for the immediate parent of such financing entity.
In order to avoid double counting, however, the indebtedness issued by an
Applicant to a financing entity will not count against the intrasystem financing
limit set forth herein. Applicants also request that SPS be authorized to retain
Southwestern Public Service Capital I, a wholly owned trust, that issued trust
preferred securities and loaned the proceeds to SPS.
7. Existing Financing Arrangements
NCE and the Subsidiaries hereby request authority to retain
such financing arrangements as were in place prior to the Merger and which are
not otherwise exempted from the provisions of the Act. The existing financing
arrangements of the Utility Subsidiaries are set forth on Annex I attached
hereto. The existing financing arrangements of the Non-Utility Subsidiaries are
set forth on Annex II attached hereto.
<PAGE>
17
F. Description of Money Pool Transactions
NCE and the Utility Subsidiaries hereby request authorization
to establish the Utility Money Pool and the Utility Subsidiaries, to the extent
not exempted by Rule 52, also request authorization to make unsecured short-term
borrowings from the Utility Money Pool and to contribute surplus funds to the
Utility Money Pool and to lend and extend credit to one another through the
Utility Money Pool. The remaining Subsidiaries, all of which are Non-Utility
Subsidiaries as well as any other newly formed Non-utility Subsidiaries, which
NCE may form with the approval of the Commission, may participate in the
Non-Utility Money Pool. The Non-Utility Money Pool activities of all of the
Non-Utility Subsidiaries except PSCCC are exempt from the prior approval
requirements of the Act under Rule 52. PSCCC is hereby requesting authority to
make unsecured short-term borrowings from the Non-Utility Money Pool to the
maximum amount requested herein, to contribute surplus funds to the Non-Utility
Money Pool and to lend and extend credit to other Non-Utility Subsidiaries. NCE
is requesting authorization to contribute surplus funds and to lend and extend
credit to (a) the Utility Subsidiaries through the Utility Money Pool and (b)
the Non-Utility Subsidiaries through the Non-Utility Money Pool.
The Applicants believe that the cost of the proposed
borrowings through the two Money Pools will generally be more favorable to the
borrowing participants than the comparable cost of external short-term
borrowings, and the yield to the participants contributing available funds to
the two Money Pools will generally be higher than the typical yield on
short-term investments.
1. Utility-Money Pool
Under the proposed terms of the Utility Money Pool, short-term
funds would be available from the following sources for short-term loans to the
Utility Subsidiaries from time to time: (1) surplus funds in the treasuries of
Utility Money Pool participants other than NCE, (2) surplus funds in the
treasury of NCE, and (3) proceeds from bank borrowings by Utility Money Pool
participants or the sale of commercial paper by NCE, PSCo, SPS and Cheyenne for
loan to the Utility Money Pool ("External Funds"). Funds would be made available
from such sources in such order as NC Services, as administrator of the Utility
Money Pool, may determine would result in a lower cost of borrowing, consistent
with the individual borrowing needs and financial standing of the companies
providing funds to the
<PAGE>
18
pool. The determination of whether a Utility Money Pool participant at any time
has surplus funds to lend to the Utility Money Pool or shall lend funds to the
Utility Money Pool would be made by such participant's chief financial officer
or treasurer, or by a designee thereof, on the basis of cash flow projections
and other relevant factors, in such participant's sole discretion.
As discussed in more detail below, a separate Non-Utility
Money Pool will be established by NCE with other Non-Utility Subsidiary
companies of NCE. Funds made available by NCE for loans through the money pools
will be made available first for loans through the Utility Money Pool and
thereafter for loans through the Non-Utility Money Pool.
Utility Money Pool participants that borrow would borrow pro
rata from each company that lends, in the proportion that the total amount
loaned by each such lending company bears to the total amount then loaned
through the Utility Money Pool. On any day when more than one fund source (e.g.,
surplus treasury funds of NCE and other Utility Money Pool participants
("Internal Funds") and External Funds), with different rates of interest, is
used to fund loans through the Utility Money Pool, each borrower would borrow
pro rata from each such fund source in the Utility Money Pool in the same
proportion that the amount of funds provided by that fund source bears to the
total amount of short-term funds available to the Utility Money Pool.
Borrowings from the Utility Money Pool would require
authorization by the borrower's chief financial officer or treasurer, or by a
designee thereof. No party would be required to effect a borrowing through the
Utility Money Pool if it is determined that it could (and had authority to)
effect a borrowing at lower cost directly from banks or through the sale of its
own commercial paper. No loans through the Utility Money Pool would be made to,
and no borrowings through the Utility Money Pool would be made by, NCE.
The cost of compensating balances, if any, and fees paid to
banks to maintain credit lines and accounts by Utility Money Pool participants
lending External Funds to the Utility Money Pool would initially be paid by the
participant maintaining such line. A portion of such costs -- or all of such
costs in the event a Utility Money Pool participant establishes a line of credit
solely for purposes of lending any External Funds obtained thereby into the
Utility Money Pool -- would be retroactively allocated every month to the
companies borrowing such External Funds through the Utility Money Pool in
propor-
<PAGE>
19
tion to their respective daily outstanding borrowings of such External Funds.
If only Internal Funds make up the funds available in the
Utility Money Pool, the interest rate applicable and payable to or by
subsidiaries for all loans of such Internal Funds will be the rates for
high-grade unsecured 30-day commercial paper sold through dealers by major
corporations as quoted in The Wall Street Journal.
If only External Funds comprise the funds available in the
Utility Money Pool, the interest rate applicable to loans of such External Funds
would be equal to the lending company's cost for such External Funds (or, if
more than one Utility Money Pool participant had made available External Funds
on such day, the applicable interest rate would be a composite rate equal to the
weighted average of the cost incurred by the respective Utility Money Pool
participants for such External Funds).
In cases where both Internal Funds and External Funds are
concurrently borrowed through the Utility Money Pool, the rate applicable to all
loans comprised of such "blended" funds would be a composite rate equal to the
weighted average of (a) the cost of all Internal Funds contributed by Utility
Money Pool participants (as determined pursuant to the second preceding
paragraph above) and (b) the cost of all such External Funds (as determined
pursuant to the immediately preceding paragraph above). In circumstances where
Internal Funds and External Funds are available for loans through the Utility
Money Pool, loans may be made exclusively from Internal Funds or External Funds,
rather than from a "blend" of such funds, to the extent it is expected that such
loans would result in a lower cost of borrowings.
Funds not required by the Utility Money Pool to make loans
(with the exception of funds required to satisfy the Utility Money Pool's
liquidity requirements) would ordinarily be invested in one or more short-term
investments, including: (i) interest-bearing accounts with banks; (ii)
obligations issued or guaranteed by the U.S. government and/or its agencies and
instrumentalities, including obligations under repurchase agreements; (iii)
obligations issued or guaranteed by any state or political subdivision thereof,
provided that such obligations are rated not less than A by a nationally
recognized rating agency; (iv) commercial paper rated not less than A-1 or P-1
or their equivalent by a nationally recognized rating agency; (v) money market
funds; (vi) bank certificates of de-
<PAGE>
20
posit, (vii) Eurodollar funds; and (viii) such other investments as are
permitted by Section 9(c) of the Act and Rule 40 thereunder.
The interest income and investment income earned on loans and
investments of surplus funds would be allocated among the participants in the
Utility Money Pool in accordance with the proportion each participant's
contribution of funds bears to the total amount of funds in the Utility Money
Pool and the cost of funds provided to the Utility Money Pool by such
participant.
Each Applicant receiving a loan through the Utility Money Pool
would be required to repay the principal amount of such loan, together with all
interest accrued thereon, on demand and in any event not later than one year
after the date of such loan. All loans made through the Utility Money Pool could
be prepaid at any time by the borrower without premium or penalty.
Under the authorization requested herein, all loans through
the Utility Money Pool would be made on or before December 31, 2002. All loans
would mature on demand, or on a date agreed by the parties (but in any case not
later than one year after the date of the applicable borrowing), and would be
prepayable in whole at any time or in part from time to time, without premium or
penalty. Interest would be payable by each borrower monthly.
2. Non-Utility Money Pool
The Non-Utility Money Pool will be operated on the same terms
and conditions as the Utility Money Pool, except that NCE funds made available
to the Money Pools will be made available to the Utility Money Pool first and
thereafter to the Non-Utility Money Pool. All contributions to, and borrowings
from, the Non-Utility Money Pool are exempt pursuant to the terms of Rule 52
under the Act, except contributions and extensions of credit by NCE and PSCCC
and short-term borrowings by PSCCC in an amount not to exceed 40% of its total
capitalization, authorization for which is hereby requested.
3. Other Contributions to Money Pool
NCE, SPS, PSCo and Cheyenne may contribute funds from the
issuance of short term debt as authorized above to the Utility Money Pool. NCE
may contribute funds from the issuance of short term debt to the Non-
<PAGE>
21
Utility Money Pool and the Non-Utility Subsidiaries may contribute funds from
the issuance of short term debt to the Non-Utility Money Pool.
4. Operation of the Money Pools and
Administrative Matters
Operation of the Utility and Non-Utility Money Pools,
including record keeping and coordination of loans, will be handled by NC
Services under the authority of the appropriate officers of the participating
companies. NC Services will administer the Utility and Non-Utility Money Pools
on an "at cost" basis and will maintain separate records for each money pool.
Surplus funds of the Utility Money Pool and the Non-Utility Money Pool may be
combined in common short-term investments, but separate records of such funds
shall be maintained by NC Services as administrator of the pools, and interest
thereon shall be separately allocated, on a daily basis, to each Money Pool in
accordance with the proportion that the amount of each Money Pool's surplus
funds bears to the total amount of surplus funds available for investment from
both Money Pools.
5. Authorization Amounts
It is proposed that the Subsidiaries borrow short term funds
from the Money Pool. The maximum amount of Money Pool borrowings outstanding for
each Subsidiary will be determined by NCE and the Subsidiaries in accordance
with business needs. Actual short-term financing would be issued based on
working capital requirements and any interim financing needed to bridge between
issuances of long-term capital. The maximum short-term debt under the Money Pool
to be issued by PSCo, SPS and Cheyenne will not exceed 40% of their total
capitalization.
6. Use of Proceeds
Proceeds of any short term borrowings from the Money Pools by
the Applicants may be used by each such Applicant (i) for the interim financing
of its construction and capital expenditure programs; (ii) for its working
capital needs; (iii) for the repayment, redemption or refinancing of its debt
and preferred stock; (iv) to meet unexpected contingencies, payment and timing
differences, and cash requirements; and (v) to otherwise finance its own
business and for other lawful general purposes.
<PAGE>
22
G. Financing of EWGs and FUCOs
As described in the Merger U-1, upon consummation of the
Merger, NCE, through its Non-Utility Subsidiaries, will own certain interests in
EWGs. As outlined in the Merger U-1, NCE's Non-Utility Subsidiaries, e prime and
Quixx and their subsidiaries, may expend internally generated funds on the
development of such projects and FUCOs. In addition, e prime and Quixx and their
subsidiaries will continually seek out and review investment opportunities which
could lead to the acquisition of an interest in or the construction of EWGs or
FUCOs. Sections 32 and 33 of the Act permit a registered holding company to
acquire and maintain interests in one or more EWGs or FUCOs without the need to
apply for or receive approval from the Commission. To the extent that funds for
one or more projects are required in excess of internally generated funds, NCE
hereby requests Commission authorization to invest proceeds from the financings
authorized hereby in EWGs and FUCOs in compliance with Rule 53(a)(1) such that
NCE's aggregate investment at any one time during the period covered by this
Application will not exceed 50% of its "consolidated retained earnings", as
defined in Rule 53(a)(1)(ii). NCE may seek additional Commission authorization
if one or more prospective transactions warrant additional financing.
H. Filing of Certificates of Notification
It is proposed that, with respect to NCE, the reporting system
of the 1933 Act and the 1934 Act be integrated with the reporting system under
the 1935 Act. This would eliminate duplication of filings with the Commission
that cover essentially the same subject matters, resulting in a reduction of
expense for both the Commission and NCE. To effect such integration, the portion
of the 1933 Act and 1934 Act reports containing or reflecting disclosures of
transactions occurring pursuant to the authorization granted in this proceeding
would be incorporated by reference into this proceeding through Rule 24
certificates of notification. The certificates would also contain all other
information required by Rule 24, including the certification that each
transaction being reported on had been carried out in accordance with the terms
and conditions of and for the purposes represented in this Application. Such
certificates of notification would be filed within 60 days after the end of each
of the first three calendar quarters, and 90 days after the end of the last
calendar quarter, in which transactions occur.
<PAGE>
23
The Rule 24 certificates will contain the following
information:
(a) If sales of capital stock by NCE are reported, the
purchase price per share and the market price per share at the date of
the agreement of sale;
(b) Consolidated balance sheets as of the end of the quarter,
and separate balance sheets as of the end of the quarter for each
company, including NCE, that has engaged in financing transactions
during the quarter;
(c) Future registration statements filed under the 1933 Act
with respect to securities that are the subject of the Application and
proxy materials filed under the Securities Exchange Act of 1934 that
relate to matters which are the subject of this Application will be
filed (or incorporated by reference) as exhibits to the next
certificate filed pursuant to Rule 24;
(d) A summary of any Money Pool activity, including (i) the
maximum amount of each Money Pool participant's short-term borrowings
outstanding during such quarter, and (ii) the average rate for the
Utility Money Pool and the Non-Utility Money Pool during such quarter.
I. Statement Pursuant to Rule 54
Rule 54 promulgated under the Act states that in determining
whether to approve the issue or sale of a security by a registered holding
company for purposes other than the acquisition of an exempt wholesale generator
("EWG") or a foreign utility company ("FUCO"), or other transactions by such
registered holding company or its subsidiaries other than with respect to EWGs
or FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of any subsidiary which is an EWG or a FUCO upon the registered holding
company system if Rules 53(a), (b) or (c) are satisfied.
Rule 53 requires that the aggregate investment in EWGs and
FUCOs not exceed 50% of a system's consolidated retained earnings. Fifty percent
of NCE's retained earnings, pro forma as of September 30, 1996 was $380,033,000;
NCE's pro forma aggregate investment (as defined in Rule 53(a)(1)(i)) in EWGs
and FUCOs is estimated to be approximately $8,207,000, thereby satisfying Rule
53(a)(1).
<PAGE>
24
NCE and its Subsidiaries will maintain books and records to
identify the investments in and earnings from EWGs and FUCOs in which they
directly or indirectly hold an interest, thereby satisfying Rule 53(a)(2). In
addition, the books and records of each such entity are and will be kept in
conformity with United States generally accepted accounting principles ("GAAP"),
the financial statements are and will be prepared according to GAAP, and NCE
undertakes to provide the Commission access to such books and records and
financial statements as it may request.
Employees of NCE's domestic public-utility companies will not
render services, directly or indirectly, to the EWGs or FUCOs in the NCE System,
thereby satisfying Rule 53(a)(3).
NCE, in connection with any Form U-1 seeking approval of EWG
or FUCO financing, will submit copies of the documents described in Rule
53(a)(4) with every federal, state or local regulation having jurisdiction over
the retail rates of the public-utility companies in the NCE System. Rule
53(a)(4) will be correspondingly satisfied.
None of the conditions described in Rule 53(b) exist with
respect to NCE, thereby satisfying Rule 53(b) and making Rule 53(c)
inapplicable.
Item 2. Fees, Commissions and Expenses
Estimated Legal Fees and Expenses
$
Estimated Miscellaneous Expenses
$---------
Total
Item 3. Applicable Statutory Provisions
Sections 6(a), 7, 9(a), 10, and 12 of the Act and Rules 42,
43, 45, 52 and 62 are considered applicable to the proposed transactions.
To the extent that the proposed transactions are considered by
the Commission to require authorization, approval or exemption under any section
of the Act or provision of the rules or regulations other than those
specifically set forth
<PAGE>
25
herein, request for such authorization, approval or exemption is hereby made.
Item 4. Regulatory Approvals
No state or federal regulatory agency other than the
Commission under the Act has jurisdiction over the proposed transactions. If any
such agency obtains jurisdiction over any of the proposed transactions, any
orders obtained will be promptly filed with the Commission.
Item 5. Procedure
The Applicants hereby request that there be no hearing on this
Application and that the Commission issue its order as soon as practicable after
the filing hereof. The Commission is respectfully requested to issue and publish
the requisite notice under Rule 23 with respect to the filing of this
Application not later than February 24, 1997, such notice to specify a date not
later than March 21, 1997, by which comments may be entered and a date not later
than the date of the Commission's order for the Merger U-1, as the date which an
order of the Commission granting and permitting the Application to become
effective may be entered by the Commission. A form of Notice is filed herewith
as Exhibit G-1.
Without prejudice to its right to modify the same if a hearing
should be ordered on this Application, NCE hereby makes the following
specifications required by paragraph (b) of Item 5 of Form U-1:
1. There should not be a recommended decision by a
hearing officer or any other responsible officer of the Commission.
2. The Division of Investment Management may assist in
the preparation of the Commission's decision and/or order.
3. There should not be a 30-day waiting period between
issuance of the Commission's order and the date on which the order is
to become effective.
Item 6. Exhibits and Financial Statements
A. Exhibits
B-1 Form of Commercial Paper Note
<PAGE>
26
B-2 Form of Standard Purchase Agreement - Debt securities
B-3 Form of Standard Purchase Agreement - Stock
B-4 Summary of Terms of Employee Benefit Plans
(to be filed by Amendment)
B-5 Form of NCE Dividend Reinvestment Plan
B-6 Form of Indenture for Debt Securities
D-1 Current Financing Order[s] issued by the Colorado Public
Utilities (to be filed by Amendment)
D-2 Current Financing Order[s] issued by the New Mexico
Public Service Commission (to be filed by Amendment)
D-3 Current Financing Order[s] issued by the Wyoming Public
Service Commission (to be filed by Amendment)
F-1 Opinion of Counsel (to be filed by Amendment)
G-1 Proposed Form of Public Notice
G-2 Financial Data Schedules (incorporated by reference
to the Annual Report on Form 10-K of NCE for the
fiscal year ended December 31, 1996)
B. Financial Statements
1.1 Pro-Forma Balance Sheet of NCE and subsidiaries,
consolidated, as of September 30, 1996 (incorporated
by reference to the Annual Report on Form 10-K of SPS
for the fiscal year ended August 31, 1996 (File No.
1-3789)).
1.2 Pro-Forma Statement of Income of NCE and
subsidiaries, for the 12 months ended September 30,
1996 (incorporated by reference to the Annual Report
on Form 10-K of SPS for the fiscal year ended August
31, 1996 (File No. 1-3789)).
2.1 Balance Sheet of PSCo as of September 30, 1996
(incorporated by reference to the Quarterly
<PAGE>
27
Statement on Form 10-Q of PSCo for the quarter ended
September 30, 1996 (File No. 1-3280)).
2.2 Statement of Income and Retained Earnings of PSCo for
the nine months ended September 30, 1996
(incorporated by reference to the Quarterly Statement
on Form 10-Q of PSCo for the quarter ended September
30, 1996 (File No. 1-3280)).
3.1 Balance Sheet of SPS as of November 30, 1996
(incorporated by reference to the Quarterly Statement
on Form 10-Q of SPS for the quarter ended
November 30, 1996 (File No. 1-3789)).
3.2 Statement of Earnings for the three months ended
November 30, 1996 (incorporated by reference to the
Quarterly Statement on form 10-Q of SPS for the
quarter ended November 30, 1996 (File No. 1-3789)).
Item 7. Information as to Environmental Effects
None of the matters that are the subject of this application
and declaration involve a "major federal action" nor do they "significantly
affect the quality of the human environment" as those terms are used in section
102(2)(C) of the National Environmental Policy Act. The transaction that is the
subject of this application will not result in changes in the operation of the
company that will have an impact on the environment. The Applicants are not
aware of any federal agency that has prepared or is preparing an environmental
impact statement with respect to the transactions that are the subject of this
application.
<PAGE>
28
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this application
and declaration to be signed on its behalf by the undersigned thereunto duly
authorized.
By: /s/ Doyle R. Bunch
-------------------------------
Name: Doyle R. Bunch, II
Title: Chairman and Secretary
Date: February 18, 1997
Exhibit B-1
FORM OF COMMERCIAL PAPER MASTER NOTE
________________________
(DATE OF ISSUANCE)
_____________________________________________ (the "Issuer"), a
corporation organized and existing under the laws of the State
of ________________, for value received, hereby promises to pay
to _________________ or registered assigns on the maturity date
of each obligation identified on the records of the Issuer
(which records are maintained by ______________________________
[the "Paying Agent"]) the principal amount for each such obli-
gation. Payment shall be made by wire transfer to the regis-
tered owner from the Paying Agent without the necessity of pre-
sentation and surrender of this Master Note.
This Master Note is a valid and binding obligation of the
Issuer.
___________________________________ ___________________________________
(As Guarantor) (As Issuer)
By:________________________________ By:________________________________
(Authorized Officer's Signature) (Authorized Officer's Signature)
___________________________________ ___________________________________
(Print Name and Title) (Print Name and Title)
<PAGE>
-2-
At the request of the registered owner, the Issuer shall
promptly issue and deliver one or more separate note certifi-
cates evidencing each obligation evidenced by this Master Note.
As of the date any such note certificate or certificates are
issued, the obligations which are evidenced thereby shall no
longer be evidenced by this Master Note.
_______________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto
_______________________________________________________________
(Name, Address, and Taxpayer Identification Number of Assignee)
the Master Note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________
Attorney to transfer said Master Note on the books of the
Issuer with full power of substitution in the premises.
Dated: _________________________________
Signature
Signature(s) Guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name as written upon the face of
this Master Note, in every particu-
lar, without alteration or enlarge-
ment or any change whatsoever.
<PAGE>
-3-
_______________________________________________________________
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE-
SENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY 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 IS MADE TO CEDE & CO., ANY TRANS-
FER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.]
Exhibit B-2
[NAME OF ISSUER]
DEBT SECURITIES
STANDARD PURCHASE PROVISIONS
INCLUDING
FORM OF PURCHASE AGREEMENT
<PAGE>
[NAME OF ISSUER]
STANDARD PURCHASE PROVISIONS -
DEBT SECURITIES
From time to time, [Name of Issuer], a corporation
organized and existing under the laws of the State of Delaware
(the "Company"), may enter into purchase agreements that pro-
vide for the sale of designated securities to the purchaser or
purchasers named therein. The standard provisions set forth
herein may be incorporated by reference in any such purchase
agreement (the "Purchase Agreement"). The Purchase Agreement,
including the provisions incorporated therein by reference, is
herein sometimes referred to as "this Agreement." The term
"Securities" shall mean the Debt Securities of the Company to
be sold by the Company pursuant to the applicable Purchase
Agreement. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
The Company has filed, in accordance with the provi-
sions of the Securities Act of 1933, as amended, and the rules
and regulations of the Securities and Exchange Commission
thereunder (collectively called the "Act"), with the Securities
and Exchange Commission (the "Commission"), a registration
statement on Form S-3 (including a prospectus), relating to the
Securities, which pursuant to Item 12 of Form S-3 incorporates
by reference documents which the Company has filed in accor-
dance with the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder
(collectively called the "Exchange Act"). Such registration
statement has been declared effective by the Commission.
Promptly upon the execution of this Agreement, the Company will
prepare a prospectus supplement relating to the Securities (the
"Prospectus Supplement"). The Company has furnished to you,
for use by the Underwriters (as defined herein) and dealers,
copies of one or more preliminary prospectuses and the docu-
ments so incorporated therein (each thereof, including the doc-
uments so incorporated therein, is herein called the "Prelimi-
nary Prospectus"). The terms Registration Statement and Pro-
spectus shall have the meanings ascribed to them in the Pur-
chase Agreement.
1. Introductory. The Company proposes to issue and
sell from time to time Securities registered under the Regis-
tration Statement. The Securities will be issued pursuant to
an Indenture, dated , to as Trustee
(the "Trustee"), as supplemented and amended, including a sup-
plemental indenture pertaining to the particular series of
<PAGE>
-2-
Securities involved in the offering (the "Indenture"), and will
have varying designations, interest rates and times of payment
of any interest, maturities, redemption provisions and other
terms, with all such terms for any particular series of the
Securities being determined at the time of the sale and set
forth in the Purchase Agreement and the Prospectus Supplement
relating to such series of Securities. The Securities involved
in any such offering are hereinafter referred to as the "Pur-
chased Securities," and the firm or firms, as the case may be,
which agree to purchase the same are hereinafter referred to as
the "Underwriters" of the Purchased Securities. The terms
"you" and "your" refer to those Underwriters who sign the Pur-
chase Agreement either on behalf of themselves only or on
behalf of themselves and as representatives of the several
Underwriters named in Schedule A thereto, as the case may be.
Purchased Securities to be purchased by Underwriters are herein
referred to as "Underwriters' Securities," and any Purchased
Securities to be purchased pursuant to Delayed Delivery Con-
tracts (as defined below) as hereinafter provided are herein
referred to as "Contract Securities."
2. Delivery and Payment. The Company will deliver
the Underwriters' Securities to you for the accounts of the
Underwriters at the place specified in the Purchase Agreement,
against payment of the purchase price by wire transfer of imme-
diately available funds (as agreed to by the parties and speci-
fied in the Purchase Agreement), at the time set forth in this
Agreement [or at such other time not later than seven full
business days thereafter] as you and the Company determine,
such time being herein referred to as the "time of purchase."
Unless otherwise provided for in the Purchase Agreement, the
Underwriters' Securities so to be delivered will be in defini-
tive fully registered form registered in such authorized denom-
inations and in such names as you request in writing not later
than 10:00 A.M.,* on the third business day prior to the time
of purchase, or, if no such request is received, in the names
of the respective Underwriters in the amounts agreed to be pur-
chased by them pursuant to this Agreement. For the purpose of
expediting the checking of the Underwriters' Securities, the
Company agrees to make the Underwriters' Securities available
to you (at the place specified in the Purchase Agreement) in
_________________________
* Times mentioned herein are New York City Time.
<PAGE>
-3-
definitive form not later than 10:00 A.M. on the first business
day preceding the time of purchase.*
If any Purchase Agreement provides for sales of Pur-
chased Securities pursuant to delayed delivery contracts, the
Company authorizes the Underwriters to solicit offers to pur-
chase Contract Securities pursuant to delayed delivery con-
tracts substantially in the form of Schedule I attached hereto
(the "Delayed Delivery Contracts") with such changes therein as
the Company may approve. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings
banks, insurance companies, pension funds, investment com-
panies, and educational and charitable institutions. At the
time of purchase the Company will pay you as compensation, for
the accounts of the Underwriters, the compensation set forth in
such Purchase Agreement in respect of the principal amount of
Contract Securities. The Underwriters will not have any
responsibility in respect of the validity or the performance of
Delayed Delivery Contracts. If the Company executes and deliv-
ers Delayed Delivery Contracts, the Contract Securities shall
be deducted from the Purchased Securities to be purchased by
the several Underwriters and the aggregate principal amount of
Purchased Securities to be purchased by each Underwriter shall
be reduced pro rata in proportion to the principal amount of
Purchased Securities set forth opposite each Underwriter's name
in such Purchase Agreement, except to the extent that you
determine that such reduction shall be otherwise allocated and
so advise the Company.
