AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 18, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
Carolina Power & Light Company
(Exact name of registrant as specified in its charter)
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
(919) 546-6111
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
North Carolina 56-0165465
(State of Incorporation) (I.R.S. Employer Identification No.)
WILLIAM CAVANAUGH III
President and Chief Executive Officer
ROBERT B. McGEHEE, Esq., Senior Vice
President and General Counsel
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
(919) 546-6111
(Names and addresses, including zip codes, and telephone numbers, including
area codes, of agents for service)
IT IS RESPECTFULLY REQUESTED THAT THE COMMISSION SEND COPIES OF ALL NOTICES,
ORDERS AND COMMUNICATIONS TO:
TIMOTHY S. GOETTEL, ESQ. RICHARD L. HARDEN, ESQ.
Hunton & Williams Winthrop, Stimson, Putnam &
421 Fayetteville Street Mall Roberts
Raleigh, North Carolina 27601 One Battery Park Plaza
(919) 899-3094 New York, New York
10004-1490
(212) 858-1228
Approximate date of commencement of proposed sale to the public: From time to
time as market conditions warrant after the Registration Statement becomes
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [ ]
_________________
If this Form is a Post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]_________________
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================
Proposed Proposed
Title of Each Class Maximum Maximum Amount of
of Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered Per Unit Offering Price Fee
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Mortgage Bonds.... (1)(3) (2) (1)(2)(3) N/A
- -------------------------------------------------------------------------------------------
Senior Notes............ (1)(4) (2) (1)(2)(4) N/A
- -------------------------------------------------------------------------------------------
Debt Securities......... (1)(5) (2) (1)(2)(5) N/A
- -------------------------------------------------------------------------------------------
Total................ $1,500,000,000 (2) $1,500,000,000 $417,000.00(6)
- -------------------------------------------------------------------------------------------
</TABLE>
(1)In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$1,500,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $1,500,000,000, notwithstanding that the stated principal amount
of such securities may exceed such amount.
(2)The proposed maximum initial offering price per unit will be determined,
from time to time, by the registrant in connection with the issuance by the
registrant of the securities registered hereunder.
(3)Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of First Mortgage Bonds as may be sold, from
time to time, by the registrant.
<PAGE>
(4)Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of Senior Notes as may be sold, from time to
time, by the registrant.
(5)Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time, by the registrant.
(6)Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933.
----------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 18, 1998
Prospectus
[CP&L Logo]
CAROLINA POWER & LIGHT COMPANY
$1,500,000,000
First Mortgage Bonds
Senior Notes
Debt Securities
-----------------------------------------------------------
We will provide specific terms of these securities, and the manner
in which they are being offered, in supplements to this Prospectus. You
should read this Prospectus and any supplement carefully before you
invest. We cannot sell any of these securities unless this Prospectus is
accompanied by a Prospectus Supplement.
-----------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this Prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
-----------------------------------------------------------------------
The information in this Prospectus is incomplete and may be
changed. We may not sell these securities until the Registration
Statement filed with the Securities and Exchange Commission is effective.
This Prospectus is not an offer to sell these securities, and it is not
soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
-----------------------------------------------------------------------
This Prospectus is dated ______________, 1998
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission ("SEC") utilizing a "shelf" registration
process. Under this shelf process, we may sell any combination of the securities
described in this Prospectus in one or more offerings up to a total dollar
amount of $1,500,000,000. We may offer any of the following securities: First
Mortgage Bonds, Senior Notes and other Debt Securities.
This Prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a Prospectus Supplement
that will contain specific information about the terms of that offering. This
Prospectus Supplement may also add, update or change information contained in
this Prospectus. The Registration Statement we filed with the SEC includes
exhibits that provide more detail on descriptions of the matters discussed in
this Prospectus. You should read this Prospectus and the related exhibits filed
with the SEC and any Prospectus Supplement together with additional information
described under the heading WHERE YOU CAN FIND MORE INFORMATION.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov or our web site at
http://www.cplc.com. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. The SEC's public reference room in Washington is located at
450 5th Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with it,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is an important
part of this Prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all of the securities being registered.
o Annual Report on Form 10-K for the year ended December 31, 1997;
o Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and
September 30, 1998;
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Robert F. Drennan, Jr., Manager
Investor Relations and
Funds Management
Treasury Department
Carolina Power & Light Company
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
Telephone: (919) 546-7474
You should rely only on the information incorporated by reference or provided in
this
-2-
<PAGE>
Prospectus or any Prospectus Supplement. We have not authorized anyone else
to provide you with different information. We are not making any offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this Prospectus or any Prospectus Supplement is accurate
as of any date other than the date on the front of those documents.
OUR COMPANY AND ADDRESS
Our Company is a public service corporation formed under the laws of North
Carolina in 1926 and is primarily engaged in the generation, transmission,
distribution and sale of electricity in portions of North Carolina and South
Carolina. Our principal executive offices are located at 411 Fayetteville
Street, Raleigh, North Carolina 27601-1748, telephone 919-546-6111.
RATIO OF EARNINGS TO FIXED CHARGES
The following tables set forth our historical ratio of earnings to fixed charges
for the periods indicated:
<TABLE>
<CAPTION>
For the Twelve Months Ended December 31
- ----------------------------------------
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C>
4.17x 4.12x 3.67x 3.31x 3.23x
</TABLE>
<TABLE>
<CAPTION>
For the Twelve Months Ended September 30
- ----------------------------------------
1998 1997
<S> <C>
4.57x 4.11x
</TABLE>
"Earnings" consists of income before income taxes and fixed charges. "Fixed
charges" consists of interest on indebtedness (including capitalized interest)
and a share of rental expense deemed to be representative of interest.
APPLICATION OF PROCEEDS
Unless we state otherwise in any Prospectus Supplement, we will use the net
proceeds from the sale of the offered securities:
o to finance our ongoing construction and maintenance program;
o to redeem, repurchase, repay, or retire outstanding indebtedness;
o to finance future acquisitions of other entities or their assets; and
o for other general corporate purposes.
We may temporarily invest any proceeds that are not immediately applied in U.S.
government or agency obligations, commercial paper, bank certificates of
deposit, or repurchase agreements collateralized by U.S. government or agency
obligations, or we may deposit the proceeds with banks.
-3-
<PAGE>
DESCRIPTION OF THE SECURITIES
This Prospectus describes certain general terms of the offered securities. When
we offer to sell a particular series, we will describe the specific terms in a
Prospectus Supplement. The securities will be issued under indentures, selected
provisions of which we have summarized below. The summary is not complete. The
forms of the indentures have been filed as exhibits to the Registration
Statement, and you should read the indentures for provisions that may be
important to you. In the summaries below, we have included references to section
numbers of the applicable indentures so that you can easily locate these
provisions. Capitalized terms used in the following summaries have the meanings
specified in the applicable indentures unless otherwise defined below.
DESCRIPTION OF FIRST MORTGAGE BONDS
GENERAL
We will issue the First Mortgage Bonds under a Mortgage and Deed of Trust, dated
as of May 1, 1940, with The Bank of New York (formerly Irving Trust Company)
(the "Mortgage Trustee") and Frederick G. Herbst (W.T. Cunningham, successor),
as Trustees. The Mortgage and Deed of Trust is supplemented by supplemental
Indentures. In the following discussion, we will refer to the Mortgage and Deed
of Trust and all Indentures supplemental to the Mortgage and Deed of Trust
together as the "Mortgage." We will refer to all of our bonds, including those
already issued and those to be issued under this shelf registration process or
otherwise issued in the future, as "First Mortgage Bonds." The information we
are providing you in this Prospectus concerning the First Mortgage Bonds and the
Mortgage is only a summary of the information provided in those documents. You
should consult the First Mortgage Bonds themselves, the Mortgage and other
documents for more complete information on the First Mortgage Bonds. These
documents appear as exhibits to the Registration Statement, or will appear as
exhibits to a Current Report on Form 8-K, which we will file, and which will be
incorporated by reference into this Prospectus.
You should consult the Prospectus Supplement relating to any particular issue of
the First Mortgage Bonds for the following information:
o the designation, series and aggregate principal amount of the First
Mortgage Bonds;
o the percentage of the principal amount for which we will issue and sell
the First Mortgage Bonds;
o the date of maturity for the First Mortgage Bonds;
o the rate at which the First Mortgage Bonds will bear interest and the
method of determining that rate;
-4-
<PAGE>
o the dates on which interest is payable;
o the denominations in which we will authorize the First Mortgage Bonds to
be issued, if other than $1,000 or integral multiples of $1,000;
o whether we will offer First Mortgage Bonds in the form of global bonds
and, if so, the name of the depositary for any global bonds;
o redemption terms; and
o any other specific terms.
Unless the applicable Prospectus Supplement states otherwise, the covenants
contained in the Mortgage will not afford holders of First Mortgage Bonds
protection in the event we have a change in control.
FORM AND EXCHANGES
Unless otherwise specified in the applicable Prospectus Supplement, we will
issue the First Mortgage Bonds as registered bonds without coupons. Holders may
exchange them, free of charge, for other First Mortgage Bonds of different
authorized denominations, in the same aggregate principal amount. Holders may
also transfer the First Mortgage Bonds free of charge except for any stamp taxes
or other governmental charges that may apply.
INTEREST AND PAYMENT
The Prospectus Supplement for any First Mortgage Bonds we issue will state the
interest rate, the method of determination of the interest rate, and the date on
which interest is payable. Unless the Prospectus Supplement states otherwise,
principal and interest will be paid at The Bank of New York in New York City.
We have agreed to pay interest on any overdue principal and, to the extent
enforceable under law, on any overdue installment of interest on the First
Mortgage Bonds at the rate of 6% annually. For more information, see Mortgage,
Section 78.
REDEMPTION AND PURCHASE OF FIRST MORTGAGE BONDS
If the First Mortgage Bonds are redeemable, the redemption terms will appear in
the Prospectus Supplement. We may declare redemptions on at least thirty (30)
days notice
o for the maintenance and replacement fund;
o for the sinking fund if we chose to establish a sinking fund for a
designated series of First Mortgage Bonds;
o with certain deposited cash;
-5-
<PAGE>
o with the proceeds of released property; or
o at our option, unless otherwise specified in the applicable supplemental
Indenture and the Prospectus Supplement.
If we have not deposited the redemption funds with the Mortgage Trustee when we
give notice of redemption, the redemption shall be subject to the deposit of
those funds on or before the redemption date. Notice of redemption will not be
effective unless the Mortgage Trustee has received the redemption funds.
Cash that is deposited under any Mortgage provisions may be applied to the
purchase of First Mortgage Bonds of any series, with certain exceptions.
For more information, see Mortgage, Article X.
MAINTENANCE AND REPLACEMENT FUND
Each year we will spend 15% of our adjusted gross operating revenues for
maintenance of and replacements for the mortgaged property and certain
automotive equipment of the Company. If we spend more for these purposes in a
given year, we may credit that amount against the 15% requirement in any
subsequent year. If a regulatory authority does not permit us to spend as much
as 15% of our adjusted gross revenues for these purposes, we will spend only the
amount permitted. We may meet the annual requirements for the maintenance and
replacement fund in any of the following ways:
o by depositing cash with the Mortgage Trustee;
o by certifying expenditures for maintenance and repairs;
o by certifying gross property additions;
o by certifying gross expenditures for certain automotive equipment; or
o by taking credit for First Mortgage Bonds and prior lien bonds that have
been retired.
Cash deposited with the Trustee to meet maintenance and replacement requirements
o may be withdrawn on expenditures for gross property additions;
o may be withdrawn on waiver of the right to issue First Mortgage Bonds; or
o may be applied to the purchase or redemption of First Mortgage Bonds of
any series we may designate.
-6-
<PAGE>
For further discussion, see "Redemption and Purchase of First Mortgage Bonds"
above.
We have reserved the right to amend the Mortgage, at our sole discretion, to
eliminate the maintenance and replacement fund payments with respect to any
First Mortgage Bonds of the Twenty-third Series and any subsequently created
series, including all series offered by this Prospectus. No consent or other
action by the holders of any such First Mortgage Bonds is required. For more
information, see Mortgage, Section 38; Twenty-second Supplemental Indenture,
Section 7.
SECURITY
All First Mortgage Bonds are secured by the Mortgage, which constitutes, in the
opinion of our Vice President - Legal and Corporate Secretary, a first mortgage
lien on all our present properties. This lien is subject to:
o leases of small portions of our property to others for uses which, in the
opinion of our counsel, do not interfere with our business;
o leases of certain property which we own but do not use in our electric
utility business; and
o certain excepted encumbrances, minor defects and irregularities.
This lien does not cover the following property:
o merchandise, equipment, materials or supplies held for sale, and fuel, oil
and similar consumable materials and supplies;
o vehicles and automobiles;
o cash, securities, receivables and all contracts, leases and operating
agreements that are not pledged or required to be pledged; and
o electric energy and other products.
The Mortgage contains provisions subjecting to the lien of the Mortgage certain
other property that is acquired after the date of the delivery of the Mortgage.
These provisions for subjecting additional property to the lien of the Mortgage
are limited in the case of consolidation, merger or sale of substantially all of
our assets. For more information, see Mortgage, Article XV.
The Trustees will have a lien upon the mortgaged property, prior to the First
Mortgage Bonds, for the payment of their reasonable compensation and expenses
and for indemnity against certain liabilities. For more information, see
Mortgage, Section 96.
-7-
<PAGE>
ISSUANCE OF ADDITIONAL FIRST MORTGAGE BONDS
We may issue an unlimited principal amount of First Mortgage Bonds under the
Mortgage (except as described in the next paragraph). We may issue First
Mortgage Bonds of any series from time to time based on any of the following:
o 70% of property additions after adjustments to offset retirement of
property;
o retirement of First Mortgage Bonds or prior lien bonds; or
o deposit of cash.
With certain exceptions in the case of retirement of First Mortgage Bonds or
prior lien bonds, we may issue First Mortgage Bonds only if adjusted net
earnings for 12 out of the preceding 15 months, before interest and income
taxes, is at least twice the annual interest requirements on, or at least 10% of
the principal amount of, the sum of all First Mortgage Bonds outstanding at the
time, including the additional First Mortgage Bonds we may issue under this
shelf registration process or other First Mortgage Bonds we may issue in the
future, and all indebtedness of prior or equal rank. Adjusted net earnings is
net of provision for repairs, maintenance and retirement of property equal to
the maintenance and replacement fund requirements for this period. Cash
deposited for the issuance of First Mortgage Bonds may be withdrawn to the
extent of 70% of property additions after adjustments to offset retirement of
property or retirement of First Mortgage Bonds or prior lien bonds. For further
discussion, see "Modification of the Mortgage" below.
Property additions must consist of electric property, or property used or useful
in connection with electric property, acquired after December 31, 1939. Property
additions may not include securities, vehicles or automobiles. We have reserved
the right to amend the Mortgage, at our sole discretion, to make available as
property additions any form of space satellites, including solar power
satellites, space stations and other similar facilities. We estimate that, as of
November 30, 1998, approximately $2.9 billion of net property additions were
available for the issuance of First Mortgage Bonds. Therefore, using the 70%
test described above, the available net property additions provide a basis for
issuing approximately $2.1 billion of additional First Mortgage Bonds as of
November 30, 1998.
The Mortgage includes restrictions on the issuance of First Mortgage Bonds
against property subject to liens and upon the increase of the amount of any
liens. For more information, see Mortgage, Sections 4-7, 20-30 and 46;
Twenty-third Supplemental Indenture, Section 5.
DIVIDEND RESTRICTIONS
Unless otherwise specified in the Prospectus Supplement, in the case of First
Mortgage Bonds issued under this shelf registration process, and so long as any
First Mortgage Bonds are outstanding, cash dividends and distributions on our
common stock, and purchases by us of our common stock, are restricted to
aggregate net income available for them, since December 31,
-8-
<PAGE>
1948, plus $3,000,000, less the amount of all preferred and common stock
dividends and distributions, and all common stock purchases, since December 31,
1948.
No portion of our retained earnings at November 30, 1998 is restricted by this
provision. For further discussion, see "Modification of the Mortgage" below.
MODIFICATION OF THE MORTGAGE
Bondholders' rights may be modified with the consent of the holders of 70% of
the First Mortgage Bonds. If less than all series of the First Mortgage Bonds
are affected, the modification must also receive the consent of the holders of
70% of the First Mortgage Bonds of each series affected. We have reserved the
right to amend the Mortgage, at our sole discretion, to substitute 66 2/3% for
the percentage requirements stated above. In general, no modification of the
terms of payment of principal or interest, and no modification affecting the
lien or reducing the percentage required for modification (except as noted
above), is effective against any holder of the First Mortgage Bonds without that
holder's consent. For more information, see Mortgage, Article XVIII; Thirteenth
Supplemental Indenture, Section 5.
We may reserve the right to amend the Mortgage, at our sole discretion, for any
of the following purposes:
o to reduce the percentage of the holders of the First Mortgage Bonds who
must consent to certain modifications of the Mortgage to a majority of the
bondholders adversely affected;
o to except from the lien of the Mortgage all property not funded or
eligible to be funded under the Mortgage for the issuance of First
Mortgage Bonds, the release of property or any other purpose under the
Mortgage;
o to ease the requirements of the net earnings test (see the first paragraph
of the Section entitled "Issuance of Additional First Mortgage Bonds"
above by allowing the calculation to be made for 12 months within the last
18, rather than the last 15, months;
o to allow the release of property from the lien of the Mortgage at cost or
at the value of the property at the time it became funded property;
o to simplify the release of unfunded property from the lien of the
Mortgage, if after the release we will have at least one dollar ($1) in
unfunded property remaining;
o to increase the amount of funded property that may be released or retired
on the basis of the retirement of First Mortgage Bonds from 100% to 143%
of the principal amount of such First Mortgage Bonds; and
o to eliminate the requirements regarding amounts to be accrued, expended or
appropriated for maintenance or property retirements.
-9-
<PAGE>
Additionally, we may choose to modify the dividend covenant applicable to a
particular series of First Mortgage Bonds. See "Dividend Restrictions" above.
The purpose for a modification of the applicable dividend covenant would be to
provide that we may declare and pay dividends in cash or property on our common
stock only out of surplus or out of net profits for the preceding fiscal year.
Dividends may not be paid out of net profits, however, if our capital has been
diminished to an extent specified in the Mortgage.
DEFAULTS AND NOTICE THEREOF
An "Event of Default" means, with respect to any series of First Mortgage Bonds,
any of the following:
o default in payment of principal of such series of First Mortgage Bonds;
o default for 30 days in payment of interest on such series of First
Mortgage Bonds;
o default in payment of interest on or principal of prior lien bonds
continued beyond applicable grace periods;
o default for 60 days in payment installments of funds for retirement of
First Mortgage Bonds, including the maintenance and replacement funds;
o certain events in bankruptcy, insolvency or reorganization; and
o default for 90 days after notice in performance of any other covenants.
For more information, see Mortgage, Section 65.
If the Trustees deem it to be in the interest of the holders of the First
Mortgage Bonds, they may withhold notice of default, except in payment of
principal, interest or funds for retirement of First Mortgage Bonds. For more
information, see Mortgage, Section 66; Third Supplemental Indenture, Section 15.
If a default occurs, holders of 25% of the First Mortgage Bonds may declare all
principal and interest immediately due and payable. If the default has been
cured, however, the holders of a majority of the First Mortgage Bonds may annul
the declaration and destroy its effect. For more information, see Mortgage,
Section 67. No holder of First Mortgage Bonds may enforce the lien of the
Mortgage unless the holder has given the Trustees written notice of a default
and unless the holders of 25% of the First Mortgage Bonds have requested the
Trustees in writing to act and have offered the Trustees reasonable opportunity
to act. For more information, see Mortgage, Section 80. The Trustees are not
required to risk their funds or to incur personal liability if there is a
reasonable ground for believing that repayment to the Trustees is not reasonably
assured. For more information, see Mortgage, Section 94. Holders of a majority
of the First Mortgage Bonds may establish the time, method and place of
conducting any proceedings for any remedy
-10-
<PAGE>
available to the Trustees, or exercising any trust or power conferred upon the
Trustees. For more information, see Mortgage, Section 71.
EVIDENCE TO BE FURNISHED TO THE MORTGAGE TRUSTEE UNDER THE MORTGAGE
We will demonstrate compliance with Mortgage provisions by providing written
statements from our officers or persons we select. For instance, we may select
an engineer to provide a written statement regarding the value of property being
certified or released, or an accountant regarding net earnings certificate, or
counsel regarding property titles and compliance with the Mortgage generally. In
certain major matters, applicable law requires that an accountant or engineer
must be independent. (See Section 314(d) of the Trust Indenture Act of 1939.) We
must file certificates and other papers each year and whenever certain events
occur. Additionally, we must provide evidence from time to time demonstrating
our compliance with the conditions and covenants under the Mortgage.
CONCERNING THE MORTGAGE TRUSTEE
In the regular course of business, we obtain short-term funds from The Bank of
New York and various other banks.
DESCRIPTION OF SENIOR NOTES
GENERAL
We may issue one or more new series of Senior Notes under a Senior Note
Indenture between us and a Senior Note Trustee whom we will name. The
information we are providing you in this Prospectus concerning the Senior Note
Indenture and related documents is only a summary of the information provided in
those documents. You should consult the Senior Notes themselves, the Senior Note
Indenture, any Supplemental Senior Note Indentures and other documents for more
complete information on the Senior Notes. These documents appear as exhibits to
this Registration Statement, or will appear as exhibits to a Current Report on
Form 8-K, which we will file later, and which will be incorporated by reference
into this Prospectus.
Until the Release Date, all of the Senior Notes will be secured by one or more
series of First Mortgage Bonds, which we will issue and deliver to the Senior
Note Trustee. For more information, see "Security" and "Release Date" below.
ON THE RELEASE DATE, THE SENIOR NOTES
O WILL CEASE TO BE SECURED BY FIRST MORTGAGE BONDS;
O WILL BECOME UNSECURED OBLIGATIONS OF THE COMPANY; AND
O WILL RANK AS EQUAL WITH OTHER UNSECURED INDEBTEDNESS OF THE COMPANY,
INCLUDING SENIOR DEBT SECURITIES.
-11-
<PAGE>
The Senior Note Indenture provides that, in addition to the Senior Notes offered
under this shelf registration process, additional Senior Notes may be issued
later, without limitation as to aggregate principal amount. Before the Release
Date, however, the amount of Senior Notes that we may issue cannot exceed the
amount of First Mortgage Bonds that we are able to issue under the Mortgage. For
more information, see "Description of First Mortgage Bonds - Issuance of
Additional First Mortgage Bonds" above.
You should consult the Prospectus Supplement relating to any particular issue of
Senior Notes for the following information:
o the title of the Senior Notes;
o any limit on aggregate principal amount of the Senior Notes or the series
of which they are a part;
o the date on which the principal of the Senior Notes will be payable;
o the rate, including the method of determination if applicable, at which
the Senior Notes will bear interest, if any; and
- the date from which any interest will accrue;
- the dates on which we will pay interest; and
- the record date for any interest payable on any interest payment
date;
o the place where
- the principal of, premium, if any, and interest on the Senior Notes
will be payable;
- you may register transfer of the Senior Notes;
- you may exchange the Senior Notes;
- you may serve notices and demands upon us regarding the Senior
Notes;
o the Security Registrar for the Senior Notes and whether the principal of
the Senior Notes is payable without presentment or surrender of them;
o the terms and conditions upon which we may elect to redeem any Senior
Notes;
o the terms and conditions upon which the Senior Notes must be redeemed or
purchased due to our obligations pursuant to any sinking fund or other
mandatory redemption provisions, or at the holder's option, including any
applicable exceptions to notice
-12-
<PAGE>
requirements;
o the denominations in which we may issue Senior Notes;
o the manner in which we will determine any amounts payable on the Senior
Notes which are to be determined with reference to an index or other fact
or event ascertainable outside the Senior Note Indenture;
o the currency, if other than United States currency, in which payments on
the Senior Notes will be payable;
o terms according to which elections can be made by us or the holder
regarding payments on the Senior Notes in currency other than the currency
in which the notes are stated to be payable;
o the portion of the principal amount of the Senior Notes payable upon
declaration of acceleration of their maturity;
o if payments are to be made on the Senior Notes in securities or other
property, the type and amount of the securities and other property or the
method by which the amount shall be determined;
o the terms applicable to any rights to convert Senior Notes into or
exchange them for our securities or those of any other entity;
o if we issue Senior Notes as Global Securities,
- any limitations on transfer or exchange rights or the right to
obtain the registration of transfer;
- any limitations on the right to obtain definitive certificates for
the Senior Notes; and
- any other matters incidental to the Senior Notes;
o whether we are issuing the Senior Notes as bearer securities;
o any limitations on transfer or exchange of Senior Notes or the right to
obtain registration of their transfer, and the terms and amount of any
service charge required for registration of transfer or exchange;
o any exceptions to the provisions governing payments due on legal holidays,
or any variations in the definition of Business Day with respect to the
Senior Notes;
o any addition to the Events of Default applicable to any Senior Notes and
any additions to
-13-
<PAGE>
our covenants for the benefit of the holders of the Senior Notes;
o if we are issuing any Senior Notes prior to the Release Date, the
designation of the series of Senior Note First Mortgage Bonds to be
delivered to the Senior Note Trustee for security for the Senior Notes;
o any other terms of the Senior Notes not in conflict with the provisions of
the Senior Note Indenture; and
o any other collateral security, assurance or guarantee for such Notes.
For more information, see Section 301 of the Senior Note Indenture.
Senior Notes may be sold at a substantial discount below their principal amount.
You should consult the applicable Prospectus Supplement for a description of
certain special United States federal income tax considerations which may apply
to Senior Notes sold at an original issue discount or denominated in a currency
other than dollars.
Unless the applicable Prospectus Supplement states otherwise, the covenants
contained in the Senior Note Indenture will not afford holders of Senior Notes
protection in the event we have a change in control or are involved after the
Release Date in a highly-leveraged transaction.
SECURITY
Until the Release Date, described in the following section, all of the Senior
Notes will be secured by one or more series of First Mortgage Bonds, which we
will issue and deliver to the Senior Note Trustee. For more information on the
First Mortgage Bonds, see "Description of First Mortgage Bonds" above. When we
issue a series of Senior Notes prior to the Release Date, we will simultaneously
issue and deliver to the Senior Note Trustee, as security for all of the Senior
Notes, a series of Senior Note First Mortgage Bonds. These First Mortgage Bonds
will have the same stated interest rate (or interest calculated in the same
manner), interest payment dates, stated maturity and redemption provisions, and
will be in the same aggregate principal amount as the series of Senior Notes we
are issuing. For more information, see Sections 401, 402 and 403 of the Senior
Note Indenture. Payments we make to the Senior Note Trustee on a series of
Senior Notes will satisfy our obligations with respect to the corresponding
payments due on the related series of Senior Note First Mortgage Bonds.
Each series of Senior Note First Mortgage Bonds will be a series of First
Mortgage Bonds, all of which are secured by a lien on certain property we own.
For more discussion of the lien, see "Description of First Mortgage
Bonds--Security" above. In certain circumstances prior to the Release Date, we
may reduce the aggregate principal amount of Senior Note First Mortgage Bonds
held by the Senior Note Trustee. In no event, however, may we reduce that amount
to an amount lower than the aggregate outstanding principal amount of the Senior
Notes then outstanding. For more information, see Section 409 of the Senior Note
Indenture. Following the Release Date, we will close the Mortgage and not issue
any additional First Mortgage Bonds under the Mortgage. For more information,
see Section 403 of the Senior Note Indenture.
-14-
<PAGE>
RELEASE DATE
ON THE RELEASE DATE, THE SENIOR NOTE FIRST MORTGAGE BONDS WILL NO LONGER SECURE
THE SENIOR NOTES, AND THE SENIOR NOTES WILL BECOME OUR UNSECURED GENERAL
OBLIGATIONS. For more information, see Section 407 of the Senior Note Indenture.
The Release Date means the date that we have repaid, redeemed or otherwise
retired all of our First Mortgage Bonds, other than the Senior Note First
Mortgage Bonds securing the Senior Notes. The Senior Note Trustee will give the
Senior Note holders notice when the Release Date occurs. See "Description of
Senior Notes--Defeasance" below for a discussion of another situation in which
outstanding Senior Notes would not be secured by Senior Note First Mortgage
Bonds.
FORM, EXCHANGE, AND TRANSFER
Unless the applicable Prospectus Supplement states otherwise, we will issue
Senior Notes only in fully registered form without coupons and in denominations
of $1,000 and integral multiplies of that amount. For more information, see
Sections 201 and 302 of the Senior Note Indenture.
Holders may present Senior Notes for exchange or for registration of transfer,
duly endorsed or accompanied by a duly executed instrument of transfer, at the
office of the Security Registrar or at the office of any Transfer Agent we may
designate. Exchanges and transfers are subject to the terms of the Senior Note
Indenture and applicable limitations for global securities. We may designate
ourselves the Security Registrar. No charge will be made for any registration of
transfer or exchange of Senior Notes, but we may require payment of a sum
sufficient to cover any tax or other governmental charge the holder must pay in
connection with the transaction. Any transfer or exchange will become effective
upon the Security Registrar or Transfer Agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. For more information, see Section 305 of the Senior Note Indenture.
The applicable Prospectus Supplement will state the name of any Transfer Agent,
in addition to the Security Registrar initially designated by the Company for
any Senior Notes. We may at any time designate additional Transfer Agents or
withdraw the designation of any Transfer Agent or make a change in the office
through which any Transfer Agent acts. We must, however, maintain a Transfer
Agent in each place of payment for the Senior Notes of each series. For more
information, see Section 702 of the Senior Note Indenture.
We will not be required to
o issue, register the transfer of, or exchange any Senior Note or any
Tranche of any Senior Note during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of
any Senior Note called for redemption and ending at the close of business
on the day of mailing; or
-15-
<PAGE>
o register the transfer of, or exchange any Senior Note selected for
redemption except the unredeemed portion of any Senior Note being
partially redeemed.
For more information, see Section 305 of the Senior Note Indenture.
PAYMENT AND PAYING AGENTS
Unless the applicable Prospectus Supplement states otherwise, we will pay
interest on a Senior Note on any interest payment date to the person in whose
name the Senior Note is registered at the close of business on the regular
record date for the interest payment. For more information, see Section 307 of
the Senior Note Indenture.
Unless the applicable Prospectus Supplement provides otherwise, we will pay
principal and any premium and interest on Senior Notes at the office of the
Paying Agent whom we will designate for this purpose. Unless the applicable
Prospectus Supplement states otherwise, the corporate trust office of the Senior
Note Trustee in New York City will be designated as our sole Paying Agent for
payments with respect to Senior Notes of each series. Any other Paying Agents
initially designated by us for the Senior Notes of a particular series will be
named in the applicable Prospectus Supplement. We may at any time add or delete
Paying Agents or change the office through which any Paying Agent acts. We must,
however, maintain a Paying Agent in each place of payment for the Senior Notes
of a particular series. For more information, see Section 702 of the Senior Note
Indenture.
All money we pay to a Paying Agent for the payment of the principal and any
premium or interest on any Senior Note which remains unclaimed at the end of two
years after payment is due will be repaid to us. After that date, the holder of
that Senior Note may look only to us for these payments. For more information,
see Section 703 of the Senior Note Indenture.
REDEMPTION
You should consult the applicable Prospectus Supplement for any terms regarding
optional or mandatory redemption of Senior Notes. Except for the provisions in
the applicable Prospectus Supplement regarding Senior Notes redeemable at the
holder's option, Senior Notes may be redeemed only upon notice by mail not less
than 30 nor more than 60 days prior to the redemption date. Further, if less
than all the Senior Notes of a series, or any Tranche of a series, are to be
redeemed, the Senior Notes to be redeemed will be selected by the method
provided for the particular series. In the absence of a selection provision, the
Trustee will select a fair and appropriate method of random selection. For more
information, see Sections 503 and 504 of the Senior Note Indenture.
A notice of redemption we provide may state:
o that redemption is conditioned upon receipt by the Paying Agent on or
before the redemption date of money sufficient to pay the principal and
any premium and interest on the Senior Notes; and
-16-
<PAGE>
o that if the money has not been received, the notice will be ineffective
and we will not be required to redeem the Senior Note.
For more information, see Section 504 of the Senior Note Indenture.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
We may not consolidate with or merge into any other person, nor may we transfer
or lease substantially all of our assets and property to any person, unless:
o the corporation formed by the consolidation or into which we are merged, or
the person which acquires by conveyance or transfer, or which leases,
substantially all of our property and assets
- is organized and validly existing under the laws of any domestic
jurisdiction and the person;
- expressly assumes our obligations on the Senior Notes and under the
Senior Note Indenture; and
- prior to the Release Date, expressly assumes our obligations under
the Senior Note First Mortgage Bonds and under the Mortgage;
o immediately after the transaction becomes effective, no Event of Default,
and no event which would become an Event of Default, shall have occurred
and be continuing; and
o we will have delivered to the Senior Note Trustee an Officer's Certificate
and Opinion of Counsel as provided in the Senior Note Indenture.
For more information, see Section 1201 of the Senior Note Indenture.
EVENTS OF DEFAULT
"Event of Default" under the Senior Note Indenture with respect to Senior Notes
of any series means any of the following:
o failure to pay any interest due on the Senior Notes within 30 days;
o failure to pay principal or premium when due on a Senior Note;
o breach of or failure to perform any other covenant or warranty in the
Senior Note Indenture with respect to the particular series of Senior
Notes for 60 days (subject to extension under certain circumstances for
another 120 days) after we receive notice from the Senior Note Trustee, or
we and the Senior Note Trustee receive notice from the
-17-
<PAGE>
holders of at least 33% in principal amount of the Senior Notes of that
series outstanding under the Senior Note Indenture according to the
provisions of the Senior Note Indenture;
o prior to the Release Date, the occurrence of a Default under the Mortgage
(see "Description of the First Mortgage Bonds--Events of Default" above);
o certain events of bankruptcy, insolvency or reorganization; and
o any other Event of Default set forth in the applicable Prospectus
Supplement.
For more information, see Section 901 of the Senior Note Indenture.
An Event of Default with respect to a particular series of Senior Notes does not
necessarily constitute an Event of Default with respect to the Senior Notes of
any other series issued under the Senior Note Indenture.
If an Event of Default with respect to a particular series of Senior Notes
occurs and is continuing, either the Senior Note Trustee or the holders of at
least 33% in principal amount of the outstanding Senior Notes of that series may
declare the principal amount of all of the Senior Notes of that series to be due
and payable immediately. If the Senior Notes of that series are discount notes
or similar Senior Notes, only the portion of the principal amount as specified
in the applicable Prospectus Supplement may be immediately due and payable. If
an Event of Default occurs and is continuing with respect to all series of
Senior Notes (including all Events of Default relating to bankruptcy, insolvency
or reorganization), the Senior Note Trustee or the holders of at least 33% in
principal amount of the outstanding Senior Notes of all series, considered
together, may declare an acceleration of the principal amount of all Senior
Notes. In the event of an acceleration prior to the Release Date with respect to
all Senior Notes, the Trustee will make a demand for acceleration of all amounts
due under all of the Senior Note First Mortgage Bonds, but this demand will only
result in such an acceleration if allowed by the acceleration provisions of the
First Mortgage.
At any time after a declaration of acceleration with respect to the Senior Notes
of a particular series, and before a judgment or decree for payment of the money
due has been obtained, and before the acceleration of the Senior Note First
Mortgage Bonds, the Event or Events of Default giving rise to the declaration of
acceleration will, without further action, be deemed to have been waived, and
the declaration and its consequences will be deemed to have been rescinded and
annulled, if
o we have paid or deposited with the Senior Note Trustee a sum sufficient to
pay
- all overdue interest on all Senior Notes of the particular series;
- the principal of and any premium on any Senior Notes of that series
which have become due otherwise than by the declaration of
acceleration and any interest at the rate prescribed in the Senior
Notes;
-18-
<PAGE>
- interest upon overdue interest at the rate prescribed in the Senior
Notes, to the extent payment is lawful;
- all amounts due to the Senior Note Trustee under the Senior Note
Indenture; and
o any other Event of Default with respect to the Senior Notes of the
particular series, other than the failure to pay the principal of the
Senior Notes of that series which has become due solely by the declaration
of acceleration, has been cured or waived as provided in the Senior Note
Indenture.
For more information, see Section 902 of the Senior Note Indenture.
The Senior Note Indenture includes provisions as to the duties of the Senior
Note Trustee in case an Event of Default occurs and is continuing. Consistent
with these provisions, the Senior Note Trustee will be under no obligation to
exercise any of its rights or powers at the request or direction of any of the
holders, unless those holders have offered to the Senior Note Trustee reasonable
indemnity. For more information, see Section 1003 of the Senior Note Indenture.
Subject to these provisions for indemnification, the holders of a majority in
principal amount of the outstanding senior notes of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Senior Note Trustee, or exercising any trust or power conferred on the
Senior Note Trustee, with respect to the Senior Notes of that series. For more
information, see Section 912 of the Senior Note Indenture.
No Senior Note holder may institute any proceeding regarding the Senior Note
Indenture, or for the appointment of a receiver or a trustee, or for any other
remedy under the Senior Note Indenture unless
o the holder has previously given to the Senior Note Trustee written notice
of a continuing Event of Default of that particular series,
o the holders of a majority in principal amount of the outstanding Senior
Notes of all series with respect to which an Event of Default is
continuing have made a written request to the Senior Note Trustee, and
have offered reasonable indemnity to the Senior Note Trustee to institute
the proceeding as trustee, and
o the Senior Note Trustee has failed to institute the proceeding, and has
not received from the holders of a majority in principal amount of the
outstanding Senior Notes of that series a direction inconsistent with the
request, within 60 days after notice, request and offer of reasonable
indemnity.
For more information, see Section 907 of the Senior Note Indenture.
The preceding limitations do not apply, however, to a suit instituted by a
Senior Note holder for the enforcement of payment of the principal of or any
premium or interest on the Senior Note on
-19-
<PAGE>
or after the applicable due date stated in the Senior Note. For more
information, see Section 908 of the Senior Note Indenture.
We must furnish annually to the Senior Note Trustee a statement by an
appropriate officer as to that officer's knowledge of our compliance with all
conditions and covenants under the Senior Note Indenture. Our compliance is to
be determined without regard to any grace period or notice requirement under the
Senior Note Indenture. For more information, see Section 706 of the Senior Note
Indenture.
MODIFICATION AND WAIVER
The Company and the Senior Note Trustee, without the consent of the holders of
the Senior Notes, may enter into one or more supplemental Senior Note Indentures
for any of the following purposes:
o to evidence the assumption by any permitted successor of our covenants in
the Senior Note Indenture and the Senior Notes;
o to add one or more covenants or other provisions for the benefit of the
holders of outstanding Senior Notes or to surrender any right or power
conferred upon us by the Senior Note Indenture;
o to add any additional Events of Default;
o to change or eliminate any provision of the Senior Note Indenture or add
any new provision to it (but if this action will adversely affect the
interests of the holders of any particular series of Senior Notes in any
material respect, the action will become effective with respect to that
series only when there is no Senior Note of that series remaining
outstanding under the Senior Note Indenture);
o to provide collateral security for the Senior Notes;
o to establish the form or terms of Senior Notes according to the provisions
of the Senior Note Indenture;
o to evidence the acceptance of appointment of a successor Senior Note
Trustee under the Senior Note Indenture with respect to one or more series
of the Senior Notes and to add to or change any of the provisions of the
Senior Note Indenture as necessary to provide for the administration of
the trusts under the Senior Note Indenture by more than one trustee;
o to provide for the procedures required to permit using a noncertificated
system of registration for any Senior Notes series;
o to change any place where
-20-
<PAGE>
- the principal of and any premium and interest on any Senior Notes is
payable,
- any Senior Notes may be surrendered for registration of transfer or
exchange, or
- notices and demands to or upon us regarding Senior Notes and the
Senior Note Indenture may be served; or
o to cure any ambiguity or inconsistency (but any of these changes or
additions will not adversely affect the interests of the holders of Senior
Notes of any series in any material respect).
For more information see Section 1301 of the Senior Note Indenture.
The holders of at least a majority in aggregate principal amount of the
outstanding Senior Notes of any series may waive
o compliance by us with certain provisions of the Senior Note Indenture (see
Section 607 of the Senior Note Indenture); and
o any past default under the Senior Note Indenture, except a default in the
payment of principal, premium, or interest, and certain covenants and
provisions of the Senior Note Indenture that cannot be modified or amended
without consent of the holder of each outstanding Senior Note of the
series affected (see Section 913 of the Senior Note Indenture).
The Trust Indenture Act of 1939 may be amended after the date of the Senior Note
Indenture to require changes to the Senior Note Indenture. In this event, the
Senior Note Indenture will be deemed to have been amended so as to effect the
changes, and we and the Senior Note Trustee may, without the consent of any
holders, enter into one or more Supplemental Senior Note Indentures to evidence
or effect the amendment. For more information, see Section 1301 of the Senior
Note Indenture.