3. Certain Covenants of the Company. The Company
agrees:
(a) As soon as possible after the execution
and delivery of this Agreement to file, or mail
for filing, the Prospectus with the Commission
pursuant to its Rule 424 under the Act and, if and
when required at any time after such execution and
delivery, to file amendments to the applications
the Company has previously filed with any state
regulatory agencies having jurisdiction to govern
the Company's issuance of its securities setting
forth, among other things, the necessary informa-
tion with respect to the price and terms of the
_________________________
* As used herein, "business day" shall mean a day on which
the New York Stock Exchange is open for trading.
<PAGE>
-4-
Purchased Securities and the terms of offering of
the Purchased Securities;
(b) To file no amendment or supplement to
the Registration Statement or Prospectus (other
than a required filing under the Exchange Act)
subsequent to the execution of this Agreement to
which you object in writing;
(c) To furnish such proper information as
may be required and otherwise to cooperate in
qualifying the Purchased Securities for sale under
the laws of such jurisdictions as you may desig-
nate and in determining their eligibility for
investment under the laws of such jurisdictions;
provided that the Company shall not be required to
qualify as a foreign corporation or to file a gen-
eral consent to service of process in any
jurisdiction;
(d) To the extent not previously furnished
to you, to furnish to you two signed copies of the
Registration Statement, as initially filed with
the Commission, of all amendments thereto, and of
all documents incorporated by reference therein
(including all exhibits filed therewith, other
than exhibits which have previously been furnished
to you), two signed copies of each consent and
certificate of independent accountants and of each
other person who by his profession gives authority
to statements made by him and who is named in the
Registration Statement as having prepared, certi-
fied or reviewed any part thereof, and to furnish
to you sufficient unsigned copies of the foregoing
(other than exhibits, including consents filed as
exhibits, to the Registration Statement) for dis-
tribution of a copy to you and to each of the
other Underwriters;
(e) To deliver to the Underwriters without
charge in New York City as soon as practicable
after the execution and delivery of this Agreement
and thereafter from time to time to furnish to the
Underwriters, without charge, as many copies of
the Prospectus in final form and any documents
incorporated by reference therein at or after the
date thereof (or as amended or supplemented, if
<PAGE>
-5-
the Company shall have made any amendment or sup-
plement after the effective date of the Registra-
tion Statement) as you or the respective Under-
writers may reasonably request for the purposes
contemplated by the Act;
(f) To advise you promptly (confirming such
advice in writing) of any official request made by
the Commission for amendments to the Registration
Statement or Prospectus or for additional informa-
tion with respect thereto, or of official notice
of institution of proceedings for, or the entry
of, a stop order suspending the effectiveness of
the Registration Statement and, if such order
should be entered by the Commission, to make every
reasonable effort to obtain the lifting or removal
thereof as soon as possible, or of the suspension
of qualification of the Purchased Securities for
offering or sale in any jurisdiction or of the
initiation or threatening of any proceeding for
any such purpose;
(g) To apply the net proceeds from the sale
of the Purchased Securities in the manner set
forth in the Prospectus;
(h) To furnish to you during a period of
five years from the time of purchase (i) as soon
as practicable after the end of each fiscal year,
a copy of its annual report to shareholders for
such year; (ii) from time to time, copies of any
reports or other communications which it shall
file with the Commission or any governmental
agency substituted therefor under the Exchange Act
or sent to its public stockholders, or holders of
the Purchased Securities, and (iii) such other
information as you may from time to time reason-
ably request regarding the financial condition and
operations of the Company;
(i) To furnish to any other Underwriter cop-
ies of such of the financial statements, reports
or other information referred to in the foregoing
subparagraphs (h)(i) and (ii) as such Underwriter
may, from time to time during the period you are
entitled to receive them, request;
<PAGE>
-6-
(j) To advise the Underwriters of the hap-
pening of any event known to the Company within
the time during which a prospectus relating to the
Purchased Securities is required to be delivered
under the Act which, in the judgment of the Com-
pany, would require the making of any change in
the Prospectus or any amended or supplemented Pro-
spectus or in the information incorporated by ref-
erence therein so that as thereafter delivered to
purchasers such Prospectus will not include an
untrue statement of a material fact or omit to
state a material fact required to be stated
therein or necessary in order to make the state-
ments therein, in the light of the circumstances
under which they were made, not misleading, and on
request to prepare and furnish to the Underwriters
and to dealers and other persons designated by you
such amendments or supplements (including appro-
priate filings under the Exchange Act) to the Pro-
spectus as may be necessary to reflect any such
change, provided that the Company shall be so
obligated only so long as the Company is notified
of unsold allotments (failure by the Underwriters
to so notify the Company cancels the Company's
obligation under this Section 3(j));
(k) As soon as practicable, to make gener-
ally available to its security holders an earnings
statement (as contemplated by Rule 158 under the
Act) covering a period of twelve months after the
effective date of the Registration Statement;
(l) To pay the fees and expenses of counsel
for the Underwriters, and to reimburse the Under-
writers for their reasonable out-of-pocket
expenses incurred in contemplation of the perfor-
mance of this Agreement, in the event that the
Underwriters' Securities are not delivered to and
taken up and paid for by the Underwriters hereun-
der for any reason whatsoever except the failure
or refusal of any Underwriter to take up and pay
for Underwriters' Securities for some reason not
permitted by the terms of this Agreement, the
Underwriters agreeing to pay the fees and expenses
of counsel for the Underwriters in any other
event;
<PAGE>
-7-
(m) To pay all expenses, fees and taxes
(other than transfer taxes and fees and disburse-
ments of counsel for the Underwriters except as
set forth under 3(l) above or (iv) below) in con-
nection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospec-
tus and the Prospectus, any documents incorporated
by reference therein at or after the date thereof
and any amendments or supplements thereto, and the
printing or reproduction and furnishing of copies
of each thereof to the Underwriters and to deal-
ers, (ii) the issue, sale and delivery of the Pur-
chased Securities, (iii) the printing or reproduc-
tion of this Agreement and the opinions and let-
ters referred to in Section 4(a) hereof, (iv) the
qualification of the Purchased Securities for sale
and determination of their eligibility for invest-
ment under state laws as aforesaid, including the
legal fees and all filing fees and disbursements
of counsel for the Underwriters and all other fil-
ing fees, and the printing or reproduction and
furnishing of copies of the "Blue Sky Survey" and
the "Legal Investment Survey" to the Underwriters
and to dealers, (v) the rating of the Purchased
Securities by national rating agencies and
(vi) the performance of the Company's other obli-
gations hereunder;
(n) To furnish to you as early as practi-
cable prior to the time of purchase, but no later
than two business days prior thereto, a copy of
the latest available unaudited interim consoli-
dated financial statements, if any, of the Company
which have been read by the Company's independent
public accountants as stated in their letters to
be furnished pursuant to Section 4(a) of this
Agreement; and
(o) If a public offering of the Purchased
Securities is to be made, not to offer or sell any
of its other debt securities which are substan-
tially similar to the Purchased Securities prior
to ten days after the time of purchase without
your consent.
<PAGE>
-8-
4. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters hereunder are subject
to the following conditions:
(a) That, at the time of purchase, you shall
receive the signed opinions of counsel for the
Company and counsel for the Underwriters, substan-
tially in the forms heretofore furnished to you,
addressed to the Underwriters (with reproduced or
conformed copies thereof for each of the other
Underwriters); and that, at the time of purchase,
you shall receive the signed letters of the
independent public accountants of the Company,
substantially in the form heretofore furnished to
you and in substance satisfactory to you addressed
to the Underwriters (with reproduced or conformed
copies thereof for each of the other
Underwriters);
(b) That, at or before 5:30 P.M. on the date
hereof, or at such later time and day as you may
have from time to time consented to in writing or
by telephone, confirmed in writing, such orders of
state authorities which are necessary to permit
the issue, sale and delivery of the Purchased
Securities, if any, shall have been issued; at the
time of purchase such orders shall be in full
force and effect; and prior to such time of pur-
chase no stop order with respect to the effective-
ness of the Registration Statement shall have been
issued under the Act by the Commission and at such
time of purchase no proceedings therefor shall be
pending or threatened;
(c) That, at the time the Registration
Statement became effective, the Registration
Statement did not contain an untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, and that at
the time of purchase the Prospectus shall not con-
tain an untrue statement of a material fact or
omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading, other than
any statement contained in, or any matter omitted
<PAGE>
-9-
from, the Registration Statement or the Prospectus
in reliance upon, and in conformity with, informa-
tion furnished in writing by or on behalf of any
Underwriter through you to the Company expressly
for use with reference to such Underwriter in the
Registration Statement or Prospectus;
(d) That, subsequent to the respective dates
as of which information is given in the Registra-
tion Statement and in the Prospectus, at the time
the Prospectus is first filed, or mailed for fil-
ing, pursuant to Rule 424 under the Act, and prior
to the time of purchase, in your opinion no mate-
rial adverse change, or any development involving
a prospective material adverse change, in the con-
dition of the Company, financial or otherwise,
shall have taken place (other than as referred to
in or contemplated by the Registration Statement
and Prospectus as of such time);
(e) That the Company shall have performed
all of its obligations under this Agreement which
are to be performed by the terms hereof at or
before the time of purchase;
(f) That, since the date of this Agreement,
there shall not have occurred any downgrading, nor
shall any notice have been given of any intended
or potential downgrading or of any review for a
possible change that does not indicate the direc-
tion of the possible change, in the rating
accorded any of the Company's securities by any
"nationally recognized statistical rating organi-
zation," as such term is defined for purposes of
Rule 436(g)(2) under the Act (other than as
referred to in or contemplated by the Registration
Statement and the Prospectus as of such time);
(g) That the Company shall, at the time of
purchase, deliver to you (with reproduced or con-
formed copies thereof for each of the other Under-
writers) a signed certificate of two of its execu-
tive officers stating that, subsequent to the
respective dates as of which information is given
in the Registration Statement and in the Prospec-
tus, at the time the Prospectus is first filed, or
mailed for filing, pursuant to Rule 424 under the
<PAGE>
-10-
Act, and prior to the time of purchase, no mate-
rial adverse change, or any development involving
a prospective material adverse change, in the con-
dition of the Company, financial or otherwise,
shall have taken place (other than as referred to
in or contemplated by the Registration Statement
and Prospectus as of such time) and also covering
the matters set forth in (c) and (e) of this Sec-
tion 4; and
(h) That the Company shall have accepted
Delayed Delivery Contracts in any case where sales
of Contract Securities arranged by the Underwrit-
ers have been approved by the Company.
5. Termination of Agreement. The obligations of
the several Underwriters hereunder shall be subject to termina-
tion in your absolute discretion, if, at any time prior to the
time of purchase, trading in securities on the New York Stock
Exchange shall have been suspended (other than a temporary sus-
pension to provide for an orderly market) or minimum prices
shall have been established on the New York Stock Exchange, or
if a banking moratorium shall have been declared either by the
United States or New York State authorities, or if after the
execution of this Agreement the United States shall have
declared war in accordance with its constitutional processes or
there shall have occurred any material outbreak or escalation
of hostilities or other national or international calamity or
crisis of such magnitude in its effect on the financial markets
of the United States as, in your judgment, to make it impracti-
cable to market the Purchased Securities.
If you elect to terminate this Agreement as provided
in this Section 5, the Company and each other Underwriter shall
be notified promptly in writing or by telephone, confirmed in
writing.
If the sale to the Underwriters of the Underwriters'
Securities, as herein contemplated, is not carried out by the
Underwriters for any reason permitted hereunder or if such sale
is not carried out because the Company shall be unable to com-
ply with any of the terms thereof, the Company shall not be
under any obligation or liability under this Agreement (except
to the extent provided in Sections 3(l), 3(m), 7(b) and 9
hereof), and the Underwriters shall be under no obligation or
liability to the Company (except to the extent provided in
<PAGE>
-11-
Sections 8(b) and 9 hereof) or to one another under this
Agreement.
6. Increase in Underwriters' Commitments: If any
Underwriter shall default in its obligation to take up and pay
for the Purchased Securities to be purchased by it hereunder
and if the principal amount of the Purchased Securities which
all Underwriters so defaulting shall have so failed to take up
and pay for does not exceed 10% of the total principal amount
of the Purchased Securities, the non-defaulting Underwriters
shall take up and pay for (in addition to the principal amount
of the Purchased Securities they are obligated to purchase pur-
suant to this Agreement) the principal amount of the Purchased
Securities agreed to be purchased by all such defaulting Under-
writers, as herein provided. Such Purchased Securities shall
be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate
with the consent of each Underwriter so designated or, in the
event no such designation is made, such Purchased Securities
shall be taken up and paid for by all non-defaulting Underwrit-
ers pro rata in proportion to the principal amount of the Pur-
chased Securities set opposite the names of all such non-
defaulting Underwriters in Schedule A to the Purchase
Agreement.
Without relieving any defaulting Underwriter of its
obligations hereunder, the Company agrees with the non-default-
ing Underwriters that it will not sell any Purchased Securities
hereunder unless all of the Underwriters' Securities are pur-
chased by the Underwriters (or by substituted Underwriters
selected by you with the approval of the Company or selected by
the Company with your approval).
If a new underwriter or underwriters are substituted
by the Underwriters or by the Company for a defaulting Under-
writer or Underwriters in accordance with the foregoing provi-
sion, the Company or you will have the right to postpone the
time of purchase for a period of not exceeding five business
days in order that necessary changes in the Registration State-
ment and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement will
refer to and include any underwriter substituted under this
Section 6 with like effect as if such substituted underwriter
had originally been named in Schedule A to the Purchase
Agreement.
<PAGE>
-12-
7. Warranties and Representations of and Indemnity
by the Company. (a) The Company warrants and represents that,
when the Registration Statement became effective, the Registra-
tion Statement complied in all material respects, and, when the
Prospectus is first filed, or mailed for filing, pursuant to
Rule 424 under the Act, the Prospectus will comply in all mate-
rial respects with the provisions of the Act, and that neither
will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or neces-
sary to make the statements therein not misleading; provided,
however, that the Company makes no warranty or representation
with respect to any statement contained in, or any matter omit-
ted from, the Registration Statement or the Prospectus in reli-
ance upon and in conformity with information furnished in writ-
ing by or on behalf of any Underwriter through you to the Com-
pany expressly for use with reference to the Underwriter in the
Registration Statement or Prospectus. The Company also war-
rants and represents that the documents incorporated by refer-
ence in the Prospectus comply in all material respects with the
requirements of the Exchange Act and any additional documents
deemed to be incorporated by reference in the Prospectus will,
when they are filed with the Commission, comply in all material
respects with the requirements of the Exchange Act, and will
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein, or neces-
sary to make the statements therein, in the light of the cir-
cumstances under which they are made, not misleading.
(b) The Company agrees to indemnify and hold harm-
less each Underwriter, and any person who controls any Under-
writer within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any loss, expense,
liability or claim (including the reasonable fees and expenses
of counsel and other reasonable expenses in connection with
investigating, defending or settling any such claim) which
arises out of or is based upon any alleged untrue statement of
a material fact in the Registration Statement, any prospectus
contained in the Registration Statement at the time it became
effective or the Prospectus, or any related preliminary pro-
spectus, or arises out of or is based upon any alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements made therein not mislead-
ing. The foregoing shall not cover any such loss, expense,
liability or claim, however, which arises out of or is based
upon any alleged untrue statement of a material fact contained
in, and in conformity with information furnished in writing by
or on behalf of such Underwriter through you to the Company
<PAGE>
-13-
expressly for use with reference to the Underwriter in, any
such documents or arises out of or is based upon any alleged
omission to state a material fact in connection with such
information required to be stated in any such documents or nec-
essary to make such information not misleading.
If any action is brought against an Underwriter or
controlling person in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, such
Underwriter shall promptly notify the Company in writing or by
telephone, confirmed in writing, of the institution of such
action and the Company shall assume the defense of such action,
including the employment of counsel and payment of expenses.
Such Underwriter or controlling person shall have the right to
employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless the employment of
such counsel shall have been authorized in writing by the Com-
pany in connection with the defense of such action or the Com-
pany shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional
to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which
events such fees and expenses of one counsel (in addition to
local counsel) for all indemnified parties selected by you
shall be borne by the Company. Anything in this paragraph to
the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without
its written consent. The Company's indemnity agreement con-
tained in this Section 7(b) and its warranties and representa-
tions contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf
of any Underwriter or controlling person, and shall survive any
termination of this Agreement or the issuance and delivery of
the Purchased Securities. The Company agrees promptly to
notify the Underwriters of the commencement of any litigation
or proceedings against the Company or any of its officers or
directors in connection with the issue and sale of the Pur-
chased Securities or with such Registration Statement or
Prospectus.
8. Warranties and Representations of and Indemnity
by Underwriters. (a) Each Underwriter warrants and represents
that the information furnished in writing by or on behalf of
<PAGE>
-14-
such Underwriter through you to the Company expressly for use
with reference to such Underwriter in the Registration State-
ment at the time it became effective or the Prospectus, or any
related preliminary prospectus does not contain an untrue
statement of a material fact and does not omit to state a mate-
rial fact in connection with such information required to be
stated in the Registration Statement at the time it became
effective or the Prospectus, or any related preliminary pro-
spectus or necessary to make such information not misleading.
Each Underwriter, in addition to other information furnished by
such Underwriter or on its behalf through you to the Company in
writing expressly for use with reference to such Underwriter in
the Registration Statement and Prospectus, hereby furnishes to
the Company in writing expressly for use with reference to such
Underwriter the statements with respect to the terms of offer-
ing of the Purchased Securities by the Underwriters set forth
on the cover page of the Prospectus Supplement and under
"Underwriting" therein.
(b) Each Underwriter severally agrees to indemnify
and hold harmless the Company, its directors and its officers
from and against any loss, expense, liability or claim (includ-
ing the reasonable fees and expenses of counsel and other rea-
sonable expenses in connection with investigating, defending or
settling any such claim) which arises out of or is based upon
any alleged untrue statement of a material fact contained in,
and in conformity with information furnished in writing by or
on behalf of such Underwriter through you to the Company
expressly for use with reference to such Underwriter in, the
Registration Statement, any prospectus contained in the Regis-
tration Statement at the time it became effective or the Pro-
spectus, or any related preliminary prospectus, or arises out
of or is based upon any alleged omission to state a material
fact in connection with such information required to be stated
in such documents or necessary to make such information not
misleading.
If any action is brought against the Company or any
such person in respect of which indemnity may be sought against
any Underwriter pursuant to the foregoing paragraph, the Com-
pany or such person shall promptly notify such Underwriter in
writing or by telephone, confirmed in writing, of the institu-
tion of such action and such Underwriter shall assume the
defense of such action, including the employment of counsel and
payment of expenses. The Company or such person shall have the
right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense
<PAGE>
-15-
of the Company or such person unless the employment of such
counsel shall have been authorized in writing by such Under-
writer in connection with the defense of such action or such
Underwriter shall not have employed counsel to have charge of
the defense of such action or such indemnified party or parties
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional
to those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses for all indemnified
parties of one counsel (in addition to local counsel) selected
by the Company shall be borne by such Underwriter. Anything in
this paragraph to the contrary notwithstanding, no Underwriter
shall be liable for any settlement of any such claim or action
effected without the written consent of such Underwriter. The
indemnity agreement on the part of each Underwriter contained
in this Section 8(b) shall remain in full force and effect
regardless of any investigation made by or on behalf of the
Company or such person, and shall survive any termination of
this Agreement or the issuance and delivery of the Purchased
Securities. Each Underwriter agrees promptly to notify the
Company of the commencement of any litigation or proceedings
against such Underwriter in connection with the issue and sale
of the Purchased Securities or with such Registration Statement
or Prospectus.
9. Contribution. If the indemnification provided
for in Sections 7(b) or 8(b) above is unavailable in respect of
any losses, expenses, liabilities or claims referred to
therein, then the parties entitled to indemnification by the
terms thereof shall be entitled to contribution to liabilities
and expenses except to the extent that contribution is not per-
mitted under the Act or the Exchange Act. In determining the
amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits
received by each party from the offering of the Purchased Secu-
rities (taking into account the portion of the proceeds of the
offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to
which the claim was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable con-
siderations appropriate under the circumstances. The Company
and the Underwriters and such controlling persons agree that it
would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the
Underwriters and such controlling persons were treated as one
<PAGE>
-16-
entity for such purpose). Notwithstanding the provisions of
this Section 9, no indemnifying Underwriter shall be required
to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by such Under-
writer and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter other-
wise has been required to pay by reason of such untrue state-
ment or alleged untrue statement or omission or alleged omis-
sion. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudu-
lent misrepresentation. The contribution agreement contained
in this Section 9 shall remain in full force and effect regard-
less of any investigation made by or on behalf of any Under-
writer or the Company or any of its officers or directors or
any controlling person and shall survive any termination of
this Agreement or the issuance and delivery of the Purchased
Securities.
10. Notices. All statements, requests, notices and
agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered
or sent by registered mail to the address furnished in writing
for the purpose of such statements, requests, notices and
agreements hereunder, and, if to the Company shall be suffi-
cient in all respects if delivered or sent by registered mail
to the Company at [Name of Issuer/Address], Attention: .
11. Construction. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New York.
The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a
part of this agreement.
12. Parties in Interest. The Agreement herein set
forth has been and is made solely for the benefit of the Under-
writers and the Company, and the controlling persons, directors
and officers referred to in Sections 7, 8 and 9 hereof, and
their respective successors, assigns, executors and administra-
tors, and no other person shall acquire or have any right under
or by virtue of this Agreement. Nothing in this Agreement is
intended or shall be construed to give to any other person,
firm or corporation (including, without limitation, any pur-
chaser of the Purchased Securities from an Underwriter or any
subsequent holder thereof or any purchaser of any Contract
<PAGE>
-17-
Securities or any subsequent holder thereof) any legal or equi-
table right, remedy or claim under or in respect of this Agree-
ment or any provision herein contained.
The term "successor" as used in this Agreement shall
not include any purchaser, as such purchaser, of any Purchased
Securities from any Underwriter or any subsequent holder
thereof or any purchaser, as such purchaser, of any Contract
Securities or any subsequent holder thereof.
13. Counterparts. This Agreement may be executed in
any number of counterparts which, taken together, shall consti-
tute one and the same instrument.
<PAGE>
Schedule I
DELAYED DELIVERY CONTRACT
Dated: , 199
[NAME OF ISSUER]
[ADDRESS]
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from [Name
of Issuer] (the "Company"), and the Company agrees to sell to
the undersigned,
$___________________
principal amount of the Company's [state title of issue] (the
"Securities") offered by the Company's Prospectus dated
, 199 and a Prospectus Supplement dated
, 199 , receipt of copies of which is hereby
acknowledged, at a purchase price of % of the principal
amount thereof plus accrued interest and on the further terms
and conditions set forth in this contract.
The undersigned agrees to purchase such Securities in
the principal amounts and on the delivery dates (the "Delivery"
"Dates") set forth below:
Delivery Principal Plus Accrued
__Date__ _Amount__ Interest From:
________________ $_______________ ________________
________________ $_______________ ________________
________________ $_______________ ________________
Payment for the Securities which the undersigned has
agreed to purchase on each Delivery Date shall be made to the
Company by wire transfer of immediately available at the
<PAGE>
-2-
Corporate Trust Office of (or at such other place
as the undersigned and the Company shall agree) at 11:00 A.M.,
New York City Time, on such Delivery Date upon issuance and
delivery to the undersigned of the Securities to be purchased
by the undersigned on such Delivery Date in such authorized
denominations and, unless otherwise provided herein, registered
in such names as the undersigned may designate by written or
telegraphic communications addressed to the Company not less
than five full business days prior to such Delivery Date.
The obligation of the Company to sell and deliver,
and of the undersigned to take delivery of and make payment
for, Securities on each Delivery Date shall be subject to the
conditions that (1) the purchase of Securities to be made by
the undersigned shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which the undersigned is
subject, (2) the sale of the Securities by the Company pursuant
to this contract shall not at the time of delivery be prohib-
ited under the laws of any jurisdiction to which the Company is
subject and (3) the Company shall have sold, and delivery shall
have taken place, to the Underwriters of such principal amount
of the Securities as is to be sold and delivered to them. In
the event that Securities are not sold to the undersigned
because one of the foregoing conditions is not met, the Company
shall not be liable to the undersigned for damages arising out
of the transactions covered by this contract.
Promptly after completion of the sale and delivery to
the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such
effect, accompanied by copies of the opinions of counsel for
the Company delivered to the Underwriters.
Failure to take delivery of and make payment for
Bonds by any purchaser under any other Delayed Delivery Con-
tract shall not relieve the undersigned of its obligations
under this contract.
The undersigned represents and warrants that (a) as
of the date of this contract, the undersigned is not prohibited
under the laws of the jurisdictions to which the undersigned is
subject from purchasing the Securities hereby agreed to be pur-
chased and (b) the undersigned does not contemplate selling the
Securities which it has agreed to purchase hereunder prior to
the Delivery Date therefor.
<PAGE>
-3-
This contract will inure to the benefit of and be
binding upon the parties hereto and their respective succes-
sors, but will not be assignable by either party hereto without
the written consent of the other. This contract shall be gov-
erned by and construed in accordance with the laws of the State
of New York. This contract may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
It is understood that the acceptance of any Delayed
Delivery Contract is in the Company's sole discretion and,
without limiting the foregoing, need not be on a first-come,
first-served basis. If the contract is acceptable to the Com-
pany, it is requested that the Company sign the form of accep-
tance below and mail or deliver one of the counterparts hereof
to the undersigned at its address set forth below. This will
become a binding contract between the Company and the under-
signed when such counterpart is so signed.