Except as provided in this section, the consent of the holders of a majority in
aggregate principal amount of the outstanding Senior Notes, considered as one
class, is required to change in any manner the Senior Note Indenture pursuant to
one or more supplemental Senior Note Indentures. If less than all of the series
of Senior Notes outstanding are directly affected by a proposed supplemental
Senior Note Indenture, however, only the consent of the holders of a majority in
aggregate principal amount of the outstanding Senior Notes of all series
directly affected, considered as one class, will be required. Furthermore, if
the Senior Notes of any series have been issued in more than one Tranche and if
the proposed supplemental Senior Note Indenture directly affects the rights of
the holders of one or more, but not all Tranches, only the consent of the
holders of a majority in aggregate principal amount of the outstanding Senior
Notes of all Tranches directly affected, considered as one class, will be
required. In addition, an amendment or modification
-21-
<PAGE>
o may not, without the consent of the holder of the Senior Note
- change the maturity of the principal of, or any installment of
principal of or interest on, any Senior Note,
- reduce the principal amount or the rate of interest, or the amount
of any installment of interest, or change the method of calculating
the rate of interest,
- reduce any premium payable upon the redemption of the Senior Note,
- reduce the amount of the principal of any Senior Note originally
issued at a discount from the stated principal amount that would be
due and payable upon a declaration of acceleration of maturity,
- change the currency or other property in which a Senior Note or
premium or interest on a Senior Note is payable,
- impair the right to institute suit for the enforcement of any
payment on or after the stated maturity (or, in the case of
redemption, on or after the redemption date) of any Senior Note; or
o may not reduce the percentage of principal amount requirement for consent
of the holders for any supplemental Senior Note Indenture, or for any
waiver of compliance with any provision of or any default under the Senior
Note Indenture, or reduce the requirements for quorum or voting, without
the consent of the holder of each outstanding Senior Note of each series
or Tranche effected;
o may not prior to the Release Date
- impair the interest of the Senior Note Trustee in the Senior Note
First Mortgage Bonds,
- reduce the principal amount of any series of Senior Note First
Mortgage Bonds to an amount less than that of the related series of
Senior Notes, or
- alter the payment provisions of the Senior Note First Mortgage Bonds
in a manner adverse to the holders of the Senior Notes; and
o may not modify provisions of the Senior Note Indenture relating to
supplemental Senior Note Indentures, waivers of certain covenants and
waivers of past defaults with respect to the Senior Notes of any series,
or any Tranche of a series, without the consent of the holder of each
outstanding Senior Note affected.
-22-
<PAGE>
A supplemental Senior Note Indenture will be deemed not to affect the rights
under the Senior Note Indenture of the holders of any series or Tranche of the
Senior Notes if the supplemental Senior Note Indenture
- changes or eliminates any covenant or other provision of the Senior
Note Indenture expressly included solely for the benefit of one or
more other particular series of Senior Notes or Tranches thereof; or
- modifies the rights of the holders of Senior Notes of any other
series or Tranches with respect to any covenant or other provision.
For more information, see Section 1302 of the Senior Note Indenture.
If we solicit from holders of the Senior Notes any type of action, we may at our
option by board resolution fix in advance a record date for the determination of
the holders entitled to vote on the action. We shall have no obligation,
however, to do so. If we fix a record date, the action may be taken before or
after the record date, but only the holders of record at the close of business
on the record date shall be deemed to be holders for the purposes of determining
whether holders of the requisite proportion of the outstanding Senior Notes have
authorized the action. For that purpose, the outstanding Senior Notes shall be
computed as of the record date. Any holder action shall bind every future holder
of the same security and the holder of every security issued upon the
registration of transfer of or in exchange for or in lieu of the security in
respect of anything done or permitted by the Senior Note Trustee or us in
reliance on that action, whether or not notation of the action is made upon the
security. For more information, see Section 104 of the Senior Note Indenture.
DEFEASANCE
Unless the applicable Prospectus Supplement provides otherwise, any Senior Note,
or portion of the principal amount of a Senior Note, will be deemed to have been
paid for purposes of the Senior Note Indenture, and, at our election, our entire
indebtedness in respect to the Senior Note (or portion thereof) will be deemed
to have been satisfied and discharged, if we have irrevocably deposited with the
Senior Note Trustee or any Paying Agent other than us in trust money, certain
Eligible Obligations, or a combination of the two, sufficient to pay principal
of any premium and interest due and to become due on the Senior Note or portions
thereof. For more information, see Section 801 of the Senior Note Indenture. For
this purpose, unless the applicable Prospectus Supplement provides otherwise,
Eligible Obligations include direct obligations of, or obligations
unconditionally guaranteed by, the United States, entitled to the benefit of
full faith and credit of the United States, and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in
these obligations or in any specific interest or principal payments due in
respect to those obligations.
-23-
<PAGE>
RESIGNATION OF SENIOR NOTE TRUSTEE
The Senior Note Trustee may resign at any time by giving written notice to us or
may be removed at any time by an action of the holders of a majority in
principal amount of outstanding Senior Notes delivered to the Senior Note
Trustee and us. No resignation or removal of the Senior Note Trustee and no
appointment of a successor trustee will become effective until a successor
trustee accepts appointment in accordance with the requirements of the Senior
Note Indenture. So long as no Event of Default or event which would become an
Event of Default has occurred and is continuing, and except with respect to a
Senior Note Trustee appointed by an action of the holders, if we have delivered
to the Senior Note Trustee a resolution of our Board of Directors appointing a
successor trustee and the successor trustee has accepted the appointment in
accordance with the terms of the Senior Note Indenture, the Senior Note Trustee
will be deemed to have resigned and the successor trustee will be deemed to have
been appointed as trustee in accordance with the Senior Note Indenture. For more
information, see Section 1010 of the Senior Note Indenture.
NOTICES
We will give notices to holders of Senior Notes by mail to their addresses as
they appear in the Security Register. For more information, see Section 106 of
the Senior Note Indenture.
TITLE
The Senior Note Trustee and its agents, and we and our agents, may treat the
person in whose name a Senior Note is registered as the absolute owner of that
Note, whether or not that Senior Note may be overdue, for the purpose of making
payment and for all other purposes. For more information, see Section 308 of the
Senior Note Indenture.
GOVERNING LAW
The Senior Note Indenture and the Senior Notes will be governed by, and
construed in accordance with, the law of the State of New York. For more
information, see Section 112 of the Senior Note Indenture.
DESCRIPTION OF DEBT SECURITIES
GENERAL
We may issue one or more new series of Debt Securities under a Debt Security
Indenture between us and a Debt Security Trustee whom we will name. The
information we are providing you in this Prospectus concerning the Debt Security
Indenture and related documents is only a summary of the information provided in
those documents. You should consult the Debt Securities themselves, the Debt
Security Indenture, any Supplemental Debt Security Indentures and other
documents for more complete information on the Debt Securities. These documents
appear as exhibits to this Registration Statement, or will appear as exhibits to
a Current Report
-24-
<PAGE>
on Form 8-K, which we will file later, and which will be incorporated by
reference into this Prospectus.
The applicable Prospectus Supplement may state that a particular series of Debt
Securities will be subordinated obligations of the Company. In the following
discussion we will refer to any of these subordinated obligations as the
Subordinated Debt Securities. Unless the applicable Prospectus Supplement
provides otherwise, we will use separate indentures (called Subordinated Debt
Security Indentures in the following discussion) for any Subordinated Debt
Securities we may issue.
You should consult the Prospectus Supplement relating to any particular issue of
Debt Securities for the following information:
o the title of the Debt Securities;
o any limit on aggregate principal amount of the Debt Securities or the
series of which they are a part;
o the date on which the principal of the Debt Securities will be payable;
o the rate, including the method of determination if applicable, at which
the Debt Securities will bear interest, if any; and
- the date from which any interest will accrue;
- the dates on which we will pay interest; and
- the record date for any interest payable on any interest payment
date;
o the place where
- the principal of, premium, if any, and interest on the Debt
Securities will be payable;
- you may register transfer of the Debt Securities;
- you may exchange the Debt Securities;
- you may serve notices and demands upon us regarding the Debt
Securities;
o the Security Registrar for the Debt Securities and whether the principal
of the Debt Securities is payable without presentment or surrender of
them;
o the terms and conditions upon which we may elect to redeem any Debt
Securities;
-25-
<PAGE>
o the terms and conditions upon which the Debt Securities must be redeemed
or purchased due to our obligations pursuant to any sinking fund or other
mandatory redemption provisions, or at the holder's option, including any
applicable exceptions to notice requirements;
o the denominations in which we may issue Debt Securities;
o the manner in which we will determine any amounts payable on the Debt
Securities which are to be determined with reference to an index or other
fact or event ascertainable outside the Debt Security Indenture;
o the currency, if other than United States currency, in which payments on
the Debt Securities will be payable;
o terms according to which elections can be made by us or the holder
regarding payments on the Debt Securities in currency other than the
currency in which the Debt Securities are stated to be payable;
o the portion of the principal amount of the Debt Securities payable upon
declaration of acceleration of their maturity;
o if payments are to be made on the Debt Securities in securities or other
property, the type and amount of the securities and other property or the
method by which the amount shall be determined;
o the terms applicable to any rights to convert Debt Securities into or
exchange them for our securities or those of any other entity;
o if we issue Debt Securities as Global Securities,
- any limitations on transfer or exchange rights or the right to
obtain the registration of transfer;
- any limitations on the right to obtain definitive certificates for
the Debt Securities; and
- any other matters incidental to the Debt Securities;
o whether we are issuing the Debt Securities as bearer securities;
o any limitations on transfer or exchange of Debt Securities or the right to
obtain registration of their transfer, and the terms and amount of any
service charge required for registration of transfer or exchange;
o any exceptions to the provisions governing payments due on legal holidays,
or any
-26-
<PAGE>
variations in the definition of Business Day with respect to the Debt
Securities;
o any addition to the Events of Default applicable to any Debt Securities
and any additions to our covenants for the benefit of the holders of the
Debt Securities; and
o any other terms of the Debt Securities not in conflict with the provisions
of the Debt Security Indenture.
For more information, see Section 301 of the Debt Security Indenture.
Debt Securities may be sold at a substantial discount below their principal
amount. You should consult the applicable Prospectus Supplement for a
description of certain special United States federal income tax considerations
which may apply to Debt Securities sold at an original issue discount or
denominated in a currency other than dollars.
Unless the applicable Prospectus Supplement states otherwise, the covenants
contained in the Debt Security Indenture will not afford holders of Debt
Securities protection in the event we have a change in control or are involved
in a highly-leveraged transaction.
SUBORDINATION
The applicable Prospectus Supplement may provide that a series of Debt
Securities will be Subordinated Debt Securities, subordinate and junior in right
of payment to all our senior Indebtedness. The indenture under which these
securities will be issued is referred to as the Subordinated Debt Security
Indenture.
No payment of principal of (including redemption and sinking fund
payments), or any premium or interest on, the Subordinated Debt Securities may
be made if
o any Senior Indebtedness is not paid when due,
o any applicable grace period with respect to default in payment of Senior
Indebtedness has ended, and the default has not been cured or waived, or
o the maturity of any Senior Indebtedness has been accelerated because of a
default.
Upon any distribution of our assets to creditors upon any dissolution,
winding-up, liquidation or reorganization, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all principal of,
and any premium and interest due or to become due on all senior indebtedness
must be paid in full before the holders of the Subordinated Debt Securities are
entitled to payment. For more information, see Section 1502 of the Subordinated
Debt Security Indenture. The rights of the holders of the Subordinated Debt
Securities will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the
-27-
<PAGE>
Subordinated Debt Securities are paid in full. For more information, see Section
1504 of the Subordinated Debt Security Indenture.
As defined in the Subordinated Debt Security Indenture, the term "Senior
Indebtedness" means
o obligations (other than non-recourse obligations and the indebtedness
issued under the Subordinated Debt Security Indenture) of, or guaranteed
or assumed by, us
- for borrowed money (including both senior and subordinated
indebtedness for borrowed money, but excluding the Subordinated Debt
Securities); or
- for the payment of money relating to any lease which is capitalized
on the consolidated balance sheet of the Company and our
subsidiaries in accordance with generally accepted accounting
principles; or
o indebtedness evidenced by bonds, debentures, notes or other similar
instruments.
In the case of any such indebtedness or obligations, Senior Indebtedness
includes amendments, renewals, extensions, modifications and refundings, whether
existing as of the date of the Subordinated Debt Security Indenture or
subsequently incurred by us.
The Subordinated Debt Security Indenture does not limit the aggregate
amount of Senior Indebtedness that we may issue.
FORM, EXCHANGE, AND TRANSFER
Unless the applicable Prospectus Supplement states otherwise, we will issue Debt
Securities only in fully registered form without coupons and in denominations of
$1,000 and integral multiplies of that amount. For more information, see
Sections 201 and 302 of the Debt Security Indenture.
Holders may present Debt Securities for exchange or for registration of
transfer, duly endorsed or accompanied by a duly executed instrument of
transfer, at the office of the Security Registrar or at the office of any
Transfer Agent we may designate. Exchanges and transfers are subject to the
terms of the Debt Security Indenture and applicable limitations for global
securities. We may designate ourselves the Security Registrar. No charge will be
made for any registration of transfer or exchange of Debt Securities, but we may
require payment of a sum sufficient to cover any tax or other governmental
charge the holder must pay in connection with the transaction. Any transfer or
exchange will become effective upon the Security Registrar or Transfer Agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. For more information, see Section 305 of the Debt
Security Indenture.
-28-
<PAGE>
The applicable Prospectus Supplement will state the name of any Transfer Agent,
in addition to the Security Registrar initially designated by the Company, for
any Debt Securities. We may at any time designate additional Transfer Agents or
withdraw the designation of any Transfer Agent or make a change in the office
through which any Transfer Agent acts. We must, however, maintain a Transfer
Agent in each place of payment for the Debt Securities of each series. For more
information, see Section 602 of the Debt Security Indenture.
We will not be required to
o issue, register the transfer of, or exchange any Debt Securities or any
Tranche of any Debt Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of
any Debt Securities called for redemption and ending at the close of
business on the day of mailing; or
o register the transfer of, or exchange any Debt Securities selected for
redemption except the unredeemed portion of any Debt Securities being
partially redeemed.
For more information, see Section 305 of the Debt Security Indenture.
PAYMENT AND PAYING AGENTS
Unless the applicable Prospectus Supplement states otherwise, we will pay
interest on a Debt Security on any interest payment date to the person in whose
name the Debt Security is registered at the close of business on the regular
record date for the interest payment. For more information, see Section 307 of
the Debt Security Indenture.
Unless the applicable Prospectus Supplement provides otherwise, we will pay
principal and any premium and interest on Debt Securities at the office of the
Paying Agent whom we will designate for this purpose. Unless the applicable
Prospectus Supplement states otherwise, the corporate trust office of the Debt
Security Trustee in New York City will be designated as our sole Paying Agent
for payments with respect to Debt Securities of each series. Any other Paying
Agents initially designated by us for the Debt Securities of a particular series
will be named in the applicable Prospectus Supplement. We may at any time add or
delete Paying Agents or change the office through which any Paying Agent acts.
We must, however, maintain a Paying Agent in each place of payment for the Debt
Securities of a particular series. For more information, see Section 602 of the
Debt Security Indenture.
All money we pay to a Paying Agent for the payment of the principal and any
premium or interest on any Debt Security which remains unclaimed at the end of
two years after payment is due will be repaid to us. After that date, the holder
of that Debt Security may look only to us for these payments. For more
information, see Section 603 of the Debt Security Indenture.
-29-
<PAGE>
REDEMPTION
You should consult the applicable Prospectus Supplement for any terms regarding
optional or mandatory redemption of Debt Securities. Except for the provisions
in the applicable Prospectus Supplement regarding Debt Securities redeemable at
the holder's option, Debt Securities may be redeemed only upon notice by mail
not less than 30 nor more than 60 days prior to the redemption date. Further, if
less than all the Debt Securities of a series, or any Tranche of a series, are
to be redeemed, the Debt Securities to be redeemed will be selected by the
method provided for the particular series. In the absence of a selection
provision, the Trustee will select a fair and appropriate method of random
selection. For more information, see Sections 403 and 404 of the Debt Security
Indenture.
A notice of redemption we provide may state:
o that redemption is conditioned upon receipt by the Paying Agent on or
before the redemption date of money sufficient to pay the principal of and
any premium and interest on the Debt Securities; and
o that if the money has not been received, the notice will be ineffective
and we will not be required to redeem the Debt Securities.
For more information, see Section 404 of the Debt Security Indenture.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
We may not consolidate with or merge into any other person, nor may we transfer
or lease substantially all of our assets and property to any person, unless:
o the corporation formed by the consolidation or into which we are merged,
or the person which acquires by conveyance or transfer, or which leases,
substantially all of our property and assets
- is organized and validly existing under the laws of any domestic
jurisdiction; and
- expressly assumes our obligations on the Debt Securities and under
the Debt Security Indenture.
o immediately after the transaction becomes effective, no Event of Default,
and no event which would become an Event of Default, shall have occurred
and be continuing; and
o we will have delivered to the Debt Security Trustee an Officer's
Certificate and Opinion of Counsel as provided in the Debt Security
Indenture.
For more information, see Section 1101 of the Debt Security Indenture.
-30-
<PAGE>
EVENTS OF DEFAULT
"Event of Default" under the Debt Security Indenture with respect to Debt
Securities of any series means any of the following:
o failure to pay any interest due on the Debt Securities within 30 days;
o failure to pay principal or premium when due on a Debt Security;
o breach of or failure to perform any other covenant or warranty in the Debt
Security Indenture with respect to the particular series of Debt
Securities for 60 days (subject to extension under certain circumstances
for another 120 days) after we receive notice from the Debt Security
Trustee, or we and the Debt Security Trustee receive notice from the
holders of at least 33% in principal amount of the Debt Securities of that
series outstanding under the Debt Security Indenture according to the
provisions of the Debt Security Indenture;
o certain events of bankruptcy, insolvency or reorganization; and
o any other Event of Default set forth in the applicable Prospectus
Supplement.
For more information, see Section 801 of the Debt Security Indenture.
An Event of Default with respect to a particular series of Debt Securities does
not necessarily constitute an Event of Default with respect to the Debt
Securities of any other series issued under the Debt Security Indenture.
If an Event of Default with respect to a particular series of Debt Securities
occurs and is continuing, either the Debt Security Trustee or the holders of at
least 33% in principal amount of the outstanding Debt Securities of that series
may declare the principal amount of all of the Debt Securities of that series to
be due and payable immediately. If the Debt Securities of that series are
discount securities or similar Debt Securities, only the portion of the
principal amount as specified in the applicable Prospectus Supplement may be
immediately due and payable. If an Event of Default occurs and is continuing
with respect to all series of Debt Securities (including all Events of Default
relating to bankruptcy, insolvency, or reorganization), the Debt Security
Trustee or the holders of at least 33% in principal amount of the outstanding
Debt Securities of all series, considered together, may declare an acceleration
of the amount payable.
At any time after a declaration of acceleration with respect to the Debt
Securities of a particular series, and before a judgment or decree for payment
of the money due has been obtained, the Event of Default giving rise to the
declaration of acceleration will, without further action, be deemed to have been
waived, and the declaration and its consequences will be deemed to have been
rescinded and annulled, if
o we have paid or deposited with the Debt Security Trustee a sum sufficient
to pay
-31-
<PAGE>
- all overdue interest on all Debt Securities of the particular
series;
- the principal of and any premium on any Debt Securities of that
series which have become due otherwise than by the declaration of
acceleration and any interest at the rate prescribed in the Debt
Securities;
- interest upon overdue interest at the rate prescribed in the Debt
Securities, to the extent payment is lawful; and
- all amounts due to the Debt Security Trustee under the Debt Security
Indenture; and
o any other Event of Default with respect to the Debt Securities of the
particular series, other than the failure to pay the principal of the Debt
Securities of that series which has become due solely by the declaration
of acceleration, has been cured or waived as provided in the Debt Security
Indenture.
For more information, see Section 802 of the Debt Security Indenture.
The Debt Security Indenture includes provisions as to the duties of the Debt
Security Trustee in case an Event of Default occurs and is continuing.
Consistent with these provisions, the Debt Security Trustee will be under no
obligation to exercise any of its rights or powers at the request or direction
of any of the holders, unless those holders have offered to the Debt Security
Trustee reasonable indemnity. For more information, see Section 903 of the Debt
Security Indenture. Subject to these provisions for indemnification, the holders
of a majority in principal amount of the outstanding Debt Securities of any
series may direct the time, method and place of conducting any proceeding for
any remedy available to the Debt Security Trustee, or exercising any trust or
power conferred on the Debt Security Trustee, with respect to the Debt
Securities of that series. For more information, see Section 812 of the Debt
Security Indenture.
No Debt Securities holder may institute any proceeding regarding the Debt
Security Indenture, or for the appointment of a receiver or a trustee, or for
any other remedy under the Debt Security Indenture unless
o the holder has previously given to the Debt Security Trustee written
notice of a continuing Event of Default of that particular series;
o the holders of a majority in principal amount of the outstanding Debt
Securities of all series with respect to which an Event of Default is
continuing have made a written request to the Debt Security Trustee, and
have offered reasonable indemnity to the Debt Security Trustee to
institute the proceeding as trustee; and
o the Debt Security Trustee has failed to institute the proceeding, and has
not received from the holders of a majority in principal amount of the
outstanding Debt Securities of that
-32-
<PAGE>
series a direction inconsistent with the request, within 60 days after
notice, request and offer of reasonable indemnity.
For more information, see Section 807 of the Debt Security Indenture.
The preceding limitations do not apply, however, to a suit instituted by a Debt
Security holder for the enforcement of payment of the principal of or any
premium or interest on the Debt Securities on or after the applicable due date
stated in the Debt Securities. For more information, see Section 808 of the Debt
Security Indenture.
We must furnish annually to the Debt Security Trustee a statement by an
appropriate officer as to that officer's knowledge of our compliance with all
conditions and covenants under the Debt Security Indenture. Our compliance is to
be determined without regard to any grace period or notice requirement under the
Debt Security Indenture. For more information, see Section 606 of the Debt
Security Indenture.
MODIFICATION AND WAIVER
We and the Debt Security Trustee, without the consent of the holders of the Debt
Securities, may enter into one or more Supplemental Debt Security Indentures for
any of the following purposes:
o to evidence the assumption by any permitted successor of our covenants in
the Debt Security Indenture and the Debt Securities;
o to add one or more covenants or other provisions for the benefit of the
holders of outstanding Debt Securities or to surrender any right or power
conferred upon us by the Debt Security Indenture;
o to add any additional Events of Default;
o to change or eliminate any provision of the Debt Security Indenture or add
any new provision to it (but if this action will adversely affect the
interests of the holders of any particular series of Debt Securities in
any material respect, the action will become effective with respect to
that series only when there is no Debt Securities of that series remaining
outstanding under the Debt Security Indenture);
o to provide collateral security for the Debt Securities;
o to establish the form or terms of Debt Securities according to the
provisions of the Debt Security Indenture;
o to evidence the acceptance of appointment of a successor Debt Security
Trustee under the Debt Security Indenture with respect to one or more
series of the Debt Securities and to add to or change any of the
provisions of the Debt Security Indenture as necessary to
-33-
<PAGE>
provide for the administration of the trusts under the Debt Security
Indenture by more than one trustee;
o to provide for the procedures required to permit using a noncertificated
system of registration for any Debt Securities series;
o to change any place where
- the principal of and any premium and interest on any Debt Securities
is payable,
- any Debt Securities may be surrendered for registration of transfer
or exchange; or
- notices and demands to or upon us regarding Debt Securities and the
Debt Security Indenture may be served; or
o to cure any ambiguity or inconsistency (but only changes or additions that
will not adversely affect the interests of the holders of Debt Securities
of any series in any material respect).
For more information see Section 1201 of the Debt Security Indenture.
The holders of at least a majority in aggregate principal amount of the
outstanding Debt Securities of any series may waive
o compliance by us with certain provisions of the Debt Security Indenture
(see Section 607 of the Debt Security Indenture); and
o any past default under the Debt Security Indenture, except a default in
the payment of principal, premium, or interest, and certain covenants and
provisions of the Debt Security Indenture that cannot be modified or
amended without consent of the holder of each outstanding Debt Security of
the series affected (see Section 813 of the Debt Security Indenture).
The Trust Indenture Act of 1939 may be amended after the date of the Debt
Security Indenture to require changes to the Debt Security Indenture. In this
event, the Debt Security Indenture will be deemed to have been amended so as to
effect the changes, and we and the Debt Security Trustee may, without the
consent of any holders, enter into one or more Supplemental Debt Security
Indentures to evidence or effect the amendment. For more information, see
Section 1201 of the Debt Security Indenture.
Except as provided in this section, the consent of the holders of a majority in
aggregate principal amount of the outstanding Debt Securities, considered as one
class, is required to change in any manner the Debt Security Indenture pursuant
to one or more supplemental Debt Security Indentures. If less than all of the
series of Debt Securities outstanding are directly affected by a proposed
supplemental Debt Security Indenture, however, only the consent of the holders
of a
-34-
<PAGE>
majority in aggregate principal amount of the outstanding Debt Securities of all
series directly affected, considered as one class, will be required.
Furthermore, if the Debt Securities of any series have been issued in more than
one Tranche and if the proposed supplemental Debt Security Indenture directly
affects the rights of the holders of one or more, but not all, Tranches, only
the consent of the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of all Tranches directly affected, considered as one
class, will be required. In addition, an amendment or modification
o may not, without the consent of the holder of the Debt Securities
- change the maturity of the principal of, or any installment of
principal of or interest on, any Debt Securities;
- reduce the principal amount or the rate of interest, or the amount
of any installment of interest, or change the method of calculating
the rate of interest;
- reduce any premium payable upon the redemption of the Debt
Securities;
- reduce the amount of the principal of any Debt Security originally
issued at a discount from the stated principal amount that would be
due and payable upon a declaration of acceleration of maturity;
- change the currency or other property in which a Debt Security or
premium or interest on a Debt Security is payable; or
- impair the right to institute suit for the enforcement of any
payment on or after the stated maturity (or in the case of
redemption, on or after the redemption date) of any Debt Securities;
o may not reduce the percentage of principal amount requirement for consent
of the holders for any supplemental Debt Security Indenture, or for any
waiver of compliance with any provision of or any default under the Debt
Security Indenture, or reduce the requirements for quorum or voting,
without the consent of the holder of each outstanding Debt Security of
each series or Tranche effected; and
o may not modify provisions of the Debt Security Indenture relating to
supplemental Debt Security Indentures, waivers of certain covenants and
waivers of past defaults with respect to the Debt Securities of any
series, or any Tranche of a series, without the consent of the holder of
each outstanding Debt Security affected.
A supplemental Debt Security Indenture will be deemed not to affect the rights
under the Debt Security Indenture of the holders of any series or Tranche of the
Debt Securities if the supplemental Debt Security Indenture
-35-
<PAGE>
- changes or eliminates any covenant or other provision of the Debt
Security Indenture expressly included solely for the benefit of one
or more other particular series of Debt Securities or Tranches
thereof; or
- modifies the rights of the holders of Debt Securities of any other
series or Tranches with respect to any covenant or other provision.
For more information, see Section 1202 of the Debt Security Indenture.
If we solicit from holders of the Debt Securities any type of action, we may at
our option by board resolution fix in advance a record date for the
determination of the holders entitled to vote on the action. We shall have no
obligation, however, to do so. If we fix a record date, the action may be taken
before or after the record date, but only the holders of record at the close of
business on the record date shall be deemed to be holders for the purposes of
determining whether holders of the requisite proportion of the outstanding Debt
Securities have authorized the action. For that purpose, the outstanding Debt
Securities shall be computed as of the record date. Any holder action shall bind
every future holder of the same security and the holder of every security issued
upon the registration of transfer of or in exchange for or in lieu of the
security in respect of anything done or permitted by the Debt Security Trustee
or us in reliance on that action, whether or not notation of the action is made
upon the security. For more information, see Section 104 of the Debt Security
Indenture.
DEFEASANCE
Unless the applicable Prospectus Supplement provides otherwise, any Debt
Security, or portion of the principal amount of a Debt Security, will be deemed
to have been paid for purposes of the Debt Security Indenture, and, at our
election, our entire indebtedness in respect to the Debt Security (or portion
thereof) will be deemed to have been satisfied and discharged, if we have
irrevocably deposited with the Debt Security Trustee or any Paying Agent other
than us in trust money, certain Eligible Obligations, or a combination of the
two, sufficient to pay principal of any premium and interest due and to become
due on the Debt Securities or portions thereof. For more information, see
Section 701 of the Debt Security Indenture. For this purpose, unless the
applicable Prospectus Supplement provides otherwise, Eligible Obligations
include direct obligations of, or obligations unconditionally guaranteed by, the
United States, entitled to the benefit of full faith and credit of the United
States, and certificates, depositary receipts or other instruments which
evidence a direct ownership interest in these obligations or in any specific
interest or principal payments due in respect to those obligations.
RESIGNATION OF DEBT SECURITY TRUSTEE
The Debt Security Trustee may resign at any time by giving written notice to us
or may be removed at any time by an action of the holders of a majority in
principal amount of outstanding Debt Securities delivered to the Debt Security
Trustee and us. No resignation or removal of the Debt Security Trustee and no
appointment of a successor trustee will become effective until a successor
trustee accepts appointment in accordance with the requirements of the Debt
Security
-36-
<PAGE>
Indenture. So long as no Event of Default or event which would become an Event
of Default has occurred and is continuing, and except with respect to a Debt
Security Trustee appointed by an action of the holders, if we have delivered to
the Debt Security Trustee a resolution of our Board of Directors appointing a
successor trustee and the successor trustee has accepted the appointment in
accordance with the terms of the Debt Security Indenture, the Debt Security
Trustee will be deemed to have resigned and the successor trustee will be deemed
to have been appointed as trustee in accordance with the Debt Security
Indenture. For more information, see Section 910 of the Debt Security Indenture.
NOTICES
We will give notices to holders of Debt Securities by mail to their addresses as
they appear in the Security Register. For more information, see Section 106 of
the Debt Security Indenture.
TITLE
The Debt Security Trustee and its agents, and we and our agents may treat the
person in whose name a Debt Security is registered as the absolute owner of that
Debt Security, whether or not that Debt Security may be overdue, for the purpose
of making payment and for all other purposes. For more information, see Section
308 of the Debt Security Indenture.
GOVERNING LAW
The Debt Security Indenture and the Debt Securities will be governed by, and
construed in accordance with, the law of the State of New York. For more
information, see Section 112 of the Debt Security Indenture.
GLOBAL SECURITIES
We may issue some or all of the First Mortgage Bonds, Senior Notes or Debt
Securities of any series as Global Securities. We will register each Global
Security in the name of a depositary identified in the applicable Prospectus
Supplement. The Global Securities will be deposited with a depositary or nominee
or custodian for the depositary and will bear a legend regarding restrictions on
exchanges and registration of transfer as discussed below and any other matters
to be provided pursuant to the Mortgage and applicable Indenture.
As long as the depositary or its nominee is the registered holder of a Global
Security, that person will be considered the sole owner and holder of the Global
Security and the securities represented by it for all purposes under the
securities and the Mortgage, Senior Note Indenture and Debt Security Indenture.
Except in limited circumstances, owners of a beneficial interest in a Global
Security
o will not be entitled to have the Global Security or any securities
represented by it registered in their names;
-37-
<PAGE>
o will not receive or be entitled to receive physical delivery of
certificated securities in exchange for the Global Security; and
o will not be considered to be the owners or holders of the Global Security
or any securities represented by it for any purposes under the securities
or the Mortgage, Senior Note Indenture or Debt Security Indenture.
We will make all payments of principal and any premium and interest on a Global
Security to the depositary or its nominee as the holder of the Global Security.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions having accounts with the depositary or its nominee, called
"participants" for purposes of this discussion, and to persons that hold
beneficial interests through participants. When a Global Security is issued, the
depositary will credit on its book entry, registration and transfer system the
principal amounts of securities represented by the Global Security to the
accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by
o the depositary, with respect to participant's interests or;
o any participant, with respect to interests of persons held by the
participants on their behalf.
Payments by participants to owners of beneficial interests held through such
participants will be the responsibility of such participants. The depositary may
from time to time adopt various policies and procedures governing payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Security. None of the following will have any responsibility or liability
for any aspect of the depositary or any participant's records relating to, or
for payments made on account of, beneficial interest in a Global Security, or
for maintaining, supervising or reviewing any records relating to these
beneficial interests:
o the Company;
o the Trustee under the Mortgage;
o the Trustee under the Senior Note Indenture;
o the Trustee under the Debt Security Indenture; or
o any agent of each of the above.
-38-
<PAGE>
PLAN OF DISTRIBUTION
We may sell the securities in any of three ways:
o through underwriters or dealers;
o directly through a limited number of institutional purchasers or to a
single purchaser; or
o through agents.
The applicable Prospectus Supplement will set forth the terms under which the
securities are offered, including
o the names of any underwriters, dealers or agents;
o the purchase price and the net proceeds to us from the sale;
o any underwriting discounts and other items constituting underwriters
compensation;
o any initial public offering price; and
o any discounts or concessions allowed, re-allowed or paid to dealers.
We or any underwriters or dealers may change from time to time any initial
public offering price and any discounts or concessions allowed or re-allowed or
paid to dealers.
If we use underwriters in the sale, the securities will be acquired by the
underwriters for their own account and may be resold in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of the sale. Unless the
applicable Prospectus Supplement states otherwise, the obligations of any
underwriter to purchase the securities will be subject to certain conditions,
and the underwriter will be obligated to purchase the securities, except that in
certain cases involving a default by an underwriter, less than all of the
securities may be purchased. If we sell securities through an agent, the
applicable Prospectus Supplement will state the name and any commission payable
by us to the agent. Unless the Prospectus Supplement states otherwise, any agent
of the Company will be acting on a best efforts basis for the period of its
appointment.
The applicable Prospectus Supplement will state whether we will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase securities at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified future date. These contracts will be subject
to the conditions set forth in the Prospectus Supplement. Additionally, the
Prospectus Supplement will set forth the commission payable for solicitation of
these contracts.
Agents and underwriters may be entitled under agreements entered into with the
Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933.
-39-
<PAGE>
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, 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.
-40-
<PAGE>
LEGAL OPINIONS
William D. Johnson of our legal department and Hunton & Williams of Raleigh,
North Carolina, our outside counsel, will issue opinions about the legality of
the offered securities for us. Any underwriters will be advised about other
issues relating to any offering by their own legal counsel, Winthrop, Stimson,
Putnam & Roberts of New York, New York.
-41-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
ESTIMATED
ITEM TOTAL
Securities and Exchange Commission registration fee $ 417,000.00
Rating agencies' fees.......................... 450,000.00
Trustees' fees................................. 150,000.00
Counsels' fees................................. 310,000.00
Auditors' fees................................. 40,000.00
Printing and engraving......................... 30,000.00
Blue Sky fees.................................. 20,000.00
Miscellaneous.................................. 20,000.00
Total $1,437,000.00
----------------
All amounts other than the registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-51 through 55-8-57 of the General Statutes of North Carolina
and the Charter and By-Laws of CP&L provide for indemnification of the
registrant's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act of 1933, as amended. CP&L has
insurance covering its expenditures which might arise in connection with the
lawful indemnification of its directors and officers for their liabilities and
expenses. Officers and directors of CP&L also have insurance which insures them
against certain liabilities and expenses.
ITEM 16. EXHIBITS.
1(a) - Form of Underwriting Agreement for First Mortgage Bonds.
1(b) - Form of Underwriting Agreement for Senior Notes.
1(c) - Form of Underwriting Agreement for Debt Securities.
*4(a) - Mortgage and Deed of Trust dated as of May 1, 1940
between CP&L and The Bank of New York (formerly Irving
Trust Company) and Frederick G. Herbst (W.T. Cunningham,
Successor), Trustees and the First through Fifth
Supplemental Indentures thereto (filed as Exhibit 2(b),
File No. 2-64189); and the Sixth through Sixty-fourth
Supplemental Indentures (filed as Exhibit 2(b)-5, File
No. 2-16210; Exhibit 2(b)-6, File No. 2-16210; Exhibit
4(b)-8, File No. 2-19118; Exhibit 4(b)-2, File No.
2-22439; Exhibit 4(b)-2, File No. 2-24624; Exhibit 2(c),
File No. 2-27297; Exhibit 2(c), File No. 2-30172;
Exhibit 2(c), File No. 2-35694; Exhibit 2(c), File No.
2-37505; Exhibit 2(c), File No. 2-39002; Exhibit 2(c),
File No. 2-41738; Exhibit 2(c), File No. 2-43439;
Exhibit 2(c), File No. 2-47751; Exhibit 2(c), File No.
2-49347; Exhibit 2(c), File No. 2-53113; Exhibit 2(d),
File No. 2-53113; Exhibit 2(c), File No. 2-59511;
Exhibit 2(c), File No. 2-61611; Exhibit 2(d), File No.
2-64189; Exhibit 2(c), File No. 2-65514; Exhibits 2(c)
and 2(d), File No. 2-66851; Exhibits 4(b)-l, 4(b)-2 and
4(b)-3, File No. 2-81299; Exhibits 4(c)-1 through
4(c)-8, File No. 2-95505; Exhibits 4(b) through 4(h),
File No. 33-25560; Exhibits 4(b) and 4(c), File No.
33-33431; Exhibits 4(b) and 4(c), File No. 33-38298;
Exhibits 4(h) and 4(i), File No. 33-
II-1
<PAGE>
42869; Exhibits 4(e)-(g), File No. 33-48607; Exhibits
4(e) and 4(f), File No. 33-55060; Exhibits 4(e) and
4(f), File No. 33-60014; Exhibits 4(a) and 4(b) to Post-
Effective Amendment No. 1, File No. 33-38349; and
Exhibit 4(e), File No. 33-50597). Exhibits 4(e) and
4(f), File No. 33-57835; and Exhibit to Current Report
on Form 8-K dated August 28, 1997, File No. 1-3382; and
Form of Carolina Power and Light Company First Mortgage
Bond, 6.80% Series Due August 15, 2007 filed as Exhibit
4 to Form 10-Q for the period ended September 30, 1998,
File No. 1-3382)
4(b) - Sixty-fifth Supplemental Indenture, dated as of April
1, 1998.
4(c) - Form of Supplemental Indenture relating to First
Mortgage Bonds.
4(d) - Form of Indenture relating to Senior Notes
4(e) - Form of Indenture relating to Debt Securities.
5 - Opinion of Hunton & Williams.
12 - Computation of Ratio of Earnings to Fixed Charges.
23(a) - Consent of Deloitte & Touche LLP.
23(b) - The consent of Hunton & Williams is contained in its
opinion filed as Exhibit 5(a).
23(c) - Consent of William D. Johnson
24 - The Power of Attorney is contained on the signature
page of this Registration Statement.
25(a) - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Bank of New York, as
Trustee under the Mortgage relating to New Bonds.
25(b) - Form T-2 Statement of Eligibility under the Trust
Indenture Act of 1939 of W.T. Cunningham, as Trustee
under the Mortgage relating to New Bonds.
+25(c) - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the Trustee under the Indenture
relating to Senior Notes.
+25(d) - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the Trustee under the Indenture
relating to Debt Securities.
- -------------------------------
* Incorporated herein by reference as indicated.
+ To be filed subsequent to effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any Prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that the registrant need not
file a post-effective amendment to include the information required to be
included by subsection (i) or (ii) if such information is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-2
<PAGE>
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b). The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to undertake to file an
application for the purpose of determining the eligibility of the trustee
under the Senior Note Indenture or the Debt Security Indenture to act
under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the SEC under
Section 305(b)(2) of the Trust Indenture Act.
II-3
<PAGE>
POWER OF ATTORNEY
Each director and/or officer of the issuer whose signature appears below
hereby appoints William Cavanaugh III, Robert B. McGehee, and Timothy S.
Goettel, and each of them severally, as his attorney-in-fact to sign in his name
and behalf, in any and all capacities stated below, and to file with the SEC,
any and all amendments, including post-effective amendments, to this
Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Raleigh, State of North Carolina, on the 9th day of
December, 1998.
CAROLINA POWER & LIGHT COMPANY
/s/ William Cavanaugh III
---------------------------------------
William Cavanaugh III, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William Cavanaugh III
_______________________________________ President and Chief
William Cavanaugh III Executive December 9, 1998
Officer and Director
/s/ Glenn E. Harder
_______________________________________ Executive Vice President
Glenn E. Harder and Chief Financial December 9, 1998
Officer
/s/ Bonnie V. Hancock
_______________________________________ Vice President and December 9, 1998
Bonnie V. Hancock Controller
/s/ Sherwood H. Smith, Jr.