Yours very truly,
____________________________________
By____________________________________
____________________________________
____________________________________
Address
Accepted, as of the date first above written
[Name of Issuer]
By_________________________________
<PAGE>
-4-
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the repre-
sentative of the Purchaser with whom details of delivery on the
Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
Name (Including Area Code) Department
<PAGE>
[NAME OF ISSUER]
PURCHASE AGREEMENT
DEBT SECURITIES
_______________, 1996
[Name of Issuer]
[ADDRESS]
Dear Sirs:
Referring to the Debt Securities, ______% Series due
(the "Securities"), of [Name of Issuer] (the "Company")
covered by registration statement on Form S-3 (No. 333- ),
such registration statement including (i) the prospectus
included therein, dated , 1996, as supplemented by a
prospectus supplement dated ______________, 19 in the form
first filed under Rule 424 and any additional prospectus sup-
plements relating to the Securities filed under Rule 424 (such
prospectus as so supplemented, including each document incorpo-
rated by reference therein is hereinafter called the "Prospec-
tus") and (ii) all documents filed as part thereof or incorpo-
rated by reference therein, is hereinafter called the "Regis-
tration Statement" on the basis of the representations, warran-
ties and agreements contained in this Agreement, but subject to
the terms and conditions herein set forth, the purchaser or
purchasers named in Schedule A hereto (the "Underwriters") sev-
erally agree to purchase and the Company agrees to sell to each
Underwriter the principal amount of the Company's Securities
having the terms described below (the "Purchased Securities")
set forth opposite the name of each Underwriter on Schedule A
hereto.
The price at which the Purchased Securities shall be
purchased from the Company by the Underwriters shall be
______%. The initial public offering price shall be ______%.
The Purchased Securities will be offered by the Underwriters as
set forth in the Prospectus relating to such Purchased
Securities.
The Purchased Securities will have the following
terms:
Title of Securities: ____________________________
<PAGE>
-2-
Interest rate: ____________________________
Interest Payment Dates: ____________________________
____________________________
____________________________
____________________________
____________________________
Maturity: ____________________________
Redemption Provisions: ____________________________
____________________________
____________________________
Other:
____________________________
____________________________
____________________________
____________________________
____________________________
____________________________
____________________________
Payment for the
Purchased Securities
shall be made in
the following funds: ____________________________
The time of purchase
shall be: ____________________________
The place(s) at which
the Purchased Securities
shall be delivered and
sold shall be: ____________________________
Delayed Delivery
Contracts: ______________________________
Notices to the Underwriters shall be sent to the fol-
lowing address or telecopier number:
<PAGE>
-3-
If we are acting as Representative(s) for the several
Underwriters named in Schedule A hereto, we represent that we are
authorized to act for such several Underwriters in connection
with the transactions contemplated in this Agreement, and that,
if there are more than one of us, any action under this Agreement
taken by any of us will be binding upon all the Underwriters.
All of the provisions contained in the document enti-
tled "[Name of Issuer] Standard Purchase Provisions - Debt Secu-
rities," a copy of which has been previously furnished to us, are
hereby incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if
such provisions had been set forth in full herein.
<PAGE>
-4-
If the foregoing is in accordance with your understand-
ing of our agreement, kindly sign and return to us the enclosed
duplicate hereof, whereupon it will become a binding agreement
between the Company and each Underwriter in accordance with its
terms.
Very truly yours,
[Firm Name]
By ________________________________
Title:
[Firm Name]
By ________________________________
Title:
Acting on behalf of and as
Representative(s) of the
several Underwriters named
in Schedule A hereto.*
The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written.
[NAME OF ISSUER]
By ___________________________
Title:
_________________________
* To be deleted if the Purchase Agreement is not executed by
one or more Underwriters acting as Representative(s) of
the Underwriters for purposes of this Agreement.
<PAGE>
SCHEDULE A
Principal
Name of Underwriter Amount
Total __________
$
Exhibit B-3
[NAME OF ISSUER]
EQUITY SECURITIES
STANDARD PURCHASE PROVISIONS
INCLUDING
FORM OF PURCHASE AGREEMENT
<PAGE>
[NAME OF ISSUER]
STANDARD PURCHASE PROVISIONS -
EQUITY SECURITIES
From time to time, [Name of Issuer], a corporation
organized and existing under the laws of the State of Delaware
(the "Company") may enter into purchase agreements that provide
for the sale of designated securities to the purchaser or pur-
chasers named therein. The standard provisions set forth
herein may be incorporated by reference in any such purchase
agreement (the "Purchase Agreement"). The Purchase Agreement,
including the provisions incorporated therein by reference, is
herein sometimes referred to as "this Agreement." The term
"[Preferred] [Common] Stock" shall mean the [Preferred] [Com-
mon] Stock of the Company. Unless otherwise defined herein,
terms defined in the Purchase Agreement are used herein as
therein defined.
The Company has filed, in accordance with the provi-
sions of the Securities Act of 1933, as amended, and the rules
and regulations of the Securities and Exchange Commission
thereunder (collectively called the "Act"), with the Securities
and Exchange Commission (the "Commission"), a registration
statement on Form S-3 (including a prospectus), relating to the
Company's [Preferred] [Common] Stock, which pursuant to Item 12
of Form S-3 incorporates by reference documents which the Com-
pany has filed in accordance with the provisions of the Securi-
ties Exchange Act of 1934, as amended, and the rules and regu-
lations thereunder (collectively called the "Exchange Act").
Such registration statement has been declared effective by the
Commission. Promptly upon the execution of this Agreement, the
Company will prepare a prospectus supplement relating to the
[Preferred] [Common] Stock to be sold by the Company pursuant
to the applicable Purchase Agreement (the "Prospectus Supple-
ment"). The Company has furnished to you, for use by the
Underwriters (as defined herein) and dealers, copies of one or
more preliminary prospectuses and the documents so incorporated
therein (each thereof, including the documents so incorporated
therein, is herein called the "Preliminary Prospectus"). The
terms Registration Statement and Prospectus shall have the
meanings ascribed to them in the Purchase Agreement.
1. Introductory. The Company proposes to issue and
sell from time to time [Preferred] [Common] Stock registered
under the Registration Statement. [Each series of Preferred
Stock to be sold pursuant to a particular Purchase Agreement
will bear dividends and have the redemption and sinking fund
provisions, if any, and other terms determined at the time of
the sale and set forth in the Purchase Agreement and the
<PAGE>
-2-
Prospectus Supplement relating to such series of Preferred
Stock.] The shares of [Preferred] [Common] Stock involved in
any such offering are hereinafter referred to as the "Shares,"
and the firm or firms, as the case may be, which agree to pur-
chase the same are hereinafter referred to as the "Underwrit-
ers" of the Shares. The terms "you" and "your" refer to those
Underwriters who sign the Purchase Agreement either on behalf
of themselves only or on behalf of themselves and as represen-
tatives of the several Underwriters named in Schedule A
thereto, as the case may be. Shares to be purchased by Under-
writers are herein referred to as "Underwriters' Shares," and
any Shares to be purchased pursuant to Delayed Delivery Con-
tracts (as defined below) as hereinafter provided are herein
referred to as "Contract Shares."
2. Delivery and Payment. The Company will deliver
the certificates for the Shares to you for the accounts of the
Underwriters at the place specified in the Purchase Agreement,
against payment of the purchase price by wire transfer of imme-
diately available funds (as agreed to by the parties and speci-
fied in the Purchase Agreement), at the time set forth in this
Agreement or at such other time not later than seven full busi-
ness days thereafter as you and the Company determine, such
time being herein referred to as the "time of purchase."
Unless otherwise provided for in the Purchase Agreement, the
certificates for the Underwriters' Shares so to be delivered
will be in such denominations and registered in such names as
you request in writing not later than 10.00 A.M.,* on the third
business day prior to the time of purchase, or, if no such
request is received, in the names of the respective Underwrit-
ers in the denominations agreed to be purchased by them pursu-
ant to this Agreement. For the purpose of expediting the
checking of the certificates for the Underwriters' Shares, the
Company agrees to make such certificates available to you at
the place specified in the Purchase Agreement registered in
such names and denominations as you shall have requested not
later than 10.00 A.M. on the first business day preceding the
time of purchase.*
If any Purchase Agreement provides for sales of
Shares pursuant to delayed delivery contracts, the Company
___________________
* Times mentioned herein are New York City Time.
* As used herein, "business day" shall mean a day on which
the New York Stock Exchange is open for trading.
<PAGE>
-3-
authorizes the Underwriters to solicit offers to purchase Con-
tract Shares pursuant to delayed delivery contracts substan-
tially in the form of Schedule I attached hereto (the "Delayed
Delivery Contracts") with such changes therein as the Company
may approve. Delayed Delivery Contracts are to be with insti-
tutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies, and
educational and charitable institutions. At the time of pur-
chase the Company will pay you as compensation, for the
accounts of the Underwriters, the compensation set forth in
such Purchase Agreement in respect of the principal amount of
Contract Shares. The Underwriters will not have any responsi-
bility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers
Delayed Delivery Contracts, the Contract Shares shall be
deducted from the Shares to be purchased by the several Under-
writers and the aggregate principal amount of Shares to be pur-
chased by each Underwriter shall be reduced pro rata in propor-
tion to the principal amount of Shares set forth opposite each
Underwriter's name in such Purchase Agreement, except to the
extent that you determine that such reduction shall be other-
wise allocated and so advise the Company.
3. Certain Covenants of the Company. The Company
agrees:
(a) As soon as possible after the execution
and delivery of this Agreement to file, or mail
for filing, the Prospectus with the Commission
pursuant to its Rule 424 under the Act and, if and
when required at any time after such execution and
delivery, to file amendments to the applications
the Company has previously filed with any state
regulatory agencies having jurisdiction to govern
the Company's issuance of its securities setting
forth, among other things, the necessary informa-
tion with respect to the price and the terms of
the Shares and the terms of offering of the
Shares;
(b) To file no amendment or supplement to
the Registration Statement or Prospectus (other
than a required filing under the Exchange Act)
subsequent to the execution of this Agreement and
prior to the time of purchase to which you object
in writing;
<PAGE>
-4-
(c) To furnish such proper information as
may be required and otherwise to cooperate in
qualifying the Shares for sale under the laws of
such jurisdictions as you may designate and in
determining their eligibility for investment under
the laws of such jurisdictions; provided that the
Company shall not be required to qualify as a for-
eign corporation or to file a general consent to
service of process in any jurisdiction;
(d) To the extent not previously furnished
to you, to furnish to you two signed copies of the
Registration Statement, as initially filed with
the Commission, of all amendments thereto, and of
all documents incorporated by reference therein
(including all exhibits filed therewith, other
than exhibits which have previously been furnished
to you), two signed copies of each consent and
certificate of independent accountants and of each
other person who by his profession gives authority
to statements made by him and who is named in the
Registration Statement as having prepared, certi-
fied or reviewed any part thereof, and to furnish
to you sufficient unsigned copies of the foregoing
(other than exhibits, including consents filed as
exhibits, to the Registration Statement) for dis-
tribution of a copy to you and to each of the
other Underwriters;
(e) To deliver to the Underwriters without
charge in New York City as soon as practicable
after the execution and delivery of this Agreement
and thereafter from time to time to furnish to the
Underwriters, without charge, as many copies of
the Prospectus in final form and any documents
incorporated by reference therein at or after the
date thereof (or as amended or supplemented, if
the Company shall have made any amendment or sup-
plement after the effective date of the Registra-
tion Statement) as you or the respective Under-
writers may reasonably request for the purposes
contemplated by the Act;
(f) To advise you promptly (confirming such
advice in writing) of any official request made by
the Commission for amendments to the Registration
Statement or Prospectus or for additional
<PAGE>
-5-
information with respect thereto, or of official
notice of institution of proceedings for, or the
entry of, a stop order suspending the effective-
ness of the Registration Statement and, if such
order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or
removal thereof as soon as possible, or of the
suspension of qualification of the Shares for
offering or sale in any jurisdiction or of the
initiation or threatening of any proceeding for
any such purpose;
(g) To apply the net proceeds from the sale
of the Shares in the manner set forth in the
Prospectus;
(h) To furnish to you during a period of
five years from the time of purchase (i) as soon
as practicable after the end of each fiscal year,
a copy of its annual report to shareholders for
such year, (ii) from time to time, copies of any
reports or other communications which it shall
file with the Commission or any governmental
agency substituted therefor under the Exchange Act
or sent to its public stockholders, or holders of
the Shares, and (iii) such other information as
you may from time to time reasonably request
regarding the financial condition and operations
of the Company;
(i) To furnish to any other Underwriter cop-
ies of such of the financial statements, reports
or other information referred to in the foregoing
subparagraphs (h)(i) and (ii) as such Underwriter
may, from time to time during the period you are
entitled to receive them, request;
(j) To advise the Underwriters of the hap-
pening of any event known to the Company within
the time during which a prospectus relating to the
Shares is required to be delivered under the Act
which, in the judgment of the Company, would
require the making of any change in the Prospectus
or any amended or supplemented Prospectus or in
the information incorporated by reference therein
so that as thereafter delivered to purchasers such
Prospectus will not include an untrue statement of
<PAGE>
-6-
a material fact or omit to state a material fact
necessary in order to make the statements therein,
in the light of the circumstances under which they
were made, not misleading, and on request to pre-
pare and furnish to the Underwriters and to deal-
ers and other persons designated by you such
amendments or supplements (including appropriate
filings under the Exchange Act) to the Prospectus
as may be necessary to reflect any such change,
provided that the Company shall be so obligated
only so long as the Company is notified of unsold
allotments (failure by the Underwriters to so
notify the Company cancels the Company's obliga-
tion under this Section 3(j));
(k) As soon as practicable, to make gener-
ally available to its security holders an earnings
statement (as contemplated by Rule 158 under the
Act) covering a period of twelve months after the
effective date of the Registration Statement;
(l) to pay the fees and expenses of counsel
for the Underwriters, and to reimburse the Under-
writers for their reasonable out-of-pocket
expenses incurred in contemplation of the perfor-
mance of this Agreement, in the event that the
Shares are not delivered to and taken up and paid
for by the Underwriters hereunder for any reason
whatsoever except the failure or refusal of any
Underwriter to take up and pay for Shares for some
reason not permitted by the terms of this Agree-
ment, the Underwriters agreeing to pay the fees
and expenses of counsel for the Underwriters in
any other event;
(m) To pay all expenses, fees and taxes
(other than transfer taxes and fees and disburse-
ments of counsel for the Underwriters except as
set forth under 3(1) above or (iv) below) in con-
nection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospec-
tus and the Prospectus, any documents incorporated
by reference therein at or after the date thereof
and any amendments or supplements thereto, and the
printing or reproduction and furnishing of copies
of each thereof to the Underwriters and to deal-
ers, (ii) the issue, sale and delivery of the
<PAGE>
-7-
Shares, (iii) the printing or reproduction of this
Agreement and the opinions and letters referred to
in Section 4(a) hereof, (iv) the qualification of
the Shares for sale and determination of their
eligibility for investment under state laws as
aforesaid, including the reasonable legal fees and
all filing fees and disbursements of counsel for
the Underwriters and all other filing fees, and
the printing or reproduction and furnishing of
copies of the "Blue Sky Survey" and the "Legal
Investment Survey" to the Underwriters and to
dealers, (v) the rating of the Shares by national
rating agencies and (vi) the performance of the
Company's other obligations hereunder;
(n) To furnish to you as early as practi-
cable prior to the time of purchase, but no later
than two business days prior thereto, a copy of
the latest available unaudited interim consoli-
dated financial statements, if any, of the Company
which have been read by the Company's independent
public accountants as stated in their letter to be
furnished pursuant to Section 4(a) of this Agree-
ment; and
(o) If a public offering of the Shares is to
be made, not to offer or sell any of its [Pre-
ferred] [Common] Stock prior to thirty days after
the time of purchase without your consent (except
pursuant to employee benefit or dividend reinvest-
ment plans).
4. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters hereunder are subject
to the following conditions:
(a) That, at the time of purchase, you shall
receive the signed opinions of counsel for the
Company and counsel for the Underwriters, substan-
tially in the forms heretofore furnished to you,
addressed to the Underwriters (with reproduced or
conformed copies thereof for each of the other
Underwriters); and that, at the time of purchase,
you shall receive the signed letters of the inde-
pendent public accountants of the Company, sub-
stantially in the form heretofore furnished to you
and in substance satisfactory to you addressed to
<PAGE>
-8-
the Underwriters (with reproduced or conformed
copies thereof for each of the other
Underwriters);
(b) That, at or before 5:30 P.M. on the date
hereof, or at such later time and day as you may
have from time to time consented to in writing or
by telephone, confirmed in writing, such orders of
state authorities which are necessary to permit
the issue, sale and delivery of the Shares, if
any, shall have been issued; at the time of pur-
chase such orders shall be in full force and
effect; and prior to such time of purchase no stop
order with respect to the effectiveness of the
Registration Statement shall have been issued
under the Act by the Commission and at such time
of purchase no proceedings therefor shall be pend-
ing or threatened;
(c) That, at the time the Registration
Statement became effective, the Registration
Statement did not contain an untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, and that at
the time of purchase the Prospectus shall not con-
tain an untrue statement of a material fact or
omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading, other than
any statement contained in, or any matter omitted
from, the Registration Statement or the Prospectus
in reliance upon, and in conformity with, informa-
tion furnished in writing by or on behalf of any
Underwriter through you to the Company expressly
for use with reference to such Underwriter in the
Registration Statement or Prospectus;
(d) That, subsequent to the respective dates
as of which information is given in the Registra-
tion Statement and in the Prospectus, at the time
the Prospectus is first filed, or mailed for fil-
ing, pursuant to Rule 424 under the Act, and prior
to the time of purchase, in your opinion no mate-
rial adverse change, or any development involving
a prospective material adverse change, in the
<PAGE>
-9-
condition of the Company, financial or otherwise,
shall have taken place (other than as referred to
in or contemplated by the Registration Statement
and Prospectus as of such time);
(e) That the Company shall have performed
all of its obligations under this Agreement which
are to be performed by the terms hereof at or
before the time of purchase; and
(f) That, since the date of this Agreement,
there shall not have occurred any downgrading, nor
shall any notice have been given of any intended
or potential downgrading or of any review for a
possible change that does not indicate the direc-
tion of the possible change, in the rating
accorded any of the Company's securities by any
"nationally recognized statistical rating organi-
zation," as such term is defined for purposes of
Rule 436(g)(2) under the Act (other than as
referred to in or contemplated by the Registration
Statement and the Prospectus as of such time);
(g) That the Company shall, at the time of
purchase, deliver to you (with reproduced or con-
formed copies thereof for each of the other Under-
writers) a signed certificate of two of its execu-
tive officers stating that, subsequent to the
respective dates as of which information is given
in the Registration Statement and in the Prospec-
tus, at the time the Prospectus is first filed, or
mailed for filing, pursuant to Rule 424 under the
Act, and prior to the time of purchase, no mate-
rial adverse change, or any development involving
a prospective material adverse change, in the con-
dition of the Company, financial or otherwise,
shall have taken place (other than as referred to
in or contemplated by the Registration Statement
and Prospectus as of such time) and also covering
the matters set forth in (c) and (e) of this
Section 4.
(h) That the Company shall have accepted
Delayed Delivery Contracts in any case where sales
of Contract Shares arranged by the Underwriters
have been approved by the Company.
<PAGE>
-10-
5. Termination of Agreement. The obligations of
the several Underwriters hereunder shall be subject to termina-
tion in your absolute discretion, if, at any time prior to the
time of purchase, trading in securities on the New York Stock
Exchange shall have been suspended (other than a temporary sus-
pension to provide for an orderly market) or minimum prices
shall have been established on the New York Stock Exchange, or
if a banking moratorium shall have been declared either by the
United States or New York State authorities, or if after the
execution of this Agreement the United States shall have
declared war in accordance with its constitutional processes or
there shall have occurred any material outbreak or escalation
of hostilities or other national or international calamity or
crisis of such magnitude in its effect on the financial markets
of the United States as, in your judgment, to make it impracti-
cable to market the Shares.
If you elect to terminate this Agreement as provided
in this Section 5, the Company and each other Underwriter shall
be notified promptly in writing or by telephone, confirmed in
writing.
If the sale to the Underwriters of the Underwriters'
Shares as herein contemplated is not carried out by the Under-
writers for any reason permitted hereunder or if such sale is
not carried out because the Company shall be unable to comply
with any of the terms thereof, the Company shall not be under
any obligation or liability under this Agreement (except to the
extent provided in Sections 3(1), 3(m), 7(b) and 9 hereof), and
the Underwriters shall be under no obligation or liability to
the Company (except to the extent provided in Sections 8(b) and
9 hereof) or to one another under this Agreement.
6. Increase in Underwriters' Commitments. If any
Underwriter shall default in its obligation to take up and pay
for the Shares to be purchased by it hereunder and if the num-
ber of Shares which all Underwriters so defaulting shall have
so failed to take up and pay for does not exceed 10% of the
total number of Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Shares they
are obligated to purchase pursuant to this Agreement) the num-
ber of Shares agreed to be purchased by all such defaulting
Underwriters, as herein provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriter or Under-
writers in such number as you may designate with the consent of
each Underwriter so designated or, in the event no such desig-
nation is made, such Shares shall be taken up and paid for by
<PAGE>
-11-
all non-defaulting Underwriters pro rata in proportion to the
number of Shares set opposite the names of all such non-
defaulting Underwriters in Schedule A to the Purchase
Agreement.
Without relieving any defaulting Underwriter of its
obligations hereunder, the Company agrees with the non-default-
ing Underwriters that it will not sell any Shares hereunder
unless all of the Shares are purchased by the Underwriters (or
by substituted Underwriters selected by you with the approval
of the Company or selected by the Company with your approval).
If a new underwriter or underwriters are substituted
by the Underwriters or by the Company for a defaulting Under-
writer or Underwriters in accordance with the foregoing provi-
sion, the Company or you will have the right to postpone the
time of purchase for a period of not exceeding five business
days in order that necessary changes in the Registration State-
ment and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement will
refer to and include any underwriter substituted under this
Section 6 with like effect as if such substituted underwriter
had originally been named in Schedule A to the Purchase
Agreement.
7. Warranties and Representations of and Indemnity
by the Company. (a) The Company warrants and represents that,
when the Registration Statement became effective, the Registra-
tion Statement complied in all material respects, and, when the
Prospectus is first filed, or mailed for filing, pursuant to
Rule 424 under the Act, the Prospectus will comply in all mate-
rial respects with the provisions of the Act, and that neither
will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or neces-
sary to make the statements therein not misleading; provided,
however, that the Company makes no warranty or representation
with respect to any statement contained in, or any matter omit-
ted from, the Registration Statement or the Prospectus in reli-
ance upon and in conformity with information furnished in writ-
ing by or on behalf of any Underwriter through you to the Com-
pany expressly for use with reference to the Underwriter in the
Registration Statement or Prospectus. The Company also war-
rants and represents that the documents incorporated by refer-
ence in the Prospectus comply in all material respects with the
requirements of the Exchange Act and any additional documents
deemed to be incorporated by reference in the Prospectus will,
<PAGE>
-12-
when they are filed with the Commission, comply in all material
respects with the requirements of the Exchange Act, and will
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein, or neces-
sary to make the statements therein, in the light of the cir-
cumstances under which they are made, not misleading.
(b) The Company agrees to indemnify and hold harm-
less each Underwriter, and any person who controls any Under-
writer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any loss,
expense, liability or claim (including the reasonable fees and
expenses of counsel and other reasonable expenses in connection
with investigating, defending or settling any such claim) which
arises out of or is based upon any alleged untrue statement of
a material fact in the Registration Statement, any prospectus
contained in the Registration Statement at the time it became
effective or the Prospectus, or any related preliminary pro-
spectus, or arises out of or is based upon any alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements made therein not mislead-
ing. The foregoing shall not cover any such loss, expense,
liability or claim, however, which arises out of or is based
upon any alleged untrue statement of a material fact contained
in, and in conformity with information furnished in writing by
or on behalf of such Underwriter through you to the Company
expressly for use with reference to the Underwriter in, any
such documents or arises out of or is based upon any alleged
omission to state a material fact in connection with such
information required to be stated in any such documents or nec-
essary to make such information not misleading.
If any action is brought against an Underwriter or
controlling person in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, such
Underwriter shall promptly notify the Company in writing or by
telephone, confirmed in writing, of the institution of such
action and the Company shall assume the defense of such action,
including the employment of counsel and payment of expenses.
Such Underwriter or controlling person shall have the right to
employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless the employment of
such counsel shall have been authorized in writing by the Com-
pany in connection with the defense of such action or the Com-
pany shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties
<PAGE>
-13-
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional
to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which
events such fees and expenses of one counsel (in addition to
local counsel) for all indemnified parties selected by you
shall be borne by the Company. Anything in this paragraph to
the contrary notwithstanding, the Company shall not be liable
for any settlement of any such claim or action effected without
its written consent. The Company's indemnity agreement con-
tained in this Section 7(b) and its warranties and representa-
tions contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf
of any Underwriter or controlling person, and shall survive any
termination of this Agreement or the issuance and delivery of
the Shares. The Company agrees promptly to notify the Under-
writers of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in con-
nection with the issue and sale of the Shares or with such Reg-
istration Statement or Prospectus.
8. Warranties and Representations of the Indemnity
by Underwriters. (a) Each Underwriter warrants and represents
that the information furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use
with reference to such Underwriter in the Registration State-
ment at the time it became effective or the Prospectus, or any
related preliminary prospectus does not contain an untrue
statement of a material fact and does not omit to state a mate-
rial fact in connection with such information required to be
stated in the Registration Statement at the time it became
effective or the Prospectus, or any related preliminary pro-
spectus or necessary to make such information not misleading.
Each Underwriter, in addition to other information furnished by
such Underwriter or on its behalf through you to the Company in
writing expressly for use with reference to such Underwriter in
the Registration Statement and Prospectus, hereby furnishes to
the Company in writing expressly for use with reference to such
Underwriter the statements with respect to the terms of offer-
ing of the Shares by the Underwriters set forth on the cover
page of the Prospectus Supplement and under "underwriting"
therein.
<PAGE>
-14-
(b) Each Underwriter severally agrees to indemnify
and hold harmless the Company, its directors and its officers
from and against any loss, expense, liability or claim (includ-
ing the reasonable fees and expenses of counsel and other rea-
sonable expenses in connection with investigating, defending or
settling any such claim) which arises out of or is based upon
any alleged untrue statement of a material fact contained in,
and in conformity with information furnished in writing by or
on behalf of such Underwriter through you to the Company
expressly for use with reference to such Underwriter in, the
Registration Statement, any prospectus contained in the Regis-
tration Statement at the time it became effective or the Pro-
spectus, or any related preliminary prospectus, or arises out
of or is based upon any alleged omission to state a material
fact in connection with such information required to be stated
in such documents or necessary to make such information not
misleading.