_______________________________________ Chairman of the Board December 9, 1998
Sherwood H. Smith, Jr.
/s/ Leslie M. Baker, Jr.
_______________________________________ Director December 9, 1998
Leslie M. Baker, Jr.
/s/ Edwin B. Borden
_______________________________________ December 9, 1998
Edwin B. Borden Director
/s/ Charles W. Coker
_______________________________________ December 9, 1998
Charles W. Coker Director
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Richard L. Daugherty
_______________________________________ December 9, 1998
Richard L. Daugherty Director
/s/ Walter Y. Elisha
_______________________________________ December 9, 1998
Walter Y. Elisha Director
/s/ Robert L. Jones
_______________________________________ December 9, 1998
Robert L. Jones Director
/s/ Estell C. Lee
_______________________________________ December 9, 1998
Estell C. Lee Director
/s/ William O. McCoy
_______________________________________ December 9, 1998
William O. McCoy Director
/s/ J. Tylee Wilson
_______________________________________ December 9, 1998
J. Tylee Wilson Director
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
<S> <C>
1(a) - Form of Underwriting Agreement for First Mortgage Bonds.
1(b) - Form of Underwriting Agreement for Senior Notes.
1(c) - Form of Underwriting Agreement for Debt Securities.
*4(a) - Mortgage and Deed of Trust dated as of May 1, 1940 between
CP&L and The Bank of New York (formerly Irving Trust Company)
and Frederick G. Herbst (W.T. Cunningham, Successor), Trustees
and the First through Fifth Supplemental Indentures thereto
(filed as Exhibit 2(b), File No. 2-64189); and the Sixth
through Sixty-fourth Supplemental Indentures (filed as Exhibit
2(b)-5, File No. 2-16210; Exhibit 2(b)-6, File No. 2-16210;
Exhibit 4(b)-8, File No. 2-19118; Exhibit 4(b)-2, File No.
2-22439; Exhibit 4(b)-2, File No. 2-24624; Exhibit 2(c), File
No. 2-27297; Exhibit 2(c), File No. 2-30172; Exhibit 2(c),
File No. 2-35694; Exhibit 2(c), File No. 2-37505; Exhibit
2(c), File No. 2-39002; Exhibit 2(c), File No. 2-41738;
Exhibit 2(c), File No. 2-43439; Exhibit 2(c), File No.
2-47751; Exhibit 2(c), File No. 2-49347; Exhibit 2(c), File
No. 2-53113; Exhibit 2(d), File No. 2-53113; Exhibit 2(c),
File No. 2-59511; Exhibit 2(c), File No. 2-61611; Exhibit
2(d), File No. 2-64189; Exhibit 2(c), File No. 2-65514;
Exhibits 2(c) and 2(d), File No. 2-66851; Exhibits 4(b)-1,
4(b)-2 and 4(b)-3, File No. 2-81299; Exhibits 4(c)-1 through
4(c)-8, File No. 2-95505; Exhibits 4(b) through 4(h), File No.
33-25560; Exhibits 4(b) and 4(c), File No. 33-33431; Exhibits
4(b) and 4(c), File No. 33-38298; Exhibits 4(h) and 4(i), File
No. 33-42869; Exhibits 4(e)-(g), File No. 33-48607; Exhibits
4(e) and 4(f), File No. 33-55060; Exhibits 4(e) and 4(f), File
No. 33-60014; Exhibits 4(a) and 4(b) to Post-Effective
Amendment No. 1, File No. 33-38349; Exhibit 4(e), File No.
33-50597; Exhibits 4(e) and 4(f), File No. 33-57835; and
Exhibit to Current Report on Form 8-K dated August 28, 1997,
File No. 1-3382; and Form of Carolina Power and Light Company
First Mortgage Bond, 6.80% Series Due August 15, 2007 filed as
Exhibit 4 to Form 10-Q for the period ended September 30,
1998, File No. 1-3382)
4(b) - Sixty-fifth Supplemental Indenture, dated as of April 1, 1998.
4(c) - Form of Supplemental Indenture relating to First Mortgage
Bonds.
4(d) - Form of Indenture relating to Senior Notes
4(e) - Form of Indenture relating to Debt Securities.
5 - Opinion of Hunton & Williams.
12 - Computation of Ratio of Earnings to Fixed Charges.
23(a) - Consent of Deloitte & Touche LLP.
23(b) - The consent of Hunton & Williams is contained in its opinion
filed as Exhibits 5(a).
23(c) - Consent of William D. Johnson.
24 - The Power of Attorney is contained on the signature page of
this Registration Statement.
25(a) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York, as Trustee under the
Mortgage relating to New Bonds.
25(b) - Form T-2 Statement of Eligibility under the Trust Indenture
Act of
II-6
<PAGE>
1939 of W.T. Cunningham, as Trustee under the Mortgage
relating to New Bonds.
+25(c) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Trustee under the Indenture relating to
Senior Notes.
+25(d) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Trustee under the Indenture relating to
Debt Securities.
</TABLE>
- -------------------------------
* Incorporated herein by reference as indicated.
+ To be filed subsequent to effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
II-7
Exhibit 1(a)
CAROLINA POWER & LIGHT COMPANY
First Mortgage Bonds
UNDERWRITING AGREEMENT
-----------------------
-----------, ----
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter named
as follows:
1. Underwriters and Representative. The term "Underwriters" as used herein
shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one
of such Underwriters. If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided. All
obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named in Schedule I hereto, any action under or in respect of
this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell its
First Mortgage Bonds of the designation, with the terms and in the amount
specified in Schedule I hereto (the "Securities"), under its Mortgage and Deed
of Trust, dated as of May 1, 1940, with The Bank of New York (formerly Irving
Trust Company) and Frederick G. Herbst (W. T. Cunningham, successor), as
Trustees, as supplemented and as it will be further supplemented by a
supplemental indenture relating to the Securities (the "Supplemental
Indenture"), in substantially the form heretofore delivered to the
Representative, said Mortgage and Deed of Trust as supplemented and to be
supplemented by the Supplemental Indenture being hereinafter referred to as the
"Mortgage".
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-______) (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), for the registration of up to an
aggregate of $1,500,000,000 of the Company's First Mortgage Bonds,
<PAGE>
Senior Notes and Debt Securities (collectively, the Registered
Securities") in unallocated amounts, as each is defined in the
Registration Statement. As of the date hereof, the Company has sold
Registered Securities in the aggregate amount of $______________. The
Registration Statement has been declared effective by the Commission, and
the Mortgage has been qualified under the Trust Indenture Act of 1939 Act,
as amended (the "1939 Act"). The term "Registration Statement" shall be
deemed to include all amendments to the date hereof and all documents
incorporated by reference therein (the "Incorporated Documents"). The
prospectus included in the Registration Statement, as it is to be
supplemented by a prospectus supplement, dated on or about the date
hereof, relating to the Securities (the "Prospectus Supplement"), and all
prior amendments or supplements thereto (other than amendments or
supplements relating to securities of the Company other than the
Securities), including the Incorporated Documents, is hereinafter referred
to as the "Prospectus". Any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement or
the Prospectus shall be deemed to refer to and include the filing of any
document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), deemed to be incorporated therein after the date hereof
and prior to the termination of the offering of the Securities by the
Underwriters, and any references herein to the terms "Registration
Statement" or "Prospectus" at a date after the filing of the Prospectus
Supplement shall be deemed to refer to the Registration Statement or the
Prospectus, as the case may be, as each may be amended or supplemented
prior to such date.
(b) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall not
previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was declared
effective by the Commission, complied, and the Registration Statement, the
Prospectus and the Mortgage, at the date the Prospectus is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the
Securities Act ("Rule 424") and at the Closing Date, will comply, in all
material respects, with the applicable provisions of the Securities Act
and the 1939 Act and the applicable rules and regulations of the
Commission thereunder; the Registration Statement, at the time and date it
was declared effective by the Commission, 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 the Prospectus, at the date it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 and at the
Closing Date, will not contain an untrue statement of 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; provided, however, that the foregoing representations and
warranties in this subparagraph (c) shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished herein or in writing to the Company by the Representative or by
or on behalf of any Underwriter through the Representative expressly for
use in the Prospectus or to any statements in or omissions from the
Statements of Eligibility (Forms T-1 and T-2) of the Trustees under the
Mortgage. The Incorporated Documents, when they were filed with the
Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the rules and
-2-
<PAGE>
regulations of the Commission thereunder, and any documents so filed and
incorporated by reference subsequent to the date hereof and prior to the
termination of the offering of the Securities by the Underwriters will,
when they are filed with the Commission, comply in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission thereunder; and, when read together with the Registration
Statement and the Prospectus, none of such documents included or includes
or will include any untrue statement of a material fact or omitted or
omits or will omit to state any 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.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved; and Deloitte &
Touche LLP, who have audited certain of the financial statements, are
independent public or independent certified public accountants as required
by the Securities Act or the Exchange Act and the rules and regulations of
the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, there has not been any material adverse change
in the business, property, financial condition or prospects of the
Company, and since such dates and prior to the Closing Date, there has not
been any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement and Prospectus and
transactions in the ordinary course of business. The Company has no
material contingent obligation which is not disclosed in the Registration
Statement and Prospectus.
(f) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof on the part of the Company to be fulfilled
have been duly authorized by all necessary corporate action of the Company
in accordance with the provisions of its charter (the "Charter"), by-laws
and applicable law, and the Securities, when issued and delivered as
provided herein, will constitute legal, valid and binding obligations of
the Company in accordance with their terms except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles; provided, however,
that certain remedies, waivers and other provisions of the Securities may
not be enforceable, but such unenforceability will not render the
Securities invalid as a whole or affect the judicial enforcement of (i)
the obligation of the Company to repay the principal, together with the
interest thereon as provided in the Securities or (ii) the right of the
Trustees to exercise their right to foreclose under the Mortgage.
(g) The consummation of the transaction herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is now a party.
(h) The summaries of the terms of the Securities contained in the
Registration Statement and Prospectus fairly describe the provisions
thereof required to be described by the registration statement form.
4. Purchase and Sale. On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
-3-
<PAGE>
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Securities at
the office of The Bank of New York, Corporate Trust Department, 101
Barclay Street, New York, New York, or such other place, time and date as
the Representative and the Company may agree. The hour and date of such
delivery and payment are herein called the "Closing Date". Payment for the
Securities shall be by wire transfer of immediately available funds
against delivery to The Depository Trust Company or to
_______________________, as custodian for The Depository Trust Company, in
fully registered global form registered in the name of CEDE & Co., for the
respective accounts specified by the Representative not later than the
close of business on the business day prior to the Closing Date or such
other date and time not later than the Closing Date as agreed by The
Depository Trust Company or _______________________. For the purpose of
expediting the checking of the certificates by the Representative, the
Company agrees to make the Securities available to the Representative not
later than 10 A.M., on the last full business day prior to the Closing
Date at said office of The Bank of New York.
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and to
take up and pay for the principal amount of the Securities to be purchased
by such one or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall have the right,
within 24 hours of receipt of such notice, either to take up and pay for
(in such proportion as may be agreed upon among them) or to substitute
another Underwriter or Underwriters, satisfactory to the Company, to take
up and pay for the principal amount of the Securities which such one or
more Underwriters did not purchase. If one or more Underwriters shall, for
any reason other than a reason permitted hereunder, fail to take up and
pay for the principal amount of the Securities to be purchased by such one
or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall be obligated to take
up and pay for (in addition to the respective principal amount of the
Securities set forth opposite their respective names in Schedule II
hereto) the principal amount of the Securities which such defaulting
Underwriter or Underwriters failed to take up and pay for, up to a
principal amount thereof equal to, in the case of each such remaining
Underwriter, ten percent (10%) of the principal amount of the Securities
set forth opposite the name of such remaining Underwriter in said Schedule
II, and such remaining Underwriters shall have the right, within 24 hours
of receipt of such notice, either to take up and pay for (in such
proportion as may be agreed upon among them), or to substitute another
Underwriter or Underwriters, satisfactory to the Company, to take up and
pay for, the remaining principal amount of the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase. If
any unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours
within which to procure another party or parties, members of the National
Association of Securities Dealers, Inc. (or if not members of such
Association, who are not eligible for membership in said Association and
who agree (i) to make no sales within the United States, its territories
or its possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with said Association's Rules
of Fair Practice) and satisfactory to the Company, to purchase or agree to
purchase such unpurchased Securities on the terms herein set forth. In any
such case either the
-4-
<PAGE>
Representative or the Company shall have the right to postpone the Closing
Date for a period not to exceed three full business days from the date
agreed upon in accordance with this paragraph 6, in order that the
necessary changes in the Registration Statement and Prospectus and any
other documents and arrangements may be effected. If the Representative
and the Company shall fail to procure a satisfactory party or parties as
above provided to purchase or agree to purchase such unpurchased
Securities, then the Company may either (i) require the remaining
Underwriters to purchase the principal amount of Securities which they are
obligated to purchase hereunder or (ii) terminate this Agreement by giving
prompt notice to the Representative. In the event that neither the
non-defaulting Underwriters nor the Company has arranged for the purchase
of such unpurchased Securities by another party or parties as above
provided and the Company has not elected to require the non-defaulting
Underwriters to purchase the principal amount of Securities which they are
obligated to purchase hereunder, then this Agreement shall terminate
without any liability on the part of the Company or any Underwriter (other
than an Underwriter which shall have failed or refused, in accordance with
the terms hereof, to purchase and pay for the principal amount of the
Securities which such Underwriter has agreed to purchase as provided in
paragraph 4 hereof), except as otherwise provided in paragraph 7 and
paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter
that:
(a) As soon as possible after the execution and delivery of this
Agreement, the Company will file the Prospectus with the Commission
pursuant to Rule 424, setting forth, among other things, the necessary
information with respect to the terms of offering of the Securities. The
Company will promptly deliver to the Representative and to counsel for the
Underwriters, to the extent not previously delivered, one fully executed
copy or one conformed copy, certified by an officer of the Company, of the
Registration Statement, as originally filed, and of all amendments
thereto, heretofore or hereafter made, (other than those relating solely
to securities other than the Securities), including any post-effective
amendment (in each case including all exhibits filed therewith and all
documents incorporated therein not previously furnished to the
Representative), including signed copies of each consent and certificate
included therein or filed as an exhibit thereto, and will deliver to the
Representative for distribution to the Underwriters as many conformed
copies of the foregoing (excluding the exhibits, but including all
documents incorporated therein) as the Representative may reasonably
request. The Company will also send to the Underwriters as soon as
practicable after the date of this Agreement and thereafter from time to
time as many copies of the Prospectus as the Representative may reasonably
request for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may be
required by law to deliver a Prospectus, if any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by the Representative shall occur, which in the Company's opinion should
be set forth in a supplement to or an amendment of the Prospectus in order
to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser, or if it is necessary to amend the
Prospectus to comply with the Securities Act, the Company will forthwith
at its expense prepare and furnish to the Underwriters and dealers named
by the Representative a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus which will
supplement or amend the Prospectus so that as supplemented or amended it
will comply with the Securities Act and will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading. In case
any Underwriter is required to deliver a Prospectus after the
-5-
<PAGE>
expiration of nine months after the commencement of the offering of the
Securities, the Company, upon the request of the Representative, will
furnish to the Representative, at the expense of such Underwriter, a
reasonable quantity of a supplemented or amended prospectus, or
supplements or amendments to the Prospectus, complying with Section 10(a)
of the Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing of
the Prospectus pursuant to Rule 424 occurs, an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities Act,
which need not be certified by independent public accountants) covering a
period of twelve months beginning not later than the first day of the
Company's fiscal quarter next following the filing of the Prospectus
pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Securities.
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement 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 a
stop order should be entered, use its best efforts to obtain the prompt
removal thereof.
(f) The Company will use its best efforts to qualify the Securities,
for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and make
in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the
Company shall not be required to qualify as a foreign corporation or
dealer in securities, or to file any general consents to service of
process under the laws of any jurisdiction. The fees and disbursements of
Underwriters' counsel shall be paid by the Underwriters (subject, however,
to the provisions of paragraph 8 requiring payment by the Company of fees
and expenses not to exceed $5,000); provided, however, that if this
Agreement is terminated in accordance with the provisions of paragraph 9,
10 or 12, the Company shall reimburse the Representative for the account
of the Underwriters for the fees and disbursements of Underwriters'
counsel. The Company shall not be required to pay any amount for any
expenses of the Representative or of any other of the Underwriters except
as provided in this paragraph 7 and in paragraph 8. The Company shall not
in any event be liable to any of the Underwriters for damages on account
of the loss of anticipated profit.
8. Payment of Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
and filing of the Registration Statement and the printing of this Agreement,
(ii) the delivery of the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of paragraph 7(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith,
and in connection with the preparation of the Blue Sky Survey and any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and
-6-
<PAGE>
delivery to the Underwriters of copies of the Blue Sky Survey and Legality
Memorandum, and (vii) the preparation, execution, filing and recording by the
Company of the Supplemental Indenture (such filing and recordation to be
promptly made, after execution and delivery of the Supplemental Indenture to the
Trustees under the Mortgage in the counties in which the mortgaged property of
the Company is located); and the Company will pay all taxes, if any (but not
including any transfer taxes), on the issue of the Securities and the filing and
recordation of the Supplemental Indenture.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company, to
the performance by the Company of its obligations to be performed hereunder
prior to the Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or threatened by, the Commission on
the Closing Date, and the Representative shall have received, prior to
payment for the Securities, a certificate dated the Closing Date and
signed by the Chairman, President or a Vice President of the Company to
the effect that no such stop order is in effect and that no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later date
as shall have been consented to by the Representative, there shall have
been issued and on the Closing Date there shall be in full force and
effect orders of the North Carolina Utilities Commission and the South
Carolina Public Service Commission authorizing the issuance and sale of
the Securities, none of which shall contain any provision unacceptable to
the Representative by reason of its being materially adverse to the
Company (it being understood that no such order in effect on the date of
this Agreement and heretofore furnished to the Representative or counsel
for the Underwriters, contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable
opinions from: (1) Hunton & Williams, of counsel to the Company, which
opinion shall be satisfactory in form and substance to counsel for the
Underwriters, and (2) counsel for the Underwriters, in each of which
opinions said counsel (except Hunton & Williams as to North Carolina law)
may rely as to all matters of North Carolina and South Carolina law upon
the opinions of William D. Johnson, Esq., Vice President-Legal and
Secretary for the Company, and [South Carolina counsel], respectively, to
the effect that:
(i) The Mortgage has been duly and validly authorized by all
necessary corporate action (with this opinion only required in the
Hunton & Williams opinion as to the original Mortgage, the
Sixty-Fourth Supplemental Indenture, and subsequent Supplemental
Indentures), has been duly and validly executed and delivered (with
this opinion only required in the Hunton & Williams opinion as to
the Sixty-Fourth Supplemental Indenture and subsequent Supplemental
Indentures), and is a valid and binding mortgage of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles; provided,
however, that certain remedies, waivers and other provisions of the
Mortgage may not be enforceable, but such unenforceability will not
render the Mortgage invalid as a whole or affect the judicial
enforcement of (i) the obligation of the Company to repay the
principal, together with the
-7-
<PAGE>
interest thereon as provided in the Securities or (ii) the right of
the Trustees to exercise their right to foreclose under the
Mortgage;
(ii) The Mortgage has been duly qualified under the 1939 Act;
(iii) Assuming authentication by the Trustees in accordance
with the Mortgage and delivery to and payment for the Securities by
the Underwriters, as provided in this Agreement, the Securities are
legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency or other laws affecting mortgagees' and other creditors'
rights and general equitable principles, are entitled to the benefit
of the security afforded by the Mortgage, and are secured equally
and ratably with all other bonds outstanding under the Mortgage
except insofar as any sinking or other fund may afford additional
security for the bonds of any particular series;
(iv) The statements made in the Prospectus under the caption
"Description of First Mortgage Bonds" and in the Prospectus
Supplement under the caption "Description of the Offered Securities"
insofar as they purport to constitute summaries of the documents
referred to therein, are correct in all material respects;
(v) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
(vi) The Registration Statement, at the time and date it was
declared effective by the Commission, and the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424, (except as to the financial statements and
other financial and statistical data constituting a part thereof or
incorporated by reference therein, upon which such opinions need not
pass), complied as to form in all material respects with the
requirements of the Securities Act and the 1939 Act and the
applicable instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in each Registration Statement and the
Prospectus pursuant to Item 12 of Form S-3 (except as to financial
statements and other financial and statistical data constituting a
part thereof or incorporated by reference therein, upon which such
opinions need not pass), at the time they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Registration
Statement has become effective under the Securities Act and, to the
best of the knowledge of said counsel, no proceedings for a stop
order with respect thereto are threatened or pending under Section 8
of the Securities Act;
(vii) Nothing has come to the attention of said counsel that
would lead them to believe that either Registration Statement, at
the time and date it was declared effective by the Commission,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 or at the Closing Date, included or includes an
untrue statement of a material fact or omitted or omits 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 (except as to financial statements and other
-8-
<PAGE>
financial and statistical data constituting a part of the
Registration Statement or the Prospectus or incorporated by
reference therein, upon which such opinions need not pass);
(viii) Orders have been entered by the North Carolina
Utilities Commission and the South Carolina Public Service
Commission authorizing the issuance and sale of the Securities, and
to the best of the knowledge of said counsel, said orders are still
in force and effect; and no further approval, authorization, consent
or other order of any public board or body (except such as have been
obtained under the Securities Act and as may be required under the
state securities or Blue Sky laws of any jurisdiction) is legally
required for the consummation of the transactions contemplated in
this Agreement.
(d) At the Closing Date, the Representative shall receive from
William D. Johnson, Esq., Vice President and Secretary for the Company, a
favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i) through (v) and subdivisions (vii) and (viii) of
subparagraph (c) of this paragraph 9 as the opinions required by said
subparagraph (c), and to the further effect that:
(i) The Company is a validly organized and existing
corporation and is in good standing under the laws of the State of
North Carolina and is duly qualified to do business and is doing
business in that State and in the State of South Carolina;
(ii) The Company is duly authorized by its Charter to conduct
the business which it is now conducting as set forth in the
Prospectus;
(iii) The Company has valid and subsisting franchises,
licenses and permits free from burdensome restrictions and adequate
for the conduct of its business;
(iv) The information contained in the Prospectus, which is
stated therein to have been made in reliance upon the opinion of
said counsel has been reviewed by said counsel and is correct;
(v) The Company has good and marketable title, with minor
exceptions, restrictions and reservations in conveyances, and
defects, which are of the nature ordinarily found in properties of
similar character and magnitude, and which, in his opinion, cannot
in any substantial way impair the security afforded by the Mortgage,
to all the properties described in the granting clauses of the
Mortgage and upon which the Mortgage purports to create a lien,
except certain rights-of-way over private property on which are
located transmission and distribution lines formerly owned by the
Tide Water Power Company (merged into the Company on February 29,
1952), title to which can be perfected by condemnation proceedings.
The description in the Mortgage of the above-mentioned properties
(including those formerly owned by Tide Water Power Company) is
legally sufficient to constitute the Mortgage a lien upon said
properties. Said properties constitute substantially all the
permanent physical properties and franchises of the Company and are
held by the Company free and clear of all liens and encumbrances
except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The Company has followed the practice
generally of purchasing rights-of-way and easements and certain
small parcels of fee property appurtenant thereto and for use in
conjunction therewith, and certain other properties of small or
inconsequential value, without an examination of title and, as to
the title to lands affected
-9-
<PAGE>
by rights-of-way and easements, of not examining the title of the
lessor or grantor whenever the lands affected by such rights-of-way
and easements are not of such substantial value as in the opinion of
the Company to justify the expense attendant upon examination of
titles in connection therewith. In his opinion such practice of the
Company is consistent with good practice and with the method
followed by other companies engaged in the same business and is
reasonably adequate to assure the Company of good and marketable
title to all such property acquired by it. It is his opinion that
any such conditions or defects as may be covered by the above
recited exceptions are not, except as to certain rights-of-way on
which are located transmission lines acquired from Tide Water Power
Company, substantial and would not interfere with the Company's
business operations. The Company has the right of eminent domain in
the States of North Carolina and South Carolina under which it may,
if necessary, perfect or obtain title to privately owned land or
acquire easements or rights-of-way required for use or used by the
Company in its public utility operations;
(vi) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
Securities is in proper form for filing for record both as a real
estate mortgage and as a security interest in all counties in the
States of North Carolina and South Carolina in which any of the
property described therein or in the Mortgage as subject to the lien
of the Mortgage is located;
(vii) The Mortgage constitutes a valid first mortgage lien of
record upon all the franchises and properties now owned by the
Company (other than those expressly excepted therefrom) situated in
the States of North Carolina and South Carolina, as described or
referred to in the granting clauses of the Mortgage, subject to the
exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (i) of subparagraph (c) above; and
(viii) The issuance and sale of the Securities have been duly
authorized by all necessary corporate action on the part of the
Company.
In said opinion such counsel may rely as to all matters of South Carolina law
(except as to paragraph (v)) on the opinion of [South Carolina counsel].
(e) At the Closing Date, the Representative shall receive from
[South Carolina counsel], a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to engage in the business in
which it is engaged in the State of South Carolina;
(ii) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
Securities is in proper form for filing for record both as a real
estate mortgage and as a security interest in all
-10-
<PAGE>
counties in the State of South Carolina in which any of the property
described therein or in the Mortgage as subject to the lien of the
Mortgage is located;
(iii) The Company holds valid and subsisting franchises,
licenses and permits in South Carolina authorizing it to carry on
the utility business in which it is engaged in South Carolina; and
(iv) They have reviewed the opinion letter of even date
therewith addressed to you by William D. Johnson, Esq., Vice
President and Secretary for the Company, and they concur in the
opinions which he has expressed therein insofar as they relate to
the laws of the State of South Carolina.
(f) At the time of execution of this Agreement and at the Closing
Date, the Representative shall have received from Deloitte & Touche LLP
letters, dated respectively the date of this Agreement and the Closing
Date, confirming that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange Act, and of the
applicable published rules and regulations thereunder, and stating in
effect that: (i) in their opinion, the audited financial statements
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of
the Securities Act or the Exchange Act, as applicable, and of the
published rules and regulations thereunder; (ii) based on the performance
of the procedures specified by the American Institute of Certified Public
Accountants for review of interim financial information as described in
Statement on Auditing Standards ("SAS") No. 71, Interim Financial
Information, on the unaudited financial statements incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and reading the
minutes of meetings of the Board of Directors, of the Executive Committee
of the Board of Directors and of the shareholders, nothing came to their
attention that caused them to believe that (A) the unaudited financial
statements incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable, and
the published rules and regulations thereunder or any material
modifications should be made for them to be in conformity with generally
accepted principles applied on a basis substantially consistent with that
of the most recent audited financial statements incorporated by reference
in the Registration Statement; or (B) at the date of the latest available
interim balance sheet read by them and at a subsequent date not more than
five days prior to the date of each such letter, there was any change in
the capital stock or long-term debt of the Company, or at the date of the
latest available interim balance sheet read by them, there was any
decrease in net assets as compared with the amount shown on the most
recent balance sheet incorporated by reference in the Registration
Statement, except for changes or decreases that the Registration Statement
discloses have occurred or may occur, for declarations of dividends, for
common stock sales under the Automatic Dividend Reinvestment and Customer
Stock Ownership Plan and Stock Purchase-Savings Plan, or for changes or
decreases that are described in such letter; and (iii) covering such other
matters as the Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the Company,
dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct as of the
Closing Date.
-11-
<PAGE>
(h) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to counsel for the Underwriters.
In case any of the conditions specified above in this paragraph 9 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated by
the Representative by mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of any party to any
other party except as otherwise provided in paragraphs 7 and 8.
10. Conditions of the Company's Obligations. The obligations of the
Company to deliver the Securities shall be subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date, and no proceedings for
that purpose shall be pending before or threatened by the Commission on
the Closing Date.
(b) Prior to 12 Noon, New York time, on the day following the date
of this Agreement, or such later date as shall have been consented to by
the Company, there shall have been issued and on the Closing Date there
shall be in full force and effect orders of the North Carolina Utilities
Commission and the South Carolina Public Service Commission authorizing
the issuance and sale by the Company of the Securities, none of which
shall contain any provision unacceptable to the Company by reason of its
being materially adverse to the Company (it being understood that no such
order in effect as of the date of this Agreement contains any such
unacceptable provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or under any other
statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including to the
extent hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus, or in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
indemnity agreement contained in this paragraph 11 shall not apply to any
such losses, claims, damages, liabilities, expenses or actions arising out
of, or based upon any such untrue statement or alleged untrue statement,
or any such omission or alleged omission, if such statement or omission
was made in reliance upon and in conformity with information furnished
herein or in writing to the Company by any Underwriter through the
Representative for use in the Registration Statement or Prospectus, or
-12-
<PAGE>
any amendment or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the Registration
Statement which shall constitute the Statements of Eligibility under the
1939 Act (Forms T-1 and T-2) of the Trustees under the Mortgage and the
trustee under the Indenture, and provided, further, that the indemnity
agreement contained in this paragraph 11 shall not inure to the benefit of
any Underwriter (or of any person controlling such Underwriter) on account
of any such losses, claims, damages, liabilities, expenses or actions
arising from the sale of the Securities to any person if a copy of the
Prospectus (excluding documents incorporated by reference therein) shall
not have been given or sent to such person by or on behalf of such
Underwriter with or prior to the written confirmation of the sale
involved, unless such Prospectus failed to correct the omission or
statement. The indemnity agreement of the Company contained in this
paragraph 11 and the representations and warranties of the Company
contained in paragraph 3 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter or any such controlling person and shall survive the delivery
of the Securities. The Underwriters agree to notify promptly the Company,
and each other Underwriter, of the commencement of any litigation or
proceedings against them or any of them, or any such controlling person,
in connection with the sale of the Securities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its officers and directors, and each person who controls the
Company within the meaning of Section 15 of the Securities Act, against
any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act or
under any other statute or common law, and to reimburse each of them for
any legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages, or liabilities, or in
connection with defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus as amended or
supplemented (if any amendments or supplements thereto shall have been
furnished), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made
in reliance upon and in conformity with information furnished herein or in
writing to the Company by such Underwriter or through the Representative
on behalf of such Underwriter for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof. The indemnity
agreement of all the respective Underwriters contained in this paragraph
11 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or any other
Underwriter, or any such controlling person, and shall survive the
delivery of the Securities. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings
against the Company or any of its officers or directors, or any such
controlling person, in connection with the sale of the Securities.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification realized by the preceding sentence shall be a material
term of this Agreement. The omission so to notify such indemnifying party
or parties of any such action shall relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party on account of any indemnity agreement contained herein
-13-
<PAGE>
but shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party otherwise
than on account of such indemnity agreement. In case such notice of any
such action shall be so given, such indemnifying party shall be entitled
to participate at its own expense in the defense or, if it so elects, to
assume (in conjunction with any other indemnifying parties) the defense of
such action, in which event such defense shall be conducted by counsel
chosen by such indemnifying party (or parties) and satisfactory to the
indemnified party or parties who shall be defendant or defendants in such
action, and such defendant or defendants shall bear the fees and expenses
of any additional counsel retained by them; but if the indemnifying party
shall elect not to assume the defense of such action, such indemnifying
parties will reimburse such indemnified party or parties for the
reasonable fees and expenses of any counsel retained by them, as such
expenses are incurred; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and
counsel for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the representation by such
counsel of both the indemnifying party and the indemnified party, the
indemnified party or parties shall have the right to select separate
counsel, satisfactory to the indemnifying party, to participate in the
defense of such action on behalf of such indemnified party or parties (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel representing the
indemnified parties who are parties to such action).
(d) If the indemnification provided for in subparagraphs (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
each indemnifying party agrees to contribute to such indemnified party
with respect to any and all losses, claims, damages, liabilities and
expenses for which each indemnification provided for in such subparagraphs
(a) or (b) shall be unenforceable, in such proportion as shall be
appropriate to reflect the relative fault of each indemnifying party on
the one hand and the indemnified party on the other in connection with the
statements or omissions which have resulted in such losses, claims,
damages, liabilities, and expenses, as well as any other relevant
equitable considerations; provided, however, that no indemnified party
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act), shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Company and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph 11(d) were to
be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above. The Underwriters' respective obligations to contribute pursuant to
this subparagraph 11(d) are several and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed
that [_______________________________] constitute the only information
provided by the Underwriters for inclusion in the Registration Statement
and the Prospectus.
12. Termination Date of this Agreement. This Agreement may be terminated
by the Representative at any time prior to the Closing Date by mailing or
delivering written notice thereof to the Company, if prior to such time (a)
there shall have occurred any general suspension of trading in securities on the
New
-14-
<PAGE>
York or Pacific Stock Exchange, or there shall have been established by the
New York or Pacific Stock Exchange or by the Commission or by any federal or
state agency or by the decision of any court any limitation on prices for such
trading or any restrictions on the distribution of securities, or (b) there
shall have occurred any new outbreak of hostilities, including, but not limited
to, an escalation of hostilities which existed prior to the date of this
Agreement, or other national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), that, in
the reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price.
This Agreement may also be terminated at any time prior to the Closing Date if
in the reasonable judgment of the Representative the subject matter of any
amendment or supplement to the Registration Statement or Prospectus (other than
an amendment or supplement relating solely to the activity of any Underwriter or
Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Securities. Any termination hereof pursuant to
this paragraph 12 shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
13. Miscellaneous. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11, the officers and directors and each
controlling person referred to in paragraph 11, and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. The term
"successors" as used in this Agreement shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
14. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
attention of Mark F. Mulhern, Treasurer.
15. Counterparts. This Agreement may be simultaneously executed in
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
16. Defined Terms. Unless otherwise defined herein, capitalized terms used
in this Underwriting Agreement shall have the meanings assigned to them in the
Registration Statement.
-15-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company 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,
CAROLINA POWER & LIGHT COMPANY
By:
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
[NAME OF REPRESENTATIVE]
By
-16-
<PAGE>
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statement No. ________
Representative and Address:
Designation: First Mortgage Bonds, ___% Series due ______, ____
Principal Amount: $___________
Supplemental Indenture dated as of _________, ____
Date of Maturity: ___________, ____
Interest Rate: ____% per annum, payable ____________ __ and __________ __ of
each year, commencing ____________, ____.
Purchase Price: _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.
Public Offering Price: ____% of the principal amount thereof, plus accrued
interest from ________________ to the date of payment and delivery.
Redemption Terms:
Closing Date and Location:
- ---------------, ----
Hunton & Williams
200 Park Avenue, 43rd Floor
New York, New York 10166-0136
-17-
<PAGE>
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL.............................
-18-
Exhibit 1(b)
CAROLINA POWER & LIGHT COMPANY
[Title of Senior Notes]
UNDERWRITING AGREEMENT
------------------------
-----------, ----
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter named
as follows:
1. Underwriters and Representative. The term "Underwriters" as used herein
shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one
of such Underwriters. If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided. All
obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named in Schedule I hereto, any action under or in respect of
this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell its
Senior Notes of the designation, with the terms and in the amount specified in
Schedule I hereto (the "Securities") in one or more new series under a governing
indenture (the "Indenture") each between the Company and ___________________, as
trustee (the "Trustee"), in substantially the form heretofore delivered to the
Representative. Until the Release Date (as defined in the Indenture), the
Securities will be secured by one or more series of Senior Note Mortgage Bonds
(as defined in the Indenture) issued and delivered by the Company to the
Trustee. On the Release Date, the Securities will cease to be secured by the
Senior Note Mortgage Bonds and will become unsecured obligations of the Company.
The Senior Note Mortgage Bonds (the "New Bonds") securing the Securities will be
issued under the Company's Mortgage and Deed of Trust, dated as of May 1, 1940
with The Bank of New York (formerly Irving Trust Company) and Frederich G.
Herbst (W. T. Cunningham, successor) as Trustees, as supplemented and as it will
be supplemented by a supplemental indenture relating to the New Bonds (the
"Supplemental Indenture" and together with the Mortgage and Deed of Trust as
supplemented, the "Mortgage") in substantially the form heretofore delivered to
the Representative.
<PAGE>
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-____) (the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), for the registration of up to an
aggregate of $1,500,000,000 of the Company's First Mortgage Bonds, Senior
Notes and Debt Securities (collectively, the "Registered Securities") in
unallocated amounts, as each is defined in the Registration Statement. As
of the date hereof, the Company has sold Registered Securities in the
aggregate amount of $_____________. The Registration Statement has been
declared effective by the Commission, and the Mortgage and Indenture have
each been qualified under the Trust Indenture Act of 1939 Act, as amended
(the "1939 Act"). The term "Registration Statement" shall be deemed to
include all amendments to the date hereof and all documents incorporated
by reference therein (the "Incorporated Documents"). The prospectus
included in the Registration Statement, as it is to be supplemented by a
prospectus supplement, dated on or about the date hereof, relating to the
Securities (the "Prospectus Supplement"), and all prior amendments or
supplements thereto (other than amendments or supplements relating to
securities of the Company other than the Securities), including the
Incorporated Documents, is hereinafter referred to as the "Prospectus".
Any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement or the Prospectus shall be
deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), deemed
to be incorporated therein after the date hereof and prior to the
termination of the offering of the Securities by the Underwriters, and any
references herein to the terms "Registration Statement" or "Prospectus" at
a date after the filing of the Prospectus Supplement shall be deemed to
refer to the Registration Statement or the Prospectus, as the case may be,
as each may be amended or supplemented prior to such date.
(b) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall not
previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was declared
effective by the Commission, complied, and the Registration Statement, the
Prospectus, the Indenture and the Mortgage, at the date the Prospectus is
filed with, or transmitted for filing to, the Commission pursuant to Rule
424 under the Securities Act ("Rule 424") and at the Closing Date, will
comply, in all material respects, with the applicable provisions of the
Securities Act and the 1939 Act and the applicable rules and regulations
of the Commission thereunder; the Registration Statement, at the time and
date it was declared effective by the Commission, 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 the Prospectus, at the date it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 and at the
Closing Date, will not contain an untrue statement of 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; provided, however, that the foregoing representations and
warranties in this subparagraph (c) shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished herein or in writing to the Company by the Representative
-2-
<PAGE>
or by or on behalf of any Underwriter through the Representative expressly
for use in the Prospectus or to any statements in or omissions from the
Statements of Eligibility (Forms T-1 and T-2) of the Trustees under the
Mortgage and the Indenture. The Incorporated Documents, when they were
filed with the Commission, complied in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations
of the Commission thereunder, and any documents so filed and incorporated
by reference subsequent to the date hereof and prior to the termination of
the offering of the Securities by the Underwriters will, when they are
filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and, when read together with the Registration
Statement and the Prospectus, none of such documents included or includes
or will include any untrue statement of a material fact or omitted or
omits or will omit to state any 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.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved; and Deloitte &
Touche LLP, who have audited certain of the financial statements, are
independent public or independent certified public accountants as required
by the Securities Act or the Exchange Act and the rules and regulations of
the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, there has not been any material adverse change
in the business, property, financial condition or prospects of the
Company, and since such dates and prior to the Closing Date, there has not
been any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement and Prospectus and
transactions in the ordinary course of business. The Company has no
material contingent obligation which is not disclosed in the Registration
Statement and Prospectus.
(f) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof on the part of the Company to be fulfilled
have been duly authorized by all necessary corporate action of the Company
in accordance with the provisions of its charter (the "Charter"), by-laws
and applicable law, and the Securities, when issued and delivered as
provided herein, will constitute legal, valid and binding obligations of
the Company in accordance with their terms except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles.
(g) The New Bonds, when issued and delivered as provided herein,
will constitute legal, valid and binding obligations of the Company in
accordance with their terms except as limited by bankruptcy, insolvency or
other laws affecting mortgagees' and other creditors' rights and general
equitable principles; provided, however, that certain remedies, waivers
and other provisions of the New Bonds may not be enforceable, but such
unenforceability will not render the New Bonds invalid as a whole or
affect the judicial enforcement of (i) the obligation of the Company to
repay the principal, together with the interest thereon as provided in the
New Bonds or (ii) the right of the Trustees to exercise their right to
foreclose under the Mortgage.
(h) The consummation of the transaction herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a
-3-
<PAGE>
default under, any indenture, mortgage, deed of trust or other agreement
or instrument to which the Company is now a party.
(i) The summaries of the terms of the Securities and the New Bonds
contained in the Registration Statement and Prospectus fairly describe the
provisions thereof required to be described by the registration statement
form.
4. Purchase and Sale. On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Securities at
the office of [name and address of the Trustee], or such other place, time
and date as the Representative and the Company may agree. The hour and
date of such delivery and payment are herein called the "Closing Date".