If any action is brought against the Company or any
such person in respect of which indemnity may be sought against
any Underwriter pursuant to the foregoing paragraph, the Com-
pany or such person shall promptly notify such Underwriter in
writing or by telephone, confirmed in writing, of the institu-
tion of such action and such Underwriter shall assume the
defense of such action, including the employment of counsel and
payment of expenses. The Company or such person shall have the
right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense
of the Company or such person unless the employment of such
counsel shall have been authorized in writing by such Under-
writer in connection with the defense of such action or such
Underwriter shall not have employed counsel to have charge of
the defense of such action or such indemnified party or parties
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional
to those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses for all indemnified
parties of one counsel (in addition to local counsel) selected
by the Company shall be borne by such Underwriter. Anything in
this paragraph to the contrary notwithstanding, no Underwriter
shall be liable for any settlement of any such claim or action
effected without the written consent of such Underwriter. The
indemnity agreement on the part of each Underwriter contained
in this Section 8(b) shall remain in full force and effect
regardless of any investigation made by or on behalf of the
<PAGE>
-15-
Company or such person, and shall survive any termination of
this Agreement or the issuance and delivery of the Shares.
Each Underwriter agrees promptly to notify the Company of the
commencement of any litigation or proceedings against such
Underwriter in connection with the issue and sale of the Shares
or with such Registration Statement or Prospectus.
9. Contribution. If the indemnification provided
for in Section 7(b) or 8(b) above is unavailable in respect of
any losses, expenses, liabilities or claims referred to
therein, then the parties entitled to indemnification by the
terms thereof shall be entitled to contribution to liabilities
and expenses except to the extent that contribution is not per-
mitted under the Act or the Exchange Act. In determining the
amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits
received by each party from the offering of the Shares (taking
into account the portion of the proceeds of the offering real-
ized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the
claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company and the
Underwriters and such controlling persons agree that it would
not be equitable if the amount of such contribution were deter-
mined by pro rata or per capita allocation (even if the Under-
writers and such controlling persons were treated as one entity
for such purpose). Notwithstanding the provisions of this
Section 9, no indemnifying Underwriter shall be required to
contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by such Under-
writer and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter other-
wise has been required to pay by reason of such untrue state-
ment or alleged untrue statement or omission or alleged omis-
sion. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudu-
lent misrepresentation. The contribution agreement contained
in this Section 9 shall remain in full force and effect regard-
less of any investigation made by or on behalf of any Under-
writer or the Company or any of its officers or directors or
any controlling person and shall survive any termination of
this Agreement or the issuance and delivery of the Shares.
<PAGE>
-16-
10. Notices. All statements, requests, notices and
agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered
or sent by registered mail to the address furnished in writing
for the purpose of such statements, requests, notices and
agreements hereunder, and, if to the Company shall be suffi-
cient in all respects if delivered or sent by registered mail
to the Company at [Issuer/Address], Attention: .
11. Construction. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New York.
The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a
part of this agreement.
12. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the con-
trolling persons, directors and officers referred to in Section
8 hereof, and their respective successors, assigns, executors
and administrators, and no other person shall acquire or have
any right under or by virtue of this Agreement. Nothing in
this Agreement is intended or shall be construed to give to any
other person, firm or corporation (including, without limita-
tion, any purchaser of the Securities from an Underwriter or
any subsequent holder thereof) any legal or equitable right,
remedy or claim under or in respect of this Agreement or any
provision herein contained.
The term "successor" as used in this Agreement shall
not include any purchaser, as such purchaser, of any Shares
from any Underwriter or any subsequent holder thereof.
13. Counterparts. This Agreement may be executed in
any number of counterparts which, taken together, shall consti-
tute one and the same instrument.
<PAGE>
Schedule I
DELAYED DELIVERY CONTRACT
Dated: , 199
[NAME OF ISSUER]
[ADDRESS]
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from [Name
of Issuer] (the "Company"), and the Company agrees to sell to
the undersigned,
___________________ shares
of the Company's [state title of issue] (the "Shares") offered
by the Company's Prospectus dated , 199 and a
Prospectus Supplement dated , 199 , receipt of cop-
ies of which is hereby acknowledged, at a purchase price of
$ per share [plus accrued dividends] and on the further
terms and conditions set forth in this contract.
The undersigned agrees to purchase such Shares in the
amounts and on the delivery dates (the "Delivery Dates") set
forth below:
Delivery Number of [Plus Accrued
__Date__ _Shares__ Dividends From:]
________________ _______________ ________________
________________ _______________ ________________
________________ _______________ ________________
Payment for the Shares which the undersigned has
agreed to purchase on each Delivery Date shall be made to the
Company or its order by wire transfer of immediately available
<PAGE>
-2-
funds at the Corporate Trust Office of (or at
such other place as the undersigned and the Company shall
agree) at 11:00 A.M., New York City Time, on such Delivery Date
upon issuance and delivery to the undersigned of the Shares to
be purchased by the undersigned on such Delivery Date and,
unless otherwise provided herein, registered in such names as
the undersigned may designate by written or telegraphic commu-
nications addressed to the Company not less than five full
business days prior to such Delivery Date.
The obligation of the Company to sell and deliver,
and of the undersigned to take delivery of and make payment
for, Shares on each Delivery Date shall be subject to the con-
ditions that (1) the purchase of Shares to be made by the
undersigned shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which the undersigned is
subject, (2) the sale of the Shares by the Company pursuant to
this contract shall not at the time of delivery be prohibited
under the laws of any jurisdiction to which the Company is sub-
ject and (3) the Company shall have sold, and delivery shall
have taken place, to the Underwriters of such number of the
Shares as is to be sold and delivered to them. In the event
that Shares are not sold to the undersigned because one of the
foregoing conditions is not met, the Company shall not be lia-
ble to the undersigned for damages arising out of the transac-
tions covered by this contract.
Promptly after completion of the sale and delivery to
the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such
effect, accompanied by copies of the opinions of counsel for
the Company delivered to the Underwriters.
Failure to take delivery of and make payment for
Shares by any purchaser under any other Delayed Delivery Con-
tract shall not relieve the undersigned of its obligations
under this contract.
The undersigned represents and warrants that (a) as
of the date of this contract, the undersigned is not prohibited
under the laws of the jurisdictions to which the undersigned is
subject from purchasing the Shares hereby agreed to be pur-
chased and (b) the undersigned does not contemplate selling the
Shares which it has agreed to purchase hereunder prior to the
Delivery Date therefor.
<PAGE>
-3-
This contract will inure to the benefit of and be
binding upon the parties hereto and their respective succes-
sors, but will not be assignable by either party hereto without
the written consent of the other. This contract shall be gov-
erned by and construed in accordance with the laws of the State
of New York. This contract may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
It is understood that the acceptance of any Delayed
Delivery Contract is in the Company's sole discretion and,
without limiting the foregoing, need not be on a first-come,
first-served basis. If the contract is acceptable to the Com-
pany, it is requested that the Company sign the form of accep-
tance below and mail or deliver one of the counterparts hereof
to the undersigned at its address set forth below. This will
become a binding contract between the Company and the under-
signed when such counterpart is so signed.
Yours very truly,
____________________________________
By____________________________________
____________________________________
____________________________________
Address
Accepted, as of the date first above written
[Name of Issuer]
By_________________________________
<PAGE>
-4-
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the repre-
sentative of the Purchaser with whom details of delivery on the
Delivery Date may be discussed are as follows:
(Please print.)
Telephone No.
Name (Including Area Code) Department
<PAGE>
[NAME OF ISSUER]
PURCHASE AGREEMENT
EQUITY SECURITIES
[Name of Issuer]
[ADDRESS]
Dear Sirs:
Referring to the [Preferred] [Common] Stock of [Name
of Issuer] (the "Company") covered by the registration state-
ment on Form S-3 (No. 333-______), such registration statement
including (i) the prospectus included therein, dated
, 199_ in the form first filed under Rule 424 and
any additional prospectus supplements relating to the [Pre-
ferred] [Common] Stock filed under Rule 424 (such prospectus as
so supplemented, including each document incorporated by refer-
ence therein is hereinafter called the "Prospectus") and
(ii) all documents filed as part thereof or incorporated by
reference therein, is hereinafter called the "Registration
Statement", on the basis of the representations, warranties and
agreements contained in this Agreement, but subject to the
terms and conditions herein set forth, the purchaser or pur-
chasers named in Schedule A hereto (the "Underwriters") agree
to purchase, severally, and the Company agrees to sell to the
Underwriters, severally, the respective number of shares of
[Preferred] [Common] Stock having the terms described below
(the "Shares") set forth opposite the name of each Underwriter
on Schedule A hereto.
The price at which the Shares shall be purchased from
the Company by the Underwriters shall be $____ per share [plus
dividends, if any, accrued from _________________, 199_]. The
initial public offering price shall be $____ per share [plus
dividends, if any, accrued from ___________________, 199_].
The Shares will be offered by the Underwriters as set forth in
the Prospectus relating to such Shares.
The Shares will have the following terms:
<PAGE>
-2-
Title of Shares: [___% Preferred Stock]
[Dividend rate: [____% per annum]
Date from which [cumula-
tive] dividend will
accrue:] _______________, 199_
[Liquidation Preference
per share:] ______________________
[Redemption Provisions:] _______________________
_______________________
_______________________
[Sinking Fund
Provisions:] _______________________
_______________________
_______________________
Other: _______________________
_______________________
_______________________
Payment for the Shares
shall be made in the fol-
lowing funds: _______________________
The "time of purchase"
shall be: _______________________
The place at which the
Shares may be checked and
packaged shall be: _______________________
The place(s) at which the
Shares shall be delivered
and sold shall be: _______________________
Delayed Delivery
Contracts: _______________________
<PAGE>
-3-
Notices to Underwriters shall be sent to the follow-
ing address(es) or telecopier number(s):
If we are acting as Representative(s) for the several
Underwriters named in Schedule A hereto, we represent that we
are authorized to act for such several Underwriters in connec-
tion with the transactions contemplated in this Agreement, and
that, if there are more than one of us, any action under this
Agreement taken by any of us will be binding upon all the
Underwriters.
All of the provisions contained in the document enti-
tled "[Name of Issuer] Standard Purchase Provisions - Equity
Securities", a copy of which has been previously furnished to
us, are hereby incorporated by reference in their entirety and
shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein.
If the foregoing is in accordance with your under-
standing of our agreement, kindly sign and return to us the
enclosed duplicate hereof, whereupon it will become a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
[Firm Name]
By _____________________________
Title: ______________________
[Firm Name]
By _____________________________
Title: ______________________
Acting on behalf of and as
Representative(s) of the
several Underwriters named
in Schedule A hereto.*
___________________
* To be deleted if the Purchase Agreement is not executed by
one or more Underwriters acting as Representative(s) of
the Underwriters for purposes of this Agreement.
<PAGE>
-4-
The foregoing Purchase Agreement is
hereby confirmed as of the date
first above written
[NAME OF ISSUER]
By ____________________________
Title: _____________________
_______________________________
<PAGE>
SCHEDULE A
Number
of
Name of Underwriters Shares
Total __________
__________
PROSPECTUS EXHIBIT B-5
NEW CENTURY ENERGIES, INC.
Dividend Reinvestment and Cash Payment Plan
Common Stock, $1 Par Value
--------------------
The Dividend Reinvestment and Cash Payment Plan (the "Plan") of New Century
Energies, Inc. (the "Company") provides a convenient and economical way for the
shareholders of the Company to reinvest cash dividends and, through optional
cash payments, to purchase shares of the Company's common stock, $1.00 par value
per share (the "Common Stock" or "Company Common Stock"), without paying any
service charge and only a minimal brokerage commission.
On January 31, 1996, shareholders of Public Service Company of Colorado, a
Colorado corporation ("PSCo"), and Southwestern Public Service Company, a New
Mexico corporation ("SPS"), approved an Agreement and Plan of Reorganization
(the "Merger Agreement") and the transactions contemplated thereby including:
(i) the merger of PSCo Merger Corp., a Colorado corporation and wholly owned
subsidiary of the Company, and PSCo, with PSCo as the surviving corporation (the
"PSCo Merger"), (ii) the merger of SPS Merger Corp., a New Mexico corporation
and wholly owned subsidiary of the Company, and SPS, with SPS as the surviving
corporation (the "SPS Merger"), (iii) the cancellation and conversion of each
outstanding share of PSCo common stock, $5.00 par value per share (the "PSCo
Common Stock"), and the SPS common stock, par value $1.00 per share (the "SPS
Common Stock"), into the right to receive one share of Company Common Stock and
0.95 of one share of Company Common Stock, respectively (the "Conversion
Ratio"), and (iv) the common shareholders of each of PSCo and SPS becoming the
common shareholders of the Company (these transactions collectively referred to
as the "Merger").
Upon the consummation of the Merger (the "Effective Date"), all shares of
PSCo Common Stock and SPS Common Stock credited to the accounts of participants
in the PSCo Automatic Dividend Reinvestment and Common Stock Purchase Plan (the
"PSCo DRIP"), the SPS Dividend Reinvestment and Cash Payment Plan for Employees
and the SPS Dividend Reinvestment and Cash Payment Plan for Shareholders
(collectively, the "SPS DRIP") have been converted into shares of Company Common
Stock based on the Conversion Ratio and have been automatically transferred to
this Plan. (See Questions 34 and 35.) However, physical certificates
representing shares of common stock of PSCo or SPS in your possession must be
presented for exchange into Company Common Stock.
The agent for the Plan ("Agent") is The Bank of New York. Any shareholder
enrolled in the Plan as in effect on the Effective Date as a result of an
automatic transfer from
<PAGE>
2
the PSCo DRIP or SPS DRIP will continue to be enrolled in the Plan without
taking any action. Any shareholder who wishes to participate in the Plan and who
has not been previously enrolled in the Plan must properly complete and return
the Authorization Card to the Agent. An Authorization Card may be obtained from
the Agent.
Participants in the plan may:
a. have cash dividends on all or part of the shares of Company Common
Stock registered in their names automatically reinvested and also
invest optional cash payments; or
b. continue to receive cash dividends on shares registered in their names
and invest by making optional cash payments of not less than $25 per
payment nor more than $100,000 per calendar year.
Shares purchased under the Plan may be, at the option of the Company, newly
issued shares, treasury shares, shares purchased on the open market by the Agent
or any combination of the foregoing. The price at which shares of Company Common
Stock will be purchased directly from the Company will be the average of the
high and low price per share paid on the last day on which Company Common Stock
was traded preceding the Investment Date (as defined) as reported on the
composite tape for New York Stock Exchange listed securities administered by the
Consolidated Tape Association. (See Question 10.) The price at which shares of
Common Stock purchased by the Agent on the open market shall be deemed to have
been acquired shall be the average price (including brokerage commissions) of
all shares purchased by the Agent for Participants in the Plan on the relevant
Investment Date.
Participation in the Plan is entirely voluntary. Any shareholder who does
not participate in the Plan will receive cash dividends, as declared, by check.
This Prospectus relates to [ ] shares of Common Stock of the Company
registered for sale under the Plan and should be retained for future reference.
<PAGE>
3
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY
STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is [ ], 1997.
<PAGE>
4
AVAILABLE INFORMATION
New Century Energies, Inc. is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, will file with the Securities and Exchange Commission ("SEC")
reports, proxy statements, and other information, which are available for
inspection and copying at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048, and at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. (The Commission
maintains a site on the World Wide Web containing reports, proxy materials,
information statements and other items. The address is http://www.sec.gov.)
Copies of such material can be obtained from the SEC's Public Reference Room,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Copies of
such material also can be inspected at the office of the New York Stock
Exchange, Inc. (the "NYSE").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner of shares of the Company to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy (without exhibits, except those specifically incorporated by reference)
of any and all of the documents referred to below which have been or may be
incorporated in this Prospectus by reference. Requests for such documents should
be directed to W. Wayne Brown, Secretary, New Century Energies, Inc., 1225
Seventeenth Street, Denver, Colorado 80202, (Tel: (303) 571-7511).
The following documents, previously filed with the SEC pursuant to the
Exchange Act, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. [33-64951])(the "NCE 1996 Form 10-K");
2. The description of the Company's Common Stock contained in the
Joint Proxy Statement/Prospectus and Registration Statement on Form S-4 of
the Company (File No. 33-64951);
3. PSCo Annual Report on Form 10-K for the year ended December 31,
1995 (File No. 1-3280) (the "PSCo 1995 Form 10-K");
4. PSCo Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996 (File No. 1-3280) (the "PSCo
Forms 10-Q");
<PAGE>
5
5. SPS Annual Report on Form 10-K for the year ended August 31, 1996
(File No. 1-3789) (the "SPS 1996 Form 10-K");
6. SPS Quarterly Report on Form 10-Q for the quarter ended November
30, 1996 (File No. 1-3789) (the "SPS Form 10-Q"); and
7. SPS Current Reports on Form 8-K dated October 11, 1996 and February
12, 1997 (File No. 1-3789).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
the offering of the securities offered hereby, shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
<PAGE>
6
THE COMPANY
The Company is a Delaware corporation which, as a result of the Merger, is
the holding company for PSCo, SPS and certain other subsidiaries. The Company is
a public utility holding company registered under the Public Utility Holding
Company Act of 1935. The principal executive offices of the Company are located
at 1225 Seventeenth Street, Denver, Colorado 80202.
PSCo. PSCo is an operating public utility engaged primarily in the
generation, purchase, transmission, distribution and sale of electricity and in
the purchase, transmission, distribution, sale and transportation of natural
gas. PSCo provides electricity or gas or both in an area having an estimated
population of 3.0 million people, of which approximately 2.1 million are in the
Denver metropolitan area. The principal executive offices of PSCo are located at
1225 Seventeenth Street, Denver, Colorado 80202.
SPS. SPS is principally engaged in the generation, transmission,
distribution and sale of electric energy in portions of Texas, New Mexico,
Oklahoma and Kansas. Electric service is provided through an interconnected
system to a population of about one million in a 52,000 square-mile area of the
Panhandle and South Plains of Texas, eastern and southeastern New Mexico, the
Oklahoma Panhandle and southwestern Kansas. The principal executive offices of
SPS are located at Tyler at Sixth, Amarillo, Texas 79101.
DESCRIPTION OF THE PLAN
The following, in question and answer form, sets forth the provisions of
the Dividend Reinvestment and Cash Payment Plan effective as of the date of this
Prospectus.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide shareholders of the Company with a
convenient and economical method of purchasing Company Common Stock. Once
enrolled in the Plan, shareholders (the "Participants") may also reinvest cash
dividends and, through optional cash investments, purchase additional shares of
Common Stock at regular intervals. Although the Company expects the Plan to
appeal to many shareholders, it is entirely optional. Each shareholder who
desires to participate must make an election in the manner set out herein unless
he or she is already a Participant in the Plan. (See Question 5.) Each
shareholder who is currently participating in the Plan will continue to
participate without any further action on such shareholder's part. (See Question
33.)
<PAGE>
7
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may:
a. have cash dividends on all or part of the shares of Common Stock
registered in their names automatically reinvested and also invest
optional cash payments; or
b. continue to receive cash dividends on shares registered in their names
and invest by making optional cash payments of not less than $25 per
payment nor more than $100,000 per calendar year.
Participants will pay only a minimal brokerage commission in connection
with open market purchases under the Plan. Such commissions payable by a Plan
Participant on each investment will be such Participant's pro rata share of the
commissions paid by the Agent in effecting all open market purchases of Common
Stock on the applicable Investment Date. The amount of such commissions will be
deducted from the dividend reinvested or the optional cash payment, as the case
may be, prior to the purchase of shares of Common Stock. However, because the
Plan Agent will be making purchases on behalf of all Plan Participants it is
expected that the amount of commissions actually paid by a Plan Participant
would be minimal compared to that paid by a shareholder who wishes to invest
outside of the Plan. The Company will pay the Agent's costs and expenses in
connection with the administration of the Plan. Commissions will be added to the
shareholders' cost basis of the Common Stock purchased under the Plan.
Full investment of funds is possible under the Plan because the Plan
permits fractions of shares, as well as full shares, to be purchased for
Participants' accounts. Dividends on such fractions, as well as on full shares,
will be used to purchase additional shares for the Participants' accounts. The
Plan includes a safekeeping service which permits Participants to deposit all of
their Common Stock certificates with the Agent, thereby reducing shareholders'
risk of loss of physical certificates and making it convenient for shareholders
to hold all shares of Common Stock in one account. In addition, regular
statements of account will provide Participants with a record of each
transaction.
Administration
3. Who administers the Plan for Participants?
By participating in the Plan each Participant designates The Bank of New
York as his or her Agent under the Plan. The Bank of New York will administer
the Plan, purchase shares of Common Stock as Agent for Participants in the Plan,
serve as custodian for shares on deposit in the Plan, keep records, send
statements of account to Participants and perform
<PAGE>
8
other duties relating to the Plan. Shares of Common Stock purchased under the
Plan will be registered in the name of the Agent (or its nominee) and held by
the Agent for each Participant in the Plan.
Participants may contact the Agent by telephone toll free at 1-800-______
between the hours of 9:00 a.m. and 6:00 p.m., Eastern time, on business days or
by writing to one of the following addresses. Optional cash payments and all
notices and transaction requests concerning the Plan should be mailed to:
New Century Energies, Inc.
c/o Dividend Reinvestment Plan
P.O. Box 1958
Newark, NJ 07101-9774
All inquiries regarding your account should be mailed to:
New Century Energies, Inc.
c/o Investor Relations Department
P.O. Box 11358
Church Street Station
New York, NY 10286-1258
Please include in your letter a telephone number where you may be reached during
busines hours.
Participation
4. Who is eligible to participate?
The Plan is available to shareholders of the Company. Shareholders who wish
to participate must be holders of record of the Company's Common Stock
("Eligible Shareholders"). A shareholder can elect to participate only with
respect to shares registered in his or her own name. Owners of Company Common
Stock whose shares are registered in names other than their own (e.g., broker,
bank nominee) must first become holders of record by having those shares
transferred into their own names in order to participate in the Plan with
respect to such shares.
5. How does an Eligible Shareholder join the Plan?
In order to join the Plan an Eligible Shareholder must properly complete an
Authorization Card and return it to the Agent. (See Question 33.)
<PAGE>
9
An Authorization Card may be obtained at any time by contacting the Agent,
The Bank of New York, at 1-800-[ ].
An Eligible Shareholder may choose to participate in the dividend
reinvestment portion of the Plan to the extent of all or part of the shares of
Common Stock registered in his or her name and he or she may also make optional
cash payments. Alternatively, an Eligible Shareholder may choose to participate
in the optional cash payment portion only, and continue to receive cash
dividends on shares registered in his or her name.
6. What does the Authorization Card provide?
The Authorization Card allows you to indicate how you wish to participate
in the Plan.
Participants must indicate whether dividends should be fully or partially
reinvested and whether any additional optional cash payments are to be made.
Participants may choose one of the following three options:
1) Full Dividend Reinvestment: Dividends on all shares of Common Stock
registered in your name will be reinvested in additional shares of Common Stock
and you will also be entitled to invest optional cash payments in additional
shares.
2) Partial Dividend Reinvestment: By designating the number of shares on
which you wish the dividends reinvested, you can cause the dividends on the
designated shares to be reinvested in Common Stock and you will also be entitled
to invest optional cash payments in additional shares.
3) Optional Cash Payments Only: Dividends on shares registered in your name
will be paid by check as usual and will not be reinvested. You may make optional
cash payments (in an amount not less than $25) to the Agent which will be
invested in additional shares. Dividends on all shares purchased with optional
cash payments and credited to your account under this aspect of the Plan will,
however, be reinvested in additional shares unless and until you request that
the purchased shares be registered in your name through the issuance of
certificates. (See Questions 12 and 20 for information concerning the issuance
of certificates.)
Shareholders who do not participate in the Plan will receive cash
dividends, as declared, by check.
7. When may an Eligible Shareholder join the Plan?
An Eligible Shareholder may join the Plan at any time. If an Authorization
Card specifying "Full Dividend Reinvestment" or "Partial Dividend Reinvestment"
is properly completed and received by the Agent in sufficient time to process
prior to payment of a particular
<PAGE>
10
dividend, then reinvestment of the designated dividends will commence with that
dividend payment. Otherwise, participation will begin with the following
dividend payment. Dividend Payment Dates (which are "Investment Dates" for
reinvested dividends) normally are February 1, May 1, August 1, and November 1
of each year.
Optional cash payments may be made at any time after a shareholder has
returned a properly completed Authorization Card to the Agent. Although optional
cash payments may be made at various times, they are invested only once a month,
usually on the "Investment Date." (See Question 13 for information concerning
the investment of optional cash payments.)
Costs
8. Are there any costs to Participants in connection with purchases and
sales under the Plan?
Participants will be charged a pro rata share of the brokerage commissions
paid by the Agent for open market purchases of shares made under the Plan. The
amount of such commissions will be deducted from the dividend reinvested or the
optional cash payment, as the case may be, prior to the purchase of shares of
Common Stock. However, due to the volume of purchases of Company Common Stock by
the Agent with each reinvestment of dividends or optional cash payments, it is
expected that such commissions will be substantially less than commissions which
would be payable by purchasing shares of Common Stock outside of the Plan. If
the source of the Company Common Stock is treasury shares or newly issued shares
(see Question 9), the Participants will not be charged. Administration costs of
the Plan will be paid by the Company. In addition, Participants that request the
sale, withdrawal or transfer of any of their Plan shares (see Questions 24 and
27) must pay any related brokerage commissions and applicable stock transfer
taxes. The Agent may effect open market purchases and sales of shares for the
Plan through BNY Brokerage Inc., an affiliated broker-dealer, in which case BNY
Brokerage Inc. will receive a commission for effecting such transactions.
Source of Shares
9. What is the source of shares purchased under the Plan?
The Company has the sole discretion to determine whether shares purchased
under the Plan will come from the authorized and unissued shares of Company
Common Stock, treasury shares or shares purchased on the open market by the
Agent for Plan Participants. The Company will not change its determination as to
the source of the shares more than once in any three month period. Any such
change will be based on a determination by the Chief Financial Officer of the
Company with respect to the Company's capital needs or another compelling reason
for a change.
<PAGE>
11
Purchases
10. What will be the price of shares of Common Stock purchased under the
Plan?
The price at which authorized and unissued shares of Company Common Stock
and treasury stock will be purchased from the Company will be the average of the
high and low price per share paid on the last day on which Company Common Stock
was traded preceding the Investment Date as reported on the composite tape for
New York Stock Exchange listed securities administered by the Consolidated Tape
Association.
The price at which shares of Common Stock purchased by the Agent on the
open market shall be deemed to have been acquired shall be the average price
(including brokerage commissions) of all shares purchased by the Agent for
Participants in the Plan on the relevant Investment Date. Such purchases may be
made on any securities exchange where Company Common Stock is traded.
The Agent may commingle Participants' funds (dividends and optional cash
payments) with those of others participating in the Plan. The Agent shall have
no responsibility as to the market value of shares acquired for Participants'
accounts.
11. How many shares of Common Stock will be purchased for Participants?
You cannot purchase a previously specified number of shares. Your account
will be credited with the number of shares, including fractions computed to four
decimal places, equal to the total amount invested (less, in the case of open
market purchases, your pro rata share of brokerage commissions) divided by the
purchase price per share.
12. Will certificates be issued to Participants for shares of Common Stock
purchased under the Plan?
Certificates for whole shares of Common Stock purchased under the Plan will
be issued only upon your written request to the Agent. (See Question 20 for
instructions on certificate issuance and Question 27 for information on
termination of participation in the Plan.)
13. When will dividends and/or optional cash payments be invested?
Dividends will be reinvested in additional shares of Company Common Stock
on the dividend payment dates (each, an "Investment Date") of February 1, May 1,
August 1, and November 1, or as soon as practicable thereafter. Optional cash
payments will be invested on the first business day of each month (also
"Investment Dates") or soon as practicable there-
<PAGE>
12
after. Shares purchased will be credited to a Participant's account on the first
day of each month or as soon as practicable thereafter. Optional cash payments
received on or before the business day preceding a given Investment Date will be
invested on that Investment Date. Optional cash payments received on or after a
given Investment Date will be held by the Agent until the next Investment Date.
The Company recommends that optional cash payments be sent so as to be received
shortly before an Investment Date since no interest will be paid on such
payments. (See Questions 18 and 19 for information on when dividends will be
paid on shares purchased with optional cash payments.)
Optional Cash Payments
14. Who is eligible to make optional cash payments?
Eligible Shareholders who are Participants in the Plan or who have
submitted a properly completed Authorization Card may make optional cash
payments at any time.
Eligible Shareholders may make an initial optional cash payment of not less
than $25 per payment nor more than $100,000 total per calendar year when
enrolling in the Plan by enclosing a check or money order with the properly
completed Authorization Card. Checks or money orders should be made payable to
The Bank of New York and mailed with the Authorization Card. Thereafter,
optional cash payments may be made at any time by sending your personal check or
money order to the Agent.
PARTICIPANTS WHO WISH TO MAKE REGULAR OPTIONAL INVESTMENTS SHOULD CONTACT
THE AGENT TO REQUEST AN AUTOMATIC MONTHLY DEDUCTION FORM. THIS PROGRAM PROVIDES
THE CONVENIENCE OF AUTOMATIC MONTHLY INVESTMENTS DEDUCTED DIRECTLY FROM YOUR
BANK ACCOUNT, WITHOUT THE NEED TO MAIL CHECKS.
15. May a Participant withdraw an optional cash payment?
Yes. A Participant may withdraw an optional cash payment by sending to the
Agent written notice of his or her intention to make such withdrawal, provided,
however, that the Agent receives such written notice not later than [48 hours]1
before the next Investment Date.
16. Are there any limitations on optional cash payments?
- ----------
1 BONY to confirm.
<PAGE>
13
Optional cash payments may be made at any time but may not be less than $25
per payment nor more than $100,000 per calendar year. Accordingly, if payments
in excess of the combined $100,000 limit per calendar year are remitted, the
Agent will return the excess to the Participant. The Agent will also return any
optional cash payments which are for amounts less than $25. The same amount of
money need not be sent with each payment, and there is no obligation to make an
optional cash payment each month.
Reports to Participants
17. What kind of reports will be sent to Participants in the Plan?
Soon after investment of optional cash payments and/or dividends,
Participants will receive a statement indicating the amount of dividends,
optional cash payments, and/or payroll deductions, the purchase price, number of
shares purchased and the total number of shares in their account. THESE
STATEMENTS ARE A PARTICIPANT'S CONTINUING RECORDS OF THE TAX COST OF THEIR
PURCHASES OF COMPANY COMMON STOCK UNDER THE PLAN, AND SHOULD BE RETAINED FOR
INCOME TAX PURPOSES UNTIL SUCH TIME AS THE PARTICIPANT HAS DISPOSED OF ALL SUCH
SHARES. Participants will also receive copies of the Company's annual and
quarterly reports to shareholders and proxy statements. All dividends paid on
shares held in the Plan for a Participant will be reported to the Internal
Revenue Service.
Dividends
18. Will Participants be credited with dividends on shares held in their
accounts under the Plan?
On the Dividend Payment Date, the Agent will credit the dividends
attributable to those outstanding shares held in the Plan for the Participant's
account as of the dividend record date and will reinvest such dividends.
Participants whose participation is limited to optional cash payments will
receive dividend checks on those shares registered in their name. Dividends on
all shares credited to their account under the Plan will be reinvested in
additional shares of Company Common Stock.
19. How will dividends be handled?
Dividends on all shares credited to your account in the Plan, including
shares purchased with reinvested dividends or optional cash payments, will be
reinvested in additional shares. Cash dividends will be paid directly to you
only with respect to those whole shares for which certificates have been issued.
Any shares remaining in your account after issuance of
<PAGE>
14
certificates for whole shares will continue to be credited to your account, and
dividends paid with respect thereto will be reinvested in additional shares.
Shares purchased with optional cash payments invested on an Investment Date
which corresponds to a Dividend Payment Date, usually February 1, May 1, August
1 and November 1, will not receive the dividend paid on that Investment Date.
This is because the investment will be made after the record date for the
dividend payment made on that Investment Date.
Issuance of Certificates
20. How may a Participant obtain certificates for shares purchased under
the Plan?
A Participant may obtain certificates for any number of whole shares in the
Participant's Plan account at any time by notifying the Agent in writing to that
effect. Certificates for whole shares of stock will be issued to the
Participant, but in no event will certificates for fractional shares be issued.
Any shares remaining in the Participant's account will continue to be credited
to that account, and dividends paid with respect thereto will be reinvested in
additional shares, until participation in the Plan is terminated. (See Question
27 for information on termination of participation and liquidation of fractional
shares.)
21. What happens to a Participant's Plan account if all certificates held
by the Participant are transferred or sold?
If the Participant disposes of all certificates representing shares of the
Common Stock held by the Participant in the Participant's own name, the Agent
will continue to reinvest the dividends on the shares held in the Plan account
until participation in the Plan is terminated.
Safekeeping Service
22. Can Participants deposit their registered shares with the Plan?
You may deposit any Common Stock certificates in your possession and
registered in your name with the Agent for safekeeping. Shares deposited for
safekeeping will be transferred into the name of the Agent, as agent for
Participants in the Plan, and credited to your account under the Plan.
Thereafter, the shares will be treated in the same manner as shares purchased
through the Plan. This service eliminates the need for safekeeping by you to
protect against loss, theft or destruction of stock certificates with respect to
the shares credited to your account.
23. What are the advantages of using the depositary service of the Plan?
<PAGE>
15
The Plan's depositary service for the safekeeping of stock certificates
offers two significant advantages to you. First, the risk associated with loss
of your stock certificates is eliminated. If a stock certificate is lost, stolen
or destroyed, no transfer or sale of the shares may take place until a
replacement certificate is obtained. This procedure is not always simple and
usually results in costs and paperwork to you, to the Company and to the
Company's transfer agent. Second, because shares deposited with the Plan for
safekeeping are treated in the same manner as shares purchased through the Plan,
they may be sold through the Plan in a convenient and efficient manner.
How to Sell Shares
24. May a Participant transfer all or a part of the Participant's Plan
shares to another person?
Yes. If you wish to transfer ownership of all or part of the shares of
Common Stock in your account through gift, private sale or otherwise, you may
effect transfer by mailing to the Agent at the address in Question 3 a properly
executed stock assignment along with a letter stating your specific instructions
regarding the transfer and both an Authorization Form and a Form W-9
(Certification of Taxpayer Identification Number) completed by the transferee.
Requests for transfer of such shares are subject to the same requirements as the
transfer of Common Stock certificates, including the requirement of a medallion
signature guarantee on the stock assignment. The Agent will provide the
appropriate forms upon request. Any shares so transferred by you will be
withdrawn from your account, and your account statement will show the number of
shares withdrawn.
You may also transfer all or a portion of the shares of Common Stock in
your Plan account into an account established for another person within the
Plan. In order to effect such a "book-to-book" transfer, the transferee must
complete an Authorization Form to open a new account within the Plan. (See
Question 5.) The Authorization Form should be sent to the Agent along with a
written request to effect the "book-to-book" transfer indicating the number of
shares to be transferred to the new account. All Participants listed on a
current Plan account must sign the written request, and their signatures must be
guaranteed by a bank, broker or financial institution that is a member of the
Signature Guarantee Medallion Program. Unless otherwise indicated in the
Authorization Form, the new account will provide for "Full Dividend
Reinvestment." (See Question 6.) You may contact the Agent at (800)___-____ to
obtain additional information and required forms to effect a "book-to-book"
transfer.
25. When shares in the Plan are transferred to another person who wishes to
become a Participant in the Plan, will the Agent issue a stock certificate to
the transferee?
<PAGE>
16
No. The Agent will retain such shares. An account in the Plan will be
opened in the name of the person to whom such shares are transferred, although a
signed Authorization Form will be required before the transfer can be effected.
26. How will a transferee be advised of the transfer?
After the transfer has been made, a transferee of shares from a Participant
will receive a statement showing the number of shares transferred to and held in
the transferee's Plan account.
Termination by a Participant
27. How does a Participant terminate participation in the Plan?
A Participant may terminate participation in the Plan prior to any dividend
payment date by giving written notice of termination signed by all persons for
whom the account is carried and directed to the Agent. Any notice received too
late to process before the payment date will not become effective until after
dividends paid on such payment date have been credited to the Participant's
account and invested as provided in the Plan. After termination, all dividends
will be paid to the Participant in cash.
In requesting termination, a Participant may elect to receive either Common
Stock or cash for all of the full shares in the Participant's account. If the
Participant elects cash, the Agent will sell such Common Stock and send proceeds
to the Participant, net of any applicable brokerage commission and transfer tax.
If no election is made in the request for termination, a certificate for the
total number of whole shares held in the account will be issued to the
Participant. In every case of termination, the Participant's interest in
fractional shares will be adjusted in cash based on the market price of Company
Common Stock on the date the termination becomes effective as determined by the
Agent and uninvested voluntary cash contributions credited to the Participant's
account will be distributed in cash.
Any optional cash payment received from a Participant after timely receipt
by the Agent from such Participant of a notice of termination will not be
invested but will be returned to the Participant. (See Question 16 relating to
withdrawal of optional cash payments.)
- -------------------------------------------------------------------------------
The Participant should recognize that neither the Company nor
the Agent can purchase any whole shares from Participants upon their withdrawal
from the Plan.
- -------------------------------------------------------------------------------
Other Information
28. What happens if the Company issues a stock dividend or declares a stock
split?
<PAGE>
17
Any stock dividend or shares resulting from stock splits with respect to
shares, both full and fractional, credited to Participants' accounts will be
added to their accounts. Stock dividends or stock splits distributed on shares
of Common Stock registered in the name of the Participant will be mailed
directly to the Participant in the same manner as to shareholders who are not
participating in the Plan.
29. How will a Participant's Plan shares be voted at a meeting of
shareholders?
All shares credited to an account under the Plan will be voted as directed.
If on the record date for a meeting of shareholders there are shares credited to
an account under the Plan, proxy material will be sent for such meeting. When an
executed proxy is returned in a timely manner, it will be voted with respect to
all shares credited to the Participant's account under the Plan (including any
fractional share). Participants may instead vote all of such shares in person at
the shareholders' meeting.
30. What are the Federal income tax consequences of participation in the
Plan?
Dividends, even though reinvested and not actually received by the
Participant, are taxable just as though they had been received directly by the
Participant. If shares of Company Common Stock are purchased on the open market
with reinvested dividends, a Participant will be treated for Federal income tax
purposes as having received a dividend distribution equal in amount to the cash
dividend used to purchase such shares and to have paid the allocable portion of
related brokerage commissions. Such dividend distribution will be reported on
the Participant's year-end Form 1099-DIV. A Participant's tax basis of shares so
purchased will equal the amount treated as a dividend distribution.
If shares of Company Common Stock are purchased directly from the Company
with reinvested dividends, a Participant will be treated for Federal income tax
purposes as having received a dividend distribution equal in amount to the fair
market value of the purchased shares on the dividend Payment Date, including
fractional shares, purchased for the Participant. Such dividend distributions
will be reported on the Participant's year-end Form 1099-DIV. A Participant's
tax basis of the shares so purchased will be equal to the amount treated as a
dividend distribution to the Participant.
A Participant who purchases shares of Company Common Stock with voluntary
cash payments will not recognize any taxable income upon such purchase. The tax
basis of such shares will be the amount of the voluntary cash payment.
A Participant's holding period for shares of Common Stock acquired pursuant
to the Plan generally begins on the day following the date the shares are
credited to the Participant's account.
<PAGE>
18
Each statement of account will show the amount of dividends paid and
reinvested, shares purchased, as well as the price per share to be used in
determining the cost basis of the Common Stock purchased with reinvested
dividends and/or cash payments pursuant to the stock purchase provision of the
Plan.
A Participant will not realize any taxable income when the Participant
receives certificates for whole shares credited to the Participant's account
under the Plan, either upon request for certificates for certain of these
shares, or upon termination of participation or termination of the Plan by the
Company. However, gain or loss may be realized by the Participant when whole
shares are sold, either by the Agent pursuant to the Participant's request when
the Participant terminates participation in the Plan or by the Participant after
withdrawal or termination. In addition, a Participant who receives, upon
termination of participation or termination of the Plan by the Company, a cash
adjustment for a fraction of a share credited to the Participant's account may
realize a gain or loss with respect to such fraction. The amount of any such
gain or loss would be the difference between the amount which the Participant
receives for a fractional share and the Participant's cost basis therefor.
In the case of foreign shareholders who elect to have their dividends
reinvested and whose dividends are subject to United States income tax
withholding and shareholders subject to backup withholding, the Agent will
invest in shares of Common Stock an amount equal to the dividends of such
Participants, less the amount of tax required to be withheld. The quarterly
statements confirming purchases made for such Participants will indicate the net
dividend payment reinvested.
This description of Federal income tax consequences of participating in the
Plan is only a summary and is not intended to be a complete description of all
tax consequences of participating in the Plan. Eligible shareholders should
consult their tax advisors as to the Federal income tax consequences of Plan
participation in their particular situations, as to rules applicable in special
circumstances, such as death of a Participant or gift of shares held under the
Plan or other tax consequences, and as to the tax consequences of Plan
participation under applicable state, local or foreign income tax laws.
31. What is the responsibility of the Company under the Plan?
Neither the Company nor the Agent administering the Plan will be liable for
any act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability arising out of failure to terminate a
Participant's account upon such Participant's death prior to receiving notice of
death.
<PAGE>
19
The Participant should recognize that neither the Company nor the Agent can
provide any assurance of a profit or protection against loss on any shares
purchased under the Plan.
32. May the Plan be changed or discontinued?
The Company reserves the right to suspend or terminate the Plan at any
time. It also reserves the sole right to make modifications to the Plan without
the necessity of Participants' approval. Participants will be notified of any
suspension, termination or modification.
33. How will a Participant in the PSCo DRIP or the SPS DRIP become a
Participant in this Plan?
Upon the consummation of the Merger, all shares of PSCo Common Stock and
SPS Common Stock credited to the accounts of Participants in the PSCo DRIP and
the SPS DRIP were cancelled and converted into shares of the Company Common
Stock based on the Conversion Ratio and were automatically transferred to this
Plan without any action by the Participant. However, physical certificate
representing shares of PSCo Common Stock and SPS Common Stock in your possession
must be presented for exchange into Company Common Stock.
34. Is a Participant of the PSCo DRIP or the SPS DRIP required to continue
to participate in this Plan?
Participants in the PSCo DRIP or the SPS DRIP may elect to discontinue
participation in this Plan in accordance with the terms of this Plan. (See
Question 27.)
USE OF PROCEEDS
The Company has no basis for estimating the number of shares of Common
Stock that ultimately will be purchased from the Company pursuant to the Plan or
the prices at which such shares will be sold. The net proceeds from the sale of
any shares of authorized and unissued stock or treasury stock sold pursuant to
the Plan will be added to the general funds of the Company and used for general
corporate purposes.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1996 included in the NCE 1996 Form 10-K, which is incorporated
herein by reference, are incorporated herein in reliance upon the report of
Arthur Andersen LLP, independent public accountants, included in the NCE 1996
Form 10-K, and upon the authority of that firm as experts in accounting and
auditing.
<PAGE>
20
The consolidated balance sheets of PSCo and its subsidiaries as of December
31, 1995 and 1994, and the related statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1995, and the related financial statement schedule, included in the PSCo 1995
Form 10-K, which are incorporated herein by reference, have been audited by
Arthur Andersen LLP, independent public accountants ("Arthur Andersen"), as set
forth in their reports with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports. Reference is made to said PSCo report which includes and
explanatory paragraph that describes uncertainties discussed in Note 2 to the
consolidated financial statements relating to PSCo's Fort St. Vrain Nuclear
Generating Station.
With respect to the unaudited consolidated interim financial information of
PSCo and subsidiaries for the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996, included in the PSCo Forms 10-Q, which are incorporated
herein by reference, Arthur Andersen has applied limited procedures in
accordance with professional standards for a review of that information.
However, their separate reports thereon state that they did not audit and they
do not express an opinion on that consolidated condensed interim financial
information. Accordingly, the degree of reliance on their reports on that
information should be restricted in light of the limited nature of the review
procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited consolidated condensed interim financial information
because those reports are not "reports" or a "part" of the Registration
Statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Act.
The consolidated financial statements incorporated in this prospectus by
reference from the SPS 1996 Form 10-K for the year ended August 31, 1996 have
been audited by Deloitte & Touche LLP, independent certified public accountants
("Deloitte & Touche") , as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
With respect to any unaudited interim financial information included in
SPS's Quarterly Reports on Form 10-Q that are or will be incorporated herein by
reference, Deloitte & Touche applies limited procedures in accordance with
professional standards for reviews of such information. As stated in any of
their reports that are included in SPS's Quarterly Reports on Form 10-Q that are
or will be incorporated by reference herein, they did not audit or will not have
audited and they did not express or will not have expressed an opinion on such
interim financial information. Accordingly, the degree of reliance of any of
their reports on such information should be restricted in light of the limited
nature of the review procedures applied. Deloitte & Touche are not subject to
the liability provisions of Section 11 of the Securities Act for any of their
reports on such unaudited interim financial information because those reports
<PAGE>
21
are not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
LEGAL OPINIONS
The legality of the share of Common Stock offered hereby has been passed
upon for the Company by _______________, New York, New York.
<PAGE>
<TABLE>
<CAPTION>
========================================================= =========================================================
<S> <C>
No person has been authorized to give any
information or to make any representation not contained
in this Prospectus and, if given or made, such
information or representation must not be relied upon
as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a NEW CENTURY ENERGIES, INC.
solicitation of an offer to buy any securities other
than the securities offered hereby or any of the
securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in
such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has Dividend Reinvestment and
been no change in the affairs of the Company since the Cash Payment Plan
date hereof.
TABLE OF CONTENTS
Page
Available Information.......................
Incorporation of Certain
Documents by Reference.................. _____________________
Description of the Plan.....................
Purpose................................. PROSPECTUS
Advantages.............................. _____________________
Administration..........................
Participation...........................
Costs...................................
Source of Shares........................
Purchases...............................
Optional Cash Payments..................
Reports to Participants.................
Dividends...............................
Issuance of Certificates................
Safekeeping Service.....................
How to Sell Shares......................
Termination by a Participant............
Other Information.......................
Use of Proceeds.............................
Experts.....................................
Legal Opinions..............................
Dated: , 1997
========================================================= =========================================================
</TABLE>
<PAGE>
Exhibit B-6
[NAME OF ISSUER]
DEBT SECURITIES
INDENTURE
_______________________________________________________________
Dated as of ,
, Trustee
<PAGE>
PARTIAL CROSS-REFERENCE TABLE
Indenture Section TIA Section
2.05 317(b)
2.06 312(a)
2.11 316(a)
(last sentence)
4.05 314(a)(4)
4.06 314(a)(1)
6.03 317(a)(1)
6.04 316(a)(1)(B)
6.05 316(a)(1)(A)
6.07 317(a)(1)
7.01 315(a)
315(d)
7.04 315(b)
7.05 313(a), 313(d)
7.07 310(a), 310(b)
7.09 310(a)(2)
8.02 310(a), 310(b)
10.04 316(c)
11.01 318(a)
11.02 313(c)
11.03 314(c)(1)
314(c)(2)
11.04 314(e)
-i-
<PAGE>
TABLE OF CONTENTS
Article Section Heading Page
1 DEFINITIONS
1.01 Definitions ....................... 1
1.02 Other Definitions ................. 3
1.03 Rules of Construction ............. 4
2 THE SECURITIES
2.01 Issuable in Series ................ 4
2.02 Execution and Authentication....... 6
2.03 Bond Agents ....................... 7
2.04 Bearer Securities ................. 7
2.05 Paying Agent to Hold Money in
Trust ........................... 8
2.06 Securityholder Lists .............. 9
2.07 Transfer and Exchange ............. 9
2.08 Replacement Securities ............ 10
2.09 Outstanding Securities ............ 10
2.10 Discounted Securities ............. 11
2.11 Treasury Securities ............... 11
2.12 Global Securities ................. 11
2.13 Temporary Securities .............. 12
2.14 Cancellation ...................... 12
2.15 Defaulted Interest ................ 12
3 REDEMPTION
3.01 Notices to Trustee ................ 13
3.02 Selection of Securities to Be
Redeemed ........................ 13
3.03 Notice of Redemption .............. 13
3.04 Effect of Notice of
Redemption ...................... 14
3.05 Payment of Redemption Price ....... 15
3.06 Securities Redeemed in Part ....... 15
4 COVENANTS
4.01 Certain Definitions ............... 16
4.02 Payment of Securities ............. 16
4.03 Overdue Interest .................. 16
4.04 No Lien Created, etc. ............. 16
4.05 Compliance Certificate ............ 17
4.06 SEC Reports ....................... 17
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<PAGE>
Article Section Heading Page
5 SUCCESSORS
5.01 When Company May Merge, etc. ...... 17
6 DEFAULTS AND REMEDIES
6.01 Events of Default ................. 18
6.02 Acceleration ...................... 19
6.03 Other Remedies .................... 20
6.04 Waiver of Past Defaults ........... 20
6.05 Control by Majority ............... 21
6.06 Limitation on Suits ............... 21
6.07 Collection Suit by Trustee ........ 21
6.08 Priorities ........................ 22
7 TRUSTEE
7.01 Rights of Trustee ................. 22
7.02 Individual Rights of Trustee ...... 23
7.03 Trustee's Disclaimer .............. 23
7.04 Notice of Defaults ................ 23
7.05 Reports by Trustee to Holders ..... 24
7.06 Compensation and Indemnity ........ 24
7.07 Replacement of Trustee ............ 25
7.08 Successor Trustee by Merger,
etc. ............................ 26
7.09 Trustee's Capital and Surplus ..... 26
8 DISCHARGE OF INDENTURE
8.01 Defeasance ........................ 26
8.02 Conditions to Defeasance .......... 27
8.03 Application of Trust Money ........ 27
8.04 Repayment to Company .............. 27
9 CONVERSION
9.01 Conversion Privilege .............. 29
9.02 Conversion Procedure .............. 29
9.03 Taxes on Conversion ............... 30
9.04 Company Determination Final ....... 31
9.05 Trustee's and Conversion
Agent's Disclaimer ............. 31
9.06 Company to Provide Conversion
Securities ...................... 31
9.07 Cash Settlement Option ............ 31
9.08 Adjustment in Conversion Rate
for Change in Capital Stock ..... 33
-iii-
<PAGE>
Article Section Heading Page
9.09 Adjustment in Conversion Rate
for Common Stock Issued
Below Market Price .............. 34
9.10 Adjustment for Other
Distributions ................... 36
9.11 Voluntary Adjustment .............. 37
9.12 When Adjustment May Be
Deferred ........................ 37
9.13 When No Adjustment Required ....... 38
9.14 Notice of Adjustment .............. 38
9.15 Notice of Certain
Transactions .................... 38
9.16 Reorganization of the Company ..... 39
10 AMENDMENTS
10.01 Without Consent of Holders ........ 39
10.02 With Consent of Holders ........... 40
10.03 Compliance with Trust Inden-
ture Act ........................ 41
10.04 Effect of Consents ................ 41
10.05 Notation on or Exchange of
Securities ...................... 41
10.06 Trustee Protected ................. 42
11 MISCELLANEOUS
11.01 Trust Indenture Act ............... 42
11.02 Notices ........................... 42
11.03 Certificate and Opinion as to
Conditions Precedent ............ 43
11.04 Statements Required in Cer-
tificate or Opinion ............. 44
11.05 Rules by Company and Agents ....... 44
11.06 Legal Holidays .................... 44
11.07 No Recourse Against Others ........ 44
11.08 Duplicate Originals ............... 45
11.09 Governing Law ..................... 45
SIGNATURES ................................ 46
Exhibit A: Form of Registered
Security ......................
Exhibit B: Form of Bearer Security .......
Notes to Exhibits A and B .................
Exhibit C: Form of Assignment ............
Exhibit D: Form of Conversion Notice .....
-iv-
<PAGE>
INDENTURE dated as of , between [NAME
OF ISSUER], a corporation organized and existing under the laws
of the State of (hereinafter called the "Company")
and , a banking corporation ("Trustee").
Each party agrees as follows for the benefit of the Hold-
ers of the Company's debt securities issued under this
Indenture:
ARTICLE 1 ` DEFINITIONS
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly con-
trolling or controlled by or under direct or indirect common
control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying
Agent.
"Authorized Newspaper" means a newspaper that is:
(1) printed in the English language or in an offi-
cial language of the country of publication;
(2) customarily published on each business day in
the place of publication; and
(3) of general circulation in the relevant place or
in the financial community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business
days and in the same or different Authorized Newspapers.
"Bearer Security" means a Security payable to bearer.
"Board" means the Board of Directors of the Company or any
authorized committee of the Board.
"Bond Resolution" means a resolution adopted by the Board
or by a committee of Officers or an Officer pursuant to Board
delegation authorizing a series of Securities.
"Capital Stock" means any and all shares, interests, par-
ticipations or other equivalents (however designated) of capi-
tal stock of any person and all warrants or options to acquire
such capital stock.
<PAGE>
"Common Stock" means the common stock, per value $1.00 per
share, of the Company.
"Company" means the party named as such above until a suc-
cessor replaces it and thereafter means the successor.
"Conversion Rate" means such number or amount of shares of
Common Stock or other equity or debt securities for which
$1,000 aggregate principal amount of Securities of any series
is convertible, initially as stated in the Bond Resolution
authorizing the series and as adjusted pursuant to the terms of
this Indenture and the Bond Resolution.