Payment for the Securities shall be by wire transfer of immediately
available funds against delivery to The Depository Trust Company or to
______________________, as custodian for The Depository Trust Company, in
fully registered global form registered in the name of CEDE & Co., for the
respective accounts specified by the Representative not later than the
close of business on the business day prior to the Closing Date or such
other date and time not later than the Closing Date as agreed by The
Depository Trust Company or ______________________. For the purpose of
expediting the checking of the certificates by the Representative, the
Company agrees to make the Securities available to the Representative not
later than 10 A.M., on the last full business day prior to the Closing
Date at said office of [the Trustee].
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and to
take up and pay for the principal amount of the Securities to be purchased
by such one or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall have the right,
within 24 hours of receipt of such notice, either to take up and pay for
(in such proportion as may be agreed upon among them) or to substitute
another Underwriter or Underwriters, satisfactory to the Company, to take
up and pay for the principal amount of the Securities which such one or
more Underwriters did not purchase. If one or more Underwriters shall, for
any reason other than a reason permitted hereunder, fail to take up and
pay for the principal amount of the Securities to be purchased by such one
or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall be obligated to take
up and pay for (in addition to the respective principal amount of the
Securities set forth opposite their respective names in Schedule II
hereto) the principal amount of the Securities which such defaulting
Underwriter or Underwriters failed to take up and pay for, up to a
principal amount thereof equal to, in the case of each such remaining
Underwriter, ten percent (10%) of the principal amount of the Securities
set forth opposite the name of such remaining Underwriter in said Schedule
II,
-4-
<PAGE>
and such remaining Underwriters shall have the right, within 24 hours of
receipt of such notice, either to take up and pay for (in such proportion
as may be agreed upon among them), or to substitute another Underwriter or
Underwriters, satisfactory to the Company, to take up and pay for, the
remaining principal amount of the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase. If any
unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours
within which to procure another party or parties, members of the National
Association of Securities Dealers, Inc. (or if not members of such
Association, who are not eligible for membership in said Association and
who agree (i) to make no sales within the United States, its territories
or its possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with said Association's Rules
of Fair Practice) and satisfactory to the Company, to purchase or agree to
purchase such unpurchased Securities on the terms herein set forth. In any
such case either the Representative or the Company shall have the right to
postpone the Closing Date for a period not to exceed three full business
days from the date agreed upon in accordance with this paragraph 6, in
order that the necessary changes in the Registration Statement and
Prospectus and any other documents and arrangements may be effected. If
the Representative and the Company shall fail to procure a satisfactory
party or parties as above provided to purchase or agree to purchase such
unpurchased Securities, then the Company may either (i) require the
remaining Underwriters to purchase the principal amount of Securities
which they are obligated to purchase hereunder or (ii) terminate this
Agreement by giving prompt notice to the Representative. In the event that
neither the non-defaulting Underwriters nor the Company has arranged for
the purchase of such unpurchased Securities by another party or parties as
above provided and the Company has not elected to require the
non-defaulting Underwriters to purchase the principal amount of Securities
which they are obligated to purchase hereunder, then this Agreement shall
terminate without any liability on the part of the Company or any
Underwriter (other than an Underwriter which shall have failed or refused,
in accordance with the terms hereof, to purchase and pay for the principal
amount of the Securities which such Underwriter has agreed to purchase as
provided in paragraph 4 hereof), except as otherwise provided in paragraph
7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter
that:
(a) As soon as possible after the execution and delivery of this
Agreement, the Company will file the Prospectus with the Commission
pursuant to Rule 424, setting forth, among other things, the necessary
information with respect to the terms of offering of the Securities. The
Company will promptly deliver to the Representative and to counsel for the
Underwriters, to the extent not previously delivered, one fully executed
copy or one conformed copy, certified by an officer of the Company, of the
Registration Statement, as originally filed, and of all amendments
thereto, heretofore or hereafter made, (other than those relating solely
to securities other than the Securities), including any post-effective
amendment (in each case including all exhibits filed therewith and all
documents incorporated therein not previously furnished to the
Representative), including signed copies of each consent and certificate
included therein or filed as an exhibit thereto, and will deliver to the
Representative for distribution to the Underwriters as many conformed
copies of the foregoing (excluding the exhibits, but including all
documents incorporated therein) as the Representative may reasonably
request. The Company will also send to the Underwriters as soon as
practicable after the date of this Agreement and thereafter from time to
time as many copies of the Prospectus as the Representative may reasonably
request for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may be
required by law to deliver a Prospectus, if
-5-
<PAGE>
any event relating to or affecting the Company, or of which the Company
shall be advised in writing by the Representative shall occur, which in
the Company's opinion should be set forth in a supplement to or an
amendment of the Prospectus in order to make the Prospectus not misleading
in the light of the circumstances when it is delivered to a purchaser, or
if it is necessary to amend the Prospectus to comply with the Securities
Act, the Company will forthwith at its expense prepare and furnish to the
Underwriters and dealers named by the Representative a reasonable number
of copies of a supplement or supplements or an amendment or amendments to
the Prospectus which will supplement or amend the Prospectus so that as
supplemented or amended it will comply with the Securities Act and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading. In case any Underwriter is required to deliver
a Prospectus after the expiration of nine months after the commencement of
the offering of the Securities, the Company, upon the request of the
Representative, will furnish to the Representative, at the expense of such
Underwriter, a reasonable quantity of a supplemented or amended
prospectus, or supplements or amendments to the Prospectus, complying with
Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing of
the Prospectus pursuant to Rule 424 occurs, an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities Act,
which need not be certified by independent public accountants) covering a
period of twelve months beginning not later than the first day of the
Company's fiscal quarter next following the filing of the Prospectus
pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Securities.
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement 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 a
stop order should be entered, use its best efforts to obtain the prompt
removal thereof.
(f) The Company will use its best efforts to qualify the Securities,
for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and make
in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the
Company shall not be required to qualify as a foreign corporation or
dealer in securities, or to file any general consents to service of
process under the laws of any jurisdiction. The fees and disbursements of
Underwriters' counsel shall be paid by the Underwriters (subject, however,
to the provisions of paragraph 8 requiring payment by the Company of fees
and expenses not to exceed $5,000); provided, however, that if this
Agreement is terminated in accordance with the provisions of paragraph 9,
10 or 12, the Company shall reimburse the Representative for the account
of the Underwriters for the fees and disbursements of Underwriters'
counsel. The Company shall not be required to pay any amount for any
expenses of the Representative or of any other of the Underwriters except
as provided in this paragraph 7 and in paragraph 8. The Company shall not
-6-
<PAGE>
in any event be liable to any of the Underwriters for damages on account
of the loss of anticipated profit.
8. Payment of Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
and filing of the Registration Statement and the printing of this Agreement,
(ii) the delivery of the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of paragraph 7(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith,
and in connection with the preparation of the Blue Sky Survey and any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and Legality Memorandum, (vii) the
preparation, execution, filing and recording by the Company of the Supplemental
Indenture (such filing and recordation to be promptly made, after execution and
delivery of such Supplemental Indenture to the Trustees under the Mortgage and
Indenture in the counties in which the mortgaged property of the Company is
located); and the Company will pay all taxes, if any (but not including any
transfer taxes), on the issue of the Securities and the filing and recordation
of the Supplemental Indenture, and (viii) any filings required in order to
perfect the interests of the Trustee in the New Bonds and the proceeds thereof.
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company, to
the performance by the Company of its obligations to be performed hereunder
prior to the Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or threatened by, the Commission on
the Closing Date, and the Representative shall have received, prior to
payment for the Securities, a certificate dated the Closing Date and
signed by the Chairman, President or a Vice President of the Company to
the effect that no such stop order is in effect and that no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later date
as shall have been consented to by the Representative, there shall have
been issued and on the Closing Date there shall be in full force and
effect orders of the North Carolina Utilities Commission and the South
Carolina Public Service Commission authorizing the issuance and sale of
the Securities and the New Bonds, none of which shall contain any
provision unacceptable to the Representative by reason of its being
materially adverse to the Company (it being understood that no such order
in effect on the date of this Agreement and heretofore furnished to the
Representative or counsel for the Underwriters, contains any such
unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable
opinions from: (1) Hunton & Williams, of counsel to the Company, which
opinion shall be satisfactory in form and substance to counsel for the
Underwriters, and (2) counsel for the Underwriters, in each of which
opinions said counsel (except Hunton & Williams as to North Carolina law)
may rely as to all matters of North Carolina and South Carolina law upon
the opinions of William D. Johnson,
-7-
<PAGE>
Esq., Vice President-Legal and Secretary for the Company, and [South
Carolina counsel], respectively, to the effect that:
(i) The Indenture has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and
delivered, and is a valid and binding obligation of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles;
(ii) The Mortgage has been duly and validly authorized by all
necessary corporate action (with this opinion only required in the
Hunton & Williams opinion as to the original Mortgage, the
Sixty-Fourth Supplemental Indenture, and subsequent Supplemental
Indentures), has been duly and validly executed and delivered (with
this opinion only required in the Hunton & Williams opinion as to
the Sixty-Fourth Supplemental Indenture and subsequent Supplemental
Indentures), and is a valid and binding mortgage of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles; provided,
however, that certain remedies, waivers and other provisions of the
Mortgage may not be enforceable, but such unenforceability will not
render the Mortgage invalid as a whole or affect the judicial
enforcement of (i) the obligation of the Company to repay the
principal, together with the interest thereon as provided in the New
Bonds or (ii) the right of the Trustees to exercise their right to
foreclose under the Mortgage;
(iii) The Mortgage and the Indenture have been duly qualified
under the 1939 Act;
(iv) Assuming authentication by the Trustees in accordance
with the Mortgage and the Indenture and delivery to and payment for
the Securities by the Underwriters, as provided in this Agreement,
the Securities and the New Bonds are legal, valid and binding
obligations of the Company enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency or other laws
affecting mortgagees' and other creditors' rights and general
equitable principles, the Securities are entitled to the benefit of
the security afforded by the Indenture and are secured equally and
ratably with all other Senior Notes issued under the Indenture
except insofar as any sinking or other fund may afford additional
security for the Senior Notes of any particular series, and the New
Bonds are entitled to the benefits of the security afforded by the
Mortgage, and are secured equally and ratably with all other bonds
outstanding under the Mortgage except insofar as any sinking or
other fund may afford additional security for the bonds of any
particular series;
(v) The statements made in the Prospectus under the captions
"Description of First Mortgage Bonds" and "Description of Senior
Notes" and in the Prospectus Supplement titled "Description of the
Offered Securities" insofar as they purport to constitute summaries
of the documents referred to therein, are correct in all material
respects;
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
-8-
<PAGE>
(vii) The Registration Statement, at the time and date it was
declared effective by the Commission, and the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424, (except as to the financial statements and
other financial and statistical data constituting a part thereof or
incorporated by reference therein, upon which such opinions need not
pass), complied as to form in all material respects with the
requirements of the Securities Act and the 1939 Act and the
applicable instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in each Registration Statement and the
Prospectus pursuant to Item 12 of Form S-3 (except as to financial
statements and other financial and statistical data constituting a
part thereof or incorporated by reference therein, upon which such
opinions need not pass), at the time they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Registration
Statement has become effective under the Securities Act and, to the
best of the knowledge of said counsel, no proceedings for a stop
order with respect thereto are threatened or pending under Section 8
of the Securities Act;
(viii) Nothing has come to the attention of said counsel that
would lead them to believe that either Registration Statement, at
the time and date it was declared effective by the Commission,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 or at the Closing Date, included or includes an
untrue statement of a material fact or omitted or omits 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 (except as to financial statements and other financial
and statistical data constituting a part of the Registration
Statement or the Prospectus or incorporated by reference therein,
upon which such opinions need not pass);
(ix) Orders have been entered by the North Carolina Utilities
Commission and the South Carolina Public Service Commission
authorizing the issuance and sale of the Securities and the New
Bonds, and to the best of the knowledge of said counsel, said orders
are still in force and effect; and no further approval,
authorization, consent or other order of any public board or body
(except such as have been obtained under the Securities Act and as
may be required under the state securities or Blue Sky laws of any
jurisdiction) is legally required for the consummation of the
transactions contemplated in this Agreement.
(d) At the Closing Date, the Representative shall receive from
William D. Johnson, Esq., Vice President and Secretary for the Company, a
favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i) through (vi) and subdivisions (viii) and (ix) of
subparagraph (c) of this paragraph 9 as the opinions required by said
subparagraph (c), and to the further effect that:
(i) The Company is a validly organized and existing
corporation and is in good standing under the laws of the State of
North Carolina and is duly qualified to do business and is doing
business in that State and in the State of South Carolina;
-9-
<PAGE>
(ii) The Company is duly authorized by its Charter to conduct
the business which it is now conducting as set forth in the
Prospectus;
(iii) The Company has valid and subsisting franchises,
licenses and permits free from burdensome restrictions and adequate
for the conduct of its business;
(iv) The information contained in the Prospectus, which is
stated therein to have been made in reliance upon the opinion of
said counsel has been reviewed by said counsel and is correct;
(v) The Company has good and marketable title, with minor
exceptions, restrictions and reservations in conveyances, and
defects, which are of the nature ordinarily found in properties of
similar character and magnitude, and which, in his opinion, cannot
in any substantial way impair the security afforded by the Mortgage,
to all the properties described in the granting clauses of the
Mortgage and upon which the Mortgage purports to create a lien,
except certain rights-of-way over private property on which are
located transmission and distribution lines formerly owned by the
Tide Water Power Company (merged into the Company on February 29,
1952), title to which can be perfected by condemnation proceedings.
The description in the Mortgage of the above-mentioned properties
(including those formerly owned by Tide Water Power Company) is
legally sufficient to constitute the Mortgage a lien upon said
properties. Said properties constitute substantially all the
permanent physical properties and franchises of the Company and are
held by the Company free and clear of all liens and encumbrances
except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The Company has followed the practice
generally of purchasing rights-of-way and easements and certain
small parcels of fee property appurtenant thereto and for use in
conjunction therewith, and certain other properties of small or
inconsequential value, without an examination of title and, as to
the title to lands affected by rights-of-way and easements, of not
examining the title of the lessor or grantor whenever the lands
affected by such rights-of-way and easements are not of such
substantial value as in the opinion of the Company to justify the
expense attendant upon examination of titles in connection
therewith. In his opinion such practice of the Company is consistent
with good practice and with the method followed by other companies
engaged in the same business and is reasonably adequate to assure
the Company of good and marketable title to all such property
acquired by it. It is his opinion that any such conditions or
defects as may be covered by the above recited exceptions are not,
except as to certain rights-of-way on which are located transmission
lines acquired from Tide Water Power Company, substantial and would
not interfere with the Company's business operations. The Company
has the right of eminent domain in the States of North Carolina and
South Carolina under which it may, if necessary, perfect or obtain
title to privately owned land or acquire easements or rights-of-way
required for use or used by the Company in its public utility
operations;
(vi) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
Securities is in proper form for filing for record both as a real
estate mortgage and as a security interest in all
-10-
<PAGE>
counties in the States of North Carolina and South Carolina in which
any of the property described therein or in the Mortgage as subject
to the lien of the Mortgage is located;
(vii) The Mortgage constitutes a valid first mortgage lien of
record upon all the franchises and properties now owned by the
Company (other than those expressly excepted therefrom) situated in
the States of North Carolina and South Carolina, as described or
referred to in the granting clauses of the Mortgage, subject to the
exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (ii) of subparagraph (c) above; and
(viii) The issuance and sale of the Securities and the
issuance and delivery of the New Bonds have been duly authorized by
all necessary corporate action on the part of the Company.
In said opinion such counsel may rely as to all matters of South Carolina law
(except as to paragraph (v)) on the opinion of [South Carolina counsel].
(e) At the Closing Date, the Representative shall receive from
[South Carolina counsel], a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to engage in the business in
which it is engaged in the State of South Carolina;
(ii) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
New Bonds is in proper form for filing for record both as a real
estate mortgage and as a security interest in all counties in the
State of South Carolina in which any of the property described
therein or in the Mortgage as subject to the lien of the Mortgage is
located;
(iii) The Company holds valid and subsisting franchises,
licenses and permits in South Carolina authorizing it to carry on
the utility business in which it is engaged in South Carolina; and
(iv) They have reviewed the opinion letter of even date
therewith addressed to you by William D. Johnson, Esq., Vice
President and Secretary for the Company, and they concur in the
opinions which he has expressed therein insofar as they relate to
the laws of the State of South Carolina.
(f) At the time of execution of this Agreement and at the Closing
Date, the Representative shall have received from Deloitte & Touche LLP
letters, dated respectively the date of this Agreement and the Closing
Date, confirming that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange Act, and of the
applicable published rules and regulations thereunder, and stating in
effect that: (i) in their opinion, the audited financial statements
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of
the
-11-
<PAGE>
Securities Act or the Exchange Act, as applicable, and of the published
rules and regulations thereunder; (ii) based on the performance of the
procedures specified by the American Institute of Certified Public
Accountants for review of interim financial information as described in
Statement on Auditing Standards ("SAS") No. 71, Interim Financial
Information, on the unaudited financial statements incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and reading the
minutes of meetings of the Board of Directors, of the Executive Committee
of the Board of Directors and of the shareholders, nothing came to their
attention that caused them to believe that (A) the unaudited financial
statements incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable, and
the published rules and regulations thereunder or any material
modifications should be made for them to be in conformity with generally
accepted principles applied on a basis substantially consistent with that
of the most recent audited financial statements incorporated by reference
in the Registration Statement; or (B) at the date of the latest available
interim balance sheet read by them and at a subsequent date not more than
five days prior to the date of each such letter, there was any change in
the capital stock or long-term debt of the Company, or at the date of the
latest available interim balance sheet read by them, there was any
decrease in net assets as compared with the amount shown on the most
recent balance sheet incorporated by reference in the Registration
Statement, except for changes or decreases that the Registration Statement
discloses have occurred or may occur, for declarations of dividends, for
common stock sales under the Automatic Dividend Reinvestment and Customer
Stock Ownership Plan and Stock Purchase-Savings Plan, or for changes or
decreases that are described in such letter; and (iii) covering such other
matters as the Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the Company,
dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct as of the
Closing Date.
(h) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to counsel for the Underwriters.
In case any of the conditions specified above in this paragraph 9 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated by
the Representative by mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of any party to any
other party except as otherwise provided in paragraphs 7 and 8.
10. Conditions of the Company's Obligations. The obligations of the
Company to deliver the Securities and the New Bonds shall be subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date, and no proceedings for
that purpose shall be pending before or threatened by the Commission on
the Closing Date.
(b) Prior to 12 Noon, New York Time, on the day following the date
of this Agreement, or such later date as shall have been consented to by
the Company, there shall have been issued and on the Closing Date there
shall be in full force and effect orders of the North Carolina Utilities
Commission and the South Carolina Public Service Commission authorizing
the issuance and sale by the Company of the Securities and the New Bonds,
none of which shall
-12-
<PAGE>
contain any provision unacceptable to the Company by reason of its being
materially adverse to the Company (it being understood that no such order
in effect as of the date of this Agreement contains any such unacceptable
provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or under any other
statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including to the
extent hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus, or in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
indemnity agreement contained in this paragraph 11 shall not apply to any
such losses, claims, damages, liabilities, expenses or actions arising out
of, or based upon any such untrue statement or alleged untrue statement,
or any such omission or alleged omission, if such statement or omission
was made in reliance upon and in conformity with information furnished
herein or in writing to the Company by any Underwriter through the
Representative for use in the Registration Statement or Prospectus, or any
amendment or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the Registration
Statement which shall constitute the Statements of Eligibility under the
1939 Act (Forms T-1 and T-2) of the Trustees under the Mortgage and the
Trustee under the Indenture, and provided, further, that the indemnity
agreement contained in this paragraph 11 shall not inure to the benefit of
any Underwriter (or of any person controlling such Underwriter) on account
of any such losses, claims, damages, liabilities, expenses or actions
arising from the sale of the Securities to any person if a copy of the
Prospectus (excluding documents incorporated by reference therein) shall
not have been given or sent to such person by or on behalf of such
Underwriter with or prior to the written confirmation of the sale
involved, unless such Prospectus failed to correct the omission or
statement. The indemnity agreement of the Company contained in this
paragraph 11 and the representations and warranties of the Company
contained in paragraph 3 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter or any such controlling person and shall survive the delivery
of the Securities. The Underwriters agree to notify promptly the Company,
and each other Underwriter, of the commencement of any litigation or
proceedings against them or any of them, or any such controlling person,
in connection with the sale of the Securities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its officers and directors, and each person who controls the
Company within the meaning of
-13-
<PAGE>
Section 15 of the Securities Act, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or
common law, and to reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable counsel fees)
incurred by them in connection with investigating any such losses, claims,
damages, or liabilities, or in connection with defending any actions,
insofar as such losses, claims, damages, liabilities, expenses or actions
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with information
furnished herein or in writing to the Company by such Underwriter through
the Representative for use in the Registration Statement or the Prospectus
or any amendment or supplement to either thereof. The indemnity agreement
of all the respective Underwriters contained in this paragraph 11 shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or any other
Underwriter, or any such controlling person, and shall survive the
delivery of the Securities. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings
against the Company or any of its officers or directors, or any such
controlling person, in connection with the sale of the Securities.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification realized by the preceding sentence shall be a material
term of this Agreement. The omission so to notify such indemnifying party
or parties of any such action shall relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party on account of any indemnity agreement contained herein but shall not
relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party (or parties) and satisfactory to the indemnified party or parties
who shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of such action, such indemnifying parties will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them, as such expenses are incurred; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and counsel for the indemnifying party
shall have reasonably concluded that there may be a conflict of interest
involved in the representation by such counsel of both the indemnifying
party and the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the
indemnifying party, to participate in the defense of such action on behalf
of such indemnified party or parties (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than
one separate counsel representing the indemnified parties who are parties
to such action).
-14-
<PAGE>
(d) If the indemnification provided for in subparagraphs (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
each indemnifying party agrees to contribute to such indemnified party
with respect to any and all losses, claims, damages, liabilities and
expenses for which each indemnification provided for in such subparagraphs
(a) or (b) shall be unenforceable, in such proportion as shall be
appropriate to reflect the relative fault of each indemnifying party on
the one hand and the indemnified party on the other in connection with the
statements or omissions which have resulted in such losses, claims,
damages, liabilities, and expenses, as well as any other relevant
equitable considerations; provided, however, that no indemnified party
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act), shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Company and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph 11(d) were to
be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above. The Underwriters' respective obligations to contribute pursuant to
this subparagraph 11(d) are several and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed
that [_______________________________] constitute the only information
provided by the Underwriters for inclusion in the Registration Statement
and the Prospectus.
12. Termination Date of this Agreement. This Agreement may be terminated
by the Representative at any time prior to the Closing Date by mailing or
delivering written notice thereof to the Company, if prior to such time (a)
there shall have occurred any general suspension of trading in securities on the
New York or Pacific Stock Exchange, or there shall have been established by the
New York or Pacific Stock Exchange or by the Commission or by any federal or
state agency or by the decision of any court any limitation on prices for such
trading or any restrictions on the distribution of securities, or (b) there
shall have occurred any new outbreak of hostilities, including, but not limited
to, an escalation of hostilities which existed prior to the date of this
Agreement, or other national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), that, in
the reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price.
This Agreement may also be terminated at any time prior to the Closing Date if
in the reasonable judgment of the Representative the subject matter of any
amendment or supplement to the Registration Statement or Prospectus (other than
an amendment or supplement relating solely to the activity of any Underwriter or
Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Securities.
-15-
<PAGE>
Any termination hereof pursuant to this paragraph 12 shall be without liability
of any party to any other party except as otherwise provided in paragraphs 7 and
8.
13. Miscellaneous. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11, the officers and directors and each
controlling person referred to in paragraph 11, and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. The term
"successors" as used in this Agreement shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
14. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
attention of Mark F. Mulhern, Treasurer.
15. Counterparts. This Agreement may be simultaneously executed in
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
16. Defined Terms. Unless otherwise defined herein, capitalized terms used
in this Underwriting Agreement shall have the meanings assigned to them in the
Registration Statement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company 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,
CAROLINA POWER & LIGHT COMPANY
By:
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
[NAME OF REPRESENTATIVE]
By
<PAGE>
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statements No. 333-________
Representative and Address:
Designation: [Title of Securities]
Principal Amount: $___________
Secured by: __________________
Indenture dated as of _________, ____
Date of Maturity: ___________, ____
Interest Rate: ____% per annum, payable ___________ __ and ___________ __ of
each year, commencing ____________, ____.
Purchase Price: _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.
Public Offering Price: ____% of the principal amount thereof, plus accrued
interest from ____________ to the date of payment and delivery.
Redemption Terms:
Closing Date and Location:
- ---------------, ----
Hunton & Williams
200 Park Avenue, 43rd Floor
New York, New York 10166-0136
<PAGE>
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL.............................
Exhibit 1(c)
CAROLINA POWER & LIGHT COMPANY
[Title of Debt Security]
UNDERWRITING AGREEMENT
-----------------------
___________, ____
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter named
as follows:
1. Underwriters and Representative. The term "Underwriters" as used herein
shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one
of such Underwriters. If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided. All
obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named in Schedule I hereto, any action under or in respect of
this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell its
Debt Securities of the designation, with the terms and in the amount specified
in Schedule I hereto (the "Securities") in one or more new series under a
governing indenture (the "Indenture") between the Company and
______________________, as trustee (the "Trustee"), in substantially the form
heretofore delivered to the Representative.
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-_______) (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), for the registration of up to an
aggregate of $1,500,000,000 of the Company's First Mortgage Bonds, Senior
Notes and Debt Securities (collectively, the "Registered Securities") in
unallocated amounts, as each is defined in the Registration Statement. As
of the date hereof, the Company
<PAGE>
has sold Registered Securities in the aggregate amount of $_____________.
The Registration Statement has been declared effective by the Commission,
and the Indenture has been qualified under the Trust Indenture Act of 1939
Act, as amended (the "1939 Act"). The term "Registration Statement" shall
be deemed to include all amendments to the date hereof and all documents
incorporated by reference therein (the "Incorporated Documents"). The
prospectus included in the Registration Statement, as it is to be
supplemented by a prospectus supplement, dated on or about the date
hereof, relating to the Securities (the "Prospectus Supplement"), and all
prior amendments or supplements thereto (other than amendments or
supplements relating to securities of the Company other than the
Securities), including the Incorporated Documents, is hereinafter referred
to as the "Prospectus". Any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement or
the Prospectus shall be deemed to refer to and include the filing of any
document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), deemed to be incorporated therein after the date hereof
and prior to the termination of the offering of the Securities by the
Underwriters, and any references herein to the terms "Registration
Statement" or "Prospectus" at a date after the filing of the Prospectus
Supplement shall be deemed to refer to the Registration Statement or the
Prospectus, as the case may be, as each may be amended or supplemented
prior to such date.
(b) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall not
previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was declared
effective by the Commission, complied, and the Registration Statement, the
Prospectus and the Indenture, at the date the Prospectus is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the
Securities Act ("Rule 424") and at the Closing Date, will comply, in all
material respects, with the applicable provisions of the Securities Act
and the 1939 Act and the applicable rules and regulations of the
Commission thereunder; the Registration Statement, at the time and date it
was declared effective by the Commission, 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 the Prospectus, at the date it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 and at the
Closing Date, will not contain an untrue statement of 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; provided, however, that the foregoing representations and
warranties in this subparagraph (c) shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished herein or in writing to the Company by the Representative or by
or on behalf of any Underwriter through the Representative expressly for
use in the Prospectus or to any statements in or omissions from the
Statements of Eligibility (Forms T-1 and T-2) of the Trustees under any
Indenture. The Incorporated Documents, when they were filed with the
Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and any documents so filed and incorporated by
reference subsequent to the date hereof and prior to the termination of
the offering of the Securities by the Underwriters will, when they are
filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and, when read together with the Registration
Statement and the Prospectus, none of such documents included or includes
or will include any
-2-
<PAGE>
untrue statement of a material fact or omitted or omits or will omit to
state any 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.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved; and Deloitte &
Touche LLP, who have audited certain of the financial statements, are
independent public or independent certified public accountants as required
by the Securities Act or the Exchange Act and the rules and regulations of
the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, there has not been any material adverse change
in the business, property, financial condition or prospects of the
Company, and since such dates and prior to the Closing Date, there has not
been any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement and Prospectus and
transactions in the ordinary course of business. The Company has no
material contingent obligation which is not disclosed in the Registration
Statement and Prospectus.
(f) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof on the part of the Company to be fulfilled
have been duly authorized by all necessary corporate action of the Company
in accordance with the provisions of its charter (the "Charter"), by-laws
and applicable law, and the Securities, when issued and delivered as
provided herein, will constitute legal, valid and binding obligations of
the Company in accordance with their terms except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles.
(g) The consummation of the transaction herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is now a party.
(h) The summaries of the terms of the Securities contained in the
Registration Statement and Prospectus fairly describe the provisions
thereof required to be described by the registration statement form.
4. Purchase and Sale. On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.
-3-
<PAGE>
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Securities at
the office of [name and address of the Trustee], or such other place, time
and date as the Representative and the Company may agree. The hour and
date of such delivery and payment are herein called the "Closing Date".
Payment for the Securities shall be by wire transfer of immediately
available funds against delivery to The Depository Trust Company or to
_________________, as custodian for The Depository Trust Company, in fully
registered global form registered in the name of CEDE & Co., for the
respective accounts specified by the Representative not later than the
close of business on the business day prior to the Closing Date or such
other date and time not later than the Closing Date as agreed by The
Depository Trust Company or _____________________. For the purpose of
expediting the checking of the certificates by the Representative, the
Company agrees to make the Securities available to the Representative not
later than 10 A.M., on the last full business day prior to the Closing
Date at said office of [the Trustee].
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and to
take up and pay for the principal amount of the Securities to be purchased
by such one or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall have the right,
within 24 hours of receipt of such notice, either to take up and pay for
(in such proportion as may be agreed upon among them) or to substitute
another Underwriter or Underwriters, satisfactory to the Company, to take
up and pay for the principal amount of the Securities which such one or
more Underwriters did not purchase. If one or more Underwriters shall, for
any reason other than a reason permitted hereunder, fail to take up and
pay for the principal amount of the Securities to be purchased by such one
or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall be obligated to take
up and pay for (in addition to the respective principal amount of the
Securities set forth opposite their respective names in Schedule II
hereto) the principal amount of the Securities which such defaulting
Underwriter or Underwriters failed to take up and pay for, up to a
principal amount thereof equal to, in the case of each such remaining
Underwriter, ten percent (10%) of the principal amount of the Securities
set forth opposite the name of such remaining Underwriter in said Schedule
II, and such remaining Underwriters shall have the right, within 24 hours
of receipt of such notice, either to take up and pay for (in such
proportion as may be agreed upon among them), or to substitute another
Underwriter or Underwriters, satisfactory to the Company, to take up and
pay for, the remaining principal amount of the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase. If
any unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours
within which to procure another party or parties, members of the National
Association of Securities Dealers, Inc. (or if not members of such
Association, who are not eligible for membership in said Association and
who agree (i) to make no sales within the United States, its territories
or its possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with said Association's Rules
of Fair Practice) and satisfactory to the Company, to purchase or agree to
purchase such unpurchased Securities on the terms herein set forth. In any
such case either the Representative or the Company shall have the right to
postpone the Closing Date for a period not to exceed three full business
days from the date agreed upon in accordance with this paragraph 6, in
order that the necessary changes in the Registration Statement and
Prospectus and any other documents and arrangements may be effected. If
the Representative and the Company shall fail to procure a satisfactory
party or parties as above provided to purchase or agree to purchase such
unpurchased Securities, then the Company may either (i) require the
remaining Underwriters to purchase the principal amount of Securities
which they are obligated to purchase hereunder or
-4-
<PAGE>
(ii) terminate this Agreement by giving prompt notice to the
Representative. In the event that neither the non-defaulting Underwriters
nor the Company has arranged for the purchase of such unpurchased
Securities by another party or parties as above provided and the Company
has not elected to require the non-defaulting Underwriters to purchase the
principal amount of Securities which they are obligated to purchase
hereunder, then this Agreement shall terminate without any liability on
the part of the Company or any Underwriter (other than an Underwriter
which shall have failed or refused, in accordance with the terms hereof,
to purchase and pay for the principal amount of the Securities which such
Underwriter has agreed to purchase as provided in paragraph 4 hereof),
except as otherwise provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter
that:
(a) As soon as possible after the execution and delivery of this
Agreement, the Company will file the Prospectus with the Commission
pursuant to Rule 424, setting forth, among other things, the necessary
information with respect to the terms of offering of the Securities. The
Company will promptly deliver to the Representative and to counsel for the
Underwriters, to the extent not previously delivered, one fully executed
copy or one conformed copy, certified by an officer of the Company, of the
Registration Statement, as originally filed, and of all amendments
thereto, heretofore or hereafter made, (other than those relating solely
to securities other than the Securities), including any post-effective
amendment (in each case including all exhibits filed therewith and all
documents incorporated therein not previously furnished to the
Representative), including signed copies of each consent and certificate
included therein or filed as an exhibit thereto, and will deliver to the
Representative for distribution to the Underwriters as many conformed
copies of the foregoing (excluding the exhibits, but including all
documents incorporated therein) as the Representative may reasonably
request. The Company will also send to the Underwriters as soon as
practicable after the date of this Agreement and thereafter from time to
time as many copies of the Prospectus as the Representative may reasonably
request for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may be
required by law to deliver a Prospectus, if any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by the Representative shall occur, which in the Company's opinion should
be set forth in a supplement to or an amendment of the Prospectus in order
to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser, or if it is necessary to amend the
Prospectus to comply with the Securities Act, the Company will forthwith
at its expense prepare and furnish to the Underwriters and dealers named
by the Representative a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus which will
supplement or amend the Prospectus so that as supplemented or amended it
will comply with the Securities Act and will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading. In case
any Underwriter is required to deliver a Prospectus after the expiration
of nine months after the commencement of the offering of the Securities,
the Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments to
the Prospectus, complying with Section 10(a) of the Securities Act.
-5-
<PAGE>
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing of
the Prospectus pursuant to Rule 424 occurs, an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities Act,
which need not be certified by independent public accountants) covering a
period of twelve months beginning not later than the first day of the
Company's fiscal quarter next following the filing of the Prospectus
pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Securities.
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement 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 a
stop order should be entered, use its best efforts to obtain the prompt
removal thereof.
(f) The Company will use its best efforts to qualify the Securities,
for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and make
in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the
Company shall not be required to qualify as a foreign corporation or
dealer in securities, or to file any general consents to service of
process under the laws of any jurisdiction. The fees and disbursements of
Underwriters' counsel shall be paid by the Underwriters (subject, however,
to the provisions of paragraph 8 requiring payment by the Company of fees
and expenses not to exceed $5,000); provided, however, that if this
Agreement is terminated in accordance with the provisions of paragraph 9,
10 or 12, the Company shall reimburse the Representative for the account
of the Underwriters for the fees and disbursements of Underwriters'
counsel. The Company shall not be required to pay any amount for any
expenses of the Representative or of any other of the Underwriters except
as provided in this paragraph 7 and in paragraph 8. The Company shall not
in any event be liable to any of the Underwriters for damages on account
of the loss of anticipated profit.
8. Payment of Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
and filing of the Registration Statement and the printing of this Agreement,
(ii) the delivery of the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of paragraph 7(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith,
and in connection with the preparation of the Blue Sky Survey and any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and Legality Memorandum, and (vii)
the preparation, execution, filing and recording by the Company of the Indenture
(such filing and recordation to be promptly made, after execution and delivery
of such Indenture to the Trustees under the Indenture in the counties in which
the mortgaged property of the Company is located); and the Company will pay all
taxes, if any (but not including any transfer taxes), on the issue of the
Securities and the filing and recordation of the Indenture.
-6-
<PAGE>
9. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company, to
the performance by the Company of its obligations to be performed hereunder
prior to the Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or threatened by, the Commission on
the Closing Date, and the Representative shall have received, prior to
payment for the Securities, a certificate dated the Closing Date and
signed by the Chairman, President or a Vice President of the Company to
the effect that no such stop order is in effect and that no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later date
as shall have been consented to by the Representative, there shall have
been issued and on the Closing Date there shall be in full force and
effect orders of the North Carolina Utilities Commission and the South
Carolina Public Service Commission authorizing the issuance and sale of
the Securities, none of which shall contain any provision unacceptable to
the Representative by reason of its being materially adverse to the
Company (it being understood that no such order in effect on the date of
this Agreement and heretofore furnished to the Representative or counsel
for the Underwriters, contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable
opinions from: (1) Hunton & Williams, of counsel to the Company, which
opinion shall be satisfactory in form and substance to counsel for the
Underwriters, and (2) counsel for the Underwriters (which counsel may rely
as to all matters of North Carolina law upon the opinions of William D.
Johnson, Esq., Vice President-Legal and Secretary for the Company) to the
effect that:
(i) The Indenture has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and
delivered, and is a valid and binding obligation of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles;
(ii) The Indenture has been duly qualified under the 1939 Act;
(iii) Assuming authentication by the Trustee in accordance
with the Indenture and delivery to and payment for the Securities by
the Underwriters, as provided in this Agreement, the Securities are
legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency or other laws affecting mortgagees' and other creditors'
rights and general equitable principles, and are entitled to the
benefit of the security afforded by the Indenture;
(iv) The statements made in the Prospectus under the caption
"Description of Debt Securities" and in the Prospectus Supplement
under the caption "Description of Offered Securities" insofar as
they purport to constitute summaries of the documents referred to
therein, are correct in all material respects;
-7-
<PAGE>
(v) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
(vi) The Registration Statement, at the time and date it was
declared effective by the Commission, and the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424, (except as to the financial statements and
other financial and statistical data constituting a part thereof or
incorporated by reference therein, upon which such opinions need not
pass), complied as to form in all material respects with the
requirements of the Securities Act and the 1939 Act and the
applicable instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in each Registration Statement and the
Prospectus pursuant to Item 12 of Form S-3 (except as to financial
statements and other financial and statistical data constituting a
part thereof or incorporated by reference therein, upon which such
opinions need not pass), at the time they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Registration
Statement has become effective under the Securities Act and, to the
best of the knowledge of said counsel, no proceedings for a stop
order with respect thereto are threatened or pending under Section 8
of the Securities Act;
(vii) Nothing has come to the attention of said counsel that
would lead them to believe that either Registration Statement, at
the time and date it was declared effective by the Commission,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 or at the Closing Date, included or includes an
untrue statement of a material fact or omitted or omits 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 (except as to financial statements and other financial
and statistical data constituting a part of the Registration
Statement or the Prospectus or incorporated by reference therein,
upon which such opinions need not pass);
(viii) Orders have been entered by the North Carolina
Utilities Commission and the South Carolina Public Service
Commission authorizing the issuance and sale of the Securities, and
to the best of the knowledge of said counsel, said orders are still
in force and effect; and no further approval, authorization, consent
or other order of any public board or body (except such as have been
obtained under the Securities Act and as may be required under the
state securities or Blue Sky laws of any jurisdiction) is legally
required for the consummation of the transactions contemplated in
this Agreement.
(d) At the Closing Date, the Representative shall receive from
William D. Johnson, Esq., Vice President and Secretary for the Company, a
favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i) through (v) and subdivisions (vii) and (viii) of
subparagraph (c) of this paragraph 9 as the opinions required by said
subparagraph (c), and to the further effect that:
-8-
<PAGE>
(i) The Company is a validly organized and existing
corporation and is in good standing under the laws of the State of
North Carolina and is duly qualified to do business and is doing
business in that State and in the State of South Carolina;
(ii) The Company is duly authorized by its Charter to conduct
the business which it is now conducting as set forth in the
Prospectus;
(iii) The Company has valid and subsisting franchises,
licenses and permits free from burdensome restrictions and adequate
for the conduct of its business;
(iv) The information contained in the Prospectus, which is
stated therein to have been made in reliance upon the opinion of
said counsel has been reviewed by said counsel and is correct;
(v) The issuance and sale of the Securities have been duly
authorized by all necessary corporate action on the part of the
Company.
In said opinion such counsel may rely on as to all matters of South
Carolina law on the opinion of [South Carolina counsel.]
(e) At the Closing Date, the Representative shall receive from
[South Carolina counsel,] a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) the Company is duly qualified to engage in the business in
which it is engaged in the State of South Carolina; and
(ii) the Company holds valid and subsisting franchises,
licenses and permits in South Carolina authorizing it to carry on
the utility business in which it is engaged in South Carolina.
(f) At the time of execution of this Agreement and at the Closing
Date, the Representative shall have received from Deloitte & Touche LLP
letters, dated respectively the date of this Agreement and the Closing
Date, confirming that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange Act, and of the
applicable published rules and regulations thereunder, and stating in
effect that: (i) in their opinion, the audited financial statements
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of
the Securities Act or the Exchange Act, as applicable, and of the
published rules and regulations thereunder; (ii) based on the performance
of the procedures specified by the American Institute of Certified Public
Accountants for review of interim financial information as described in
Statement on Auditing Standards ("SAS") No. 71, Interim Financial
Information, on the unaudited financial statements incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and reading the
minutes of meetings of the Board of Directors, of the Executive Committee
of the Board of Directors and of the shareholders, nothing came to their
attention that caused them to believe that (A) the unaudited financial
statements incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable, and
the published rules and regulations thereunder or any material
modifications should be made for them to be in conformity with
-9-
<PAGE>
generally accepted principles applied on a basis substantially consistent
with that of the most recent audited financial statements incorporated by
reference in the Registration Statement; or (B) at the date of the latest
available interim balance sheet read by them and at a subsequent date not
more than five days prior to the date of each such letter, there was any
change in the capital stock or long-term debt of the Company, or at the
date of the latest available interim balance sheet read by them, there was
any decrease in net assets as compared with the amount shown on the most
recent balance sheet incorporated by reference in the Registration
Statement, except for changes or decreases that the Registration Statement
discloses have occurred or may occur, for declarations of dividends, for
common stock sales under the Automatic Dividend Reinvestment and Customer
Stock Ownership Plan and Stock Purchase-Savings Plan, or for changes or
decreases that are described in such letter; and (iii) covering such other
matters as the Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the Company,
dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct as of the
Closing Date.
(h) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to counsel for the Underwriters.
In case any of the conditions specified above in this paragraph 9 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated by
the Representative by mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of any party to any
other party except as otherwise provided in paragraphs 7 and 8.
10. Conditions of the Company's Obligations. The obligations of the
Company to deliver the Securities shall be subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date, and no proceedings for
that purpose shall be pending before or threatened by the Commission on
the Closing Date.
(b) Prior to 12 Noon, New York Time, on the day following the date
of this Agreement, or such later date as shall have been consented to by
the Company, there shall have been issued and on the Closing Date there
shall be in full force and effect orders of the North Carolina Utilities
Commission and the South Carolina Public Service Commission authorizing
the issuance and sale by the Company of the Securities, none of which
shall contain any provision unacceptable to the Company by reason of its
being materially adverse to the Company (it being understood that no such
order in effect as of the date of this Agreement contains any such
unacceptable provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
-10-
<PAGE>
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or under any other
statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including to the
extent hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus, or in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
indemnity agreement contained in this paragraph 11 shall not apply to any
such losses, claims, damages, liabilities, expenses or actions arising out
of, or based upon any such untrue statement or alleged untrue statement,
or any such omission or alleged omission, if such statement or omission
was made in reliance upon and in conformity with information furnished
herein or in writing to the Company by any Underwriter through the
Representative for use in the Registration Statement or Prospectus, or any
amendment or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the Registration
Statement which shall constitute the Statements of Eligibility under the
1939 Act (Forms T-1 and T-2) of the Trustee under the Indenture, and
provided, further, that the indemnity agreement contained in this
paragraph 11 shall not inure to the benefit of any Underwriter (or of any
person controlling such Underwriter) on account of any such losses,
claims, damages, liabilities, expenses or actions arising from the sale of
the Securities to any person if a copy of the Prospectus (excluding
documents incorporated by reference therein) shall not have been given or
sent to such person by or on behalf of such Underwriter with or prior to
the written confirmation of the sale involved, unless such Prospectus
failed to correct the omission or statement. The indemnity agreement of
the Company contained in this paragraph 11 and the representations and
warranties of the Company contained in paragraph 3 hereof shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any such controlling person and
shall survive the delivery of the Securities. The Underwriters agree to
notify promptly the Company, and each other Underwriter, of the
commencement of any litigation or proceedings against them or any of them,
or any such controlling person, in connection with the sale of the
Securities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its officers and directors, and each person who controls the
Company within the meaning of Section 15 of the Securities Act, against
any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act or
under any other statute or common law, and to reimburse each of them for
any legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with
investigating any such losses, claims, damages, or liabilities, or in
connection with defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus as amended or
supplemented (if any amendments or supplements thereto shall have been
furnished), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made
in reliance upon and in conformity with information furnished herein or in
writing to the Company by such
-11-
<PAGE>
Underwriter or through the Representative on behalf of such Underwriter
for use in the Registration Statement or the Prospectus or any amendment
or supplement to either thereof. The indemnity agreement of all the
respective Underwriters contained in this paragraph 11 shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of the Company or any other Underwriter, or any such
controlling person, and shall survive the delivery of the Securities. The
Company agrees promptly to notify the Representative of the commencement
of any litigation or proceedings against the Company or any of its
officers or directors, or any such controlling person, in connection with
the sale of the Securities.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification realized by the preceding sentence shall be a material
term of this Agreement. The omission so to notify such indemnifying party
or parties of any such action shall relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party on account of any indemnity agreement contained herein but shall not
relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party (or parties) and satisfactory to the indemnified party or parties
who shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of such action, such indemnifying parties will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them, as such expenses are incurred; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and counsel for the indemnifying party
shall have reasonably concluded that there may be a conflict of interest
involved in the representation by such counsel of both the indemnifying
party and the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the
indemnifying party, to participate in the defense of such action on behalf
of such indemnified party or parties (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than
one separate counsel representing the indemnified parties who are parties
to such action).
(d) If the indemnification provided for in subparagraphs (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
each indemnifying party agrees to contribute to such indemnified party
with respect to any and all losses, claims, damages, liabilities and
expenses for which each indemnification provided for in such subparagraphs
(a) or (b) shall be unenforceable, in such proportion as shall be
appropriate to reflect the relative fault of each indemnifying party on
the one hand and the indemnified party on the other in connection with the
statements or omissions which have resulted in such losses, claims,
damages, liabilities, and expenses, as well as any other relevant
equitable considerations; provided, however, that no indemnified party
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act), shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or
-12-
<PAGE>
alleged omission to state a material fact relates to information supplied
by such indemnifying party or the indemnified party and each such party's
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and each
of the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subparagraph 11(d) were to be determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above. The
Underwriters' respective obligations to contribute pursuant to this
subparagraph 11(d) are several and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed
that [_______________________________] constitute the only information
provided by the Underwriters for inclusion in the Registration Statement
and the Prospectus.
12. Termination Date of this Agreement. This Agreement may be terminated
by the Representative at any time prior to the Closing Date by mailing or
delivering written notice thereof to the Company, if prior to such time (a)
there shall have occurred any general suspension of trading in securities on the
New York or Pacific Stock Exchange, or there shall have been established by the
New York or Pacific Stock Exchange or by the Commission or by any federal or
state agency or by the decision of any court any limitation on prices for such
trading or any restrictions on the distribution of securities, or (b) there
shall have occurred any new outbreak of hostilities, including, but not limited
to, an escalation of hostilities which existed prior to the date of this
Agreement, or other national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), that, in
the reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price.
This Agreement may also be terminated at any time prior to the Closing Date if
in the reasonable judgment of the Representative the subject matter of any
amendment or supplement to the Registration Statement or Prospectus (other than
an amendment or supplement relating solely to the activity of any Underwriter or
Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Securities. Any termination hereof pursuant to
this paragraph 12 shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
13. Miscellaneous. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11, the officers and directors and each
controlling person referred to in paragraph 11, and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. The term
"successors" as used in this Agreement shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
-13-
<PAGE>
14. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
attention of Mark F. Mulhern, Treasurer.
15. Counterparts. This Agreement may be simultaneously executed in
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
16. Defined Terms. Unless otherwise defined herein, capitalized terms used
in this Underwriting Agreement shall have the meanings assigned to them in the
Registration Statement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company 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,
CAROLINA POWER & LIGHT COMPANY
By:
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
[NAME OF REPRESENTATIVE]
By
-14-
<PAGE>
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statement No. 333-_____
Representative and Address:
Designation: [Title of Debt Securities]
Principal Amount: $___________
Indenture dated as of _________, ____
Date of Maturity: ___________, ____
Interest Rate: ____% per annum, payable ________ __ and __________ __ of each
year, commencing ____________, ____.
Purchase Price: _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.
Public Offering Price: ____% of the principal amount thereof, plus accrued
interest from ___________ to the date of payment and delivery.
Redemption Terms:
Closing Date and Location:
- ---------------, ----
Hunton & Williams
200 Park Avenue, 43rd Floor
New York, New York 10166-0136
-15-
<PAGE>
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL.............................
-16-
EXHIBIT 4(B)
=======================================================================
CAROLINA POWER & LIGHT COMPANY
TO
THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY)
AND
W.T. CUNNINGHAM
(SUCCESSOR TO FREDERICK G. HERBST, RICHARD H. WEST, J.A. AUSTIN, E.J. MCCABE,
G. WHITE, D.W. MAY, J.A. VAUGHAN, JOSEPH J. ARNEY AND WAFAA ORFY)
AS TRUSTEES UNDER CAROLINA POWER & LIGHT
COMPANY'S MORTGAGE AND DEED OF TRUST, DATED
AS OF MAY 1, 1940
----------------
SIXTY-FIFTH SUPPLEMENTAL INDENTURE
PROVIDING AMONG OTHER THINGS FOR
CERTAIN AMENDMENTS TO THE MORTGAGE
DATED AS OF APRIL 1, 1998
- -----------------------------------------------------------------------
<PAGE>
SIXTY-FIFTH SUPPLEMENTAL INDENTURE
INDENTURE, dated as of April 1, 1998, by and between CAROLINA POWER &
LIGHT COMPANY, a corporation of the State of North Carolina, whose post office
address is 411 Fayetteville Street, Raleigh, North Carolina 27601-1768
(hereinafter sometimes called the Company), and THE BANK OF NEW YORK (formerly
Irving Trust Company), a corporation of the State of New York, whose post office
address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes
called the Corporate Trustee), and W.T. CUNNINGHAM (successor to Frederick G.
Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White, D.W. May, J.A.
Vaughan, Joseph J. Arney and Wafaa Orfy), whose post office address is 3
Arlington Drive, Denville, New Jersey 07834 (the Corporate Trustee and the
Individual Trustee being hereinafter together sometimes called the Trustees), as
Trustees under the Mortgage and Deed of Trust, dated as of May 1, 1940
(hereinafter called the Mortgage), which Mortgage was executed and delivered by
the Company to Irving Trust Company (now The Bank of New York) and Frederick G.
Herbst to secure the payment of bonds issued or to be issued under and in
accordance with the provisions of the Mortgage, reference to which Mortgage is
hereby made, this Indenture (hereinafter sometimes called the Sixty-fifth
Supplemental Indenture) being supplemental thereto:
WHEREAS, the Mortgage was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, the Mortgage was indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, an instrument, dated as of June 25, 1945, was executed by the
Company appointing Richard H. West as Individual Trustee in succession to said
Frederick G. Herbst (deceased) under the Mortgage, and by Richard H. West
accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of December 12, 1957, was executed by the
Company appointing J.A. Austin as Individual Trustee in succession to said
Richard H. West (resigned) under the Mortgage, and by J.A. Austin accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of April 15, 1966, was executed by the
Company appointing E.J. McCabe as Individual Trustee in succession to said J.A.
Austin (resigned) under the Mortgage, and by E.J. McCabe accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the
Company, among other things, appointed G. White as Individual Trustee in
succession to said E.J. McCabe (resigned), and G. White accepted said
appointment; and
WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the
Company, among other things, appointed D.W. May as Individual Trustee in
succession to said G. White (resigned), and D.W. May accepted said appointment;
and
WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed J.A. Vaughan as Individual Trustee in
succession to said D.W. May (resigned), and J.A. Vaughan accepted said
appointment; and
<PAGE>
2
WHEREAS, an instrument, dated as of June 27, 1988, was executed by the
Company appointing Joseph J. Arney as Individual Trustee in succession to said
J.A. Vaughan (resigned) under the Mortgage, and by Joseph J. Arney accepting
said appointment, which instrument was recorded in various Counties in the
States of North Carolina and South Carolina; and
WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed Wafaa Orfy as Individual Trustee in
succession to said Joseph J. Arney (resigned), and Wafaa Orfy accepted said
appointment; and
WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the
Company, among other things, appointed W.T. Cunningham as Individual Trustee in
succession to said Wafaa Orfy (resigned), and W.T. Cunningham accepted said
appointment; and
WHEREAS, such instruments were indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, by the Ninth Supplemental Indenture mentioned below, the Company,
among other things, reserved the right to amend the Mortgage, as supplemented,
without any consent or other action by the holders of the bonds of the Tenth
Series or any subsequent series issued under the Mortgage, so as to eliminate
Section 64 of the Mortgage, as supplemented; and
WHEREAS, by the Tenth Supplemental Indenture mentioned below, the Company,
among other things, reserved the right, without any consent or other action by
the holders of the bonds of the Eleventh Series or any subsequent series issued
under the Mortgage, to make certain amendments to the Mortgage as shall be
necessary in order to terminate thereafter certain requirements of Section 39 of
the Mortgage, as supplemented; and
WHEREAS, by the Mortgage, the Company covenanted that it would execute and
deliver such supplemental indenture or indentures and such further instruments
and do such further acts as might be necessary or proper to carry out more
effectually the purposes of the Mortgage and to make subject to the lien of the
Mortgage any property thereafter acquired intended to be subject to the lien
thereof; and
WHEREAS, for said purposes, among others, the Company executed and
delivered to the Trustees the following supplemental indentures:
<PAGE>
3
DESIGNATION DATED AS OF
----------- -----------
First Supplemental Indenture.................... January 1, 1949
Second Supplemental Indenture................... December 1, 1949
Third Supplemental Indenture.................... February 1, 1951
Fourth Supplemental Indenture................... October 1, 1952
Fifth Supplemental Indenture.................... March 1, 1958
Sixth Supplemental Indenture.................... April 1, 1960
Seventh Supplemental Indenture.................. November 1, 1961
Eighth Supplemental Indenture................... July 1, 1964
Ninth Supplemental Indenture.................... April 1, 1966
Tenth Supplemental Indenture.................... October 1, 1967
Eleventh Supplemental Indenture................. October 1, 1968
Twelfth Supplemental Indenture.................. January 1, 1970
Thirteenth Supplemental Indenture............... August 1, 1970
Fourteenth Supplemental Indenture............... January 1, 1971
Fifteenth Supplemental Indenture................ October 1, 1971
Sixteenth Supplemental Indenture................ May 1, 1972
Seventeenth Supplemental Indenture.............. May 1, 1973
Eighteenth Supplemental Indenture............... November 1, 1973
Nineteenth Supplemental Indenture............... May 1, 1974
Twentieth Supplemental Indenture................ December 1, 1974
Twenty-first Supplemental Indenture............. April 15, 1975
Twenty-second Supplemental Indenture............ October 1, 1977
Twenty-third Supplemental Indenture............. June 1, 1978
Twenty-fourth Supplemental Indenture............ May 15, 1979
Twenty-fifth Supplemental Indenture............. November 1, 1979
Twenty-sixth Supplemental Indenture............. November 1, 1979
Twenty-seventh Supplemental Indenture........... April 1, 1980
Twenty-eighth Supplemental Indenture............ October 1, 1980
Twenty-ninth Supplemental Indenture............. October 1, 1980
Thirtieth Supplemental Indenture................ December 1, 1982
Thirty-first Supplemental Indenture............. March 15, 1983
Thirty-second Supplemental Indenture............ March 15, 1983
Thirty-third Supplemental Indenture............. December 1, 1983
Thirty-fourth Supplemental Indenture............ December 15, 1983
Thirty-fifth Supplemental Indenture............. April 1, 1984
Thirty-sixth Supplemental Indenture............. June 1, 1984
Thirty-seventh Supplemental Indenture........... June 1, 1984
Thirty-eighth Supplemental Indenture............ June 1, 1984
Thirty-ninth Supplemental Indenture............. April 1, 1985
Fortieth Supplemental Indenture................. October 1, 1985
Forty-first Supplemental Indenture.............. March 1, 1986
Forty-second Supplemental Indenture............. July 1, 1986
Forty-third Supplemental Indenture.............. January 1, 1987
Forty-fourth Supplemental Indenture............. December 1, 1987
Forty-fifth Supplemental Indenture.............. September 1, 1988
Forty-sixth Supplemental Indenture.............. April 1, 1989
Forty-seventh Supplemental Indenture............ August 1, 1989
Forty-eighth Supplemental Indenture............. November 15, 1990
Forty-ninth Supplemental Indenture.............. November 15, 1990
<PAGE>
4
DESIGNATION DATED AS OF
----------- -----------
Fiftieth Supplemental Indenture................. February 15, 1991
Fifty-first Supplemental Indenture.............. April 1, 1991
Fifty-second Supplemental Indenture............. September 15, 1991
Fifty-third Supplemental Indenture.............. January 1, 1992
Fifty-fourth Supplemental Indenture............. April 15, 1992
Fifty-fifth Supplemental Indenture.............. July 1, 1992
Fifty-sixth Supplemental Indenture.............. October 1, 1992
Fifty-seventh Supplemental Indenture............ February 1, 1993
Fifty-eighth Supplemental Indenture............. March 1, 1993
Fifty-ninth Supplemental Indenture.............. July 1, 1993
Sixtieth Supplemental Indenture................. July 1, 1993
Sixty-first Supplemental Indenture.............. August 15, 1993
Sixty-second Supplemental Indenture............. January 15, 1994
Sixty-third Supplemental Indenture.............. May 1, 1994
Sixty-fourth Supplemental Indenture............. August 15, 1997
which supplemental indentures were recorded in various Counties in the States of
North Carolina and South Carolina, and were indexed and cross-indexed in the
real and chattel mortgage or security interest records in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, the Mortgage and said First through Sixty-fourth Supplemental
Indentures were recorded in all Counties in the States of North Carolina and
South Carolina in which by the respective terms of the Mortgage, each was to be
recorded; and
WHEREAS, because no recording of this Sixty-fifth Supplemental Indenture
is required by law in order to fully preserve and protect the security of the
bondholders and all rights of the Trustees, this Sixty-fifth Supplemental
Indenture will not be recorded or filed; and
WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as supplemented, the following series of First
Mortgage Bonds:
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ------ -----------
3-3/4% Series due 1965...................$ 46,000,000 None
3-1/8% Series due 1979.....................20,100,000 None
3-1/4% Series due 1979.....................43,930,000 None
2-7/8% Series due 1981.....................15,000,000 None
3-1/2% Series due 1982.....................20,000,000 None
4-1/8% Series due 1988.....................20,000,000 None
4-7/8% Series due 1990.....................25,000,000 None
4-1/2% Series due 1991.....................25,000,000 None
4-1/2% Series due 1994.....................30,000,000 None
5-1/8% Series due 1996.....................30,000,000 None
6-3/8% Series due 1997.....................40,000,000 None
6-7/8% Series due 1998.....................40,000,000 40,000,000
8-3/4% Series due 2000.....................40,000,000 None
8-3/4% Series due August 1, 2000...........50,000,000 None
<PAGE>
5
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ------ -----------
7-3/8% Series due 2001..................... 65,000,000 None
7-3/4% Series due October 1, 2001.......... 70,000,000 None
7-3/4% Series due 2002.....................100,000,000 None
7-3/4% Series due 2003.....................100,000,000 None
8-1/8% Series due November 1, 2003.........100,000,000 None
9-3/4% Series due 2004.....................125,000,000 None
11-1/8% Series due 1994....................50,000,000 None
11% Series due April 15, 1984..............100,000,000 None
8-1/2% Series due October 1, 2007..........100,000,000 None
9-1/4% Series due June 1, 2008.............100,000,000 None
10-1/2% Series due May 15, 2009............125,000,000 None
12-1/4% Series due November 1, 2009........100,000,000 None
Pollution Control Series A................. 63,000,000 None
14-1/8% Series due April 1, 1987...........125,000,000 None
Pollution Control Series B................. 50,000,000 None
Pollution Control Series C................. 6,000,000 None
11-5/8% Series due December 1, 1992........100,000,000 None
Pollution Control Series D................. 48,485,000 48,485,000
Pollution Control Series E................. 5,970,000 5,970,000
12-7/8% Series due December 1, 2013........100,000,000 None
Pollution Control Series F................. 34,700,000 34,700,000
13-3/8% Series due April 1, 1994...........100,000,000 None
Pollution Control Series G.................122,615,000 None
Pollution Control Series H................. 70,000,000 None
Pollution Control Series I................. 70,000,000 None
Pollution Control Series J................. 6,385,000 $1,795,000
Pollution Control Series K................. $2,580,000 $2,580,000
Extendible Series due April 1, 1995........125,000,000 None
11-3/4% Series due October 1, 2015.........100,000,000 None
8-7/8% Series due March 1, 2016............100,000,000 None
8-1/8% Series due July 1, 1996.............125,000,000 None
8-1/2% Series due January 1, 2017..........100,000,000 None
9.174% Series due December 1, 1992.........100,000,000 None
9% Series due September 1, 1993............100,000,000 None
9.60% Series due April 1, 1991.............100,000,000 None
Secured Medium-Term Notes, Series A........200,000,000 None
8-1/8% Series due November 15, 1993........100,000,000 None
Secured Medium-Term Notes, Series B........100,000,000 50,000,000
8-7/8% Series due February 15, 2021........125,000,000 None
9% Series due April 1, 2022................100,000,000 None
8-5/8% Series due September 15, 2021.......100,000,000 100,000,000
5.20% Series due January 1, 1995...........125,000,000 None
7-7/8% Series due April 15, 2004...........150,000,000 150,000,000
8.20% Series due July 1, 2022..............150,000,000 150,000,000
6-3/4% Series due October 1, 2002..........100,000,000 100,000,000
6-1/8% Series due February 1, 2000.........150,000,000 150,000,000
7-1/2% Series due March 1, 2023............150,000,000 150,000,000
5-3/8% Series due July 1, 1998.............100,000,000 100,000,000
<PAGE>
6
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ------ -----------
Secured Medium-Term Notes, Series C........200,000,000 65,000,000
6-7/8% Series due August 15, 2023..........100,000,000 100,000,000
5-7/8% Series due January 15, 2004.........150,000,000 150,000,000
Pollution Control Series L................. 72,600,000 72,600,000
Pollution Control Series M................. 50,000,000 50,000,000
6.80% Series due August 15, 2007...........200,000,000 200,000,000
which bonds are also hereinafter sometimes called bonds of the First through
Sixty-eighth Series, respectively; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that
any power, privilege or right expressly or impliedly reserved to or in any way
conferred upon the Company by any provision of the Mortgage, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and the Company
may enter into any further covenants, limitations or restrictions for the
benefit of any one or more series of bonds issued thereunder, or the Company may
cure any ambiguity contained therein, or in any supplemental indenture, or may
establish the terms and provisions of any series of bonds other than said First
Series, by an instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real estate to
record in all of the states in which any property at the time subject to the
lien of the Mortgage shall be situated; and
WHEREAS, the Company now desires to alter and amend in certain respects
the covenants and provisions contained in the Mortgage, as heretofore
supplemented; and
WHEREAS, the execution and delivery by the Company of this Sixty-fifth
Supplemental Indenture has been duly authorized by the Board of Directors of the
Company by appropriate resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the premises and of One Dollar to it
duly paid by the Trustees at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, and in further evidence of
assurance of the estate, title and rights of the Trustees and in order further
to secure the payment of both the principal of and interest and premium, if any,
on the bonds from time to time issued under the Mortgage, according to their
tenor and effect and the performance of all the provisions of the Mortgage
(including any instruments supplemental thereto and any modification made as in
the Mortgage provided) and of said bonds, hereby grants, bargains, sells,
releases, conveys, assigns, transfers, mortgages, pledges, sets over and
confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of
the Mortgage) unto The Bank of New York and W.T. Cunningham, as Trustees under
the Mortgage, and to their successor or successors in said trust, and to said
Trustees and their successors and assigns forever, all the following described
properties of the Company:
All electric generating plants, stations, transmission lines, and
electric distribution systems, including permanent improvements,
extensions or additions to or about such electrical plants, stations,
transmission lines and distribution systems of the Company; all
<PAGE>
7
dams, power houses, power sites, buildings, generators, reservoirs, pipe
lines, flumes, structures and works; all substations, transformers,
switchboards, towers, poles, wires, insulators, and other appliances and
equipment, and the Company's rights or interests in the land upon which
the same are situated, and all other property, real or personal, forming a
part of or appertaining to, or used, occupied or enjoyed in connection
with said generating plants, stations, transmission lines, and
distribution systems; together with all rights of way, easements, permits,
privileges, franchises and rights for or related to the construction,
maintenance, or operation thereof, through, over, under or upon any public
streets or highways, or the public lands of the United States, or of any
State or other lands; and all water appropriations and water rights,
permits and privileges; including all property, real, personal, and mixed,
acquired by the Company after the date of the execution and delivery of
the Mortgage, in addition to property covered by the above-mentioned
supplemental indentures (except any herein or in the Mortgage, as
heretofore supplemented, expressly excepted), now owned or, subject to the
provisions of Section 87 of the Mortgage, hereafter acquired by the
Company and wheresoever situated, including (without in anywise limiting
or impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in this Sixty-fifth
Supplemental Indenture) all lands, power sites, flowage rights, water
rights, flumes, raceways, dams, rights of way and roads; all steam and
power houses, gas plants, street lighting systems, standards and other
equipment incidental thereto, telephone, radio and television systems,
air-conditioning systems and equipment incidental thereto, water works,
steam heat and hot water plants, lines, service and supply systems,
bridges, culverts, tracts, ice or refrigeration plants and equipment,
street and interurban railway systems, offices, buildings and other
structures and the equipment thereof; all machinery, engines, boilers,
dynamos, electric and gas machines, regulators, meters, transformers,
generators, motors, electrical, gas and mechanical appliances, conduits,
cables, water, steam heat, gas or other pipes, gas mains and pipes,
service pipes, fittings, valves and connections, pole and transmission
lines, wires, cables, tools, implements, apparatus, furniture, chattels
and choses in action; all municipal and other franchises, consents or
permits; all lines for the transmission and distribution of electric
current, gas, steam heat or water for any purpose including poles, wires,
cables, pipes, conduits, ducts and all apparatus for use in connection
therewith; all real estate, lands, easements, servitudes, licenses,
permits, franchises, privileges, rights of way and other rights in or
relating to real estate or the occupancy of the same and (except as herein
or in the Mortgage, as heretofore supplemented, expressly excepted) all
the right, title and interest of the Company in and to all other property
of any kind or nature appertaining to and/or used and/or occupied and/or
enjoyed in connection with any property hereinbefore or in the Mortgage,
as heretofore supplemented, described.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
revenues, issues, earnings, income, product and profits thereof, and all the
estate, right, title and interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to the
aforesaid property and franchises and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of
Section 87 of the Mortgage, all the property, rights and franchises acquired by
the Company after the date hereof (except any herein or in the Mortgage, as
heretofore supplemented, expressly excepted) shall be and are as fully granted
and conveyed hereby and as fully embraced within the lien hereof and the lien of
the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.
<PAGE>
8
PROVIDED THAT the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed hereunder and are hereby expressly
excepted from the lien and operation of this Sixty-fifth Supplemental Indenture
and from the lien and operation of the Mortgage, namely: (1) cash, shares of
stock and obligations (including bonds, notes and other securities) not
hereafter specifically pledged, paid, deposited or delivered under the Mortgage
or covenanted so to be; (2) merchandise, equipment, materials or supplies held
for the purpose of sale in the usual course of business and fuel, oil and
similar materials and supplies consumable in the operation of any properties of
the Company; rolling stock, buses, motor coaches, vehicles and automobiles; (3)
bills, notes and accounts receivable, and all contracts, leases and operating
agreements not specifically pledged under the Mortgage, as heretofore
supplemented, or this Sixty-fifth Supplemental Indenture or covenanted so to be;
(4) electric energy and other materials or products generated, manufactured,
produced or purchased by the Company for sale, distribution or use in the
ordinary course of its business; and (5) any property and rights heretofore
released from the lien of the Mortgage; provided, however, that the property and
rights expressly excepted from the lien and operation of the Mortgage and this
Sixty-fifth Supplemental Indenture in the above subdivisions (2) and (3) shall
(to the extent permitted by law) cease to be so excepted in the event and as of
the date that either or both of the Trustees or a receiver or trustee shall
enter upon and take possession of the Mortgaged and Pledged Property in the
manner provided in Article XII of the Mortgage by reason of the occurrence of a
Default as defined in said Article XII.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustees, their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as heretofore supplemented, this Sixty-fifth
Supplemental Indenture being supplemental to the Mortgage.
AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions,
provisos, covenants and provisions contained in the Mortgage, as heretofore
supplemented, shall affect and apply to the property hereinbefore described and
conveyed and to the estate, rights, obligations and duties of the Company and
the Trustees and the beneficiaries of the trust with respect to said property,
and to the Trustees and their successors as Trustees of said property in the
same manner and with the same effect as if the said property had been owned by
the Company at the time of the execution of the Mortgage and had been
specifically and at length described in and conveyed to the Trustees by the
Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustees and
their successor or successors in such trust under the Mortgage as follows:
<PAGE>
9
ARTICLE I
AMENDMENTS TO CERTAIN PROVISIONS OF THE MORTGAGE
SECTION 1. Pursuant to the reservation of right in Section 6 of the Ninth
Supplemental Indenture, and all bonds issued prior to the Ninth Supplemental
Indenture having been retired, the Mortgage is hereby amended so as to eliminate
the requirements of Section 64 of the Mortgage, as supplemented.
SECTION 2. Pursuant to the reservation of right in Section 5 of the Tenth
Supplemental Indenture, and all bonds issued prior to the Tenth Supplemental
Indenture having been retired, the Mortgage is hereby amended so as to terminate
the requirements of Section 39 of the Mortgage that the Company deliver to the
Corporate Trustee as an improvement fund for the bonds Outstanding under the
Mortgage annually amounts as to each series in cash and/or principal amount of
bonds of such series equivalent to one-half (1/2) of one per centum (1%) of the
greatest principal amount of bonds of such series prior to January 1 of such
year at any one time Outstanding.
ARTICLE II
MISCELLANEOUS PROVISIONS
SECTION 3. Subject to the amendments provided for in this Sixty-fifth
Supplemental Indenture, the terms defined in the Mortgage, as heretofore
supplemented, shall, for all purposes of this Sixty-fifth Supplemental
Indenture, have the meanings specified in the Mortgage, as heretofore
supplemented.
SECTION 4. The Trustees hereby accept the trusts herein declared,
provided, created or supplemented and agree to perform the same upon the terms
and conditions herein and in the Mortgage, as heretofore supplemented, set forth
and upon the following terms and conditions:
The Trustees shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Sixty-fifth Supplemental
Indenture or for or in respect of the recitals contained herein, all of
which recitals are made by the Company solely. In general each and every
term and condition contained in Article XVI of the Mortgage shall apply to
and form part of this Sixty-fifth Supplemental Indenture with the same
force and effect as if the same were herein set forth in full with such
omissions, variations and insertions, if any, as may be appropriate to
make the same conform to the provisions of this Sixty-fifth Supplemental
Indenture.
SECTION 5. Subject to the provisions of Article XV and Article XVI of the
Mortgage, whenever in this Sixty-fifth Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Sixty-fifth Supplemental Indenture contained by or on behalf of the Company
or by or on behalf of the Trustees shall bind and inure to the benefit of the
respective successors and assigns of such parties whether so expressed or not.
SECTION 6. Nothing in this Sixty-fifth Supplemental Indenture, expressed
or implied, is intended, or shall be construed, to confer upon, or to give to,
any person, firm or corporation, other than the parties hereto and the holders
of the Outstanding bonds and coupons, any right, remedy or claim under or by
reason of this Sixty-fifth Supplemental Indenture or any covenant, condition,
stipulation, promise or agreement hereof, and all the covenants, conditions,
stipulations, promises and
<PAGE>
10
agreements in this Sixty-fifth Supplemental Indenture contained by or on behalf
of the Company shall be for the sole and exclusive benefit of the parties
hereto, and of the holders of the Outstanding bonds and coupons.
SECTION 7. This Sixty-fifth Supplemental Indenture shall be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
<PAGE>
11
IN WITNESS WHEREOF, Carolina Power & Light Company has caused its
corporate name to be hereunto affixed, and this instrument to be signed and
sealed by its President or one of its Vice Presidents or its Treasurer and its
corporate seal to be attested by its Secretary or one of its Assistant
Secretaries, and The Bank of New York has caused its corporate name to be
hereunto affixed, and this instrument to be signed and sealed by one of its Vice
Presidents or Assistant Vice Presidents, and its corporate seal to be attested
by one of its Assistant Vice Presidents or Assistant Secretaries and W.T.
Cunningham has hereunto set his hand and affixed his seal, all as of the day and
year first above written.
CAROLINA POWER & LIGHT COMPANY
/s/ Mark F. Mulhern
By.............................................
Mark F. Mulhern, Vice President and Treasurer
Attest:
/s/ Patricia Kornegay-Timmons
By................................................
Patricia Kornegay-Timmons, Assistant Secretary
Executed, sealed and delivered by
CAROLINA POWER & LIGHT
COMPANY in the presence of:
/s/ Ann E. Fanning
.................................
Ann E. Fanning
/s/ Edie S. McCrea
.................................
Edie S. McCrea
<PAGE>
12
THE BANK OF NEW YORK, as Trustee
/s/ Mary Jane Morrissey
By ...................................
Mary Jane Morrissey, Vice President
Attest:
/s/ Louis J. Hack
By ..................................
Louis J. Hack, Assistant Secretary
/s/ W.T. Cunningham
............................. (L.S.)
W.T. Cunningham
Executed, sealed and delivered
by THE BANK OF NEW YORK
and W.T. CUNNINGHAM
in the presence of:
/s/ Michele Russo
.................................
Michele Russo
/s/ Stacey Poindexter
.................................
Stacey Poindexter
<PAGE>
13
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
This 1st day of April, A.D. 1998, personally came before me, Sherry W.
Waddell, a Notary Public in and for the County aforesaid, MARK F. MULHERN, who,
being by me duly sworn, says that he is the Vice President and Treasurer of
CAROLINA POWER & LIGHT COMPANY, and that the seal affixed to the foregoing
instrument in writing is the corporate seal of said company, and that said
writing was signed and sealed by him in behalf of said corporation by its
authority duly given. And the said MARK F. MULHERN acknowledged the said writing
to be the act and deed of said corporation.
On the 1st day of April, in the year of 1998, before me personally came
MARK F. MULHERN, to me known, who, being by me duly sworn, did depose and say
that he resides at 109 Deer Valley Drive, Apex, North Carolina 27502, State of
North Carolina; that he is the Vice President and Treasurer of CAROLINA POWER &
LIGHT COMPANY, one of the corporations described in and which executed the above
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
/s/ Sherry W. Waddell
.......................................
Sherry W. Waddell
NOTARY PUBLIC, State of North Carolina
Wake County
My Commission Expires: October 9, 1999
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
Personally appeared before me Ann E. Fanning, who being duly sworn, says
that she saw the corporate seal of CAROLINA POWER & LIGHT COMPANY affixed to the
above written instrument, and that she also saw MARK F. MULHERN, the Vice
President and Treasurer, with PATRICIA KORNEGAY-TIMMONS, an Assistant Secretary,
of said CAROLINA POWER & LIGHT COMPANY, sign and attest the same, and that she,
deponent, with Edie S. McCrea, witnessed the execution and delivery thereof as
the act and deed of said CAROLINA POWER & LIGHT COMPANY.
/s/ Ann E. Fanning
.......................................
Ann E. Fanning
Sworn to before me this
1st day of April, 1998
.......................................
Sherry W. Waddell
NOTARY PUBLIC, State of North Carolina
Wake County
My Commission Expires: October 9, 1999
<PAGE>
14
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
This 2nd day of April, A.D. 1998, personally came before me, William J.
Cassels, a Notary Public in and for the County aforesaid, MARY JANE MORRISSEY,
who, being by me duly sworn, says that she is a Vice President of THE BANK OF
NEW YORK, and that the seal affixed to the foregoing instrument in writing is
the corporate seal of said company, and that said writing was signed and sealed
by her in behalf of said corporation by its authority duly given. And the said
MARY JANE MORRISSEY acknowledged the said writing to be the act and deed of said
corporation.
On the 2nd day of April, in the year 1998, before me personally came MARY
JANE MORRISSEY, to me known, who, being by me duly sworn, did depose and say
that she resides in Shark River Hills, New Jersey, that she is a Vice President
of THE BANK OF NEW YORK, one of the corporations described in and which executed
the above instrument; that she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that she signed her
name thereto by like order.
I, William J. Cassels, a Notary Public in and for the County aforesaid, do
hereby certify that W.T. CUNNINGHAM personally appeared before me this day and
acknowledged the due execution by him as successor Individual Trustee of the
foregoing instrument.
On the 2nd day of April, 1998, before me personally came W.T. CUNNINGHAM,
to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he, as successor Individual Trustee, executed
the same.
WITNESS my hand and official seal this 2nd day of April, 1998.
/s/ William J. Cassels
.......................................
William J. Cassels
NOTARY PUBLIC, State of New York
No. 010A5027729
Qualified in Bronx County
Certificate filed in New York County
Commission Expires May 18, 1998
<PAGE>
15
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
Personally appeared before me MICHELE RUSSO, who, being duly sworn, says
that she saw the corporate seal of THE BANK OF NEW YORK affixed to the above
written instrument and that she also saw MARY JANE MORRISSEY, a Vice President,
with Louis J. Hack, an Assistant Secretary of said THE BANK OF NEW YORK, sign
and attest the same, and that she, deponent, with STACEY POINDEXTER, witnessed
the execution and delivery thereof as the act and deed of said THE BANK OF NEW
YORK.
Personally appeared before me MICHELE RUSSO, who, being duly sworn, says
that she saw the within named W.T. CUNNINGHAM, as successor Individual Trustee,
sign, seal and as his act and deed deliver the foregoing instrument for the
purposes therein mentioned, and that she, deponent, with STACEY POINDEXTER,
witnessed the execution thereof.
/s/ Michele Russo
.......................................
Michele Russo
Sworn to before me this
2nd day of April, 1998
/s/ William J. Cassels
.....................................
William J. Cassels
NOTARY PUBLIC, State of New York
No. 010A5027729
Qualified in Bronx County
Certificate filed in New York County
Commission Expires May 18, 1998
EXHIBIT 4(C)
================================================================================
CAROLINA POWER & LIGHT COMPANY
TO
THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY)
AND
W.T. CUNNINGHAM
(SUCCESSOR TO FREDERICK G. HERBST, RICHARD H. WEST, J.A. AUSTIN, E.J. MCCABE,
G. WHITE, D.W. MAY, J.A. VAUGHAN, JOSEPH J. ARNEY AND WAFAA ORFY)
AS TRUSTEES UNDER CAROLINA POWER & LIGHT
COMPANY'S MORTGAGE AND DEED OF TRUST, DATED
AS OF MAY 1, 1940
----------------
____________ SUPPLEMENTAL INDENTURE
PROVIDING AMONG OTHER THINGS FOR
[FIRST MORTGAGE BONDS, _% SERIES DUE _____________]
[FIRST MORTGAGE BONDS, DESIGNATED SECURED MEDIUM-TERM NOTES, SERIES ___]
(___________ SERIES)
-----------------
DATED AS OF _____________
================================================================================
<PAGE>
____________ SUPPLEMENTAL INDENTURE
INDENTURE, dated as of _____________, by and between CAROLINA POWER &
LIGHT COMPANY, a corporation of the State of North Carolina, whose post office
address is 411 Fayetteville Street, Raleigh, North Carolina 27601-1768
(hereinafter sometimes called the Company), and THE BANK OF NEW YORK (formerly
Irving Trust Company), a corporation of the State of New York, whose post office
address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes
called the Corporate Trustee), and W.T. CUNNINGHAM (successor to Frederick G.
Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White, D.W. May, J.A.
Vaughan, Joseph J. Arney and Wafaa Orfy), whose post office address is 3
Arlington Drive, Denville, New Jersey 07834 (the Corporate Trustee and the
Individual Trustee being hereinafter together sometimes called the Trustees), as
Trustees under the Mortgage and Deed of Trust, dated as of May 1, 1940
(hereinafter called the Mortgage), which Mortgage was executed and delivered by
the Company to Irving Trust Company (now The Bank of New York) and Frederick G.
Herbst to secure the payment of bonds issued or to be issued under and in
accordance with the provisions of the Mortgage, reference to which Mortgage is
hereby made, this Indenture (hereinafter sometimes called the ____________
Supplemental Indenture) being supplemental thereto:
WHEREAS, the Mortgage was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, the Mortgage was indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, an instrument, dated as of June 25, 1945, was executed by the
Company appointing Richard H. West as Individual Trustee in succession to said
Frederick G. Herbst (deceased) under the Mortgage, and by Richard H. West
accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of December 12, 1957, was executed by the
Company appointing J.A. Austin as Individual Trustee in succession to said
Richard H. West (resigned) under the Mortgage, and by J.A. Austin accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of April 15, 1966, was executed by the
Company appointing E.J. McCabe as Individual Trustee in succession to said J.A.