"coupon" means an interest coupon for a Bearer Security.
"Default" means any event which is, or after notice or
passage of time would be, an Event of Default.
"Discounted Security" means a Security where the amount of
principal due upon acceleration is less than the stated princi-
pal amount.
"Holder" or "Securityholder" means the person in whose
name a Registered Security is registered and the bearer of a
Bearer Security or coupon.
"Indenture" means this Indenture and any Bond Resolution
as amended from time to time.
"Officer" means the Chairman, any Vice-Chairman, the Pres-
ident, any Executive or Senior Vice President, any Vice-Presi-
dent, the Treasurer or any Assistant Treasurer, the Secretary
or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be
an employee of or counsel to the Company or the Trustee.
"principal" of a debt security means the principal of the
security plus the premium, if and when applicable, on the
security.
"Registered Security" means a Security registered as to
principal and interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
-2-
<PAGE>
"Securities" means the debt securities issued under this
Indenture.
"series" means a series of Securities or the Securities of
the series.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
{ 77aaa-77bbbb) as amended.
"Trading Day" means each day on which the securities
exchange or quotation system which is used to determine the
Market Price is open for trading or quotation.
"Trustee" means the party named as such above until a suc-
cessor replaces it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the Pres-
ident or any other officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust
matters.
"United States" means the United States of America, its
territories and possessions and other areas subject to its
jurisdiction.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Bankruptcy Law" 6.01
"Conditional Redemption" 3.04
"Conversion Agent" 2.03
"Conversion Date" 9.02
"Conversion Notice" 9.02
"Conversion Right" 9.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 11.06
"Lien" 4.01
"Market Price" 9.07
"Paying Agent" 2.03
"Price Per Share" 9.09
"Registrar" 2.03
"Subsidiary" 4.01
"Transfer Agent" 2.03
"Treasury Regulations" 2.04
"U.S. Government Obligations" 8.02
"Voting Stock" 4.01
"Yield to Maturity" 4.01
-3-
<PAGE>
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with gener-
ally accepted accounting principles in the
United States;
(3) generally accepted accounting principles are
those applicable from time to time;
(4) all terms used in this Indenture that are
defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the
TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in
the plural include the singular.
ARTICLE 2 ` THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be
issued under this Indenture is unlimited. The Securities may
be issued from time to time in one or more series. Each series
shall be created by a Bond Resolution or a supplemental inden-
ture that establishes the terms of the series, which may
include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate, if any, or method of calcula-
ting the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Regis-
tered Securities;
-4-
<PAGE>
(6) the dates when principal and interest are
payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are
payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemp-
tion by the Company including any sinking fund;
(11) the terms of any redemption at the option of
Holders;
(12) the denominations in which Securities are
issuable;
(13) whether Securities will be issuable as Regis-
tered Securities or Bearer Securities;
(14) whether and upon what terms Registered Securi-
ties and Bearer Securities may be exchanged;
(15) whether any Securities will be represented by a
Security in global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite cur-
rency) in which principal or interest may be
paid;
(19) if payments of principal or interest may be made
in a currency other than that in which Securi-
ties are denominated, the manner for determining
such payments;
(20) if amounts of principal or interest may be
determined by reference to an index, formula or
other method, the manner for determining such
amounts;
(21) provisions for electronic issuance of Securities
or for Securities in uncertificated form;
-5-
<PAGE>
(22) the portion of principal payable upon accelera-
tion of a Discounted Security;
(23) any Events of Default or covenants in addition
to or in lieu of those set forth in this
Indenture;
(24) whether and upon what terms Securities may be
defeased;
(25) the forms of the Securities or any coupon, which
may be in the form of Exhibit A or B;
(26) any terms that may be required by or advisable
under U.S. laws;
(27) whether and upon what terms the Securities will
be convertible into or exchangeable for Common
Stock of the Company or other equity or debt
securities, which may include the terms provided
in Article 9; and
(28) any other terms not inconsistent with this
Indenture.
All Securities of one series need not be issued at the
same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.
The creation and issuance of a series and the authentica-
tion and delivery thereof are not subject to any conditions
precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or fac-
simile signature. The Company's seal shall be reproduced on
the Securities. An Officer shall sign any coupons by facsimile
signature.
If an Officer whose signature is on a Security or its cou-
pons no longer holds that office at the time the Security is
authenticated or delivered, the Security and coupons shall
nevertheless be valid.
A Security and its coupons shall not be valid until the
Security is authenticated by the manual signature of the Regis-
trar. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
-6-
<PAGE>
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security shall be dated the date
of its original issuance or as provided in the Bond Resolution.
Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued
without the signatures or seal contemplated by this
Section 2.02.
SECTION 2.03. Bond Agents.
The Company shall maintain an office or agency where
Securities may be authenticated ("Registrar"), where Securities
may be presented for registration of transfer or for exchange
("Transfer Agent"), where Securities may be presented for pay-
ment ("Paying Agent") and where Securities may be presented for
conversion ("Conversion Agent"). Whenever the Company must
issue or deliver Securities pursuant to this Indenture, the
Registrar shall authenticate the Securities at the Company's
request. The Transfer Agent shall keep a register of the Secu-
rities and of their transfer and exchange.
The Company may appoint more than one Registrar,
Transfer Agent, Paying Agent or Conversion Agent for a series.
The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture. If the Company does
not appoint or maintain a Registrar, Transfer Agent, Paying
Agent or Conversion Agent for a series, the Trustee shall act
as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or
exchanges of and payments on Bearer Securities. Therefore,
except as provided below:
(1) Bearer Securities will be offered, sold and
delivered only outside the United States and
will be delivered only upon presentation of a
certificate in a form prescribed by the Company
to comply with U.S. laws and regulations.
(2) Bearer Securities will not be issued in exchange
for Registered Securities.
-7-
<PAGE>
(3) All payments of principal and interest (includ-
ing original issue discount) on Bearer Securi-
ties will be made outside the United States by a
Paying Agent located outside the United States
unless the Company determines that:
(A) such payments may not be made by such Pay-
ing Agent because the payments are illegal
or prevented by exchange controls as
described in Treasury Regulation
{ 1.163-5(c)(2)(v); and
(B) making the payments in the United States
would not have an adverse tax effect on the
Company.
If there is a change in the relevant provisions of U.S.
laws or Treasury Regulations or the judicial or administrative
interpretation thereof, a restriction set forth in paragraph
(1), (2) or (3) above will not apply to a series if the Company
determines that the relevant provisions no longer apply to the
series or that failure to comply with the relevant provisions
would not have an adverse tax effect on the Company or on
Securityholders or cause the series to be treated as
"registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determinations
by the Company under this Section.
"Treasury Regulations" means regulations of the U.S. Trea-
sury Department under the Internal Revenue Code of 1986, as
amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series
other than the Trustee to agree in writing that the Paying
Agent will hold in trust for the benefit of the persons enti-
tled thereto all money held by the Paying Agent for the payment
of principal of or interest on the series, and will notify the
Trustee of any default by the Company in making any such
payment.
While any such default continues, the Trustee may require
a Paying Agent to pay all money so held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent shall have no further liability for
the money.
-8-
<PAGE>
If the Company or an Affiliate acts as Paying Agent for a
series, it shall segregate and hold as a separate trust fund
all money held by it as Paying Agent for the series.
The Company may elect not to exchange or register the
transfer of any Security for a period of 15 days before a
selection of Securities to be redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is rea-
sonably practicable the most recent list available to it of the
names and addresses of Securityholders. If the Trustee is not
the Transfer Agent, the Company shall furnish to the Trustee
semiannually and at such other times as the Trustee may request
a list in such form and as of such date as the Trustee may rea-
sonably require of the names and addresses of Holders of Regis-
tered Securities and Holders of Bearer Securities whose names
are on the list referred to below.
The Transfer Agent shall keep a list of the names and
addresses of Holders of Bearer Securities who file a request to
be included on such list. A request will remain in effect for
two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a
notice to all Holders of Registered Securities of a series, it
also shall mail the notice to Holders of Bearer Securities of
the series whose names are on the list.
Whenever the Company is required to publish a notice to
all Holders of Bearer Securities of a series, it also shall
mail the notice to such of them whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to
the Transfer Agent with a request to register transfer or to
exchange them for an equal principal amount of Registered Secu-
rities of other denominations of the series, the Transfer Agent
shall register the transfer or make the exchange if its
requirements for such transactions are met.
The Transfer Agent may require a Holder to pay a sum suf-
ficient to cover any taxes imposed on a transfer or exchange.
If a series provides for Registered and Bearer Securities
and for their exchange, Bearer Securities may be exchanged for
Registered Securities and Registered Securities may be
-9-
<PAGE>
exchanged for Bearer Securities as provided in the Securities
or the Bond Resolution if the requirements of the Transfer
Agent for such transactions are met and if Section 2.04 permits
the exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has
been lost, destroyed or wrongfully taken, then, in the absence
of notice to the Company or the Trustee that the Security or
coupon has been acquired by a bona fide purchaser, the Company
shall issue a replacement Security or coupon if the Company and
the Trustee receive:
(1) evidence satisfactory to them of the loss,
destruction or taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their
expenses and any taxes for replacing the Secu-
rity or coupon.
A replacement Security shall have coupons attached correspond-
ing to those, if any, on the replaced Security.
Every replacement Security or coupon is an additional
obligation of the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securi-
ties authenticated by the Registrar except for those cancelled
by it, those delivered to it for cancellation, and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it
ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Security
is held by a bona fide purchaser.
If Securities are considered paid under Section 4.02, they
cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
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SECTION 2.10. Discounted Securities.
In determining whether the Holders of the required princi-
pal amount of Securities have concurred in any direction,
waiver or consent, the principal amount of a Discounted Secu-
rity shall be the amount of principal that would be due as of
the date of such determination if payment of the Security were
accelerated on that date.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required princi-
pal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affil-
iate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Bond Resolution so provides, the Company may issue
some or all of the Securities of a series in temporary or per-
manent global form. A global Security may be in registered
form, in bearer form with or without coupons or in
uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global
Security or as endorsed thereon from time to time. At the Com-
pany's request, the Registrar shall endorse a global Security
to reflect the amount of any increase or decrease in the Secu-
rities represented thereby.
The Company may issue a global Security only to a deposi-
tory designated by the Company. A depository may transfer a
global Security only as a whole to its nominee or to a succes-
sor depository.
The Bond Resolution may establish, among other things, the
manner of paying principal and interest on a global Security
and whether and upon what terms a beneficial owner of an inter-
est in a global Security may exchange such interest for defini-
tive Securities.
The Company, an Affiliate, the Trustee and any Agent shall
not be responsible for any acts or omissions of a depository,
for any depository records of beneficial ownership interests or
for any transactions between the depository and beneficial
owners.
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SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for
delivery, the Company may use temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers
appropriate for temporary Securities. Temporary Securities may
be in global form. Temporary Bearer Securities may have one or
more coupons or no coupons. Without unreasonable delay, the
Company shall deliver definitive Securities in exchange for
temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Reg-
istrar for cancellation. The Transfer Agent and the Paying
Agent shall forward to the Registrar any Securities and coupons
surrendered to them for payment, exchange or registration of
transfer. The Registrar shall cancel all Securities or coupons
surrendered for payment, registration of transfer, exchange or
cancellation as follows: the Registrar will cancel all Regis-
tered Securities and matured coupons. The Registrar also will
cancel all Bearer Securities and unmatured coupons unless the
Company requests the Registrar to hold the same for redelivery.
Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy
cancelled Securities and coupons unless the Company otherwise
directs.
Unless the Bond Resolution otherwise provides, the Company
may not issue new Securities to replace Securities that the
Company has paid or that the Company has delivered to the Reg-
istrar for cancellation.
SECTION 2.15. Defaulted Interest
If the Company defaults in a payment of interest on Regis-
tered Securities, it need not pay the defaulted interest to
Holders on the regular record date. The Company may fix a spe-
cial record date for determining Holders entitled to receive
defaulted interest or the Company may pay defaulted interest in
any other lawful manner.
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ARTICLE 3 ` REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity
shall be redeemable in accordance with their terms and, unless
the Bond Resolution otherwise provides, in accordance with this
Article.
In the case of a redemption by the Company, the Company
shall notify the Trustee of the redemption date and the princi-
pal amount of Securities to be redeemed. The Company shall
notify the Trustee at least 35 days before the redemption date
unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it may
reduce the principal amount of Securities required to be
redeemed to the extent it is permitted a credit by the terms of
the Securities and it notifies the Trustee of the amount of the
credit and the basis for it. If the reduction is based on a
credit for acquired or redeemed Securities that the Company has
not previously delivered to the Registrar for cancellation, the
Company shall deliver the Securities at the same time as the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be
redeemed, the Trustee shall select the Securities to be
redeemed by a method the Trustee considers fair and appropri-
ate. The Trustee shall make the selection from Securities of
the series outstanding not previously called for redemption.
The Trustee may select for redemption portions of the principal
of Securities having denominations larger than the minimum
denomination for the series. Securities and portions thereof
selected for redemption shall be in amounts equal to the mini-
mum denomination for the series or an integral multiple
thereof. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each
Holder of Registered Securities whose Securities are to be
redeemed.
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If Bearer Securities are to be redeemed, the Company shall
publish a notice of redemption in an Authorized Newspaper as
provided in the Securities.
A notice shall identify the Securities of the series to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together
with all coupons, if any, maturing after the
redemption date, must be surrendered to the Pay-
ing Agent to collect the redemption price;
(5) that interest on Securities called for redemp-
tion ceases to accrue on and after the redemp-
tion date; and
(6) whether the redemption by the Company is manda-
tory or optional; and
(7) whether the redemption is conditional as pro-
vided in Section 3.04, the terms of the condi-
tion, and that, if the condition is not satis-
fied or is not waived by the Company, the Secu-
rities will not be redeemed and such a failure
to redeem will not constitute an Event of
Default.
A redemption notice given by publication need not identify
Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is
given, Securities called for redemption become due and payable
on the redemption date at the redemption price stated in the
notice.
A notice of redemption may provide that it is subject to
the occurrence of any event before the date fixed for such
redemption as described in such notice ("Conditional
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Redemption") and such notice of Conditional Redemption shall be
of no effect unless all such conditions to the redemption have
occurred before such date or have been waived by the Company.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall
deposit with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to
be redeemed on that date.
When the Holder of a Security surrenders it for redemption
in accordance with the redemption notice, the Company shall pay
to the Holder on the redemption date the redemption price and
accrued interest to such date, except that:
(1) the Company will pay any such interest (except
defaulted interest) to Holders on the record
date of Registered Securities if the redemption
date occurs on an interest payment date; and
(2) the Company will pay any such interest to Hold-
ers of coupons that mature on or before the
redemption date upon surrender of such coupons
to the Paying Agent.
Coupons maturing after the redemption date on a called
Security are void absent a payment default on that date.
Nevertheless, if a Holder surrenders for redemption a Bearer
Security missing any such coupons, the Company may deduct the
face amount of such coupons from the redemption price. If
thereafter the Holder surrenders to the Paying Agent the miss-
ing coupons, the Company will return the amount so deducted.
The Company also may waive surrender of the missing coupons if
it receives an indemnity bond satisfactory to the Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Company shall deliver to the Holder a new Security of the same
series equal in principal amount to the unredeemed portion of
the Security surrendered.
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ARTICLE 4 ` COVENANTS
SECTION 4.01. Certain Definitions.
"Lien" means any mortgage, pledge, security interest or
lien.
"Subsidiary" means a corporation a majority of whose Vot-
ing Stock is owned by the Company or a Subsidiary.
"Voting Stock" means capital stock having voting power
under ordinary circumstances to elect directors.
"Yield to Maturity" means the yield to maturity on a Secu-
rity at the time of its issuance or at the most recent determi-
nation of interest on the Security.
SECTION 4.02. Payment of Securities.
The Company shall pay the principal of and interest on a
series in accordance with the terms of the Securities for the
series, any related coupons, and this Indenture. Principal and
interest on a series shall be considered paid on the date due
if the Paying Agent for the series holds on that date money
sufficient to pay all principal and interest then due on the
series.
SECTION 4.03. Overdue Interest.
Unless the Bond Resolution otherwise provides, the Company
shall pay interest on overdue principal of a Security of a
series at the rate (or Yield to Maturity in the case of a Dis-
counted Security) borne by the series; it shall pay interest on
overdue installments of interest at the same rate or Yield to
Maturity to the extent lawful.
SECTION 4.04. No Lien Created, etc.
This Indenture and the Securities do not create a Lien,
charge or encumbrance on any property of the Company or any
Subsidiary.
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SECTION 4.05. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, a brief cer-
tificate signed by the principal executive officer, principal
financial officer or principal accounting officer of the Com-
pany, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (deter-
mined without regard to any period of grace or requirement of
notice provided herein).
Any other obligor on the Securities shall also deliver to
the Trustee such a certificate as to its compliance with this
Indenture within 120 days after the end of each of its fiscal
years.
The certificates need not comply with Section 11.04.
SECTION 4.06. SEC Reports.
The Company shall file with the Trustee, within 15 days
after the Company is required to file the same with the SEC,
copies of the annual reports and of the information, documents,
and other reports (or such portions of the foregoing as the SEC
may prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
Any other obligor on the Securities shall do likewise as
to the above items which it is required to file with the SEC
pursuant to those sections.
ARTICLE 5 ` SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Bond Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into,
or transfer all or substantially all of its assets to, any per-
son unless:
(1) the person is organized under the laws of the
United States or a State thereof;
(2) the person assumes by supplemental indenture all
the obligations of the Company under this Inden-
ture, the Securities and any coupons;
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(3) all required approvals of any regulatory body
having jurisdiction over the transaction shall
have been obtained; and
(4) immediately after the transaction no Default
exists.
The successor shall be substituted for the Company, and
thereafter all obligations of the Company under this Indenture,
the Securities and any coupons shall terminate.
ARTICLE 6 ` DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Bond Resolution otherwise provides, an "Event
of Default" on a series occurs if:
(1) the Company defaults in any payment of interest
on any Securities of the series when the same
becomes due and payable and the Default contin-
ues for a period of 60 days;
(2) the Company defaults in the payment of the prin-
cipal and premium, if any, of any Securities of
the series when the same becomes due and payable
at maturity or upon redemption, acceleration or
otherwise, and such default shall continue for
five or more days;
(3) the Company defaults in the payment or satisfac-
tion of any sinking fund obligation with respect
to any Securities of a Series as required by the
Securities Resolution establishing such series
and the Default continues for a period of 60
days;
(4) the Company defaults in the performance of any
of its other agreements applicable to the series
and the Default continues for 90 days after the
notice specified below;
(5) the Company pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for
relief against it in an involuntary case,
(C) consents to the appointment of a Custodian
for it or for all or substantially all of
its property, or
(D) makes a general assignment for the benefit
of its creditors;
(6) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case,
(B) appoints a Custodian for the Company or for
all or substantially all of its property,
or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in
effect for 60 days; or
(7) there occurs any other Event of Default provided
for in the series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The
term "Custodian" means any receiver, trustee, assignee, liqui-
dator or a similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default
until the Trustee or the Holders of at least 33 1/3% in princi-
pal amount of the series notify the Company of the Default and
the Company does not cure the Default within the time specified
after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice
is a "Notice of Default." If Holders notify the Company of a
Default, they shall notify the Trustee at the same time.
The failure to redeem any Security subject to a Condi-
tional Redemption is not an Event of Default if any event on
which such redemption is so conditioned does not occur and is
not waived before the redemption date.
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SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a
series, the Trustee by notice to the Company, or the Holders of
at least 33 1/3% in principal amount of the series by notice to
the Company and the Trustee, may declare the principal of and
accrued interest on all the Securities of the series to be due
and payable immediately. Discounted Securities may provide
that the amount of principal due upon acceleration is less than
the stated principal amount.
The Holders of a majority in principal amount of the
series by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default on the
series have been cured or waived except nonpayment of principal
or interest that has become due solely because of the
acceleration.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a
series, the Trustee may pursue any available remedy to collect
principal or interest then due on the series, to enforce the
performance of any provision applicable to the series, or
otherwise to protect the rights of the Trustee and Holders of
the series.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or coupons or does not produce
any of them in the proceeding. A delay or omission by the
Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event
of Default. All remedies are cumulative to the extent permit-
ted by law.
SECTION 6.04. Waiver of Past Defaults.
Unless the Bond Resolution otherwise provides, the Holders
of a majority in principal amount of a series by notice to the
Trustee may waive an existing Default on the series and its
consequences except:
(1) a Default in the payment of the principal of or
interest on the series, or
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(2) a Default in respect of a provision that under
Section 10.02 cannot be amended without the con-
sent of each Securityholder affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series
may direct the time, method and place of conducting any pro-
ceeding for any remedy available to the Trustee, or of exer-
cising any trust or power conferred on the Trustee, with
respect to the series. However, the Trustee may refuse to fol-
low any direction that conflicts with law or this Indenture.
SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with
respect to the series only if:
(1) the Holder gives to the Trustee notice of a con-
tinuing Event of Default on the series;
(2) the Holders of at least 25% in principal amount
of the series make a request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against
any loss, liability or expense;
(4) the Trustee does not comply with the request
within 60 days after receipt of the request and
the offer of indemnity; and
(5) during such 60-day period the Holders of a
majority in principal amount of the series do
not give the Trustee a direction inconsistent
with such request.
A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference
or priority over another Securityholder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal
or sinking fund specified in Section 6.01(1), (2) or (3) occurs
and is continuing on a series, the Trustee may recover judgment
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in it own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remain-
ing unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to
this Article, it shall pay out the money in the following
order:
First: to the Trustee for amounts due under
Section 7.06;
Second: to Securityholders of the series for
amounts due and unpaid for principal and interest,
ratably, without preference or priority of any kind,
according to the amounts due and payable for princi-
pal and interest, respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to
Securityholders.
ARTICLE 7 ` TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may rely on any document believed by
it to be genuine and to have been signed or pre-
sented by the proper person. The Trustee need
not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an
Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take
in good faith in reliance on the Certificate or
Opinion.
(3) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence
of any agent appointed with due care.
(4) The Trustee shall not be liable for any action
it takes or omits to take in good faith in
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accordance with a direction received by it pur-
suant to Section 6.05.
(5) The Trustee may refuse to perform any duty or
exercise any right or power which it reasonably
believes may expose it to any loss, liability or
expense unless it receives indemnity satisfac-
tory to it against such loss, liability or
expense.
(6) The Trustee shall not be liable for interest on
any money received by it except as the Trustee
may agree with the Company. Money held in trust
by the Trustee need not be segregated from other
funds except to the extent required by law.
(7) The Trustee shall have no duty with respect to a
Default unless it has actual knowledge of the
Default.
(8) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it
believes to be authorized and within its powers.
(9) Any Agent shall have the same rights and be pro-
tected to the same extent as if it were Trustee.
SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities or coupons and may
otherwise deal with the Company or an Affiliate with the same
rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities or any coupons; it
shall not be accountable for the Company's use of the proceeds
from the Securities; it shall not be responsible for any state-
ment in the Securities or any coupons; it shall not be respon-
sible for any overissue; it shall not be responsible for deter-
mining whether the form and terms of any Securities or coupons
were established in conformity with this Indenture; and it
shall not be responsible for determining whether any Securities
were issued in accordance with this Indenture.
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SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if
it is known to the Trustee, the Trustee shall mail a notice of
the Default within 90 days after it occurs to Holders of Regis-
tered Securities of the series. Except in the case of a
Default in payment on a series, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold
notice of a Default described in Section 6.01(4) until at least
90 days after it occurs.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA { 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before
July 15 of each year.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock
exchange on which any Securities are listed. The Company shall
notify the Trustee when any Securities are listed on a stock
exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's com-
pensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss
or liability incurred by it. The Trustee shall notify the Com-
pany promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall coop-
erate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made
without its consent.
The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through
negligence or bad faith.
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To secure the Company's payment obligations in this Sec-
tion, the Trustee shall have a lien prior to the Securities and
any coupons on all money or property held or collected by the
Trustee, except that held in trust to pay principal or interest
on particular securities.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(5) or (6) occurs,
such expenses and the compensation for such services are
intended to constitute expenses of administration under any
Bankruptcy Law.
The provisions of the Section shall survive any termina-
tion or discharge of this Indenture (including without limita-
tion any termination under any Bankruptcy Law) and the resigna-
tion or removal of the Trustee.
SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the suc-
cessor Trustee's acceptance of appointment as provided in this
Section.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the Securities may
remove the Trustee by so notifying the Trustee and may appoint
a successor Trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA { 310(a) or
{ 310(b) or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a Custodian or other public officer takes charge
of the Trustee or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section
6.01(5) or (6) occurs with respect to the
Trustee.
The Company also may remove the Trustee with or without
cause if the Company so notifies the Trustee six months in
advance and if no Default occurs during the six-month period.
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If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company
shall promptly appoint a successor Trustee.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of a majority in principal
amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA { 310(a) or
{ 310(b) or with Section 7.09, any Securityholder may petition
any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.
Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided
for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust busi-
ness to, another corporation, the successor corporation without
any further act shall be the successor Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent
published report of condition.
ARTICLE 8 ` DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with
their terms and, unless the Bond Resolution otherwise provides,
in accordance with this Article.
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The Company at any time may terminate as to a series all
of its obligations under this Indenture, the Securities of the
series and any related coupons ("legal defeasance option").
The Company at any time may terminate as to a series its obli-
gations, if any, under any restrictive covenants which may be
applicable to a particular series ("covenant defeasance
option"). However, in the case of the legal defeasance option,
the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 7.06, 7.07 and 8.04 shall survive until the Securi-
ties of the series are no longer outstanding; thereafter the
Company's obligations in Section 7.06 shall survive.
The Company may exercise its legal defeasance option not-
withstanding its prior exercise of its covenant defeasance
option. If the Company exercises its legal defeasance option,
a series may not be accelerated because of an Event of Default.
If the Company exercises it covenant defeasance option, a
series may not be accelerated by reference to any restrictive
covenants which may be applicable to a particular series so
defeased under the terms of the series.
The Trustee upon request shall acknowledge in writing the
discharge of those obligations that the Company terminates.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defea-
sance option or its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with
the Trustee or another trustee money or U.S.