Austin (resigned) under the Mortgage, and by E.J. McCabe accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the
Company, among other things, appointed G. White as Individual Trustee in
succession to said E.J. McCabe (resigned), and G. White accepted said
appointment; and
WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the
Company, among other things, appointed D.W. May as Individual Trustee in
succession to said G. White (resigned), and D.W. May accepted said appointment;
and
WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed J.A. Vaughan as Individual Trustee in
succession to said D.W. May (resigned), and J.A. Vaughan accepted said
appointment; and
WHEREAS, an instrument, dated as of June 27, 1988, was executed by the
Company appointing Joseph J. Arney as Individual Trustee in succession to said
J.A. Vaughan (resigned) under the Mortgage, and by Joseph J. Arney
<PAGE>
2
accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed Wafaa Orfy as Individual Trustee in
succession to said Joseph J. Arney (resigned), and Wafaa Orfy accepted said
appointment; and
WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the
Company, among other things, appointed W.T. Cunningham as Individual Trustee in
succession to said Wafaa Orfy (resigned), and W.T. Cunningham accepted said
appointment; and
WHEREAS, such instruments were indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, by the Mortgage, the Company covenanted that it would execute and
deliver such supplemental indenture or indentures and such further instruments
and do such further acts as might be necessary or proper to carry out more
effectually the purposes of the Mortgage and to make subject to the lien of the
Mortgage any property thereafter acquired intended to be subject to the lien
thereof; and
WHEREAS, for said purposes, among others, the Company executed and
delivered to the Trustees the following supplemental indentures:
DESIGNATION DATED AS OF
----------- -----------
First Supplemental Indenture.................... January 1, 1949
Second Supplemental Indenture................... December 1, 1949
Third Supplemental Indenture.................... February 1, 1951
Fourth Supplemental Indenture................... October 1, 1952
Fifth Supplemental Indenture.................... March 1, 1958
Sixth Supplemental Indenture.................... April 1, 1960
Seventh Supplemental Indenture.................. November 1, 1961
Eighth Supplemental Indenture................... July 1, 1964
Ninth Supplemental Indenture.................... April 1, 1966
Tenth Supplemental Indenture.................... October 1, 1967
Eleventh Supplemental Indenture................. October 1, 1968
Twelfth Supplemental Indenture.................. January 1, 1970
Thirteenth Supplemental Indenture............... August 1, 1970
Fourteenth Supplemental Indenture............... January 1, 1971
Fifteenth Supplemental Indenture................ October 1, 1971
Sixteenth Supplemental Indenture................ May 1, 1972
Seventeenth Supplemental Indenture.............. May 1, 1973
Eighteenth Supplemental Indenture............... November 1, 1973
Nineteenth Supplemental Indenture............... May 1, 1974
Twentieth Supplemental Indenture................ December 1, 1974
Twenty-first Supplemental Indenture............. April 15, 1975
Twenty-second Supplemental Indenture............ October 1, 1977
Twenty-third Supplemental Indenture............. June 1, 1978
Twenty-fourth Supplemental Indenture............ May 15, 1979
Twenty-fifth Supplemental Indenture............. November 1, 1979
Twenty-sixth Supplemental Indenture............. November 1, 1979
Twenty-seventh Supplemental Indenture........... April 1, 1980
Twenty-eighth Supplemental Indenture............ October 1, 1980
Twenty-ninth Supplemental Indenture............. October 1, 1980
Thirtieth Supplemental Indenture................ December 1, 1982
Thirty-first Supplemental Indenture............. March 15, 1983
<PAGE>
3
DESIGNATION DATED AS OF
----------- -----------
Thirty-second Supplemental Indenture............ March 15, 1983
Thirty-third Supplemental Indenture............. December 1, 1983
Thirty-fourth Supplemental Indenture............ December 15, 1983
Thirty-fifth Supplemental Indenture............. April 1, 1984
Thirty-sixth Supplemental Indenture............. June 1, 1984
Thirty-seventh Supplemental Indenture........... June 1, 1984
Thirty-eighth Supplemental Indenture............ June 1, 1984
Thirty-ninth Supplemental Indenture............. April 1, 1985
Fortieth Supplemental Indenture................. October 1, 1985
Forty-first Supplemental Indenture.............. March 1, 1986
Forty-second Supplemental Indenture............. July 1, 1986
Forty-third Supplemental Indenture.............. January 1, 1987
Forty-fourth Supplemental Indenture............. December 1, 1987
Forty-fifth Supplemental Indenture.............. September 1, 1988
Forty-sixth Supplemental Indenture.............. April 1, 1989
Forty-seventh Supplemental Indenture............ August 1, 1989
Forty-eighth Supplemental Indenture............. November 15, 1990
Forty-ninth Supplemental Indenture.............. November 15, 1990
Fiftieth Supplemental Indenture................. February 15, 1991
Fifty-first Supplemental Indenture.............. April 1, 1991
Fifty-second Supplemental Indenture............. September 15, 1991
Fifty-third Supplemental Indenture.............. January 1, 1992
Fifty-fourth Supplemental Indenture............. April 15, 1992
Fifty-fifth Supplemental Indenture.............. July 1, 1992
Fifty-sixth Supplemental Indenture.............. October 1, 1992
Fifty-seventh Supplemental Indenture............ February 1, 1993
Fifty-eighth Supplemental Indenture............. March 1, 1993
Fifty-ninth Supplemental Indenture.............. July 1, 1993
Sixtieth Supplemental Indenture................. July 1, 1993
Sixty-first Supplemental Indenture.............. August 15, 1993
Sixty-second Supplemental Indenture............. January 15, 1994
Sixty-third Supplemental Indenture.............. May 1, 1994
Sixty-fourth Supplemental Indenture............. August 15, 1997
Sixty-fifth Supplemental Indenture.............. April 1, 1998
1
which supplemental indentures (other than the Sixty-Fifth Supplemental
Indenture) were recorded in various Counties in the States of North Carolina and
South Carolina, and were indexed and cross-indexed in the real and chattel
mortgage or security interest records in various Counties in the States of North
Carolina and South Carolina; and
WHEREAS, the Mortgage and the First through Sixty-Fourth Supplemental
Indentures were or are to be recorded in all Counties in the States of North
Carolina and South Carolina in which this ____________ Supplemental Indenture is
to be recorded; and
WHEREAS, in addition to the property described in the Mortgage, as
heretofore supplemented, the Company has acquired certain other property, rights
and interests in property; and
WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as supplemented, the following series of First
Mortgage Bonds:
- --------------------
1 Here will be inserted additional executed supplemental indentures.
<PAGE>
4
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ------ -----------
3-3/4% Series due 1965......................$ 46,000,000 None
3-1/8% Series due 1979....................... 20,100,000 None
3-1/4% Series due 1979....................... 43,930,000 None
2-7/8% Series due 1981....................... 15,000,000 None
3-1/2% Series due 1982....................... 20,000,000 None
4-1/8% Series due 1988....................... 20,000,000 None
4-7/8% Series due 1990....................... 25,000,000 None
4-1/2% Series due 1991....................... 25,000,000 None
4-1/2% Series due 1994....................... 30,000,000 None
5-1/8% Series due 1996....................... 30,000,000 None
6-3/8% Series due 1997....................... 40,000,000 None
6-7/8% Series due 1998....................... 40,000,000 None
8-3/4% Series due 2000..................... 40,000,000 None
8-3/4% Series due August 1, 2000............. 50,000,000 None
7-3/8% Series due 2001....................... 65,000,000 None
7-3/4% Series due October 1, 2001............ 70,000,000 None
7-3/4% Series due 2002.......................100,000,000 None
7-3/4% Series due 2003.......................100,000,000 None
8-1/8% Series due November 1, 2003...........100,000,000 None
9-3/4% Series due 2004.......................125,000,000 None
11-1/8% Series due 1994...................... 50,000,000 None
11% Series due April 15, 1984................100,000,000 None
8-1/2% Series due October 1, 2007............100,000,000 None
9-1/4% Series due June 1, 2008...............100,000,000 None
10-1/2% Series due May 15, 2009..............125,000,000 None
12-1/4% Series due November 1, 2009..........100,000,000 None
Pollution Control Series A................... 63,000,000 None
14-1/8% Series due April 1, 1987.............125,000,000 None
Pollution Control Series B................... 50,000,000 None
Pollution Control Series C................... 6,000,000 None
11-5/8% Series due December 1, 1992..........100,000,000 None
Pollution Control Series D................... 48,485,000 $48,485,000
Pollution Control Series E................... 5,970,000 5,970,000
12-7/8% Series due December 1, 2013..........100,000,000 None
Pollution Control Series F................... 34,700,000 34,700,000
13-3/8% Series due April 1, 1994.............100,000,000 None
Pollution Control Series G...................122,615,000 None
Pollution Control Series H................... 70,000,000 None
Pollution Control Series I................... 70,000,000 None
Pollution Control Series J................... 6,385,000 1,795,000
Pollution Control Series K................... 2,580,000 2,580,000
Extendible Series due April 1, 1995..........125,000,000 None
11-3/4% Series due October 1, 2015...........100,000,000 None
8-7/8% Series due March 1, 2016..............100,000,000 None
8-1/8% Series due July 1, 1996...............125,000,000 None
8-1/2% Series due January 1, 2017............100,000,000 None
9.174% Series due December 1, 1992...........100,000,000 None
9% Series due September 1, 1993..............100,000,000 None
9.60% Series due April 1, 1991...............100,000,000 None
<PAGE>
5
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ------ -----------
Secured Medium-Term Notes, Series A..........200,000,000 None
8-1/8% Series due November 15, 1993..........100,000,000 None
Secured Medium-Term Notes, Series B..........100,000,000 50,000,000
8-7/8% Series due February 15, 2021......... 125,000,000 None
9% Series due April 1, 2022..................100,000,000 None
8-5/8% Series due September 15, 2021.........100,000,000 100,000,000
5.20% Series due January 1, 1995.............125,000,000 None
7-7/8% Series due April 15, 2004.............150,000,000 150,000,000
8.20% Series due July 1, 2022................150,000,000 150,000,000
6-3/4% Series due October 1, 2002............100,000,000 100,000,000
6-1/8% Series due February 1, 2000...........150,000,000 150,000,000
7-1/2% Series due March 1, 2023..............150,000,000 150,000,000
5-3/8% Series due July 1, 1998...............100,000,000 None
Secured Medium-Term Notes, Series C..........200,000,000 None
6-7/8% Series due August 15, 2023............100,000,000 100,000,000
5-7/8% Series due January 15, 2004...........150,000,000 150,000,000
Pollution Control Series L................... 72,600,000 72,600,000
Pollution Control Series M................... 50,000,000 50,000,000
6.80% Series due August 15, 2007.............200,000,000 200,000,000
2
which bonds are also hereinafter sometimes called bonds of the First through
Sixty-eighth Series, respectively; and
WHEREAS, Section 8 of the Mortgage provides that the form of each series
of bonds (other than the First Series) issued thereunder and of the coupons to
be attached to coupon bonds of such series shall be established by Resolution of
the Board of Directors of the Company and that the form of such series, as
established by said Board of Directors, shall specify the descriptive title of
the bonds and various other terms thereof, and may also contain such provisions
not inconsistent with the provisions of the Mortgage as said Board of Directors
may, in its discretion, cause to be inserted therein expressing or referring to
the terms and conditions upon which such bonds are to be issued and/or secured
under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that
any power, privilege or right expressly or impliedly reserved to or in any way
conferred upon the Company by any provision of the Mortgage, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and the Company
may enter into any further covenants, limitations or restrictions for the
benefit of any one or more series of bonds issued thereunder, or the Company may
cure any ambiguity contained therein, or in any supplemental indenture, or may
establish the terms and provisions of any series of bonds other than said First
Series, by an instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real estate to
record in all of the states in which any property at the time subject to the
lien of the Mortgage shall be situated; and
WHEREAS, the Company now desires to create __ new series of bonds and to
add to its covenants and agreements contained in the Mortgage, as heretofore
supplemented, certain other covenants and agreements to be observed by it and to
alter and amend in certain respects the covenants and provisions contained in
the Mortgage, as heretofore supplemented; and
- -----------------
2 Here will be inserted additional outstanding Series.
<PAGE>
6
WHEREAS, the execution and delivery by the Company of this ____________
Supplemental Indenture, and the terms of the bonds of the ___________ Series,
hereinafter referred to, have been duly authorized by the Board of Directors of
the Company by appropriate resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the premises and of One Dollar to it
duly paid by the Trustees at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, and in further evidence of
assurance of the estate, title and rights of the Trustees and in order further
to secure the payment of both the principal of and interest and premium, if any,
on the bonds from time to time issued under the Mortgage, according to their
tenor and effect and the performance of all the provisions of the Mortgage
(including any instruments supplemental thereto and any modification made as in
the Mortgage provided) and of said bonds, hereby grants, bargains, sells,
releases, conveys, assigns, transfers, mortgages, pledges, sets over and
confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of
the Mortgage) unto The Bank of New York and W.T. Cunningham, as Trustees under
the Mortgage, and to their successor or successors in said trust, and to said
Trustees and their successors and assigns forever, all the following described
properties of the Company:
All electric generating plants, stations, transmission lines, and
electric distribution systems, including permanent improvements,
extensions or additions to or about such electrical plants, stations,
transmission lines and distribution systems of the Company; all dams,
power houses, power sites, buildings, generators, reservoirs, pipe lines,
flumes, structures and works; all substations, transformers, switchboards,
towers, poles, wires, insulators, and other appliances and equipment, and
the Company's rights or interests in the land upon which the same are
situated, and all other property, real or personal, forming a part of or
appertaining to, or used, occupied or enjoyed in connection with said
generating plants, stations, transmission lines, and distribution systems;
together with all rights of way, easements, permits, privileges,
franchises and rights for or related to the construction, maintenance, or
operation thereof, through, over, under or upon any public streets or
highways, or the public lands of the United States, or of any State or
other lands; and all water appropriations and water rights, permits and
privileges; including all property, real, personal, and mixed, acquired by
the Company after the date of the execution and delivery of the Mortgage,
in addition to property covered by the above-mentioned supplemental
indentures (except any herein or in the Mortgage, as heretofore
supplemented, expressly excepted), now owned or, subject to the provisions
of Section 87 of the Mortgage, hereafter acquired by the Company and
wheresoever situated, including (without in anywise limiting or impairing
by the enumeration of the same the scope and intent of the foregoing or of
any general description contained in this ____________ Supplemental
Indenture) all lands, power sites, flowage rights, water rights, flumes,
raceways, dams, rights of way and roads; all steam and power houses, gas
plants, street lighting systems, standards and other equipment incidental
thereto, telephone, radio and television systems, air-conditioning systems
and equipment incidental thereto, water works, steam heat and hot water
plants, lines, service and supply systems, bridges, culverts, tracts, ice
or refrigeration plants and equipment, street and interurban railway
systems, offices, buildings and other structures and the equipment
thereof; all machinery, engines, boilers, dynamos, electric and gas
machines, regulators, meters, transformers, generators, motors,
electrical, gas and mechanical appliances, conduits, cables, water, steam
heat, gas or other pipes, gas mains and pipes, service pipes, fittings,
valves and connections, pole and transmission lines, wires, cables, tools,
implements, apparatus, furniture, chattels and choses in action; all
municipal and other franchises, consents or permits; all lines for the
transmission and distribution of electric current, gas, steam heat or
water for any purpose including poles, wires, cables, pipes, conduits,
ducts and all apparatus for use in connection therewith; all real estate,
lands, easements, servitudes, licenses, permits, franchises, privileges,
rights of way and other rights in or relating to real estate or the
occupancy of the same and (except as herein or in the Mortgage, as
heretofore supplemented, expressly excepted) all the right, title and
interest of the Company in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore or in the Mortgage, as heretofore
supplemented, described.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
revenues, issues, earnings, income, product
<PAGE>
7
and profits thereof, and all the estate, right, title and interest and claim
whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforesaid property and franchises and every part
and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of
Section 87 of the Mortgage, all the property, rights and franchises acquired by
the Company after the date hereof (except any herein or in the Mortgage, as
heretofore supplemented, expressly excepted) shall be and are as fully granted
and conveyed hereby and as fully embraced within the lien hereof and the lien of
the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.
PROVIDED THAT the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed hereunder and are hereby expressly
excepted from the lien and operation of this ____________ Supplemental Indenture
and from the lien and operation of the Mortgage, namely: (1) cash, shares of
stock and obligations (including bonds, notes and other securities) not
hereafter specifically pledged, paid, deposited or delivered under the Mortgage
or covenanted so to be; (2) merchandise, equipment, materials or supplies held
for the purpose of sale in the usual course of business and fuel, oil and
similar materials and supplies consumable in the operation of any properties of
the Company; rolling stock, buses, motor coaches, vehicles and automobiles; (3)
bills, notes and accounts receivable, and all contracts, leases and operating
agreements not specifically pledged under the Mortgage, as heretofore
supplemented, or this ____________ Supplemental Indenture or covenanted so to
be; (4) electric energy and other materials or products generated, manufactured,
produced or purchased by the Company for sale, distribution or use in the
ordinary course of its business; and (5) any property and rights heretofore
released from the lien of the Mortgage; provided, however, that the property and
rights expressly excepted from the lien and operation of the Mortgage and this
____________ Supplemental Indenture in the above subdivisions (2) and (3) shall
(to the extent permitted by law) cease to be so excepted in the event and as of
the date that either or both of the Trustees or a receiver or trustee shall
enter upon and take possession of the Mortgaged and Pledged Property in the
manner provided in Article XII of the Mortgage by reason of the occurrence of a
Default as defined in said Article XII.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustees, their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as heretofore supplemented, this ___________
Supplemental Indenture being supplemental to the Mortgage.
AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions,
provisos, covenants and provisions contained in the Mortgage, as heretofore
supplemented, shall affect and apply to the property hereinbefore described and
conveyed and to the estate, rights, obligations and duties of the Company and
the Trustees and the beneficiaries of the trust with respect to said property,
and to the Trustees and their successors as Trustees of said property in the
same manner and with the same effect as if the said property had been owned by
the Company at the time of the execution of the Mortgage and had been
specifically and at length described in and conveyed to the Trustees by the
Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustees and
their successor or successors in such trust under the Mortgage as follows:
<PAGE>
8
ARTICLE I
___________ SERIES OF BONDS
SECTION 1. There shall be a series of bonds designated "_% Series due
_____________" (herein sometimes referred to as the "___________ Series"), each
of which shall also bear the descriptive title "First Mortgage Bond", and the
form thereof, which shall be established by Resolution of the Board of Directors
of the Company, shall contain suitable provisions with respect to the matters
hereinafter in this Section specified. Bonds of the ___________ Series shall be
initially issued in the aggregate principal amount of $__________, mature on
_____________, bear interest at the rate of _% per annum, payable from _______,
199_, if the date of said bonds is prior to _________, 199_, or, if the date of
said bonds is after __________ 199_, from the _______ or _________ next
preceding the date of said bonds, and thereafter semi-annually on _________ and
_______ of each year, be issued as fully registered bonds in the denominations
of One Thousand Dollars and, at the option of the Company, in any multiple or
multiples of One Thousand Dollars (the exercise of such option to be evidenced
by the execution and delivery thereof) and be dated as in Section 10 of the
Mortgage provided, the principal of and interest on each said bond to be payable
at the office or agency of the Company in the Borough of Manhattan, The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for public and private debts.
(3) [SECTION 1. There shall be a series of bonds designated "Secured
Medium-Term Notes, Series _" (herein sometimes referred to as the "____________
Series"), each of which shall also bear the descriptive title "First Mortgage
Bond", and the form thereof, which shall be established by Resolution of the
Board of Directors of the Company, shall contain suitable provisions with
respect to the matters hereinafter in this Section specified. Bonds of the
____________ Series shall be issued from time to time in an aggregate principal
amount not to exceed $___________, be issued as fully registered bonds in the
denominations of One Thousand Dollars and, at the option of the Company, in any
multiple or multiples of One Thousand Dollars (the exercise of such option to be
evidenced by the execution and delivery thereof) and be dated as in Section 10
of the Mortgage provided; each bond of the ____________ Series shall mature on
such date not less than nine months nor more than 30 years from date of issue,
shall bear interest at such rate or rates (which may be either fixed or
variable) and have such other terms and provisions not inconsistent with the
Mortgage as the Board of Directors may determine in accordance with a Resolution
filed with the Corporate Trustee referring to this ____________ Supplemental
Indenture; the principal of and interest on each said bond to be payable at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts. Interest on bonds of the
____________ Series which bear interest at a fixed rate shall be payable
semiannually on _______ and _______ of each year and at maturity (each an
interest payment date). Interest on bonds of the ____________ Series which bear
interest at a variable rate shall be payable on the dates (each an interest
payment date) established on the Issue Date hereinafter specified with respect
to such bonds and shall be set forth in such bonds. Notwithstanding the
foregoing, so long as there is no existing default in the payment of interest on
the bonds of the ____________ Series, all bonds of the ____________ Series
authenticated by the Corporate Trustee after the Record Date hereinafter
specified for any interest payment date, and prior to such interest payment date
(unless the Issue Date is after such Record Date), shall be dated the date of
authentication, but shall bear interest from such interest payment date, and the
person in whose name any bond of the ____________ Series is registered at the
close of business on any Record Date with respect to any interest payment date
shall be entitled to receive the interest payable on such interest payment date,
notwithstanding the cancellation of such bond of the ____________ Series, upon
any transfer or exchange thereof subsequent to the Record Date and on or prior
to such interest payment date. If the Issue Date of the bonds of the
____________ Series of a designated interest rate and maturity is after such
Record Date, such bonds shall bear interest from the Issue Date (unless some
other date is determined by the Board of Directors in accordance with a
Resolution filed with the Corporate Trustee referring to this ____________
Supplemental Indenture) but payment of interest shall commence on the second
interest payment date succeeding the Issue Date. "Record Date" for bonds of the
____________ Series which bear interest at a fixed rate shall mean ______ for
interest payable _________ and __________ for interest payable __________,
- -----------------------
(3) These provisions will be inserted in lieu of the first paragraph of
Section 1 above in any supplemental indenture relating to the issuance of
First Mortgage Bonds which are designated "Secured Medium-Term Notes,
Series ______".
<PAGE>
9
and __________ for bonds of the _____________ Series which bear interest at a
variable rate, the date 15 calendar days prior to any interest payment date,
provided that, interest payable on the maturity date will be payable to the
person to whom the principal thereof shall be payable. "Issue Date" with respect
to bonds of the ____________ Series of a designated interest rate and maturity
shall mean the date of first authentication of bonds of such designated interest
rate and maturity.]
(I) Bonds of the ___________ Series shall be redeemable after ________,
____ at the option of the Company or by the application (either at the option of
the Company or pursuant to the requirements of the Mortgage) of cash deposited
with the Corporate Trustee pursuant to any of the provisions of Section 38,
Section 39 or Section 64 of the Mortgage or with the Proceeds of Released
Property in whole at any time, or in part from time to time, prior to maturity,
upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail at
least 30 days and not more than 90 days prior to the date fixed for redemption),
at the following general redemption prices, expressed in percentages of the
principal amount of the bonds to be redeemed:
GENERAL REDEMPTION PRICES
If redeemed during 12 months period ending _________,
together, in each case, with accrued interest on the principal amount thereof to
the date fixed for redemption.
(4)[(I) Bonds of the ____________ Series shall be redeemable at the option
of the Company or by the application (either at the option of the Company or
pursuant to the requirements of the Mortgage) of cash deposited with the
Corporate Trustee pursuant to any of the provisions of Section 38, Section 39 or
Section 64 of the Mortgage or with the Proceeds of Released Property in whole at
any time, or in part from time to time, prior to maturity, upon notice as
provided in Sections 52 and 54 of the Mortgage (given by mail at least 30 days
and not more than 90 days prior to the date fixed for redemption), as the Board
of Directors may determine in accordance with a Resolution filed with the
Corporate Trustee referring to this ____________ Supplemental Indenture.]
(5)[(I) The bonds of the ____________ Series shall be redeemable at the
option of the Company or by the application (either at the option of the Company
or pursuant to the requirements of the Mortgage) of cash deposited with the
Corporate Trustee pursuant to any of the provisions of Sections 38, 39 or 64 of
the Mortgage or with the Proceeds of Released Property in whole at any time, or
in part from time to time, prior to maturity, upon notice as provided in
Sections 52 and 54 of the Mortgage (given by mail at least 30 days and not more
than 90 days prior to the date fixed for redemption (the "Redemption Date")), at
a redemption price equal to the greater of (i) 100% of their principal amount or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon from the Redemption Date to the maturity date,
computed by discounting such payments, in each case, to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Yield plus 10 basis points, plus in each case accrued interest on
the principal amount thereof to the Redemption Date.
- ---------------
(4) This provision will be inserted in lieu of clause (I) of Section 1 above
in any supplemental indenture relating to the issuance of First Mortgage
Bonds which are designated "Secured Medium-Term Notes, Series ___".
(5) This provision may be inserted in lieu of clause (I) of Section 1 above.
<PAGE>
10
"Treasury Yield" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker having a maturity comparable to the
remaining term of the bonds of the ____________ Series that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the bonds of the ____________ Series. "Independent Investment
Banker" means _________________________________ or, if such firm is unwilling or
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing selected by the Company and appointed
by the Corporate Trustee.
"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Company obtains fewer than four Reference Treasury Dealer Quotations,
the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Corporate Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Corporate Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such Redemption Date. The Company shall
furnish the Corporate Trustee a notice in writing at least five business days
and not more than ten business days prior to such Redemption Date of (a) the
name of each Reference Treasury Dealer, (b) the Redemption Date, and (c) the
third business day preceding the Redemption Date.
"Reference Treasury Dealer" means each of ________________________,
_____________________, and _____________________, and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government Securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
The Company shall deliver to the Corporate Trustee before any Redemption
Date for the bonds of the ____________ Series its calculation of the redemption
price applicable to such redemption. Except with respect to the obligations of
the Corporate Trustee expressly set forth in the foregoing definitions of
"Comparable Treasury Issue" and "Reference Treasury Dealer Quotations," the
Corporate Trustee shall be under no duty to inquire into, may presume the
correctness of, and shall be fully protected in acting upon the Company's
calculation of any redemption price of the bonds of the ____________ Series.
In lieu of stating the redemption price, notices of redemption of the
bonds of the ____________ Series shall state substantially the following: "The
redemption price of the bonds to be redeemed shall equal the greater of (i) 100%
of the principal amount of such bonds or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon from the
Redemption Date to the maturity date, computed by discounting such payments, in
each case, to the Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Yield (as defined in the
____________ Supplemental Indenture) plus 10 basis points, plus in each case
accrued interest on the principal amount thereof to the Redemption Date.]
Except as provided herein, Article X of the Mortgage, as heretofore
supplemented, shall apply to redemptions of bonds of the ____________ Series.
(II) At the option of the registered owner, any bonds of the ___________
Series, upon surrender thereof for cancellation at the office or agency of the
Company in the Borough of Manhattan, The City of New York, shall be exchangeable
for a like aggregate principal amount of bonds of the same series of other
authorized denominations
<PAGE>
11
(6)[which have the same Issue Date, maturity date, interest rate or rates, and
redemption provisions, if any]. The bonds of the ___________ Series may bear
such legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or with the rules or regulations of any stock
exchange or to conform to usage or agreement with respect thereto.
Bonds of the ___________ Series shall be transferable upon the surrender
thereof for cancellation, together with a written instrument of transfer in form
approved by the registrar duly executed by the registered owner or by his duly
authorized attorney, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.
[Bonds of the __________, Series will not be transferable except (i) as
required to effect an assignment to a successor trustee under the Indenture (For
Senior Notes) dated as of _____________ __, ______, between the Company and
_______________ as Trustee (the "Senior Note Indenture"), or as otherwise
provided in Sections 407 and 409 of the Senior Note Indenture, or (ii) in
compliance with a final order of a court of competent jurisdiction in connection
with any bankruptcy or reorganization proceeding of the Company.](7)
Upon any exchange or transfer of bonds of the ___________ Series, the
Company may make a charge therefor sufficient to reimburse it for any tax or
taxes or other governmental charge required to be paid by the Company, as
provided in Section 12 of the Mortgage, but the Company hereby waives any right
to make a charge in addition thereto for any exchange or transfer of bonds of
said Series.
[The Company's obligation to make payments with respect to the principal
of, premium, if any, and or interest on, the Bonds of the __________ Series
shall be fully or partially satisfied and discharged to the extent that, at the
time any such payment shall be due, the corresponding amount then due of
principal of, and/or premium, if any, and/or interest then due on, the Senior
Notes shall have been fully or partially paid (other than by the application of
the proceeds of a payment in respect of such Bonds of the ____ Series), as the
case may be, or there shall have been deposited with the Senior Note Trustee
pursuant to the Senior Note Indenture trust funds sufficient under such
indenture to fully or partially pay, as the case may be, the corresponding
amount then due of principal of, and/or premium, if any and/or interest on, the
Senior Notes (other than by the application of the proceeds of a payment in
respect of such Bonds of the ____ Series)(8)
(9)SECTION 2. Except as otherwise provided in this Section, the registered
owner of all bonds of the ____________ Series shall be Cede & Co., as nominee of
The Depository Trust Company ("DTC"). Payment of interest for any bonds of the
____________ Series registered in the name of Cede & Co. shall be made by wire
transfer to the account of Cede & Co. on the interest payment date for such
bonds of the ____________ Series at the address indicated for Cede & Co. in the
registration books of the Company kept by the registrar, anything in the bonds
of the ____________ Series to the contrary notwithstanding.
The bonds of the ____________ Series shall initially be issued in the form
of one or more fully registered global bonds ("Global Bonds") which will have an
aggregate principal amount equal to the bonds of the ____________ Series
represented thereby. Upon initial issuance, the ownership of the bonds of the
____________ Series shall be registered in the registration books of the Company
kept by the registrar in the name of Cede & Co., as nominee of DTC. The
Corporate Trustee and the Company may treat DTC (or its nominee) as the sole and
exclusive owner of the bonds of the ____________ Series registered in its name
for the purposes of payment of the principal of, or premium, if any, or interest
on such bonds of the ____________ Series, giving any notice permitted or
required to be given to holders herein, registering the transfer of such bonds
of the ____________ Series, obtaining
- ------------------
(6) Bracketed language will be added in any supplemental indenture relating to
the issuance of First Mortgage Bonds which are designated "Secured
Medium-Term Notes, Series __".
(7) This paragraph will be included in lieu of the preceding paragraph in a
supplemental indenture relating to the issuance of Senior Notes.
(8) This paragraph will be included in a supplemental indenture relating to
the issuance of Senior Notes.
(9) This provision may be inserted in any supplemental indenture relating to
the issuance of First Mortgage Bonds which are to be "book-entry" bonds.
<PAGE>
12
any consent or other action to be taken by holders and for all other purposes
whatsoever; and neither the Trustees nor the Company shall be affected by any
notice to the contrary. Neither the Trustees nor the Company shall have any
responsibility or obligation to any DTC participant, any person claiming a
beneficial ownership interest in bonds of the ____________ Series registered in
the name of Cede & Co. under or through DTC or any DTC participant, or any other
person not shown on the registration books of the Company kept by the registrar
as being a holder with respect to the accuracy of any records maintained by DTC,
Cede & Co., or any DTC participant; the payment by DTC or any DTC participant to
any beneficial owner of any amount in respect of the principal of, or premium,
if any, or interest on the bonds of the ____________ Series registered in the
name of Cede & Co.; the delivery to any DTC participant or any beneficial owner
of any notice which is permitted or required to be given to holders herein; the
selection by DTC or any DTC participant of any person to receive payment in the
event of a partial payment of any bonds of the _____________ Series registered
in the name of Cede & Co.; or any consent given or other action taken by DTC as
holder. All principal of, and premium, if any, and interest on any bonds of the
____________ Series registered in the name of Cede & Co., shall be paid only to
or upon the order of Cede & Co., as nominee of DTC, and all such payments shall
be valid and effective to fully satisfy and discharge the Company's obligations
with respect to the principal of, and premium, if any, and interest on such
bonds of the ____________ Series to the extent of the sum or sums so paid. Upon
delivery by DTC to the Corporate Trustee of written notice to the effect that
DTC had determined to substitute a nominee in place of Cede & Co., as registered
owner of any bonds of the ____________ Series, and subject to the provisions
herein with respect to record dates, the words "Cede & Co." herein shall refer
to such new nominee of DTC with respect to such bonds.
A Global Bond shall be exchangeable for definitive certificates registered
in the names of persons other than DTC or its nominee only if (i) DTC notifies
the Company that it is unwilling or unable to continue as a depository for such
Global Bond and no successor depository shall have been appointed, or if at any
time DTC ceases to be a clearing agency registered to act as such depository or
(ii) the Company in its sole discretion determines that such Global Bond shall
be so exchangeable. In any such event, the Company shall issue, register the
transfer of and exchange definitive certificates as requested by DTC in
appropriate amounts and the Company shall be obligated to prepare and deliver,
and the Corporate Trustee shall be obligated to authenticate, definitive
certificates.
So long as any bonds of the ____________ Series are registered in the name
of Cede & Co., as nominee of DTC, the Company and the Corporate Trustee are
hereby authorized to enter in any arrangements determined necessary or desirable
with DTC in order to effectuate this Section 2 and both of them shall act in
accordance with the Mortgage, as heretofore supplemented, and any such
arrangements. Without limiting the generality of the foregoing, any such
arrangements may alter the manner of effecting delivery of bonds of the
____________ Series, the transfer of funds for the payment of the bonds of the
____________ Series, and the delivery of notices to DTC.
In connection with any notice or other communication to be provided to
holders by the Company or the Corporate Trustee with respect to any consent or
other action to be taken by holders, so long as any bonds of the ____________
Series are registered in the name of Cede & Co., as nominee of DTC, the Company
shall establish a record date for such consent or other action and give DTC
notice of such record date not less than 15 calendar days in advance of such
record date. If a record date is fixed, those persons who were holders at such
record date (or their duly designated proxies), and only those persons, shall be
entitled in consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such persons continue to be holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
[SECTION 3. Upon payment of the principal of, and premium if any, and
interest due on the Senior Notes, whether at maturity or prior to maturity by
acceleration, redemption or otherwise, or upon provision for the payment thereof
having been made in accordance with the Senior Note Indenture (other than by the
application of the proceeds of a payment in respect of such Bonds of the ____
Series), Bonds of the _______________ Series in a principal amount equal to the
principal amount of Senior Notes so paid or for which such provision for payment
has been made shall be deemed fully paid, satisfied and discharged and the
obligations of the Company thereunder shall be terminated and such Bonds of the
________________ Series shall be surrendered to and canceled by the Trustees.
From and after the Release Date (as defined in the Senior Note Indenture), the
Bonds of the ____________ Series shall be deemed fully paid, satisfied and
discharged and the obligation of the Company
<PAGE>
13
thereunder shall be terminated. On the Release Date, the Bonds of the
____________ Series shall be surrendered to and canceled by the Trustees.](10)
ARTICLE II
DIVIDEND COVENANT
(11)SECTION 4. The Company covenants and agrees that, so long as any of
the bonds of the ___________ Series remain Outstanding, the Company will not
declare or pay any dividends upon its common stock (other than dividends in
common stock) or make any other distributions on its common stock or purchase or
otherwise retire any shares of its common stock, unless immediately after such
declaration, payment, purchase, retirement or distribution (hereinafter in this
Section referred to as "Restricted Payments"), and giving effect thereto, the
amount arrived at by adding
(a) the aggregate amount of all such Restricted Payments (other than
the dividend of fifty cents ($.50) per share declared on December 8, 1948
and paid on February 1, 1949 to holders of Common Stock) made by the
Company during the period from December 31, 1948, to and including the
effective date of the Restricted Payment in respect of which the
determination is being made, plus
(b) an amount equal to the aggregate amount of cumulative dividends
for such period (whether or not paid) on all preferred stock of the
Company from time to time outstanding during such period, at the rate or
rates borne by such preferred stock, plus
(c) an amount equal to the amount, if any, by which fifteen per
centum (15%) of the Gross Operating Revenues of the Company for such
period shall exceed the aggregate amount during such period expended
and/or accrued on its books for maintenance and/or appropriated on its
books out of income for property retirement, in each case in respect of
the Mortgaged and Pledged Property and/or automotive equipment used
primarily in the electric utility business of the Company (but excluding
any provisions for amortization of any amounts included in utility plant
acquisition adjustment accounts or utility plant adjustment accounts),
will not exceed the amount of the aggregate net income of the Company for said
period available for dividends (computed and ascertained in accordance with
sound accounting practice, on a cumulative basis, including the making of proper
deductions for any deficits occurring during any part of such period), plus
$3,000,000.
The Company further covenants and agrees that not later than May 1 of each
year beginning with the year 199_ it will furnish to the Corporate Trustee a
Treasurer's Certificate stating whether or not the Company has fully observed
the restrictions imposed upon it by the covenant contained in this Section 3.
[SECTION 4. The Company covenants and agrees, that so long as any of the
bonds of the _____ Series remain Outstanding, the Company will declare and pay
dividends in cash or property on any shares of its common stock only either (1)
out of its Surplus or (2) in case there shall be no Surplus, out of its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. If the Capital of the Company shall have been diminished
by the depreciation in the value of its property, or by losses, or otherwise, to
an amount less than the aggregate amount of the Capital represented by the
issued and outstanding stock of all classes having a preference upon the
distribution of assets of the Company, the Board of Directors shall not declare
and pay out of such net profits any dividends upon any shares of its common
stock until the deficiency in the amount of Capital represented by the issued
and outstanding stock of all classes having a preference upon the distribution
of assets shall have been repaired.
- ------------------
(10) This Section will be included in a Supplemental Indenture relating to the
issuance of Senior Notes.
(11) At the option of the Company this Section may be replaced by the bracketed
Section.
<PAGE>
14
The term "Capital" shall mean that part of the consideration received by
the Company for any shares of its capital stock which has been determined by a
Board Resolution to be capital, or, if the Board of Directors shall not have so
determined, "Capital" shall mean an amount equal to the aggregate par value of
shares having a par value, plus the amount of consideration for such shares
without par value.
The term "Surplus" shall mean the excess of the net assets of the Company
over its Capital.]
ARTICLE III
CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES
SECTION 5. Upon the filing of this ____________ Supplemental Indenture for
record in all counties in which the Mortgaged and Pledged Property is located,
and until a further indenture or indentures supplemental to the Mortgage shall
be executed and delivered by the Company to the Trustees pursuant to
authorization by the Board of Directors of the Company and filed for record in
all counties in which the Mortgaged and Pledged Property is located further
increasing or decreasing the amount of future advances which may be secured by
the Mortgage, as supplemented, the Mortgage, as supplemented, may secure future
advances and other indebtedness and sums not to exceed in the aggregate
$___________, in addition to $_____________ in aggregate principal amount of
bonds to be Outstanding at the time of such filing, and all such advances and
other indebtedness and sums shall be secured by the Mortgage, as supplemented,
equally, to the same extent and with the same priority, as the amount originally
advanced on the security of the Mortgage, namely, $46,000,000, and such advances
and other indebtedness and sums may be made or become owing and may be repaid
and again made or become owing and the amount so stated shall be considered only
as the total amount of such advances and other indebtedness and sums as may be
outstanding at one time.
[ARTICLE IV
RESERVATION OF RIGHTS TO AMEND CERTAIN PROVISIONS
OF THE MORTGAGE
SECTION 6. The Company reserves the right, without any consent or other
action by holders of bonds of the _________ Series or of any subsequently
created series to amend the Mortgage, as heretofore amended and supplemented, as
follows:
To amend subdivision (b) of clause (B) of Section 4 of the Mortgage by
adding the following words at the beginning thereof:
"ten-sevenths of"
SECTION 7. The Company reserves the right, without any consent or other
action by holders of bonds of the __________ Series or of any subsequently
created series to amend the Mortgage, as heretofore amended and supplemented, as
follows:
To amend the second and third lines of clause (A) of Section 7 of the
Mortgage by replacing the phrase "within the fifteen (15) calendar months" with
the phrase "within the eighteen (18) calendar months".
SECTION 8. The Company reserves the right, without any consent or other
action by holders of bonds of the ___________ Series or any subsequently created
series to amend the Mortgage, as heretofore amended and supplemented, as
follows:
<PAGE>
15
To amend the excepted property clause on page 121 of the Mortgage by
deleting the word "and" at the end of subdivision (3) and adding a subdivision
(5) immediately after the phrase "ordinary course of its business;" to read as
follows:
and "(5) any property which does not constitute Property
Additions, Funded Property or Funded Cash, as hereinafter defined;"
SECTION 9. The Company reserves the right, without any consent or other
action of holders of bonds of the __________ Series or of any subsequently
created series to amend the Mortgage, as heretofore amended and supplemented, as
follows:
To eliminate subsection III of Section 38.