Government Obligations;
(2) the Company delivers to the Trustee a certifi-
cate from a nationally recognized firm of inde-
pendent accountants expressing their opinion
that the payments of principal and interest when
due on the deposited U.S. Government Obligations
without reinvestment plus any deposited money
without investment will provide cash at such
times and in such amounts as will be sufficient
to pay principal and interest when due on all
the Securities of the series to maturity or
redemption, as the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under
any other agreement binding on the Company;
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(5) the deposit does not cause the Trustee to have a
conflicting interest under TIA { 310(a) or
{ 310(b) as to another series;
(6) the Company delivers to the Trustee an Opinion
of Counsel to the effect that Holders of the
series will not recognize income, gain or loss
for Federal income tax purposes as a result of
the defeasance; and
(7) 91 days pass after the deposit is made and dur-
ing the 91-day period no Default specified in
Section 6.01(5) or (6) occurs that is continuing
at the end of the period.
Before or after a deposit the Company may make arrange-
ments satisfactory to the Trustee for the redemption of Securi-
ties at a future date in accordance with Article 3.
"U.S. Government Obligations" means direct obligations of
(i) the United States or (ii) an agency or instrumentality of
the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, have
the full faith and credit of the United States pledged for pay-
ment and which are not callable at the issuer's option, or cer-
tificates representing an ownership interest in such
obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.02. It
shall apply the deposited money and the money from U.S. Govern-
ment Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal and interest on
Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over
to the Company upon request any excess money or securities held
by them at any time.
The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of princi-
pal or interest that remains unclaimed for two years. After
payment to the Company, Securityholders entitled to the money
must look to the Company for payment as unsecured general
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creditors unless an abandoned property law designates another
person.
ARTICLE 9 ` CONVERSION
SECTION 9.01. Conversion Privilege.
If the Bond Resolution establishing the terms of a
series of securities so provides, Securities of any series may
be convertible into or for Common Stock or other equity or debt
securities (a "Conversion Right"). The Bond Resolution may
establish, among other things, the Conversion Rate, provisions
for adjustments to the Conversion Rate and limitations upon
exercise of the Conversion Right.
Unless the Bond Resolution otherwise provides, a
Holder may convert a portion of a Security if the portion is
$1,000 or an integral multiples thereof. Provisions of this
Indenture that apply to the conversion of the aggregate princi-
pal amount of a Security also apply to conversion of a portion
of it.
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all
requirements in the Securities or the Bond Resolution and
(i) complete and manually sign the conversion notice (the "Con-
version Notice") provided for in the Bond Resolution or the
Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other
office or agency maintained for such purpose, (ii) surrender
the Security to the Conversion Agent or at such other office or
agency by physical delivery, (iii) if required, furnish appro-
priate endorsements and transfer documents, and (iv) if
required, pay all transfer or similar taxes. The date on which
such notice shall have been received by and the Security shall
have been so surrendered to the Conversion Agent is the "Con-
version Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conver-
sion of Securities not later than the fifth business day fol-
lowing the Conversion Date in respect of the cash portion
elected to be delivered in lieu of the securities into which
the Security is convertible and not later than the seventh
business day following the Conversion Date in respect of the
portion to be settled in such securities.
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If any Security is converted between the record date
for the payment of interest and the next succeeding interest
payment date, such Security must be accompanied by funds equal
to the interest payable on such succeeding interest payment
date on the principal amount so converted (unless such Security
shall have been called for redemption during such period, in
which case no such payment shall be required). A Security con-
verted on an interest payment date need not be accompanied by
any payment, and the interest on the principal amount of the
Security being converted will be paid on such interest payment
date to the registered holder of such Security on the immedi-
ately preceding record date. Subject to the aforesaid right of
the registered holder to receive interest, no payment or
adjustment will be made on conversion for interest accrued on
the converted Security or for interest, dividends or other dis-
tributions payable on any security issued on conversion.
If a Holder converts more than one Security at the
same time, the securities into which the Security is convert-
ible issuable or cash payable upon the conversion shall be
based on the total principal amount of the Securities
converted.
Upon surrender of a Security that is converted in
part the Trustee shall authenticate for the Holder a new Secu-
rity equal in principal amount to the unconverted portion of
the Security surrendered; except that if a Global Security is
so surrendered the Trustee shall authenticate and deliver to
the Depositary a new Global Security in a denomination equal to
and in exchange for the unconverted portion of the principal of
the Global Security so surrendered.
If the last day on which a Security may be converted
is a Legal Holiday in a place where a Conversion Agent is
located, the Security may be surrendered to that Conversion
Agent on the next succeeding day that is not a Legal Holiday.
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion
Right, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of the securities into
which the Security is convertible upon the conversion. How-
ever, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than
the Holder's name. Nothing herein shall preclude any income
tax or other withholding required by law or regulations.
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SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes
pursuant to this Article 9 or consistent with terms provided
for in any Bond Resolution is conclusive, absent manifest
error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the
Company) has no duty to determine when or if an adjustment
under this Article 9 or any Bond Resolution should be made, how
it should be made or calculated or what it should be. The
Trustee (and each Conversion Agent other than the Company)
makes no representation as to the validity or value of any
securities issued upon conversion of Securities. The Trustee
(and each Conversion Agent other than the Company) shall not be
responsible for the Company's failure to comply with this
Article 9 or any provision of a Bond Resolution relating to a
Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but
unissued Common Stock or its Common Stock held in treasury suf-
ficient shares to permit the conversion of all of the Securi-
ties convertible into Common Stock. The Company shall arrange
and make available for issuance upon conversion the full amount
of any other securities into which the Securities are convert-
ible to permit such conversion of the Securities.
All shares of Common Stock or other equity securities
of any person which may be issued upon conversion of the Secu-
rities shall be validly issued, fully paid and non-assessable.
The Company will comply with all securities laws reg-
ulating the offer and delivery of securities upon conversion of
Securities.
SECTION 9.07. Cash Settlement Option.
If the Bond Resolution so provides, the Company may
elect to satisfy, in whole or in part, a Conversion Right of
Securities convertible into Common Stock or other securities of
any person by the delivery of cash. The amount of cash to be
delivered shall be equal to the Market Price on the last Trad-
ing Day preceding the applicable Conversion Date of a share of
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Common Stock or other securities of any person into which the
Securities are convertible multiplied by the number of shares
of Common Stock or the number of shares or principal amount of
other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver
cash. If the Company elects to satisfy, in whole or in part, a
Conversion Right by the delivery of shares of Common Stock or
other securities, no fractional shares or portion of other
securities will be delivered. Instead, the Company will pay
cash based on the Market Price for such fractional share of
Common Stock or portion of other securities.
The "Market Price" of the Common Stock into which
Securities or other equity securities into which the Securities
are convertible may be converted pursuant to a Bond Resolution
or this Article 9 on any Trading Day means the weighted average
per share sale price for all sales of the Common Stock or other
equity securities on such Trading Day (or, if the information
necessary to calculate such weighted average per share sale
price is not reported, the average of the high and low sale
prices, or if no sales are reported, the average of the bid and
ask prices or, if more than one in either case, the average of
the average bid and average ask prices), as reported in the
composite transactions for the New York Stock Exchange, or if
the Common Stock or other equity securities into which the
Securities are convertible is not listed or admitted to trading
on such exchange, as reported in the composite transactions for
the principal national or regional United States securities
exchange on which the Common Stock or other equity securities
into which the Securities are convertible is listed or admitted
to trading or, if the Common Stock or other equity securities
into which the Securities are convertible is not listed or
admitted to trading on a United States national or regional
securities exchange, as reported by NASDAQ or by the National
Quotation Bureau Incorporated or if not so reported as deter-
mined in the manner set forth in the appropriate Bond Resolu-
tion. In the absence of such quotations, the Company shall be
entitled to determine the Market Price on the basis of such
quotations as it considers appropriate.
The "Market Price" of any debt security into which Securi-
ties are convertible shall be determined as set forth in the
applicable Bond Resolution.
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SECTION 9.08. Adjustment in Conversion Rate
for Change in Capital Stock.
If the Securities are convertible into Common Stock
and the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(3) combines its outstanding shares of Common Stock
into a smaller number of shares;
(4) pays a dividend or makes a distribution on its
Common Stock in shares of its Capital Stock other than
Common Stock; or
(5) issues by reclassification of its Common Stock
any shares of its Capital Stock,
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the
Holder of a Security thereafter converted may receive the num-
ber of shares of Capital Stock of the Company (or, at the Com-
pany's option, an equivalent amount in cash) which he would
have owned immediately following such action if he had con-
verted the Security immediately prior to such action.
The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution
and immediately after the effective date in the case of a sub-
division, combination or reclassification.
If the Security into which the Securities are con-
vertible are other than Common Stock of the Company, the con-
version rate sall be subject to adjustment as set forth in the
applicable Bond Resolution.
If after an adjustment a Holder of a Security may,
upon conversion, receive shares of two or more classes of Capi-
tal Stock of the Company or other securities, the Board of
Directors of the Company shall determine allocation of the
adjusted Conversion Rate between or among the classes of Capi-
tal Stock or other securities. After such allocation, the con-
version privilege and the Conversion Rate of each class of Cap-
ital Stock or other securities shall thereafter be subject to
adjustment on terms comparable to those applicable to Common
Stock in this Article or in such Bond Resolution.
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SECTION 9.09. Adjustment in Conversion Rate for
Common Stock Issued Below Market Price.
If the Securities are convertible with Common Stock,
and the Company issues to all holders of Common Stock rights,
options or warrants to subscribe for or purchase shares of Com-
mon Stock, or any securities convertible into or exchangeable
for shares of Common Stock, or rights, options or warrants to
subscribe for or purchase such convertible or exchangeable
securities at a Price Per Share (as defined and determined
according to the formula given below) lower than the current
Market Price on the date of such issuance, the Conversion Rate
shall be adjusted in accordance with the following formula:
AC = CC x O + N___
O + R
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding immedi-
ately prior to such issuance (which number shall include
shares owned or held by or for the account of the
Company).
N = the "Number of Shares," which (i) in the case of rights,
options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or
exchangeable for shares of Common Stock, is the maximum
number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the
case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities, is the
maximum number of shares of Common Stock initially issu-
able upon the conversion or exchange of the convertible or
exchangeable securities issuable upon the exercise of such
rights, options or warrants.
R = the proceeds received or receivable by the Company, which
(i) in the case of rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or of secu-
rities convertible into or exchangeable for shares of Com-
mon Stock, is the aggregate amount received or receivable
by the Company in consideration for the sale and issuance
of such rights, options, warrants or convertible or
exchangeable securities, plus the minimum aggregate amount
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of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon exer-
cise, conversion or exchange thereof; and (ii) in the case
of rights, options or warrants to subscribe for or pur-
chase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in
consideration for the sale and issuance of such rights,
options or warrants, plus the minimum aggregate considera-
tion payable to the Company upon the exercise thereof,
plus the minimum aggregate amount of additional considera-
tion, other than the convertible or exchangeable securi-
ties, payable upon the conversion or exchange of the con-
vertible or exchangeable securities; provided, that in
each case the proceeds received or receivable by the Com-
pany shall be deemed to be the amount of gross cash pro-
ceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase
thereof by underwriters or dealers or others performing
similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the
date of issue of the rights, options or warrants to sub-
scribe for or purchase shares of Common Stock or the secu-
rities convertible into or exchangeable for shares of Com-
mon Stock or the rights, options or warrants to subscribe
for or purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined accord-
ing to the following formula:
P = R
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants
or convertible or exchangeable securities with respect to its
Common Stock for a consideration consisting, in whole or in
part, of property other than cash the amount of such considera-
tion shall be determined in good faith by the Board of Direc-
tors whose determination shall be conclusive and evidenced by a
resolution of the Board of Directors filed with the Trustee.
The adjustment shall be made successively whenever
any such additional rights, options, warrants or convertible or
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exchangeable securities with respect to its Common Stock are
issued, and shall become effective immediately after the date
of issue of such shares, rights, options, warrants or convert-
ible or exchangeable securities.
To the extent that such rights, options or warrants
to acquire Common Stock expire unexercised or to the extent any
convertible or exchangeable securities with respect to its Com-
mon Stock are redeemed by the Company or otherwise cease to be
convertible or exchangeable into shares of Common Stock, the
Conversion Rate shall be readjusted to the Conversion Rate
which would then be in effect had the adjustment made upon the
date of issuance of such rights, options, warrants or convert-
ible or exchangeable securities been made upon the basis of the
issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which
such rights, options or warrants were actually exercised and
the number of shares of Common Stock that were actually issued
upon the conversion or exchange of the convertible or exchange-
able securities.
If the Securities are convertible into securities
other than the Common Stock, any adjustment in the Conversion
Rate required for the issuance or sale of the securities into
which the Securities are convertible shall be made as set forth
in the Bond Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Com-
mon Stock and the Company distributes to all holders of its
Common Stock any of its assets or debt securities or any rights
or warrants to purchase assets or debt securities of the Com-
pany, the Conversion Rate shall be adjusted in accordance with
the following formula:
AC = CC x __(O x M)__
(O x M) - F
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the
record date mentioned below (which number shall include
shares owned or held by or for the account of the
Company).
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M = the current Market Price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants distributed. The Board of
Directors of the Company shall determine the fair market
value.
The adjustment shall become effective immediately
after the record date for the determination of stockholders
entitled to receive the distribution.
If the securities into which the Securities are con-
vertible are other than Common Stock, any adjustments for such
other distribution shall be made as set forth in the Bond
Resolution.
This Section does not apply to cash dividends or dis-
tributions or to reclassifications or distributions referred to
in Section 9.08. Also, this Section does not apply to shares
issued below Market Price referred to in Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion
Rate, temporarily or otherwise, by any amount but in no event
shall such Conversion Rate result in the issuance of Capital
Stock at a price less than the par value of such Capital Stock
at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made
unless the adjustment would require a change of at least 1% in
the Conversion Rate. Any adjustments that are not made due to
the immediately preceding sentence shall be carried forward and
taken into account in any subsequent adjustment; provided, that
any adjustment carried forward shall be deferred not in excess
of three years, whereupon any adjustment to the Conversion Rate
will be effected.
All calculations under this Article 9 shall be made
to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
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SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in
the Conversion Rate shall be made because the Company issues,
in exchange for cash, property or services, shares of Common
Stock, or any securities convertible into shares of Common
Stock, or securities carrying the right to purchase shares of
Common Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for
rights to purchase or the sale of Common Stock pursuant to a
Company plan providing for reinvestment of dividends or
interest.
No adjustment in the Conversion Rate need be made for
a change in the par value of the Common Stock or other securi-
ties having a par value.
No adjustment need be made for a transaction referred
to in Section 9.08, 9.09 or 9.10 if Securityholders are to par-
ticipate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock
or other securities into which the Securities are convertible
participate in the transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Holders of Securities affected a notice
of the adjustment. The Company shall file with the Trustee an
Officers' Certificate or a certificate from the Company's inde-
pendent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate
shall be conclusive evidence that the adjustment is correct,
absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that
would require an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that
would require a supplemental indenture pursuant to
Section 9.16, or
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(3) there is a proposed liquidation or dissolution
of the Company or of the issuer of any other security into
which the Securities are convertible,
the Company shall mail to Holders of Securities of any affected
series a notice stating the proposed record date for a dividend
or distribution or the proposed effective date of a subdivi-
sion, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall
mail the notice at least 15 days before such date. Failure to
mail the notice or any defect in it shall not affect the valid-
ity of the transaction.
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to
Section 5.01, the successor corporation (if other than the Com-
pany) shall enter into a supplemental indenture which shall
provide that the Holder of a Security may convert it into the
kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or
transfer if he had converted the Security immediately before
the effective date of the transaction. The supplemental inden-
ture shall provide for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for
in this Article. The successor company shall mail to Holders
of Securities of any affected series a notice briefly describ-
ing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10
do not apply.
ARTICLE 10 ` AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the
Securities or any coupons without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5 or Section 9.16;
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(3) to provide that specific provisions of this
Indenture shall not apply to a series not previ-
ously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or
more series; or
(6) to make any change that does not materially
adversely affect the rights of any
Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Bond Resolution otherwise provides, the Company
and the Trustee may amend this Indenture, the Securities and
any coupons with the written consent of the Holders of a major-
ity in principal amount of the Securities of all series
affected by the amendment voting as one class. However, with-
out the consent of each Securityholder affected, an amendment
under this Section may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the interest on or change the time for
payment of interest on any Security;
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Secu-
rity or reduce the amount of principal of any
Discounted Security that would be due upon an
acceleration thereof;
(5) change the currency in which principal or inter-
est on a Security is payable;
(6) make any change that materially adversely
affects the right to convert any Security; or
(7) make any change in Section 6.04 or 10.02, except
to increase the amount of Securities whose Hold-
ers must consent to an amendment or waiver or to
provide that other provisions of this Indenture
cannot be amended or waived without the consent
of each Securityholder affected thereby.
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An amendment of a provision included solely for the bene-
fit of one or more series does not affect Securityholders of
any other series.
Securityholders need not consent to the exact text of a
proposed amendment or waiver; it is sufficient if they consent
to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall
be set forth in a supplemental indenture that complies with the
TIA.
If a provision of the TIA requires or permits a provision
of this Indenture and the TIA provision is amended, then the
Indenture provision shall be automatically amended to like
effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance
with its terms and thereafter binds every Securityholder enti-
tled to consent to it.
A consent to an amendment or waiver by a Holder of a Secu-
rity is a continuing consent by the Holder and every subsequent
Holder of a Security that evidences the same debt as the con-
senting Holder's Security. Any Holder or subsequent Holder may
revoke the consent as to his Security if the Trustee receives
notice of the revocation before the amendment or waiver becomes
effective.
The Company may fix a record date for the determination of
Holders of Registered Securities entitled to give a consent.
The record date shall not be less than 10 nor more than 60 days
prior to the first written solicitation of Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate nota-
tion about an amendment or waiver on any Security thereafter
authenticated. The Company may issue in exchange for affected
Securities new Securities that reflect the amendment or waiver.
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SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that
adversely affects its rights. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opin-
ion of Counsel and an Officers' Certificate each stating that
the execution of any amendment or supplement or waiver autho-
rized puruant to this Article is authorized or permitted by
this Indenture, and that such amendment or supplement or waiver
constitutes the legal, valid and binding obligation of the
Company.
ARTICLE 11 ` MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA {{ 310 through 317 that impose
duties on any person (including the provisions automatically
deemed included herein unless expressly excluded by this Inden-
ture) are a part of and govern this Indenture, whether or not
expressly set forth herein.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02. Notices
Any notice by one party to another is duly given if in
writing and delivered in person, sent by facsimile transmission
confirmed by mail or mailed by first-class mail to the other's
address shown below:
Company:
Fax:
Attention:
Trustee:
Fax:
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Attention:
A party by notice to the other parties may designate addi-
tional or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed to
his address shown on the register kept by the Transfer Agent or
on the list referred to in Section 2.06. Failure to mail a
notice to a Securityholder or any defect in a notice mailed to
a Securityholder shall not affect the sufficiency of the notice
mailed to other Securityholders or the sufficiency of any pub-
lished notice.
If a notice is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company mails a notice to Securityholders, it shall
mail a copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a
notice required to be mailed or to publish a notice required to
be published, the Company may give such substitute notice as
the Trustee approves. Failure to publish a notice as required
or any defect in it shall not affect the sufficiency of any
mailed notice.
All notices shall be in the English language, except that
any published notice may be in an official language of the
country of publication.
A "notice" includes any communication required by this
Indenture.
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall if so requested furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions prece-
dent, if any, provided for in this Indenture
relating to the proposed action have been com-
plied with; and
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(2) an Opinion of Counsel stating that, in the opin-
ion of such counsel, all such conditions prece-
dent have been complied with.
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
shall include:
(1) a statement that the person making such certifi-
cate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such cer-
tificate or opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as
is necessary to enable him to express an
informed opinion as to whether or not such cove-
nant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has
been complied with.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a
meeting of Securityholders. An Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 11.06. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on
which banking institutions are not required to be open. If a
payment date is a Legal Holiday at a place of payment, unless
the Bond Resolution establishing a series otherwise provides
with respect to Securities of the series, payment may be made
at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening
period.
-44-
<PAGE>
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director,
officer, employee or stockholder, as such, of the Company is
waived and released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Inden-
ture. One signed copy is enough to prove this Indenture.
SECTION 11.09. Governing Law.
The laws of the State of New York shall govern this Inden-
ture, the Securities and any coupons, unless federal law
governs.
-45-
<PAGE>
SIGNATURES
Dated: , [NAME OF ISSUER]
By ______________________________
Name:
Title:
(SEAL)
Attest:
________________________
Name:
Title:
Dated: , [ ]
By ______________________________
Name:
Title:
Attest: (SEAL)
_________________________
Name:
Title:
-46-
<PAGE>
EXHIBIT A
A Form of Registered Security
No. $
[NAME OF ISSUER]
[Title of Security]
[Name Of Issuer]
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
[ ] [NAME OF ISSUER]
Transfer Agent and Paying Agent
by
(SEAL)
Authenticated: Chairman of the Board
[Name of Registrar]
Registrar, by
Authorized Signature Vice-President
A-1
<PAGE>
[NAME OF ISSUER]
[Title of Security]
1. Interest.1
[Name Of Issuer] ("Company"), a corporation organized
and existing under the laws of the State of
, promises to pay interest on the principal
amount of this Security at the rate per annum shown
above. The Company will pay interest on
and of each year
commencing , 19__. Interest on the Securi-
ties will accrue from the most recent date to which
interest has been paid or, if no interest has been
paid, from , 19__. Interest will be com-
puted on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.2
The Company will pay interest on the Securities to
the persons who are registered holders of Securities
at the close of business on the record date for the
next interest payment date, except as otherwise pro-
vided in the Indenture. Holders must surrender Secu-
rities to a Paying Agent to collect principal pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money. It may mail
an interest check to a holder's registered address.
3. Bond Agents.
Initially,
Attention: , will act as Paying
Agent, Transfer Agent and Registrar. The Company may
change any Paying Agent, Transfer Agent or Registrar
without notice or provide for more than one such
agent. The Company or any Affiliate may act in any
such capacity. Subject to certain conditions, the
Company may change the Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as ,
("Indenture") between the Company and
A-2
<PAGE>
("Trustee"). The terms of the Securi-
ties include those stated in the Indenture and in the
Bond Resolution creating the Securities and those
made part of the Indenture by the Trust Indenture Act
of 1939 (15 U.S. Code {{ 77aaa-77bbbb).
Securityholders are referred to the Indenture, the
Bond Resolution and the Act for a statement of such
terms.
5. Optional Redemption.3
On or after , the Company may redeem
all the Securities at any time or some of them from
time to time at the following redemption prices
(expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.5 The
Company may reduce the principal amount of Securities
to be redeemed pursuant to this paragraph by sub-
tracting 100% of the principal amount (excluding pre-
mium) of any Securities (i) that the Company has
acquired or that the Company has redeemed other than
pursuant to this paragraph and (ii) that the Company
has delivered to the Registrar for cancellation. The
Company may so subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter
through at a redemption price of 100% of
A-3
<PAGE>
principal amount, plus accrued interest to the
redemption date.
8. Notice of Redemption.7
Notice of redemption will be mailed at least 30 days
before the redemption date to each holder of Securi-
ties to be redeemed at his registered address.
A notice of redemption may provide that it is subject
to the occurrence of any event before the date fixed
for such redemption as described in such notice
("Conditional Redemption") and such notice of Condi-
tional Redemption shall be of no effect unless all
such conditions to the redemption have occurred
before such date or have been waived by the Company.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1) complete and
sign the conversion notice on the back of the
A-4
<PAGE>
Security, (2) surrender the Security to a Conversion
Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or
Conversion Agent and (4) pay any transfer or similar
tax if required. A Holder may convert a portion of a
Security if the portion is $1,000 or an integral mul-
tiple of $1,000.
10. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons
in denominations of $1,00010 and whole multiples of
$1,000. The transfer of Securities may be registered
and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorse-
ments and transfer documents and to pay any taxes and
fees required by law or the Indenture. The Transfer
Agent need not exchange or register the transfer of
any Security or portion of a Security selected for
redemption. Also, it need not exchange or register
the transfer of any Securities for a period of 15
days before a selection of Securities to be redeemed.
11. Persons Deemed Owners.
The registered holder of a Security may be treated as
its owner for all purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.11
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the
Indenture or the Securities may be amended, among
other things, to cure any ambiguity, omission, defect
or inconsistency; to provide for assumption of Com-
pany obligations to Securityholders; or to make any
change that does not materially adversely affect the
rights of any Securityholder.
A-5
<PAGE>
13. Restrictive Covenants.12
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
The Indenture does not limit other unsecured debt.
14. Successors.
When a successor assumes all the obligations of the
Company under the Securities and the Indenture, the
Company will be released from those obligations.
15. Defeasance Prior to Redemption or Maturity.13
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest
on the Securities to redemption or maturity. U.S.
Government Obligations are securities backed by the
full faith and credit of the United States of America
or certificates representing an ownership interest in
such Obligations.
16. Defaults and Remedies.
An Event of Default14 includes: default for 60 days
in payment of interest on the Securities; default in
payment of principal on the Securities; default in
payment or satisfaction of any sinking fund obliga-
tion; default by the Company for a specified period
after notice to it in the performance of any of its
other agreements applicable to the Securities; cer-
tain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series.
If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 33 1/3% in princi-
pal amount of the Securities may declare the
principal15 of all the Securities to be due and pay-
able immediately.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority
in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of
A-6
<PAGE>
any continuing default (except a default in payment
of principal or interest) if it determines that with-
holding notice is in their interests. The Company
must furnish annual compliance certificates to the
Trustee.
17. Trustee Dealings with Company.
, the Trustee under the Indenture, in
its individual or any other capacity, may make loans
to, accept deposits from, and perform services for
the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not
Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
19. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
20. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon writ-
ten request and without charge a copy of the Indenture and the
Bond Resolution, which contains the text of this Security in
larger type. Requests may be made to: [Name/Address Of
Issuer], Attention: Corporate Secretary.
A-7
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. $
[NAME OF ISSUER]
[Title of Security]
[Name Of Issuer]
promises to pay to bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Dated:
[ ] [NAME OF ISSUER]
Transfer Agent
(SEAL) by
Authenticated: Chairman of the Board
[Name of Registrar]
Registrar, by
Authorized Signature Vice-President
B-1
<PAGE>
[NAME OF ISSUER]
[Title of Security]
1. Interest.1
[Name Of Issuer] ("Company"), a corporation organized
and existing under the laws of the State of Delaware,
promises to pay to bearer interest on the principal
amount of this Security at the rate per annum shown
above. The Company will pay interest on
and of each year commencing
, 19 . Interest on the Securities will
accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from
, 19 . Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment.2
Holders must surrender Securities and any coupons to
a Paying Agent to collect principal and interest pay-
ments. The Company will pay principal and interest
in money of the United States that at the time of
payment is legal tender for payment of public and
private debts. The Company may pay principal and
interest by check payable in such money.