SECTION 10. The Company reserves the right, without any consent or other
action by holders of bonds of the __________ Series or of any subsequently
created series, to amend the Mortgage, as heretofore amended and supplemented,
as follows:
To amend subsection 3(a) of Section 59 of the Mortgage to read as follows:
"(a) a Treasurer's Certificate describing in reasonable detail
the property to be released and requesting such release;
To amend subsection 3(b) of Section 59 of the Mortgage to read as follows:
"(b) (i) the Fair Value and (ii) the Cost (or as to Property
Additions constituting Funded Property of which the Fair Value to the
Company at the time the same became Funded Property was less than the Cost
as determined pursuant to Section 4 hereof, then such Fair Value in lieu
of Cost), in the opinion of the signers, of the property to be released;
and the Cost (or as to Property Additions constituting Funded Property of
which the Fair Value to the Company at the time the same became Funded
Property was less than the Cost as determined pursuant to Section 4
hereof, then such Fair Value in lieu of Cost), in the opinion of the
signers, of any portion thereof that is Funded Property;"
To amend the first six lines of subsection (4) of Section 59 of the
Mortgage to read as follows:
"(4) an amount in cash, to be held by the Corporate Trustee as part
of the Mortgaged and Pledged Property, equivalent to the amount, if any,
by which the Cost (or as to Property Additions constituting Funded
Property of which the Fair Value to the Company at the time the same
became Funded Property was less than the Cost as determined pursuant to
Section 4 hereof, then such Fair Value in lieu of Cost) of the property to
be released, as specified in the Engineer's Certificate provided for in
subdivision (3) above, exceeds the aggregate of the following items:"
To amend the first sentence of subsection (4)(c) of Section 59 of the
Mortgage by adding the following words at the beginning thereof:
"an amount equal to ten-sevenths of"
To amend Section 60 of the Mortgage by inserting "(I)" before the word
"Unless" in the first line thereof, and by adding the following subsection (II)
at the end of Section 60;
<PAGE>
16
"(II) Unless the Company is in default in the payment of the
interest on any bonds then Outstanding hereunder or one or more of the
Defaults defined in Section 65 hereof shall have occurred and be
continuing, the Company may obtain the release of any of the Mortgaged and
Pledged Property that is not Funded Property, except cash then held by the
Corporate Trustee (provided, however, that Prior Lien Bonds deposited with
the Corporate Trustee shall not be released or surrendered except as
provided in Article IX hereof and obligations secured by purchase money
mortgage deposited with the Corporate Trustee shall not be released except
as provided in Section 61 hereof), and the Corporate Trustee shall release
all its right, title and interest in and to the same from the Lien hereof
upon application of the Company and receipt by the Corporate Trustee of
the following (in lieu of complying with the requirements of Section 59
hereof):
(1) a Treasurers' Certificate describing in reasonable detail the
property to be released and requesting such release, and stating:
(a) that the Company is not in default in the payment of
interest on any bonds then Outstanding hereunder and that no Default
has occurred and is continuing;
(b) that the property to be released is not Funded Property;
and
(c) that (except in any case where a governmental body or
agency has exercised a right to order the Company to divest itself
of such property) such release is in the opinion of the signers
desirable in the conduct of the business of the Company;
(2) an Engineer's Certificate, made and dated not more than ninety
(90) days prior to the date of such application, stating:
(a) a description of the property to be released;
(b) the Fair Value, in the opinion of the signers, of the
property (or securities) to be released;
(c) that in the opinion of the signers such release will not
impair the security under this Indenture in contravention of the
provisions hereof; and
(d) that the Company has Property Additions constituting
property that is not Funded Property (not including any Property
Additions then being released) of a Cost or Fair Value to the
Company (whichever is less) of not less than one dollar ($1) (after
making any deductions and any additions pursuant to the provisions
of Section 4 hereof) after deducting the Cost of the property then
being released; and
(3) an Opinion of Counsel stating the signer's opinion to the effect
that on the delivery to the corporate Trustee of the certificates, if any,
and documents specified in such Opinion of Counsel, the conditions
precedent provided for in this Indenture relating to the release of the
property in question have been complied with; and in case the Corporate
Trustee is requested to release any franchise, further stating that in
such signer's opinion such release will not impair to any material extent
the right of the Company to operate any of its remaining properties."
SECTION 11. The Company reserves the right, without action of holders of
bonds of _____ Series or of any subsequently created series to make such
amendments to the Mortgage as heretofore amended and supplemented, and as it may
be amended pursuant to the Thirteenth Supplemental Indenture, as shall be
necessary in order to amend the indicated Sections of the Mortgage, as such
Sections are then in effect, to read as follows:
"SECTION 112. The holders of (a) a majority in principal amount of
the bonds Outstanding hereunder when such meeting is held or (b) if the action
proposed at said meeting adversely affects solely the rights of
<PAGE>
17
the holders of one or more, but less than all, series of bonds then Outstanding,
then only a majority in principal amount of those bonds then Outstanding so to
be adversely affected must be present at such meeting in person or by proxy in
order to constitute a quorum for the transaction of business, less than a
quorum, however, having power to adjourn.
"SECTION 113. Subject to the provisions of Section 80 hereof, any
modification or alteration of this Indenture (including any indentures
supplemental hereto) and/or of the rights and obligations of the Company and/or
the rights of the holders of bonds and/or coupons issued hereunder in any
particular (including but not limited to the waiver of any past Default, as
defined in Section 65 hereof, or other default, and its consequences), may be
made at a meeting of bondholders duly convened and held in accordance with the
provisions of this Article, by resolution duly adopted (a) by the affirmative
vote of the holders of a majority or more in principal amount of the bonds
Outstanding hereunder, or (b) if the rights of one or more, but less than all,
series of bonds then Outstanding are to be adversely affected by action taken at
such meeting, then only by affirmative vote of the holders of a majority in
principal amount of those bonds so to be adversely affected and Outstanding
hereunder when such meeting is held, considered as one class, and in every case
approved by Resolution of the Board of Directors of the Company, as herein
specified; provided, however, that no such modification or alteration shall,
without the consent of the holder of any bond issued hereunder affected thereby,
(1) impair or affect the right of such holder to receive payment of the
principal of (and premium, if any) and interest on such bond, on or after the
respective due dates expressed in such bond, or to institute suit for the
enforcement of any such payment on or after such respective dates, or (2) permit
the creation of any lien ranking prior to, or on a parity with, the Lien of this
Indenture with respect to any of the Mortgaged and Pledged Property, or (3)
permit the deprivation of any non-assenting bondholder of a lien upon the
Mortgaged and Pledged Property for the security of his bonds (subject only to
the lien of taxes, assessments or governmental charges not then delinquent and
to any mortgage or other liens existing upon such property which are prior
hereto at the date of the calling of any such bondholders' meeting), or (4)
permit the reduction of the percentage required by the provisions of this
Section for the taking of any action under this Section with respect to any bond
Outstanding hereunder. For all purposes of this Article, the Trustees, subject
to the provisions of Sections 88 and 89 hereof, shall be entitled to rely upon
an Opinion of Counsel with respect to the extent, if any, as to which any action
taken at such meeting affects the rights under this Indenture or under any
indenture supplemental hereto of any holders of bonds then Outstanding
hereunder.
"Except for the purpose of waiving any past Default, as defined in
Section 65 hereof, and its consequences, in which event the provisions of
Section 71 hereof shall be applicable, bonds owned and/or held by and/or for
account of and/or for the benefit or interest of the Company, or any corporation
of which the Company shall own twenty-five per centum (25%) or more of the
outstanding voting stock, shall not be deemed Outstanding for the purpose of any
vote or of any calculation of bonds Outstanding in this Article XVIII provided
for, except that, for the purpose of determining whether the Trustees shall be
protected in relying on any such vote or calculation, only bonds which the
Trustees, or either of them, know are so owned and/or held, shall be excluded.
"SECTION 116. (A) Anything in this Article contained to the contrary
notwithstanding, the Corporate Trustee shall accept the written consent (in any
number of instruments of similar tenor executed by bondholders or by their
attorneys appointed in writing) of the holders of a majority or more in
principal amount of the bonds Outstanding hereunder, or if the rights of one or
more, but less than all, series of bonds then Outstanding are to be adversely
affected by action taken pursuant to such consent, then the Corporate Trustee
shall accept the written consent of the holders of a majority in principal
amount of only such bonds so to be adversely affected and Outstanding hereunder
(at the time the last such needed consent is delivered to the Corporate Trustee)
in lieu of the holding of a meeting pursuant to this Article and in lieu of all
action at such a meeting and with the same force and effect as a resolution duly
adopted in accordance with the provisions of Section 113 hereof.
"(B) Instruments of consent shall be witnessed or in the alternative
may (a) have the signature guaranteed by a bank or trust company or a registered
dealer in securities, (b) be acknowledged before a Notary Public or other
officer authorized to take acknowledgments, or (c) have their genuineness
otherwise established to the satisfaction of the Corporate Trustee.
<PAGE>
18
"The amount of bonds payable to bearer, and the series and serial
numbers thereof, held by a person executing an instrument of consent (or whose
attorney has executed an instrument of consent in his behalf), and the date of
his holding the same, may be proved either by exhibiting the bonds themselves to
the Corporate Trustee or by a certificate executed (i) by any bank, or trust or
insurance company organized under the laws of the United States of America or of
any state thereof, (ii) by any trustee, secretary, administrator or other proper
officer of any pension, welfare, hospitalization or similar fund, (iii) by the
United States of America, any Territory thereof, the District of Columbia, any
State of the United States, any municipality in any State or Territory of the
United States or any public instrumentality of the United States, any State or
Territory, or (iv) by any other person or corporation satisfactory to the
Corporate Trustee. A bondholder in any of the foregoing categories may sign a
certificate in his own behalf.
"Each such certificate shall be dated and shall state in effect that
as of the date thereof a coupon bond or bonds of a specified series and bearing
a specified serial number or numbers was deposited with or exhibited to the
signer of such certificate. The holding by the person named in any such
certificate of any bond specified therein shall be presumed to continue unless
(1) any certificate bearing a later date issued in respect of the same bond
shall be produced, (2) the bond specified in such certificate (or any bond or
bonds issued in exchange or substitution for such bond) shall be produced by
another holder, or (3) the bond specified in such certificate shall be
registered as to principal or shall have been surrendered in exchange for a
fully registered bond registered in the name of another holder. The Corporate
Trustee may nevertheless in its discretion require further proof in cases where
it deems further proof desirable. The ownership of registered bonds shall be
proved by the registry books.
"(C) Until such time as the Corporate Trustee shall receive the
written consent of the necessary per centum in principal amount of the bonds
required by the provisions of subsection (A) above for action contemplated by
such consent, any holder of a bond, the serial number of which is shown by the
evidence to be included in the bonds the holders of which have consented to such
action, may, by filing written notice with the Corporate Trustee at its
principal office and upon proof of holding as provided in subsection (B) above,
revoke such consent so far as it concerns such bond. Except as aforesaid, any
such consent shall be conclusive and binding upon such holder and upon all
future holders of such bond (and any bond issued in lieu thereof or exchanged
therefor), irrespective of whether or not any notation of such consent is made
upon such bond, and in any event any action taken by the holders of the
percentage in aggregate principal amount of the bonds specified in subsection
(A) above in connection with such action shall, subject to the provisions of the
last sentence of Section 114 hereof, be conclusively binding upon the Company,
the Trustees and the holders of all the bonds."](12)
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 12. Subject to the amendments provided for in this ____________
Supplemental Indenture, the terms defined in the Mortgage, as heretofore
supplemented, shall, for all purposes of this ____________ Supplemental
Indenture, have the meanings specified in the Mortgage, as heretofore
supplemented.
SECTION 13. The provisions of the third and fourth paragraphs of Section
64 of the Mortgage with reference to the bonds of the First Series (therein
called "1965 Series") shall also be deemed to apply separately to the bonds of
the ___________ Series to the same extent as if such paragraphs had been
repeated in said Section 64 with the words "___________ Series" substituted
therein wherever the figure and word "1965 Series" occur.
SECTION 14. The Trustees hereby accept the trusts herein declared,
provided, created or supplemented and agree to perform the same upon the terms
and conditions herein and in the Mortgage, as heretofore supplemented, set forth
and upon the following terms and conditions:
- ------------------
(12) Any of the provisions contained in this Article IV may be inserted in any
subsequent supplemental indenture.
<PAGE>
19
The Trustees shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this ____________ Supplemental
Indenture or for or in respect of the recitals contained herein, all of
which recitals are made by the Company solely. In general each and every
term and condition contained in Article XVI of the Mortgage shall apply to
and form part of this ____________ Supplemental Indenture with the same
force and effect as if the same were herein set forth in full with such
omissions, variations and insertions, if any, as may be appropriate to
make the same conform to the provisions of this ____________ Supplemental
Indenture.
SECTION 15. Subject to the provisions of Article XV and Article XVI of the
Mortgage, whenever in this ____________ Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this ____________ Supplemental Indenture contained by or on behalf of the
Company or by or on behalf of the Trustees shall bind and inure to the benefit
of the respective successors and assigns of such parties whether so expressed or
not.
SECTION 16. Nothing in this ____________ Supplemental Indenture, expressed
or implied, is intended, or shall be construed, to confer upon, or to give to,
any person, firm or corporation, other than the parties hereto and the holders
of the Outstanding bonds and coupons, any right, remedy or claim under or by
reason of this ____________ Supplemental Indenture or any covenant, condition,
stipulation, promise or agreement hereof, and all the covenants, conditions,
stipulations, promises and agreements in this ____________ Supplemental
Indenture contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto, and of the holders of the Outstanding
bonds and coupons.
SECTION 17. This ____________ Supplemental Indenture shall be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
<PAGE>
20
IN WITNESS WHEREOF, Carolina Power & Light Company has caused its
corporate name to be hereunto affixed, and this instrument to be signed and
sealed by its President or one of its Vice Presidents or its Treasurer and its
corporate seal to be attested by its Secretary or one of its Assistant
Secretaries, and The Bank of New York has caused its corporate name to be
hereunto affixed, and this instrument to be signed and sealed by one of its Vice
Presidents or Assistant Vice Presidents, and its corporate seal to be attested
by one of its Assistant Vice Presidents or Assistant Secretaries and W.T.
Cunningham has hereunto set his hand and affixed his seal, all as of the day and
year first above written.
CAROLINA POWER & LIGHT COMPANY
By....................................
---------
ATTEST:
......................................
-------------------
Executed, sealed and delivered by
CAROLINA POWER & LIGHT
COMPANY in the presence of:
......................................
------------------
......................................
-----------------
<PAGE>
21
THE BANK OF NEW YORK, as Trustee
By ......................................
------------------------
ATTEST:
......................................
-------------------
......................................(L.S.)
W.T. Cunningham, Individual Trustee
Executed, sealed and delivered
by THE BANK OF NEW YORK
and W.T. CUNNINGHAM
in the presence of:
......................................
--------------
......................................
--------------
<PAGE>
22
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
This ____ day of _____, A.D. 199_, personally came before me,
____________, a Notary Public in and for the County aforesaid,
_________________, who, being by me duly sworn, says that she is the _________
of CAROLINA POWER & LIGHT COMPANY, and that the seal affixed to the foregoing
instrument in writing is the corporate seal of said company, and that said
writing was signed and sealed by her in behalf of said corporation by its
authority duly given. And the said _____________ acknowledged the said writing
to be the act and deed of said corporation.
On the ____ day of _____, in the year of 199_, before me personally came
_________, to me known, who, being by me duly sworn, did depose and say that she
resides at ____________________________, State of North Carolina; that she is
the _________ of CAROLINA POWER & LIGHT COMPANY, one of the corporations
described in and which executed the above instrument; that she knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that she signed her name thereto by like order.
......................................
------------------
NOTARY PUBLIC, State of North Carolina
Wake County
My Commission Expires _____________
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
Personally appeared before me __________________, who being duly sworn,
says that she saw the corporate seal of CAROLINA POWER & LIGHT COMPANY affixed
to the above written instrument, and that she also saw _________________, the
_________, with ________________, an Assistant Secretary, of said CAROLINA POWER
& LIGHT COMPANY, sign and attest the same, and that she, deponent, with
_______________, witnessed the execution and delivery thereof as the act and
deed of said CAROLINA POWER & LIGHT COMPANY.
......................................
------------------
Sworn to before me this
____ day of _____, 199_
......................................
------------------
NOTARY PUBLIC, State of North Carolina
Wake County
My Commission Expires ____ __, ____
<PAGE>
23
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
This ____ day of _____, A.D. 199_, personally came before me,
_____________, a Notary Public in and for the County aforesaid,
_________________, who, being by me duly sworn, says that he is an Assistant
Vice President of THE BANK OF NEW YORK, and that the seal affixed to the
foregoing instrument in writing is the corporate seal of said company, and that
said writing was signed and sealed by him in behalf of said corporation by its
authority duly given. And the said _________________ acknowledged the said
writing to be the act and deed of said corporation.
On the ____ day of _____, in the year 199_, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he resides in ________, ________; that he is an Assistant Vice President of
THE BANK OF NEW YORK, one of the corporations described in and which executed
the above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that he signed his name
thereto by like order.
I, ______________, a Notary Public in and for the County aforesaid, do
hereby certify that W.T. CUNNINGHAM personally appeared before me this day and
acknowledged the due execution by him as successor Individual Trustee of the
foregoing instrument.
On the ____ day of _____, 199_, before me personally came W.T. CUNNINGHAM,
to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he, as successor Individual Trustee, executed
the same.
WITNESS my hand and official seal this ____ day of _____, 199_.
......................................
--------------
NOTARY PUBLIC, State of New York
No. _______
Qualified in ______ County
Certificate filed in New York County
Commission Expires ___ __, 199_
<PAGE>
24
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
Personally appeared before me ______________________, who, being duly
sworn, says that she saw the corporate seal of THE BANK OF NEW YORK affixed to
the above written instrument and that she also saw _________________, an
Assistant Vice President, with _____________, an Assistant Secretary, of said
THE BANK OF NEW YORK, sign and attest the same, and that she, deponent, with
______________, witnessed the execution and delivery thereof as the act and deed
of said THE BANK OF NEW YORK.
Personally appeared before me ______________________, who, being duly
sworn, says that she saw the within named W.T. CUNNINGHAM, as successor
Individual Trustee, sign, seal and as his act and deed deliver the foregoing
instrument for the purposes therein mentioned, and that she, deponent, with
______________, witnessed the execution thereof.
......................................
--------------
Sworn to before me this
____ day of _____, 199_
......................................
------------------
NOTARY PUBLIC, State of New York
No. _____
Qualified in ______ County
Certificate filed in New York County
Commission Expires ____________
EXHIBIT 4(D)
--------------------------------------------------
CAROLINA POWER & LIGHT COMPANY
TO
------------------------------,
TRUSTEE
------------
INDENTURE
(FOR SENIOR NOTES)
DATED AS OF ______________,199__
--------------------------------------------------
<PAGE>
TABLE OF CONTENTS*
PARTIES......................................................................1
RECITAL OF THE COMPANY.......................................................1
ARTICLE I Definitions and Other Provisions of General Application...........1
Section 101. Definitions...............................................1
Section 102. Compliance Certificates and Opinions......................7
Section 103. Form of Documents Delivered to Trustee....................8
Section 104. Acts of Holders...........................................9
Section 105. Notices, Etc. to Trustee and Company.....................11
Section 106. Notice to Holders of Notes; Waiver.......................11
Section 107. Conflict with Trust Indenture Act........................12
Section 108. Effect of Headings and Table of Contents.................12
Section 109. Successors and Assigns...................................12
Section 110. Separability Clause......................................12
Section 111. Benefits of Indenture....................................12
Section 112. Governing Law............................................13
Section 113. Legal Holidays...........................................13
ARTICLE II Note Forms......................................................13
Section 201. Forms Generally..........................................13
Section 202. Form of Trustee's Certificate of Authentication..........14
ARTICLE III The Notes......................................................14
Section 301. Amount Unlimited; Issuable in Series.....................14
Section 302. Denominations............................................17
Section 303. Execution, Authentication, Delivery and Dating...........17
Section 304. Temporary Notes..........................................20
Section 305. Registration, Registration of Transfer and Exchange......21
Section 306. Mutilated, Destroyed, Lost and Stolen Notes..............22
Section 307. Payment of Interest; Interest Rights Preserved...........23
Section 308. Persons Deemed Owners....................................24
Section 309. Cancellation by Note Registrar...........................24
Section 310. Computation of Interest..................................25
Section 311. Payment to be in Proper Currency.........................25
- ---------------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
Section 312. Payments on Senior Note First Mortgage Bonds.............25
ARTICLE IV Senior Note First Mortgage Bonds................................25
Section 401. Acceptance of Senior Note First Mortgage Bonds;
Registration and Ownership of Senior Note First Mortgage
Bond.....................................................25
Section 402. Terms of Senior Note First Mortgage Bonds................26
Section 403. Senior Note First Mortgage Bonds as Security for Notes...26
Section 404. Fair Value Certificate...................................27
Section 405. Senior Note First Mortgage Bonds Held by the Trustee.....28
Section 406. No Transfer of Senior Note First Mortgage Bonds;
Exception................................................28
Section 407. Delivery to the Company of all Senior Note First
Mortgage Bonds...........................................28
Section 408. Further Assurances.......................................28
Section 409. Exchange and Surrender of Senior Note First Mortgage
Bonds....................................................29
ARTICLE V Redemption of Notes..............................................29
Section 501. Applicability of Article.................................29
Section 502. Election to Redeem; Notice to Trustee....................29
Section 503. Selection of Notes to be Redeemed........................30
Section 504. Notice of Redemption.....................................30
Section 505. Notes Payable on Redemption Date.........................31
Section 506. Notes Redeemed in Part...................................32
ARTICLE VI Sinking Funds...................................................32
Section 601. Applicability of Article.................................32
Section 602. Satisfaction of Sinking Fund Payments with Notes.........32
Section 603. Redemption of Notes for Sinking Fund.....................33
ARTICLE VII Covenants......................................................33
Section 701. Payment of Principal, Premium and Interest...............33
Section 702. Maintenance of Office or Agency..........................34
Section 703. Money for Notes Payments to be Held in Trust.............34
Section 704. Corporate Existence......................................36
Section 705. Maintenance of Properties................................36
Section 706. Annual Officer's Certificate as to Compliance............36
Section 707. Waiver of Certain Covenants..............................36
Section 708. Recording, Filing, etc.; Opinions of Counsel.............37
ARTICLE VIII Satisfaction and Discharge....................................37
Section 801. Satisfaction and Discharge of Notes......................37
Section 802. Satisfaction and Discharge of Indenture..................40
Section 803. Application of Trust Money...............................41
(ii)
<PAGE>
ARTICLE IX Events of Default; Remedies.....................................42
Section 901. Events of Default........................................42
Section 902. Acceleration of Maturity; Rescission and Annulment.......43
Section 903. Collection of Indebtedness and Suits for Enforcement by
Trustee..................................................45
Section 904. Trustee May File Proofs of Claim.........................45
Section 905. Trustee May Enforce Claims Without Possession of Notes...46
Section 906. Application of Money Collected...........................46
Section 907. Limitation on Suits......................................46
Section 908. Unconditional Right of Holders to Receive Principal,
Premium and Interest.....................................47
Section 909. Restoration of Rights and Remedies.......................47
Section 910. Rights and Remedies Cumulative...........................48
Section 911. Delay or Omission Not Waiver.............................48
Section 912. Control by Holders of Notes..............................48
Section 913. Waiver of Past Defaults..................................48
Section 914. Undertaking for Costs....................................49
Section 915. Waiver of Stay or Extension Laws.........................49
Section 916. Default Under the First Mortgage.........................49
ARTICLE X The Trustee......................................................50
Section 1001. Certain Duties and Responsibilities.....................50
Section 1002. Notice of Defaults......................................50
Section 1003. Certain Rights of Trustee...............................50
Section 1004. Not Responsible for Recitals or Issuance of Notes.......52
Section 1005. May Hold Notes..........................................52
Section 1006. Money Held in Trust.....................................52
Section 1007. Compensation and Reimbursement..........................52
Section 1008. Disqualification; Conflicting Interests.................53
Section 1009. Corporate Trustee Required; Eligibility.................53
Section 1010. Resignation and Removal; Appointment of Successor.......54
Section 1011. Acceptance of Appointment by Successor..................56
Section 1012. Merger, Conversation, Consolidation or Succession to
Business................................................57
Section 1013. Preferential Collection of Claims Against Company.......57
Section 1014. Co-trustees and Separate Trustees.......................58
Section 1015. Appointment of Authenticating Agent.....................59
ARTICLE XI Holders'Lists and Reports by Trustee and Company................61
Section 1101. Lists of Holders........................................61
Section 1102. Reports by Trustee and Company..........................61
ARTICLE XII Consolidation, Merger, Conveyance or Other Transfer............62
Section 1201. Company May Consolidate, Etc., Only on Certain Terms....62
(iii)
<PAGE>
Section 1202. Successor Corporation Substituted.......................62
ARTICLE XIII Supplemental Indentures.......................................63
Section 1301. Supplemental Indentures Without Consent of Holders......63
Section 1302. Supplemental Indentures With Consent of Holders.........65
Section 1303. Execution of Supplemental Indentures....................66
Section 1304. Effect of Supplemental Indentures.......................66
Section 1305. Conformity With Trust Indenture Act.....................66
Section 1306. Reference in Notes to Supplemental Indentures...........67
Section 1307. Modification Without Supplemental Indenture.............67
ARTICLE XIV Meetings of Holders; Action Without Meeting....................67
Section 1401. Purposes for Which Meetings May be Called...............67
Section 1402. Call, Notice and Place of Meetings......................67
Section 1403. Persons Entitled to Vote at Meetings....................68
Section 1404. Quorum; Action..........................................68
Section 1405. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings.............69
Section 1406. Counting Votes and Recording Action of Meetings.........70
Section 1407. Action Without Meeting..................................71
ARTICLE XV Immunity of Incorporators, Stockholders, Officers and Directors.71
Section 1501. Liability Solely Corporate..............................71
Testimonium.................................................................71
Signature and Seals.........................................................72
Acknowledgments.............................................................73
(iv)
<PAGE>
CAROLINA POWER & LIGHT COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ___________, 199__
TRUST INDENTURE ACT SECTION INDENTURE SECTION
ss.310 (a)(1)................................................ 1009
(a)(2)................................................ 1009
(a)(3)................................................ 1014
(a)(4)................................................ Not Applicable
(b) ................................................ 1008
1010
ss.311 (a) ................................................ 1013
(b) ................................................ 1013
(c) ................................................ 1013
ss.312 (a) ................................................ 1101
(b) ................................................ 1101
(c) ................................................ 1101
ss.313 (a) ................................................ 1102
(b) ................................................ 1102
(c) ................................................ 1102
(d) ................................................ 1102
ss.314 (a) ................................................ 1102
(a)(4)................................................ 706
(b) ................................................ 708
(c)(1)................................................ 102
(c)(2)................................................ 102
(c)(3)................................................ Not Applicable
(d) ................................................ 102
404
(e) ................................................ 102
ss.315 (a) ................................................ 1001
1003
(b) ................................................ 1002
(c) ................................................ 1001
(d) ................................................ 1001
(e) ................................................ 914
ss.316 (a) ................................................ 912
.................................................. 913
(a)(1)(A)............................................. 902
912
(a)(1)(B)............................................. 913
(a)(2)................................................ Not Applicable
(b) ................................................ 908
ss.317 (a)(1)................................................ 903
(a)(2)................................................ 904
(b) ................................................ 703
ss.318 (a) ................................................ 107
(v)
<PAGE>
INDENTURE, dated as of ________________, 199__, between CAROLINA
POWER & LIGHT COMPANY, a corporation duly organized and existing under the laws
of the State of North Carolina (herein called the "Company"), having its
principal office at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
and ____________________, a ____________________, having its principal office at
__________, __________, _______________, as Trustee (herein called the
"Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Senior Notes
(herein called the "Notes"), in an unlimited aggregate principal amount, to be
issued in one or more series as contemplated herein; and all acts necessary to
make this Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes or of series
thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted
<PAGE>
hereunder shall mean such accounting principles as are generally accepted
in the United States at the date of such computation or, at the election
of the Company from time to time, at the date of the execution and
delivery of this Indenture; provided, however, that in determining
generally accepted accounting principles applicable to the Company, the
Company shall, to the extent required, conform to any order, rule or
regulation of any administrative agency, regulatory authority or other
governmental body having jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Ten, are defined in that
Article.
"ACT", when used with respect to any Holder of a Note, has the
meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Notes, by contract or otherwise; and the
terms "CONTROLLING" AND "CONTROLLED" have meanings correlative to the foregoing.
"AUTHENTICATING AGENT" means any Person (other than the Company or
an Affiliate of the Company) authorized by the Trustee pursuant to Section 1015
to act on behalf of the Trustee to authenticate one or more series of Notes or
Tranche thereof.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President,
any Vice President, the Treasurer or any other duly authorized officer of the
Company.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof duly authorized to act or any director or
directors and/or officer or officers of the Company to whom that board or
committee shall have duly delegated its authority in respect of matters relating
to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or any
other particular location specified in the Notes or this Indenture, means any
day, other than a Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other location are
generally authorized or required by law, regulation or executive order to remain
closed, except as may be otherwise specified as contemplated by Section 301.
-2-
<PAGE>
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body, if any, performing such duties at such
time.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by an Authorized Officer and delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution and delivery of this
Indenture is located at __________, __________, _______________.
"CORPORATION" means a corporation, association, company, limited
liability company, joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DISCOUNT NOTE" means any Note which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 902. "Interest" with
respect to a Discount Note means interest, if any, borne by such Note at a
Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"ELIGIBLE OBLIGATIONS" MEANS:
(a) with respect to Notes denominated in Dollars, Government
Obligations; or
(b) with respect to Notes denominated in a currency other than
Dollars or in a composite currency, such other obligations or instruments
as shall be specified with respect to such Notes, as contemplated by
Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section 901.
"EXPERT" means any officer of the Company familiar with the terms of
the First Mortgage and this Indenture, any law firm, any investment banking
firm, any accounting firm, or any other person, in each case that is appointed
by Company Request, is an expert in the applicable matter, and is satisfactory
in the reasonable judgment of the Trustee.
-3-
<PAGE>
"FIRST MORTGAGE" means the Company's Mortgage and Deed of Trust,
dated as of May 1, 1940, as supplemented and amended from time to time.
"FIRST MORTGAGE BONDS" means all first mortgage bonds issued by the
Company and outstanding under the Mortgage, other than Senior Note First
Mortgage Bonds.
"GOVERNMENTAL AUTHORITY" means the government of the United States
or of any State or Territory thereof or of the District of Columbia or of any
county, municipality or other political subdivision of any thereof, or any
department, agency, authority or other instrumentality of any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in clause
(a) above or in any specific interest or principal payments due in respect
thereof; provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or trust company
(which may include the Trustee or any Paying Agent) subject to Federal or
state supervision or examination with a combined capital and surplus of at
least $100,000,000; and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to the holders
of such certificates, depositary receipts or other instruments the full
amount received by such custodian in respect of such obligations or
specific payments and shall not be permitted to make any deduction
therefrom.
"HOLDER" means a Person in whose name a Note is registered in the
Note Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Notes
established as contemplated by Section 301.
"INDEPENDENT" when used with respect to any specified Person means
such a Person who is in fact independent and selected by the Company and
approved by the Trustee in the exercise of reasonable care.
"INTEREST PAYMENT DATE", when used with respect to any Note, means
the Stated Maturity of an installment of interest on such Note.
"MORTGAGE TRUSTEE" means the Persons serving as trustees at the time
under the First Mortgage.
-4-
<PAGE>
"MATURITY", when used with respect to any Note, means the date on
which the principal of such Note or an installment of principal becomes due and
payable as provided in such Note or in this Indenture, whether at the Stated
Maturity, by declaration of acceleration, upon call for redemption or otherwise.
"NOTE REGISTER" AND "NOTE REGISTRAR" have the respective meanings
specified in Section 305.
"NOTES" has the meaning stated in the first recital of this
Indenture and more particularly means any notes authenticated and delivered
under this Indenture.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, or other counsel acceptable to the Trustee.
"OUTSTANDING", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered under
this Indenture, except:
(a) Notes theretofore canceled by the Trustee or the Security
Registrar or delivered to the Trustee or the Security Registrar for
cancellation;
(b) Notes deemed to have been paid in accordance with Section 801;
and
(c) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect
of which there shall have been presented to the Trustee proof satisfactory
to it and the Company that such Notes are held by a bona fide purchaser or
purchasers in whose hands such Notes are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Notes Outstanding under this Indenture, or the
Outstanding Notes of any series or Tranche, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Notes,
(x) Notes owned by the Company or any other obligor upon the
Notes or any Affiliate of the Company or of such other obligor
(unless the Company, such Affiliate or such obligor owns all Notes
Outstanding under this Indenture, or all Outstanding Notes of each
such series and each such Tranche, as the case may be, determined
without regard to this clause (x)) shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Notes which the
Trustee knows to be so owned shall be so disregarded; provided,
however, that Notes so owned which have been pledged in
-5-
<PAGE>
good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Company
or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor; and
(y) the principal amount of a Discount Note that shall be
deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date
of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 902;
provided, further, that, in the case of any Note the principal of which is
payable from time to time without presentment or surrender, the principal amount
of such Note that shall be deemed to be Outstanding at any time for all purposes
of this Indenture shall be the original principal amount thereof less the
aggregate amount of principal thereof theretofore paid.
"PAYING AGENT" means any Person, including the Company, authorized
by the Company to pay the principal of and premium, if any, or interest, if any,
on any Notes on behalf of the Company.
"PERIODIC OFFERING" means an offering of Notes of a series from time
to time any or all of the specific terms of which Notes, including without
limitation the rate or rates of interest, if any, thereon, the Stated Maturity
or Maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon the issuance of
such Notes.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Notes of any
series, or Tranche thereof, means the place or places, specified as contemplated
by Section 301, at which, subject to Section 702, principal of and premium, if
any, and interest, if any, on the Notes of such series or Tranche are payable.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed (to the extent lawful)
to evidence the same debt as the mutilated, destroyed, lost or stolen Note.
"REDEMPTION DATE", when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Notes of any series means the date specified for that
purpose as contemplated by Section 301.
-6-
<PAGE>
"RELEASE DATE" means the date as of which all First Mortgage Bonds
have been retired through payment, redemption, or otherwise at, before or after
the maturity thereof.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICEr", when used with respect to the Trustee, means
any officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.
"SENIOR NOTE FIRST MORTGAGE BONDS" shall mean any bonds issued by
the Company under the First Mortgage and delivered to the Trustee pursuant to
Section 401 hereof.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on
the Notes of any series means a date fixed by the Trustee pursuant to Section
307.
"STATED INTEREST RATE" means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear interest. Any calculation or
other determination to be made under this Indenture by reference to the Stated
Interest Rate on a Note shall be made without regard to the effective interest
cost to the Company of such Note and without regard to the Stated Interest Rate
on, or the effective cost to the Company of, any other indebtedness in respect
of which the Company's obligations are evidenced or secured in whole or in part
by such Note.
"STATED MATURITY", when used with respect to any obligation or any
installment of principal thereof or interest thereon, means the date on which
the principal of such obligation or such installment of principal or interest is
stated to be due and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"TRANCHE" means a group of Notes which (a) are of the same series
and (b) have identical terms except as to principal amount.
"TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act
of 1939, or any successor statute, as in effect at such time.
"TRUSTEE" means the Person named as the "TRUSTEE" in the first
paragraph of this Indenture until a successor Trustee shall have become such
with respect to one or more series of Notes pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Notes of any series
shall mean the Trustee with respect to Notes of that series.
"UNITED STATES" means the United States of America, its Territories,
its possessions and other areas subject to its political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture,
-7-
<PAGE>
the Company shall furnish to the Trustee an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such Person has made
such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such Officer's Certificate or opinion are
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
-8-
<PAGE>
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Notes issued under the authority of such defective document
or instrument shall nevertheless be the valid obligations of the Company
entitled to the benefits of this Indenture equally and ratably with all other
Outstanding Notes, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders duly called and held in accordance with the provisions
of Article Fourteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments and so voting at any such meeting. Proof of execution of any
such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Note, shall be sufficient for any purpose of
this Indenture and (subject to Section 1001) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
The record of any meeting of Holders shall be proved in the manner
provided in Section 1406.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds,
-9-
<PAGE>
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof or may be proved in any other
manner which the Trustee and the Company deem sufficient. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient
proof of his authority.
(c) The principal amount (except as otherwise contemplated in clause
(y) of the proviso to the definition of Outstanding) and serial numbers of
Notes held by any Person, and the date of holding the same, shall be
proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future Holder
of the same Note and the Holder of every Note issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is
made upon such Note.
(e) Until such time as written instruments shall have been delivered
to the Trustee with respect to the requisite percentage of principal
amount of Notes for the action contemplated by such instruments, any such
instrument executed and delivered by or on behalf of a Holder may be
revoked with respect to any or all of such Notes by written notice by such
Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Notes of any series, or any Tranche thereof, authenticated and
delivered after any Act of Holders may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any action
taken by such Act of Holders. If the Company shall so determine, new Notes
of any series, or any Tranche thereof, so modified as to conform, in the
opinion of the Trustee and the Company, to such action may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes of such series or Tranche.
(g) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on the record date shall be
deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of the Outstanding Notes have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Notes shall be computed as of the record date.
-10-
<PAGE>
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee by any Holder or by the Company, or the Company by the Trustee or by any
Holder, shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by facsimile
transmission or other direct written electronic means to such telephone number
or other electronic communications address as the parties hereto shall from time
to time designate, or transmitted by certified or registered mail, charges
prepaid, to the applicable address set opposite such party's name below or to
such other address as either party hereto may from time to time designate:
If to the Trustee, to:
----------
----------
---------- -----
Attention: __________
Telephone: __________
Telecopy: __________
If to the Company, to:
Carolina Power & Light Company
411 Fayetteville Street
Raleigh, North Carolina 27601-1768
Attention: Mark F. Mulhern, Treasurer
Telephone: (919) 546-6373
Telecopy: (919) 546-7826
Any communication contemplated herein shall be deemed to have been
made, given, furnished and filed if personally delivered, on the date of
delivery, if transmitted by facsimile transmission or other direct written
electronic means, on the date of transmission, and if transmitted by certified
or registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF NOTES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given, and shall be deemed given, to Holders if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice.
-11-
<PAGE>
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders.
Any notice required by this Indenture may be waived in writing by
the Person entitled to receive such notice, either before or after the event
otherwise to be specified therein, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts
with another provision hereof which is required or deemed to be included in this
Indenture by, or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall
control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Notes, express or implied, shall
give to any Person, other than the parties hereto, their successors hereunder,
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
-12-
<PAGE>
SECTION 112. GOVERNING LAW.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
law of any other jurisdiction shall be mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Note shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Notes
other than a provision in Notes of any series, or any Tranche thereof, or in the
Board Resolution or Officer's Certificate which establishes the terms of the
Notes of such series or Tranche, which specifically states that such provision
shall apply in lieu of this Section) payment of interest or principal and
premium, if any, need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and, if such payment is made or duly provided
for on such Business Day, no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such Business Day.
ARTICLE II
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The definitive Notes of each series shall be in substantially the
form or forms thereof established in the indenture supplemental hereto
establishing such series or in a Board Resolution establishing such series, or
in an Officer's Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any Notes exchange or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
of the Notes. If the form or forms of Notes of any series are established in a
Board Resolution or in an Officer's Certificate pursuant to a Board Resolution,
such Board Resolution and Officer's Certificate, if any, shall be delivered to
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Notes.
Unless otherwise specified as contemplated by Sections 301 or
1301(g), the Notes of each series shall be issuable in registered form without
coupons. The definitive Notes shall be produced in such manner as shall be
determined by the officers executing such Notes, as evidenced by their execution
thereof.
-13-
<PAGE>
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Notes of the series designated therein referred
to in the within-mentioned Indenture.
-----------------------------------
as Trustee
By: _____________________________
Authorized [Officer] [Signatory]
ARTICLE III
THE NOTES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is unlimited.