3. Bond Agents.
Initially, , Attention:
, will act as Transfer Agent,
Paying Agent and Registrar. The Company may change
any Paying Agent, Transfer Agent or Registrar without
notice or provide for more than one such agent. The
Company or any Affiliate may act in any such capac-
ity. Subject to certain conditions, the Company may
change the Trustee.
4. Indenture.
The Company issued the securities of this series
("Securities") under an Indenture dated as of
, ("Indenture") between the Company and
("Trustee"). The terms of the Securities
include those stated in the Indenture and the Bond
Resolution and those made part of the Indenture by
the Trust Indenture Act of 1939 (15 U.S. Code
{{ 77aaa-77bbbb). Securityholders are referred to
B-2
<PAGE>
the Indenture, the Bond Resolution and the Act for a
statement of such terms.
5. Optional Redemption.3
On or after , the Company may redeem all
the Securities at any time or some of them from time
to time at the following redemption prices (expressed
in percentages of principal amount), plus accrued
interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
and thereafter 100%.
6. Mandatory Redemption.4
The Company will redeem $ principal amount of
Securities on and on each
thereafter through at a redemption price
of 100% of principal amount, plus accrued interest to
the redemption date.5 The Company may reduce the
principal amount of Securities to be redeemed pursu-
ant to this paragraph by subtracting 100% of the
principal amount (excluding premium) of any Securi-
ties (i) that the Company has acquired or that the
Company has redeemed other than pursuant to this
paragraph and (ii) that the Company has delivered to
the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. Additional Optional Redemption.6
In addition to redemptions pursuant to the above
paragraph(s), the Company may redeem not more than
$ principal amount of Securities on
and on each thereafter through
at a redemption price of 100% of principal amount,
plus accrued interest to the redemption date.
8. Notice of Redemption.7
Notice of redemption will be published once in an
Authorized Newspaper in the City of New York and if
the Securities are listed on any stock exchange
located outside the United States and such stock
exchange so requires, in any other required city
B-3
<PAGE>
outside the United States at least 30 days before the
redemption date. Notice of redemption also will be
mailed to holders who have filed their names and
addresses with the Transfer Agent within the two pre-
ceding years. A holder of Securities may miss impor-
tant notices if he fails to maintain his name and
address with the Transfer Agent.
A notice of redemption may provide that it is subject
to the occurrence of any event before the date fixed
for such redemption as described in such notice
("Conditional Redemption") and such notice of Condi-
tional Redemption shall be of no effect unless all
such conditions to the redemption have occurred
before such date or have been waived by the Company.
9. Conversion.8
A Holder of a Security may convert it into Common
Stock of the Company or cash, or a combination
thereof, at the Company's option, at any time before
the close of business on ___________, or, if the
Security is called for redemption, the Holder may
convert it at any time before the close of business
on the redemption date. The initial Conversion Rate
is ____________ (or an equivalent amount in cash) per
$1,000 principal amount of the Securities, subject to
adjustment as provided in Article 9 of the
Indenture.9 The Company will deliver a check in lieu
of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities
will be made nor for dividends on the Common Stock
issued on conversion. If any Security is converted
between the record date for the payment of interest
and the next succeeding interest payment date, such
Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment
date on the principal amount so converted (unless
such Security shall have been called for redemption,
in which case no such payment shall be required). A
Security converted on an interest payment date need
not be accompanied by any payment, and the interest
on the principal amount of the Security being con-
verted will be paid on such interest payment date to
the registered holder of such Security on the immedi-
ately preceding record date.
To convert a Security a Holder must (1)
complete and sign the conversion notice on the back
of the Security, (2) surrender the Security to a
B-4
<PAGE>
Conversion Agent, (3) furnish appropriate endorse-
ments and transfer documents if required by the Reg-
istrar or Conversion Agent and (4) pay any transfer
or similar tax if required. A Holder may convert a
portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. Denominations, Transfer, Exchange.
The Securities are in bearer form with coupons in
denominations of $5,00010 and whole multiples of
$5,000. The Securities may be transferred by deliv-
ery and exchanged as provided in the Indenture. Upon
an exchange, the Transfer Agent may require a holder,
among other things, to furnish appropriate documents
and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange any
Security or portion of a Security selected for
redemption. Also, it need not exchange any Securi-
ties for a period of 15 days before a selection of
Securities to be redeemed.
11. Persons Deemed Owners.
The holder of a Security or coupon may be treated as
its owner for all purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the
Securities may be amended with the consent of the
holders of a majority in principal amount of the
securities of all series affected by the amendment.11
Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a
majority in principal amount of the series.
Without the consent of any Securityholder, the Inden-
ture or the Securities may be amended, among other
things, to cure any ambiguity, omission, defect or
inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change
that does not materially adversely affect the rights
of any Securityholder.
13. Restrictive Covenants.12
The Securities are unsecured general obligations of
the Company limited to $ principal amount.
The Indenture does not limit other unsecured debt.
B-5
<PAGE>
14. Successors.
When a successor assumes all the obligations of the
Company under the Securities, any coupons and the
Indenture, the Company will be released from those
obligations.
15. Defeasance Prior to Redemption or Maturity.13
Subject to certain conditions, the Company at any
time may terminate some or all of its obligations
under the Securities, any coupons and the Indenture
if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of prin-
cipal and interest on the Securities to redemption or
maturity. U.S. Government Obligations are securities
backed by the full faith and credit of the United
States of America or certificates representing an
ownership interest in such Obligations.
16. Defaults and Remedies.
An Event of Default14 includes: default for 60 days
in payment of interest on the Securities; default in
payment of principal on the Securities; default in
payment or satisfaction of any sinking fund obliga-
tion; default by the Company for a specified period
after notice to it in the performance of any of its
other agreements applicable to the Securities; cer-
tain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series.
If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 33 1/3% in princi-
pal amount of the Securities may declare the
principal15 of all the Securities to be due and pay-
able immediately.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority
in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of
any continuing default (except a default in payment
of principal or interest) if it determines that with-
holding notice is in their interests. The Company
must furnish annual compliance certificates to the
Trustee.
B-6
<PAGE>
17. Trustee Dealings with Company.
, the Trustee under the Indenture, in
its individual or any other capacity, may make loans
to, accept deposits from, and perform services for
the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not
Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for
any obligations of the Company under the Securities
or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Secu-
rity waives and releases all such liability. The
waiver and release are part of the consideration for
the issue of the Securities.
19. Authentication.
This Security shall not be valid until authenticated
by a manual signature of the Registrar.
20. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM
(=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Securityholder upon writ-
ten request and without charge a copy of the Indenture and the
Bond Resolution, which contains the text of this Security in
larger type. Requests may be made to: [Name/Address Of
Issuer], Attention: Corporate Secretary.
B-7
<PAGE>
[FACE OF COUPON]
...............
[$]............
Due............
[NAME OF ISSUER]
[Title of Security]
Unless the Security attached to this coupon has been
called for redemption, [Name Of Issuer] (the "Company") will
pay to bearer, upon surrender, the amount shown hereon when
due. This coupon may be surrendered for payment to any Paying
Agent listed on the back of this coupon unless the Company has
replaced such Agent. Payment may be made by check. This cou-
pon represents months' interest.
[Name Of Issuer]
By_______________________________
[REVERSE OF COUPON]
PAYING AGENTS
B-8
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate
per annum, insert a description of the manner in which the
rate of interest is to be determined. If the Security is
not to bear interest prior to maturity, so state.
2 If the method or currency of payment is different, insert
a statement thereof.
3 If applicable. A restriction on redemption or refunding
or any provision applicable to to its redemption other may
be added.
4 If applicable.
5 If the Security is a Discounted Security, insert amount to
be redeemed or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for
repayment of Securities at the option of the
Securityholder.
7 If applicable.
8 If applicable. If convertible into securities other than
Common Stock, insert appropriate summary.
9 If additional or different adjustment provisions apply so
specify.
10 If applicable. Insert additional or different denomina-
tions and terms as appropriate.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants
apply, insert a brief summary thereof.
13 If applicable. If different defeasance terms apply,
insert a brief summary thereof.
14 If additional or different Events of Default apply, insert
a brief summary thereof.
15 If the Security is a Discounted Security, set forth the
amount due and payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted
and Bearer Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
: :
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________
agent to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Date: _______________ Your Signature: ________________________
________________________
(Sign exactly as your name appears on the other side of
this Security)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security,
check the box:
_____
/ /
To convert only part of this
Security, state the amount
(must be in integral multiples
of $1,000);
$_____________________________
If you want the securities
delivered upon conversion made
out in another person's name,
fill in the form below:
(Insert other person's Social
Security or Tax I.D. Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other
person's name, address
and zip code)
Date: _________ Signature(s): ______________________________
______________________________
(Sign exactly as your name(s)
appear(s) on the other side of
this Security)
D-1
<PAGE>
Signature(s) guaranteed by: ________________________________
(All signatures must be
guaranteed by a member of a
national securities exchange or
of the National Association of
Securities Dealers, Inc. or by a
commercial bank or trust company
located in the United States)
D-2
EXHIBIT G-1
New Century Energies, Inc., et al. (70- )
New Century Energies, Inc. ("NCE"), it service company subsidiary, New
Century Services, Inc., and its non-utility holding company subsidiary, New
Century Enterprises, Inc., together with, Public Service Company of Colorado, a
Colorado public utility company ("PSCo"), Cheyenne Light, Fuel and Power Company
("Cheyenne"), WestGas Interstate Inc., e prime, inc. and its subsidiary
companies ("e prime"), PS Colorado Credit Corporation ("PSCC"), Natural Fuels
Corporation, PSRI Investments, Inc., Green & Clear Lakes Company, 1480 Welton,
Inc., each of 1225 Seventeenth Street, Denver, Colorado 80202 and Southwestern
Public Service Company, a New Mexico public utility company ("SPS" and together
with PSCo and Cheyenne, the "Utility Subsidiaries"), Utility Engineering
Corporation and its subsidiary companies and Quixx Corporation and its
subsidiary companies ("Quixx"), each of Tyler at Sixth, Amarillo, Texas 79101
(together, "Applicants")(all subsidiaries, "Subsidiaries")(all subsidiary
companies, excluding the Utility Subsidiaries, the "Non-Utility Subsidiaries")
have filed a joint application/declaration under sections 6, 7, 9, 10, 12(b),
12(c), 12(e), 12(f), 32 and 33 and rules 42, 43, 45, 53 and 62 thereunder.
The Applicants are seeking, for the period from the effective date of
an order in this matter through December 31, 2002 (the "Authorization Period"),
as more fully described below, Commission authorization for: (1) external
financings by
<PAGE>
2
NCE, including (a) equity financing, (b) short-term financing, (c)
interest rate and equity swaps and (d) the issuance of other securities; (2)
financing by the Utility Subsidiaries, including (a) short-term debt, (b)
interest rate swaps and (c) the issuance of other securities; (3) financing by
the Non-Utility Subsidiaries; (4) intrasystem financing of Subsidiaries,
including (a) open account advances, long term loans and/or capital stock
purchases and (b) guarantees; (5) changes in capital stock of the Subsidiaries;
(6) the formation and retention of financing entities; (7) certain existing
financing arrangements; (8) the establishment of two money pool arrangements
through December 31, 2002, including (a) a Utility Money Pool and (b) a
Non-Utility Money Pool; (9) financing for the purpose of acquiring exempt
wholesale generators ("EWGs") and foreign utility companies ("FUCOs"); (10) the
acquisition, redemption or retirement of securities; and (11) the solicitation
of proxies, consents or authorizations to seek shareholder approval.
The Applicants request authority to engage in various financing and
related transactions, for a period from the effective date of an order in this
matter through December 31, 2002, for which the specific terms and conditions
are not at this time known. The authorization is sought subject to the following
conditions: (1) NCE's (and each Utility Subsidiary's) common equity will be at
least 30% of its consolidated capitalization; (2) any long-term debt issued to
unaffiliated
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3
persons pursuant to an authorization in this proceeding will be, or will meet
the qualifications for being, investment grade; (3) the effective cost of money
on financings authorized in this proceeding will not exceed, for long-term debt,
300 basis points over the rate borne by comparable term U.S. Treasury
securities, and for short-term debt, 300 basis points over the London interbank
offered rate; (4) the effective cost of money for preferred stock and other
fixed income oriented securities will not exceed 500 basis points over the
interest rate borne by 30 year term U.S. Treasury securities; (5) the maturity
of authorized indebtedness will not exceed 50 years; (6) issuance expenses in
connection with an offering of securities, including any underwriting fees,
commissions or other similar compensation, may not exceed 5% of the total amount
of the securities being issued; (7) the aggregate amount of external financing
will not exceed $10 billion, the aggregate amount of intrasystem financing will
not exceed $4 billion and the aggregate amount of intrasystem guarantees and
other credit support will not exceed $4 billion; (9) the proceeds of the
proposed financings will be used for general and corporate purposes including:
(a) capital expenditures of NCE and its Subsidiaries, (b) the repayment,
redemption, refunding or repurchase of debt and capital stock of NCE or its
Subsidiaries, (c) financing working capital requirements, and (d) other lawful
general purposes. Financing may not be used to invest in an EWG or a FUCO
unless, at the time of each financing transaction, NCE is in compliance with the
requirements of rules 53 and 54 under the Act. Any
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4
deviation from these conditions would require further Commission approval.
The proposed transactions and the proposed participation of the
various Applicants are described below.
1. External Financing by NCE. During the Authorization Period NCE
proposes from time to time to issue and sell capital stock, short-term debt and
other securities and to engage in interest rate and equity swaps. Securities may
be sold through underwriters or dealers, directly to a limited number of
purchasers, or through agents.
a. Capital Stock. NCE proposes to issue and sell preferred stock or
common stock, including stock issued upon the exercise of convertible debt or
pursuant to rights, options, warrants and similar securities and income
preferred securities.1
NCE may also buy back shares of such stock or such other securities
during the Authorization Period.
NCE also proposes to issue and/or sell its common stock under certain
employee benefit plans and dividend reinvestment plans to be adopted. Such
shares may be newly issued shares, treasury shares or shares purchased in the
open market.
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1 In connection with issuance of such securities, NCE proposes to form
financing entities, as described below, and to issue debt to such
entities to back up obligations under securities issued by such
entities.
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5
Applicants also request authority to solicit proxies, consents or
authorizations in connection with employee benefit plans for employees of NCE or
its Subsidiaries. Such solicitations shall be within the exemption provided by
Rule 65.
b. Short-term Debt. NCE proposes to issue and sell commercial paper in
established domestic or European commercial paper markets to dealers at the
discount rate prevailing at the date of issuance for comparable commercial
paper. The dealers would reoffer such commercial paper at a discount to
investors. NCE also proposes to establish back-up lines of credit providing for
borrowings from time to time when it is impracticable to issue commercial paper.
Such lines of credit would be in an aggregate principal amount not to exceed the
amount of authorized commercial paper, and borrowings under these lines would
mature not more than one year from the date of borrowing. NCE also proposes to
engage in other types of short-term financing generally available to borrowers
with investment grade credit ratings as it may deem appropriate.
c. Interest Rate and Equity Swaps. NCE proposes to engage in interest
rate swaps involving its interest obligations existing at the date of the swap.
NCE also proposes to engage in equity swaps in which it would exchange one
equity investment market risk for another or would exchange fixed or floating
rate interest income from an investment for payments
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6
based on a stock index.2 Interest rate and equity swaps would be limited to
obligations and investments existing at the time of the swap.
NCE requests reservation of jurisdiction over the use of equity swaps
pending completion of the record as to the exact form of transactions. NCE also
undertakes to file a post-effective amendment in this proceeding which will
describe the general terms of each such equity swap and request a supplemental
order of the Commission authorizing the issuance thereof by NCE. Such
supplemental order may be issued by the Commission without further public notice
in the Federal Register.
d. Other Securities. In addition to the specific securities for which
authorization is sought, NCE also proposes to issue other types of securities
that it deems appropriate during the period of the Commission's authorization.
NCE requests that the Commission reserve jurisdiction over the issuance of
additional types of securities. NCE also undertakes that it will file a
post-effective amendment in this proceeding describing the general terms of each
such security and obtain a supplemental order of the Commission authorizing the
issuance thereof by NCE. Such supplemental orders may be issued by the
Commission without further public notice in the Federal Register.
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2 NCE states that equity swaps could be used to hedge earnings from its
domestic or international investments, but would not be used to
transfer title to the equity securities owned by it that are used in
the swap transaction.
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7
2. Utility Subsidiary Financings. The Utility Subsidiaries request
authorization to engage in certain external financings which are outside the
scope of the Rule 52 exemption for financings of utility companies, interest
rate swaps and other securities.
a. Short-term debt. These may include short-term debt financings of
PSCo and Cheyenne (less than 12 month maturity) and SPS (less than 18 month
maturity) which may be granted but do not require approval by state regulators.
Each of these companies may issue commercial paper in established domestic or
European commercial paper markets in a manner similar to NCE discussed above.
b. Interest Rate Swaps. Each Utility Subsidiary may engage in interest
rate swaps to the same extent, and under the same conditions, as NCE.
c. Other Securities. Each Utility Subsidiary may issue other
securities in the same manner, and subject to the same conditions, as NCE.
3. Non-Utility Subsidiary Financings. Each of the Non-Utility
Subsidiaries propose to issue other types of securities that are not exempted by
Rule 52 from the requirement of Commission approval and that they deem
appropriate during the
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8
period of the Commission's authorization. These Applicants request that the
Commission reserve jurisdiction over the issuance of additional types of
securities and also undertake that they will cause a post-effective amendment to
be filed in this proceeding describing the general terms of each such security
and obtain a supplemental order of the Commission authorizing the issuance
thereof by such Applicants. Such supplemental orders may be issued by the
Commission without further public notice in the Federal Register.
4. Intrasystem Financing. The Applicants propose various financing
transactions between NCE and its subsidiaries and between certain subsidiaries.
The aggregate amount of all such financing would not exceed $4.0 billion
excluding amounts exempt pursuant to Rules 45 and 52.
a. General. NCE proposes to make to its Subsidiaries and certain
Subsidiaries propose to make to other Subsidiaries open-account advances,
long-term loans and/or capital stock purchases, as determined by NCE and its
respective Subsidiaries to be appropriate. These borrowings would be made on a
revolving basis and would bear interest at a rate equal to the weighted average
effective interest rate of NCE's short-term borrowings or, if no such borrowings
are outstanding, at a rate based on the Federal Funds effective rate of interest
quoted daily by the Federal Reserve Bank of New York. Such advances may be made
through the Money Pools.
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9
In addition, the Non-Utility Subsidiaries propose to issue and NCE or
other Non-Utility Subsidiaries propose to acquire other types of securities that
are not exempted by Rule 52 from the requirement of Commission approval but that
are considered by such companies to be appropriate during the period of the
Commissions authorization. These Applicants request that the Commission reserve
jurisdiction over the issuance of additional types of securities and also
undertake that they will cause a post-effective amendment to be filed in this
proceeding describing the general terms of each such security and obtain a
supplemental order of the Commission authorizing the issuance and acquisition
thereof. Such supplemental orders may be issued by the Commission without
further public notice in the Federal Register.
b. Guarantees. The Applicants propose to enter into guarantee
arrangements, obtain letters of credit, enter into expense agreements and
otherwise provide credit support with respect to the obligations of the other
Applicants to third parties. NCE proposes to enter into such arrangements with
respect to the obligations of any Subsidiary and any Subsidiary proposes to
enter into such arrangements with respect to any other Subsidiary. The aggregate
amount of all such arrangements would not exceed $4.0 billion outstanding at any
one time, except to the extent the same are exempt pursuant to Rule 52 and are
in addition to the $10.0 billion limit on ex
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10
ternal financing for NCE and its Subsidiaries and the $4.0 billion limit on
intrasystem financing.
5. Changes in Capital Stock of Subsidiaries. The portion of an
individual Subsidiary's aggregate financing through the sale of stock to NCE or
other immediate parent company cannot be ascertained at this time. NCE and its
Subsidiaries request authority to increase such Subsidiary's authorized capital
stock and to change the amount or terms of any such Subsidiary's capital stock
capitalization by an amount deemed appropriate by NCE or other immediate parent
company and to change or eliminate the par value of such stock without further
Commission approval. The Applicants also seek authority to solicit proxies,
consents or authorizations to obtain shareholder approval regarding changes in
their capital stock which may be required under Section 12(e) and Rule 62
thereunder. Such solicitations shall be within the exemption provided by
Rule 65.
6. Financing Entities. In connection with the issuance of income
preferred securities or other securities authorized in this proceeding, the
Applicants seek authorization to organize new corporations, trusts, partnerships
or other entities created for the purpose of facilitating such financings..
Request is also made for these financing entities to issue such
securities to third parties in the event such transactions involving financing
by the Applicants are not exempt pursuant to Rule 52. Additionally, request is
made for authorization with respect to (i) the issuance of debentures or
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11
other evidences of indebtedness by any of the Applicants to a financing entity
in return for the proceeds of the financing, (ii) the acquisition by any of the
Applicants of voting interests or equity securities issued by the financing
entity to establish any such Applicant's ownership of the financing entity (the
equity portion of the entity generally being created through a capital
contribution or the purchase of equity securities, ranging from 1 to 3 percent
of the capitalization of the financing entity) and (iii) the guarantee by the
Applicants of such financing entity's obligations in connection therewith. Each
of the Applicants and the Subsidiaries also request authorization to enter into
expense agreements with its respective financing entity, pursuant to which it
would agree to pay all expenses of such entity. Any amounts issued by such
financing entities to third parties pursuant to this authorization will be
included in the overall external financing limitation authorized herein for the
immediate parent of such financing entity, however, the indebtedness issued by
an Applicant to a financing entity will not count against the intrasystem
financing limit set forth herein. Applicants also request that SPS be authorized
to retain Southwestern Public Service Capital I, a wholly owned trust, that
issued trust preferred securities and loaned the proceeds to SPS.
7. Existing Financing Arrangements. The Applicants propose to retain
such financing arrangements as were in
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12
place prior to the Merger and which are not otherwise exempted from the
provisions of the Act.
8. Establishment of Money Pools. The Applicants propose to establish
(i) the Utility Money Pool and the Utility Subsidiaries, to the extent not
exempted by Rule 52, also request authorization to make borrowings and to
contribute to the Utility Money Pool and (ii) the Non-Utility Money Pool in
which the Non-Utility Subsidiaries as well as any other newly formed Non-Utility
Subsidiaries, may participate. The Non-Utility Money Pool activities of all of
the Non-Utility subsidiaries except PSCCC are exempt from the prior approval
requirements of the Act under Rule 52. Applicants propose PSCCC participate in
the Non-Utility Money Pool. Applicants also propose NCE contribute surplus funds
and lend and extend credit to (a) the Utility Subsidiaries through the Utility
Money Pool and (b) the Non-Utility Subsidiaries through the Non-Utility Money
Pool. Funds made available by NCE for loans through the money pools will be made
available first for loans through the Utility Money Pool and thereafter for
loans through the Non-Utility Money Pool. No loans through the Utility Money
Pool would be made to, and no borrowings through the Utility Money Pool would be
made by, NCE.
The maximum amount of Money Pool borrowings outstanding for each
Subsidiary will be determined by NCE and the Subsidiaries in accordance with
business needs. Actual short-term financing would be issued based on working
capital requirements
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13
and any interim financing needed to bridge between issuances of long-term
capital.
NC Services will operate and administer the Utility and Non-Utility
Money Pools on an "at cost" basis and will maintain separate records for each
money pool. Surplus funds of the Utility Money Pool and the Non-Utility Money
Pool may be combined in common short-term investments, but separate records of
such funds shall be maintained by NC Services as administrator of the pools, and
interest thereon shall be separately allocated, on a daily basis, to each Money
Pool in accordance with the proportion that the amount of each Money Pool's
surplus funds bears to the total amount of surplus funds available for
investment from both Money Pools and will be similarly allocated among the
Participants.
a. Utility-Money Pool. Under the proposed terms of the Utility Money
Pool, funds would be available for short-term loans to the Utility Subsidiaries
from time to time. The maximum short-term debt under the Utility Money Pool to
be issued by PSCo, SPS and Cheyenne will not exceed 40% of their total
capitalization.
Utility Money Pool participants that borrow would borrow pro rata from
each company that lends, in the proportion that the total amount loaned by each
such lending company bears to the total amount then loaned through the Utility
Money Pool. On any day when more than one fund source (e.g., surplus treas-
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14
ury funds of NCE and other Utility Money Pool participants ("Internal Funds")
and proceeds from bank borrowings or commercial paper sales by the Utility
Subsidiaries or NCE ("External Funds")), with different rates of interest, is
used to fund loans through the Utility Money Pool, each borrower would borrow
pro rata from each such fund source in the Utility Money Pool in the same
proportion that the amount of funds provided by that fund source bears to the
total amount of short-term funds available to the Utility Money Pool.
The interest rate applicable and payable to or by subsidiaries for all
loans of Internal Funds will be the rates for high-grade unsecured 30-day
commercial paper sold through dealers by major corporations as quoted in The
Wall Street Journal. The interest rate applicable to loans of such External
Funds would be equal to the lending company's cost for such External Funds (or,
if more than one Utility Money Pool participant had made available External
Funds on such day, the applicable interest rate would be a composite rate equal
to the weighted average of the cost incurred by the respective Utility Money
Pool participants for such External Funds). In cases where both Internal Funds
and External Funds are concurrently borrowed through the Utility Money Pool, the
rate applicable to all loans comprised of such "blended" funds would be a
composite rate.
Funds not required by the Utility Money Pool to make loans (with the
exception of funds required to satisfy the
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15
Utility Money Pool's liquidity requirements) would ordinarily be invested in one
or more short-term investments.
b. Non-Utility Money Pool. The Non-Utility Money Pool will be operated
on the same terms and conditions as the Utility Money Pool. All contributions
to, and borrowings from, the Non-Utility Money Pool are exempt pursuant to the
terms of Rule 52 under the Act, except contributions and extensions of credit by
NCE and PSCCC and short-term borrowings by PSCCC in an amount not to exceed 40%
of its total capitalization, authorization for which is hereby requested.
9. Financing of EWGs and FUCOs. NCE's Non-Utility Subsidiaries, e
prime and Quixx and their subsidiaries, currently own investments in EWGs.
Sections 32 and 33 of the Act permit a registered holding company to acquire and
maintain interests in one or more EWGs or FUCOs without the need to apply for or
receive approval from the Commission. To the extent that funds for one or more
projects are required in excess of internally generated funds, NCE hereby
requests Commission authorization to invest proceeds from the financings
authorized hereby in EWGs and FUCOs in compliance with Rule 53(a)(1) such that
NCE's aggregate investment at any one time during the period covered by this
Application will not exceed 50% of its "consolidated retained earnings", as
defined in Rule 53(a)(1)(ii).
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16
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