The Notes may be issued in one or more series. Subject to the last
paragraph of this Section, prior to the authentication and delivery of Notes of
any series there shall be established by specification in a supplemental
indenture or in a Board Resolution, or in an Officer's Certificate pursuant to a
supplemental indenture or a Board Resolution:
(a) the title of the Notes of such series (which shall distinguish
the Notes of such series from Notes of all other series);
(b) any limit upon the aggregate principal amount of the Notes of
such series which may be authenticated and delivered under this Indenture
(except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes of the series
pursuant to Section 304, 305, 306, 506 or 1306 and, except for any Notes
which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(c) the Person or Persons (without specific identification) to whom
interest on Notes of such series, or any Tranche thereof, shall be payable
on any Interest Payment Date, if other than the Persons in whose names
such Notes (or one or more Predecessor Notes) are registered at the close
of business on the Regular Record Date for such interest;
-14-
<PAGE>
(d) the date or dates on which the principal of the Notes of such
series or any Tranche thereof, is payable or any formulary or other method
or other means by which such date or dates shall be determined, by
reference to an index or other fact or event ascertainable outside of this
Indenture or otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Notes of such series, or any
Tranche thereof, shall bear interest, if any (including the rate or rates
at which overdue principal shall bear interest, if different from the rate
or rates at which such Notes shall bear interest prior to Maturity, and,
if applicable, the rate or rates at which overdue premium or interest
shall bear interest, if any), or any formulary or other method or other
means by which such rate or rates shall be determined, by reference to an
index or other fact or event ascertainable outside of this Indenture or
otherwise; the date or dates from which such interest shall accrue; the
Interest Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on such Notes on any
Interest Payment Date; and the basis of computation of interest, if other
than as provided in Section 310;
(f) the place or places at which or methods by which (1) the
principal of and premium, if any, and interest, if any, on Notes of such
series, or any Tranche thereof, shall be payable, (2) registration of
transfer of Notes of such series, or any Tranche thereof, may be effected,
(3) exchanges of Notes of such series, or any Tranche thereof, may be
effected and (4) notices and demands to or upon the Company in respect of
the Notes of such series, or any Tranche thereof, and this Indenture may
be served; the Note Registrar for such series; and if such is the case,
that the principal of such Notes shall be payable without presentment or
surrender thereof;
(g) the period or periods within which, or the date or dates on
which, the price or prices at which and the terms and conditions upon
which the Notes of such series, or any Tranche thereof, may be redeemed,
in whole or in part, at the option of the Company and any restrictions on
such redemptions, including but not limited to a restriction on a partial
redemption by the Company of the Notes of any series, or any Tranche
thereof, resulting in delisting of such Notes from any national exchange;
(h) the obligation or obligations, if any, of the Company to redeem
or purchase the Notes of such series, or any Tranche thereof, pursuant to
any sinking fund or other mandatory redemption provisions or at the option
of a Holder thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and conditions
upon which such Notes shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and applicable exceptions to the requirements
of Section 504 in the case of mandatory redemption or redemption at the
option of the Holder;
(i) the denominations in which Notes of such series, or any Tranche
thereof, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof;
-15-
<PAGE>
(j) the currency or currencies, including composite currencies, in
which payment of the principal of and premium, if any, and interest, if
any, on the Notes of such series, or any Tranche thereof, shall be payable
(if other than in Dollars);
(k) if the principal of or premium, if any, or interest, if any, on
the Notes of such series, or any Tranche thereof, are to be payable, at
the election of the Company or a Holder thereof, in a coin or currency
other than that in which the Notes are stated to be payable, the period or
periods within which and the terms and conditions upon which, such
election may be made;
(l) if the principal of or premium, if any, or interest, if any, on
the Notes of such series, or any Tranche thereof, are to be payable, or
are to be payable at the election of the Company or a Holder thereof, in
Notes or other property, the type and amount of such Notes or other
property, or the formulary or other method or other means by which such
amount shall be determined, and the period or periods within which, and
the terms and conditions upon which, any such election may be made;
(m) if the amount payable in respect of principal of or premium, if
any, or interest, if any, on the Notes of such series, or any Tranche
thereof, may be determined with reference to an index or other fact or
event ascertainable outside this Indenture, the manner in which such
amounts shall be determined to the extent not established pursuant to
clause (e) of this paragraph;
(n) if other than the principal amount thereof, the portion of the
principal amount of Notes of such series, or any Tranche thereof, which
shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 902;
(o) any Events of Default, in addition to those specified in Section
901, with respect to the Notes of such series, and any covenants of the
Company for the benefit of the Holders of the Notes of such series, or any
Tranche thereof, in addition to those set forth in Article Seven;
(p) the terms, if any, pursuant to which the Notes of such series,
or any Tranche thereof, may be converted into or exchanged for shares of
capital stock or other Notes of the Company or any other Person;
(q) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the Notes of such
series, or any Tranche thereof, denominated in a currency other than
Dollars or in a composite currency, and any additional or alternative
provisions for the reinstatement of the Company's indebtedness in respect
of such Notes after the satisfaction and discharge thereof as provided in
Section 801;
(r) if the Notes of such series, or any Tranche thereof, are to be
issued in global form, (i) any limitations on the rights of the Holder or
Holders of such Notes to transfer or exchange the same or to obtain the
registration of transfer thereof, (ii) any
-16-
<PAGE>
limitations on the rights of the Holder or Holders thereof to obtain
certificates therefor in definitive form in lieu of temporary form and
(iii) any and all other matters incidental to such Notes;
(s) if the Notes of such series, or any Tranche thereof, are to be
issuable as bearer Notes, any and all matters incidental thereto which are
not specifically addressed in a supplemental indenture as contemplated by
clause (g) of Section 1301;
(t) to the extent not established pursuant to clause (r) of this
paragraph, any limitations on the rights of the Holders of the Notes of
such Series, or any Tranche thereof, to transfer or exchange such Notes or
to obtain the registration of transfer thereof; and if a service charge
will be made for the registration of transfer or exchange of Notes of such
series, or any Tranche thereof, the amount or terms thereof;
(u) any exceptions to Section 113, or variation in the definition of
Business Day, with respect to the Notes of such series, or any Tranche
thereof;
(v) if any Notes of the series are issued prior to the Release Date,
the designation of the series of Senior Note First Mortgage Bonds to be
delivered to the Trustee in connection with the issuance of such series of
Notes;
(w) any collateral security, assurance or guarantee for such series
of Notes (other than the Senior Note First Mortgage Bonds); and
(x) any other terms of the Notes of such series, or any Tranche
thereof, not inconsistent with the provisions of this Indenture.
With respect to Notes of a series subject to a Periodic Offering,
the indenture supplemental hereto or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such supplemental indenture or
Board Resolution, as the case may be, may provide general terms or parameters
for Notes of such series and provide either that the specific terms of Notes of
such series, or any Tranche thereof, shall be specified in a Company Order or
that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by clause (b) of
the third paragraph of Section 303.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Notes, or any Tranche thereof, the Notes of each series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Notes, or any Tranche thereof, the Notes shall be
executed on behalf of the Company by an Authorized Officer and may have the
corporate seal of the Company affixed thereto or
-17-
<PAGE>
reproduced thereon attested by any other Authorized Officer. The signature of
any or all of these officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at the time of execution Authorized Officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
The Trustee shall authenticate and deliver Notes of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or forms and
terms of such series, as provided in Sections 201 and 301;
(b) a Company Order requesting the authentication and delivery of
such Notes and, to the extent that the terms of such Notes shall not have
been established in an indenture supplemental hereto or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated by Sections 201 and
301, either (i) establishing such terms or (ii) in the case of Notes of a
series subject to a Periodic Offering, specifying procedures, acceptable
to the Trustee, by which such terms are to be established (which
procedures may provide, to the extent acceptable to the Trustee, for
authentication and delivery pursuant to oral or electronic instructions
from the Company or any agent or agents thereof, which oral instructions
are to be promptly confirmed electronically or in writing), in either case
in accordance with the instrument or instruments delivered pursuant to
clause (a) above; the Notes of such series, executed on behalf of the
Company by an Authorized Officer;
(c) if prior to the Release Date, Senior Note First Mortgage Bonds
of a series conforming to the requirements of Sections 401 and 402 hereof;
(d) the Notes of such series, executed on behalf of the Company by
an Authorized Officer;
(e) an Opinion of Counsel to the effect that:
(i) the form or forms of such Notes have been duly authorized
by the Company and have been established in conformity with the
provisions of this Indenture;
(ii) the terms of such Notes have been duly authorized by the
Company and have been established in conformity with the provisions
of this Indenture; and
(iii) such Notes, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the
-18-
<PAGE>
Company, entitled to the benefits provided by this Indenture, and
enforceable in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally the
enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency laws and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) if prior to the Release Date, the Senior Note First
Mortgage Bonds being delivered to the Trustee in connection with the
issuance of such Notes have been duly authorized by the Company and
duly issued under the First Mortgage and will constitute valid and
legal, binding obligations of the Company, enforceable in accordance
with their terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such enforceability is
considered at law or in equity); and such Senior Note First Mortgage
Bonds are entitled to the benefits and security afforded by the
First Mortgage, and are secured equally and ratably with all other
bonds outstanding thereunder, except as to sinking fund provisions;
provided, however, that, with respect to Notes of a series subject to a Periodic
Offering, the Trustee shall be entitled to receive such Opinion of Counsel only
once at or prior to the time of the first authentication of such Notes (provided
that such Opinion of Counsel addresses the authentication and delivery of all
Notes of such series) and that in lieu of the opinions described in clauses (ii)
and (iii) above Counsel may opine that:
(x) when the terms of such Notes shall have been established
pursuant to a Company Order or Orders or pursuant to such procedures
(acceptable to the Trustee) as may be specified from time to time by
a Company Order or Orders, all as contemplated by and in accordance
with the instrument or instruments delivered pursuant to clause (a)
above, such terms will have been duly authorized by the Company and
will have been established in conformity with the provisions of this
Indenture; and
(y) such Notes, when authenticated and delivered by the
Trustee in accordance with this Indenture and the Company Order or
Orders or specified procedures referred to in paragraph (x) above
and issued and delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will have been
duly issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general principles
of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
With respect to Notes of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
-19-
<PAGE>
of such Notes, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and other
documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, at or prior to the time of the first authentication of Notes of such
series unless and until such opinion or other documents have been superseded or
revoked or expire by their terms. In connection with the authentication and
delivery of Notes of a series subject to a Periodic Offering, the Trustee shall
be entitled to assume that the Company's instructions to authenticate and
deliver such Notes do not violate any rules, regulations or orders of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Notes of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Notes if the issuance of such Notes pursuant to this Indenture
will materially or adversely affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Notes, or any Tranche thereof, each Note shall be dated
the date of its authentication.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Notes, or any Tranche thereof, no Note shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Note a certificate of authentication
substantially in the form provided for herein executed by the Trustee or its
agent by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder to the Company, or any Person acting on
its behalf, but shall never have been issued and sold by the Company, and the
Company shall deliver such Note to the Trustee for cancellation as provided in
Section 309 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Note has never been issued and sold by the Company, for all purposes of
this Indenture such Note shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits hereof.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes of any series, or any
Tranche thereof, the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued, with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as evidenced by
their execution of such Notes; provided, however, that temporary Notes need not
recite specific redemption, sinking fund, conversion or exchange provisions.
-20-
<PAGE>
Unless otherwise specified as contemplated by Section 301 with
respect to the Notes of any series, or any Tranche thereof, after the
preparation of definitive Notes of such series or Tranche, the temporary Notes
of such series or Tranche shall be exchangeable, without charge to the Holder
thereof, for definitive Notes of such series or Tranche upon surrender, of such
temporary Notes at the office or agency of the Company maintained pursuant to
Section 702 in a Place of Payment for such Notes. Upon such surrender of
temporary Notes, the Company shall, except as aforesaid, execute and the Trustee
shall authenticate and deliver in exchange therefor definitive Notes of the same
series and Tranche, of authorized denominations and of like tenor and aggregate
principal amount.
Until exchanged in full as hereinabove provided, temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
definitive Notes of the same series and Tranche and of like tenor authenticated
and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated
pursuant to Section 702, with respect to the Notes of each series or any Tranche
thereof, a register (all registers kept in accordance with this Section being
collectively referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes of such series or Tranche and the registration of transfer
thereof. The Company shall designate one Person to maintain the Note Register
for the Notes of each series on a consolidated basis, and such Person is
referred to herein, with respect to such series, as the "Note Registrar."
Anything herein to the contrary notwithstanding, the Company may designate one
or more of its offices as an office in which a register with respect to the
Notes of one or more series, or any Tranche or Tranches thereof, shall be
maintained, and the Company may designate itself the Note Registrar with respect
to one or more of such series. The Note Register shall be open for inspection by
the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Notes of any series, or any Tranche thereof, upon surrender for
registration of transfer of any Note of such series or Tranche at the office or
agency of the Company maintained pursuant to Section 702 in a Place of Payment
for such series or Tranche, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Notes of any series, or any Tranche thereof, any Note of such
series or Tranche may be exchanged at the option of the Holder, for one or more
new Notes of the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency. Whenever any Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Notes which the Holder making the exchange is entitled to receive.
-21-
<PAGE>
All Notes delivered upon any registration of transfer or exchange of
Notes shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the Note
Registrar) be duly endorsed or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee or the Note Registrar,
as the case may be, duly executed by the Holder thereof or his attorney duly
authorized in writing.
Unless otherwise specified as contemplated by Section 301 with
respect to Notes of any series, or any Tranche thereof, no service charge shall
be made for any registration of transfer or exchange of Notes, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 304, 506 or 1306 not
involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Notes of any series, or any
Tranche thereof, during a period of 15 days immediately preceding the date
notice of redemption of the Notes of such series or Tranche is to be given or
(b) any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If any mutilated Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Note of the same series, and of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction, loss or
theft of any Note and (b) such security or indemnity as may be reasonably
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Note is
held by a Person purporting to be the owner of such Note, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Note, a new Note of the same series and Tranche, and
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
Notwithstanding the foregoing, in case any such mutilated,
destroyed, lost or stolen Note has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
-22-
<PAGE>
Every new Note of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone other than the Holder of
such new Note, and any such new Note shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Notes of such
series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with
respect to the Notes of any series, or any Tranche thereof, interest on any Note
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Note of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the related Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes of such series (or their
respective Predecessor Notes) are registered at the close of business on a
date (herein called a "Special Record Date") for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note of such series and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall promptly cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Notes of such series at the
address of such Holder as it appears in the Note Register, not less than
10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall
-23-
<PAGE>
be paid to the Persons in whose names the Notes of such series (or their
respective Predecessor Notes) are registered at the close of business on
such Special Record Date.
(b) The Company may make payment of any Defaulted Interest on the
Notes of any series in any other lawful manner not inconsistent with the
requirements of any Notes exchange on which such Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and premium, if any,
and (subject to Sections 305 and 307) interest, if any, on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION BY NOTE REGISTRAR.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Note
Registrar, be delivered to the Note Registrar and, if not theretofore canceled,
shall be promptly canceled by the Note Registrar. The Company may at any time
deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever or which the Company shall not have issued and sold, and all
Notes so delivered shall be promptly canceled by the Note Registrar. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Notes held by the Note Registrar shall be disposed of in accordance
with the customary practices of the Note Registrar at the time in effect, and
the Security Registrar shall not be required to destroy any such certificates,
and the Note Registrar shall promptly deliver a certificate of disposition to
the Trustee and the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Notes be returned to it. The Note Registrar
shall promptly deliver evidence of any cancellation of a Note in accordance with
this Section to the Trustee and the Company.
-24-
<PAGE>
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Notes of any series, or any Tranche thereof, interest on the Notes of each
series shall be computed on the basis of a 360-day year consisting of twelve
30-day months and on the basis of the actual number of days elapsed within any
month in relation to the deemed 30 days of such month.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Notes of any series, or any Tranche thereof,
denominated in any currency other than Dollars or in a composite currency (the
"Required Currency"), except as otherwise specified with respect to such Notes
as contemplated by Section 301, the obligation of the Company to make any
payment of the principal thereof, or the premium or interest thereon, shall not
be discharged or satisfied by any tender by the Company, or recovery by the
Trustee, in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely holding the full
amount of the Required Currency then due and payable. If any such tender or
recovery is in a currency other than the Required Currency, the Trustee may take
such actions as it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange, including without
limitation the risks of delay and exchange rate fluctuation, shall be borne by
the Company, the Company shall remain fully liable for any shortfall or
delinquency in the full amount of Required Currency then due and payable, and in
no circumstances shall the Trustee be liable therefor except in the case of its
negligence or willful misconduct.
SECTION 312. PAYMENTS ON SENIOR NOTE FIRST MORTGAGE BONDS.
Subject to Section 403 and Articles Eight and Nine hereof, all
payments made by the Company to the Trustee on Senior Note First Mortgage Bonds
shall be applied by the Trustee to pay, when due, principal of, and premium, if
any, and interest on the Notes of the related series of Notes and, to the extent
so applied, shall satisfy the Company's obligations in respect of payment of
principal of, and premium, if any, and interest on such Notes. The Company shall
pay to the Trustee principal of, and premium, if any, and interest on Senior
Note First Mortgage Bonds of each series in a manner and at a time that will
enable the Trustee to make payments when due, of principal of, and premium, if
any, and interest on the Notes of the related series.
ARTICLE IV
SENIOR NOTE FIRST MORTGAGE BONDS
--------------------------------
SECTION 401. ACCEPTANCE OF SENIOR NOTE FIRST MORTGAGE BONDS; REGISTRATION AND
OWNERSHIP OF SENIOR NOTE FIRST MORTGAGE BONDS.
At or prior to the time of issuance of a series of Notes hereunder
at any time prior to the Release Date, the Company shall issue and deliver to
the Trustee for the benefit of the Holders of all Notes from time to time
Outstanding as described in Section 403 hereof, and the Trustee shall accept
therefor, Senior Note First Mortgage Bonds of a series of Senior Note First
-25-
<PAGE>
Mortgage Bonds not theretofore delivered to the Trustee. All Senior Note First
Mortgage Bonds shall be registered in the name of the Trustee or its nominee and
shall be held by the Trustee, subject to the provisions of this Indenture, for
the benefit of the holders of all Notes from time to time Outstanding, and the
Company shall have no interest therein.
SECTION 402. TERMS OF SENIOR NOTE FIRST MORTGAGE BONDS.
Each series of Senior Note First Mortgage Bonds issued and delivered
to the Trustee pursuant to Section 401 hereof in respect of a series of Notes
being issued hereunder shall have the same rate or rates of interest (or
interest calculated in the same manner) (including interest payable following a
default on the Notes), interest payment dates, maturity and redemption
provisions, and shall be in the same aggregate principal amount, as such series
of Notes.
SECTION 403. SENIOR NOTE FIRST MORTGAGE BONDS AS SECURITY FOR NOTES.
Until the Release Date and subject to Article Eight hereof, Senior
Note First Mortgage Bonds issued and delivered to the Trustee shall serve as
security for any and all obligations of the Company under all Notes from time to
time Outstanding, including, but not limited to (1) the full and prompt payment
of the principal and premium, if any, on such Notes when and as the same shall
become due and payable in accordance with the terms and provisions of this
Indenture or such Notes, either at the Stated Maturity thereof, upon
acceleration of the maturity thereof, upon redemption, or otherwise, and (2) the
full and prompt payment of any interest on such Notes when and as the same shall
become due and payable in accordance with the terms and provisions of this
Indenture or the Notes including, if and to the extent provided for in such
Notes, interest on overdue installments of principal and (to the extent
permitted by law) interest on overdue installments of interest.
Each supplemental indenture to the First Mortgage pursuant to which
any Senior Note First Mortgage Bonds are issued shall contain a provision to the
effect that any payment by the Company hereunder of principal of or premium or
interest on Notes which shall have been authenticated and delivered in
connection with the issuance and delivery to the Trustee of such Senior Note
First Mortgage Bonds (other than by the application of the proceeds of a payment
in respect of such Senior Note First Mortgage Bonds) shall to the extent
thereof, be deemed to satisfy and discharge the obligation of the Company, if
any, to make a payment of principal, premium or interest, as the case may be, in
respect of such Senior Note First Mortgage Bonds which is then due.
Notwithstanding anything in this Indenture to the contrary, from and
after the Release Date, the obligation of the Company to make payment with
respect to the principal of and premium, if any, and interest on the Senior Note
First Mortgage Bonds shall be deemed satisfied and discharged as provided in the
supplemental indenture or indentures to the First Mortgage creating such Senior
Note First Mortgage Bonds and the Senior Note First Mortgage Bonds shall cease
to secure in any manner Notes theretofore or subsequently issued. From and after
the Release Date, all Notes, whether theretofore or subsequently issued, shall
be unsecured, and any conditions to the issuance of Notes that refer or relate
to Senior Note First Mortgage Bonds or the First Mortgage shall be inapplicable.
Following the Release Date, the Company shall cause the First Mortgage to be
closed and the Company shall not issue any additional First Mortgage Bonds or
Senior Note First Mortgage
-26-
<PAGE>
Bonds under the First Mortgage. Notice of the occurrence of the Release Date
shall be given by the Trustee to the Holders of the Notes in the manner provided
for in Section 106 hereof not later than 30 days after the Company notifies the
Trustee of the occurrence of the Release Date.
SECTION 404. FAIR VALUE CERTIFICATE.
(a) Upon the delivery by the Company to the Trustee of Senior Note
First Mortgage Bonds pursuant to Section 401 hereof, the Company shall
simultaneously therewith deliver to the Trustee a certificate of an Expert (1)
stating that he or she is familiar with the provisions of such Senior Note First
Mortgage Bonds and of this Indenture; (2) identifying such Senior Note First
Mortgage Bonds; (3) identifying the Notes being issued contemporaneously
therewith and (4) stating the fair value to the Company of such Senior Note
First Mortgage Bonds. If the fair value to the Company of the Senior Note First
Mortgage Bonds so delivered, as described in the certificate to be delivered
pursuant to this Section 404(a), both (1) is equal to or exceeds (A) $25,000 and
(B) 1% of the principal amount of the Notes outstanding at the date of delivery
of such Senior Note First Mortgage Bonds and (2) together with the fair value to
the Company, as described in the certificates delivered pursuant to this Section
404(a), of all other Senior Note First Mortgage Bonds delivered to the Trustee
since the commencement of the then current calendar year, is equal to or exceeds
10% of the principal amount of the Notes outstanding at the date of delivery of
such Senior Note First Mortgage Bonds, then the certificate required by this
Section 404(a) shall (1) be delivered by an Independent Expert and (2) shall, in
addition to the certifications described above, state the fair value to the
Company of all Senior Note First Mortgage Bonds delivered to the Trustee
pursuant to Section 401 hereof since the commencement of the then current year
as to which a certificate was not delivered by an Independent Expert.
(b) If Senior Note First Mortgage Bonds are delivered or
surrendered to the Company pursuant to Sections 403, 407 or 409 hereof, the
Company shall simultaneously therewith deliver to the Trustee a certificate of
an Expert (1) stating that it is familiar with the provisions of such Senior
Note First Mortgage Bonds and of this Indenture, (2) identifying such Senior
Note First Mortgage Bonds, (3) if applicable, identifying the Notes, the payment
of the interest on and principal of which has been discharged hereunder, (4)
stating that such delivery or surrender will not impair the lien of this
Indenture in contravention of the provisions of this Indenture. If, prior to the
Release Date, the fair value of the Senior Note First Mortgage Bonds so
delivered and surrendered, as described in the certificate to be delivered
pursuant to this Section 404(b), both (1) is equal to or exceeds (A) $25,000 and
(B) 1% of the principal amount of the Notes outstanding at the date of delivery
or surrender of such Senior Note First Mortgage Bonds and (2) together with the
fair value, as described in the certificates delivered pursuant to this Section
404(b), of all other Senior Note First Mortgage Bonds released from the lien of
this Indenture since the commencement of the then current calendar year, is
equal to or exceeds 10% of the principal amount of the Notes outstanding at the
date of delivery or surrender of such Senior Note First Mortgage Bonds, then the
certificate required by this Section 404(b) shall be delivered by an Independent
Expert.
-27-
<PAGE>
If, in connection with a delivery or surrender of outstanding Senior
Note First Mortgage Bonds provided for in subsection (a) or (b) of this Section
404, as the case may be, the Company provides to the trustee an Opinion of
Counsel stating that the certificate described by the applicable subsection is
not required by law, such certificate shall not be required to be delivered
hereunder in connection with such delivery or surrender.
SECTION 405. SENIOR NOTE FIRST MORTGAGE BONDS HELD BY THE TRUSTEE.
The Trustee, as a Holder of Senior Note First Mortgage Bonds, shall
attend each meeting of holders of First Mortgage Bonds under the First Mortgage
as to which it receives due notice, or, at its option, shall deliver its proxy
in connection therewith. Either at such meeting, or otherwise where consent of
holders of First Mortgage Bonds issued under the First Mortgage is sought
without a meeting, the Trustee shall vote all of the Senior Note First Mortgage
Bonds held by it, or shall consent or withhold its consent with respect thereto,
as directed by the Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes, considered as one class.
SECTION 406. NO TRANSFER OF SENIOR NOTE FIRST MORTGAGE BONDS; EXCEPTION.
Except as required to effect an assignment to a successor trustee or
to a nominee of the Trustee under this Indenture or pursuant to Section 407 or
Section 409 hereof, the Trustee shall not sell, assign or transfer the Senior
Note First Mortgage Bonds and the Company shall issue stop transfer instructions
to the Mortgage Trustee and any transfer agent under the First Mortgage to
effect compliance with this Section 406.
SECTION 407. DELIVERY TO THE COMPANY OF ALL SENIOR NOTE FIRST MORTGAGE BONDS.
When the obligation of the Company to make payment with respect to
the principal of and premium, if any, and interest on the Senior Note First
Mortgage Bonds shall be satisfied or deemed satisfied pursuant to Section 403 or
Article Eight hereof, the Trustee shall, upon written request of the Company and
receipt of the certificate of the Expert described in Section 404(b) hereof (if
such certificate is then required by Section 404(b) hereof), deliver to the
Company without charge therefor all of the Senior Note First Mortgage Bonds,
together with such appropriate instruments of transfer or release as may be
reasonably requested by the Company. All Senior Note First Mortgage Bonds
delivered to the Company in accordance with this Section 407 shall be delivered
by the Company to the First Mortgage Trustee for cancellation.
SECTION 408. FURTHER ASSURANCES.
The Company, at its own expense, shall do such further lawful acts
and things, and execute and deliver such additional conveyances, assignments,
assurances, agreements, financing statements and instruments. as may be
necessary in order to further assign, assure, perfect and confirm to the Trustee
its security interest in the Senior Note First Mortgage Bonds and for
maintaining, protecting and preserving such security interest.
-28-
<PAGE>
SECTION 409. EXCHANGE AND SURRENDER OF SENIOR NOTE FIRST MORTGAGE BONDS.
At any time upon receipt of a Company Order at the written direction
of the Company, the Trustee shall surrender to the Company all or part of the
Senior Note First Mortgage Bonds in exchange for Senior Note First Mortgage
Bonds equal in aggregate principal amount to, in different denominations than
but of the same series and with all other terms identical to, the Senior Note
First Mortgage Bonds so surrendered to the Company. In addition, at any time a
Note shall cease to be entitled to any lien, benefit or security under this
Indenture pursuant to Article Eight hereof, the Trustee shall surrender an equal
principal amount of Senior Note First Mortgage Bonds of the related series to
the Company for cancellation. The Trustee shall, together with such Senior Note
First Mortgage Bonds, deliver to the Company such appropriate instruments of
transfer or release as the Company may reasonably request. Prior to the
surrender required by this paragraph, the Trustee shall receive from the Company
the following, and (subject to Section 801 hereof) shall be fully protected in
relying upon, (a) an Officer's Certificate stating (i) the aggregate outstanding
principal amount of the Senior Note First Mortgage Bonds of the series
surrendered by the Trustee, after giving effect to such surrender, (ii) the
aggregate Outstanding principal amount of the related series of Notes, (iii)
that the surrender of the Senior Note First Mortgage Bonds will not result in
any default under this Indenture, and (iv) that any Senior Note First Mortgage
Bonds to be received in exchange for the Senior Note First Mortgage Bonds being
surrendered comply with the provisions of this Section.
The Company shall not be permitted to cause the surrender or
exchange of all or any part of a series of Senior Note First Mortgage Bonds
contemplated in this Section, if, after such surrender or exchange, the
aggregate Outstanding principal amount of the related series of Notes would
exceed the aggregate outstanding principal amount of such series of Senior Note
First Mortgage Bonds held by the Trustee. Any Senior Note First Mortgage Bonds
received by the Company pursuant to this Section shall be delivered to the
Mortgage Trustee for cancellation.
ARTICLE V
REDEMPTION OF NOTES
-------------------
SECTION 501. APPLICABILITY OF ARTICLE.
Notes of any series, or any Tranche thereof, which are redeemable
before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Notes of
such series or Tranche) in accordance with this Article.
SECTION 502. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes shall be evidenced
by a Board Resolution and/or an Officer's Certificate. The Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
-29-
<PAGE>
such Notes to be redeemed. In the case of any redemption of Notes (a) prior to
the expiration of any restriction on such redemption provided in the terms of
such Notes or elsewhere in this Indenture or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such Notes,
the Company shall furnish the Trustee with an Officer's Certificate evidencing
compliance with such restriction or condition.
SECTION 503. SELECTION OF NOTES TO BE REDEEMED.
If less than all the Notes of any series, or any Tranche thereof,
are to be redeemed, the particular Notes to be redeemed shall be selected by the
Trustee from the Outstanding Notes of such series or Tranche not previously
called for redemption, by such method as shall be provided for any particular
series, or, in the absence of any such provision, by such method of random
selection as the Trustee shall deem fair and appropriate and which may, in any
case, provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Notes of such series or Tranche or any integral
multiple thereof) of the principal amount of Notes of such series or Tranche of
a denomination larger than the minimum authorized denomination for Notes of such
series or Tranche; provided, however, that if, as indicated in an Officer's
Certificate, the Company shall have offered to purchase all or any principal
amount of the Notes then Outstanding of any series, or any Tranche thereof, and
less than all of such Notes as to which such offer was made shall have been
tendered to the Company for such purchase, the Trustee, if so directed by
Company Order, shall select for redemption all or any principal amount of such
Notes which have not been so tendered.
The Trustee shall promptly notify the Company Note Registrar in
writing of the Notes selected for redemption and, in the case of any Notes
selected to be redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
SECTION 504. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 106 to the Holders of the Notes to be redeemed not less than 30 nor more
than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Notes of any series or Tranche are to be
redeemed, the identification of the particular Notes to be redeemed and
the portion of the principal amount of any Note to be redeemed in part,
-30-
<PAGE>
(d) that on the Redemption Date, the Redemption Price, together with
accrued interest, if any, to the Redemption Date, will become due and
payable upon each such Note to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(e) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued interest, if any, unless it
shall have been specified as contemplated by Section 301 with respect to
such Notes that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund, if such is
the case, and
(g) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Notes in accordance
with Section 301, with respect to any notice of redemption of Notes at the
election of the Company, unless, upon the giving of such notice, such Notes
shall be deemed to have been paid in accordance with Section 801, such notice
may state that such redemption shall be conditional upon the receipt by the
Paying Agent or Agents for such Notes, on or prior to the date fixed for such
redemption, of money sufficient to pay the principal of and premium, if any, and
interest, if any, on such Notes and that if such money shall not have been so
received such notice shall be of no force or effect and the Company shall not be
required to redeem such Notes. In the event that such notice of redemption
contains such a condition and such money is not so received, the redemption
shall not be made and within a reasonable time thereafter notice shall be given,
in the manner in which the notice of redemption was given, that such money was
not so received and such redemption was not required to be made, and the Paying
Agent or Agents for the Notes otherwise to have been redeemed shall promptly
return to the Holders thereof any of such Notes which had been surrendered for
payment upon such redemption.
Notice of redemption of Notes to be redeemed at the election of the
Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Note Registrar in the name and at the expense of the Company. Notice of
mandatory redemption of Notes shall be given by the Note Registrar in the name
and at the expense of the Company.
SECTION 505. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the Notes or
portions thereof so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption, the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Notes or portions thereof, if interest-bearing, shall cease to bear
interest. Upon surrender of any such Note for redemption in accordance with such
notice, such Note or portion thereof shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that no such surrender shall be a
-31-
<PAGE>
condition to such payment if so specified as contemplated by Section 301 with
respect to such Note; and provided, further, that except as otherwise specified
as contemplated by Section 301 with respect to such Note, any installment of
interest on any Note the Stated Maturity of which installment is on or prior to
the Redemption Date shall be payable to the Holder of such Note, or one or more
Predecessor Notes, registered as such at the close of business on the related
Regular Record Date according to the terms of such Note and subject to the
provisions of Section 307.
SECTION 506. NOTES REDEEMED IN PART.
Upon the surrender of any Note which is to be redeemed only in part
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note, without service charge, a
new Note or Notes of the same series and Tranche, of any authorized denomination
requested by such Holder and of like tenor and in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Note
so surrendered.
ARTICLE VI
SINKING FUNDS
-------------
SECTION 601. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Notes of any series, or any Tranche thereof,
except as otherwise specified as contemplated by Section 301 for Notes of such
series or Tranche.
The minimum amount of any sinking fund payment provided for by the
terms of Notes of any series, or any Tranche thereof, is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Notes of any series, or any Tranche thereof,
is herein referred to as an "optional sinking fund payment." If provided for by
the terms of Notes of any series, or any Tranche thereof, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 602.
Each sinking fund payment shall be applied to the redemption of Notes of the
series or Tranche in respect of which it was made as provided for by the terms
of such Notes.
SECTION 602. SATISFACTION OF SINKING FUND PAYMENTS WITH NOTES.
The Company (a) may deliver to the Trustee Outstanding Notes (other
than any previously called for redemption) of a series or Tranche in respect of
which a mandatory sinking fund payment is to be made and (b) may apply as a
credit Notes of such series or Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Notes or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Notes, in each case in satisfaction of all or any part of such mandatory
sinking fund payment; provided, however, that no Notes shall be applied in
satisfaction of a mandatory
-32-
<PAGE>
sinking fund payment if such Notes shall have been previously so applied. Notes
so applied shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Notes for redemption through operation of the
sinking fund and the amount of such mandatory sinking fund payment shall be
reduced accordingly.
SECTION 603. REDEMPTION OF NOTES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for
the Notes of any series, or any Tranche thereof, the Company shall deliver to
the Trustee an Officer's Certificate specifying:
(a) the amount of the next succeeding mandatory sinking fund payment
for such series or Tranche;
(b) the amount, if any, of the optional sinking fund payment to be
made together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by the payment of cash; and
(e) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by delivering and crediting Notes of such series
or Tranche pursuant to Section 602 and stating the basis for such credit
and that such Notes have not previously been so credited, and the Company
shall also deliver to the Trustee any Notes to be so delivered.
If the Company shall not have delivered such Officer's Certificate
and, to the extent applicable, all such Notes, on or prior to the 45th day prior
to such sinking fund payment date, the sinking fund payment for such series or
Tranche in respect of such sinking fund payment date shall be made entirely in
cash in the amount of the mandatory sinking fund payment. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the Notes to
be redeemed upon such sinking fund payment date in the manner specified in
Section 503 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 504. Such
notice having been duly given, the redemption of such Notes shall be made upon
the terms and in the manner stated in Sections 505 and 506.
ARTICLE VII
COVENANTS
SECTION 701. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if any, and
interest, if any, on the Notes of each series in accordance with the terms of
such Notes and this Indenture.
-33-
<PAGE>
SECTION 702. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the Notes of
each series, or any Tranche thereof, an office or agency where payment of such
Notes shall be made, where the registration of transfer or exchange of such
Notes may be effected and where notices and demands to or upon the Company in
respect of such Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency and prompt notice to the Holders of any
such change in the manner specified in Section 106. If at any time the Company
shall fail to maintain any such required office or agency in respect of Notes of
any series, or any Tranche thereof, or shall fail to furnish the Trustee with
the address thereof, payment of such Notes shall be made, registration of
transfer or exchange thereof may be effected and notices and demands in respect
thereof may be served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent for all such purposes in any
such event.
The Company may also from time to time designate one or more other
offices or agencies with respect to the Notes of one or more series, or any
Tranche thereof, for any or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that, unless otherwise
specified as contemplated by Section 301 with respect to the Notes of such
series or Tranche no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency for such purposes
in each Place of Payment for such Notes in accordance with the requirements set
forth above. The Company shall give prompt written notice to the Trustee, and
prompt notice to the Holders in the manner specified in Section 106, of any such
designation or rescission and of any change in the location of any such other
office or agency.
Anything herein to the contrary notwithstanding, any office or
agency required by this Section may be maintained at an office of the Company,
in which event the Company shall perform all functions to be performed at such
office or agency.
SECTION 703. MONEY FOR NOTES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Notes of any series, or any Tranche thereof, it shall, on or
before each due date of the principal of and premium, if any, and interest, if
any, on any of such Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and premium or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company shall promptly notify the
Trustee of any failure by the Company (or any other obligor on such Notes) to
make any payment of principal of or premium, if any, or interest, if any, on
such Notes.
Whenever the Company shall have one or more Paying Agents for the
Notes of any series, or any Tranche thereof, it shall, on or before each due
date of the principal of and premium, if any, and interest, if any, on such
Notes, deposit with such Paying Agents sums sufficient (without duplication) to
pay the principal and premium or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
-34-
<PAGE>
interest, and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Notes of any
series, or any Tranche thereof, other than the Company or the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or any
other obligor upon such Notes) to make any payment of principal of or
premium, if any, or interest, if any, on such Notes; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent and furnish to the Trustee such
information as it possesses regarding the names and addresses of the
Persons entitled to such sums.
The Company may at any time pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent and, if
so stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article Eight; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and premium,
if any, or interest, if any, on any Note and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon such payment or
discharge, the Holder of such Note shall, as an unsecured general creditor and
not as a Holder of an Outstanding Note, look only to the Company for payment of
the amount so due and payable and remaining unpaid, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
payment to the Company, may at the expense of the Company cause to be mailed, on
one occasion only, notice to such Holder that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such mailing, any unclaimed balance of such money then remaining
will be paid to the Company.
-35-
<PAGE>
SECTION 704. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Twelve, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.
SECTION 705. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all its properties used or
useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and shall cause (or, with respect to
property owned in common with others, make reasonable effort to cause) to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the Company, may be necessary so that the
business carried on in connection therewith may be properly conducted; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation and maintenance
of any of its properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business.
SECTION 706. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than ____________________ in each year, commencing
_________________, the Company shall deliver to the Trustee an Officer's
Certificate which need not comply with Section 102, executed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, stating whether to such officer's knowledge, the Company
is in compliance with all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of grace or requirement
of notice under this Indenture, and making any other statements as may be
required by the provisions of Section 314(a)(4) of the Trust Indenture Act.
SECTION 707. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in (a) Section 702 or any additional
covenant or restriction specified with respect to the Notes of any series, or
any Tranche thereof, as contemplated by Section 301 if before the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Outstanding Notes of all series and Tranches with respect to which
compliance with Section 702 or such additional covenant or restriction is to be
omitted, considered as one class, shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition and (b) Section 704, 705, 706 or Article Twelve if before
the time for such compliance the Holders of at least a majority in principal
amount of Notes Outstanding under this Indenture shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or (b), no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver
-36-
<PAGE>
shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
SECTION 708. RECORDING, FILING, ETC.; OPINIONS OF COUNSEL.
The Company will cause this Indenture, any indentures supplemental
to this Indenture, any financing or continuation statements, and any other
documents, to be promptly recorded and filed and rerecorded and refiled in such
a manner and in such places, as may be required by law in order fully to
preserve, protect and perfect the security of the Holders and all rights of the
Trustee, and shall deliver to the Trustee:
(a) promptly after the execution and delivery of this Indenture and
of any indenture supplemental to this Indenture but prior to the Release Date,
an Opinion of Counsel either stating that, in the opinion of such counsel, this
Indenture or such supplemental indenture, any financing or continuation
statements, and any other documents, have been properly recorded and filed so as
to make effective and to perfect the security interest of the Trustee intended
to be created by this Indenture for the benefit of the Holders from time to time
in the Senior Note First Mortgage Bonds, and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to perfect or make such security interest effective and stating what,
if any, action of the foregoing character may reasonably be expected to become
necessary prior to the next succeeding _______________ to maintain, perfect and
make such security interest effective; and
(b) on or before ________________ of each year, beginning in ___,
and prior to the Release Date, an Opinion of Counsel either stating that in the
opinion of such counsel such action has been taken, since the date of the most
recent Opinion of Counsel furnished pursuant to this Section 710(b) or the first
Opinion of Counsel furnished pursuant to Section 710(a), with respect to the
recording, filing, rerecording, or refiling of this Indenture, each supplemental
indenture, any financing or continuation statements, and any other documents, as
is necessary to maintain and perfect the security interest of the Trustee
intended to be created by this Indenture for the benefit of the Holders from
time to time of the Notes in the Senior Note First Mortgage Bonds, and reciting
the details of such action, or stating that in the opinion of such counsel no
such action is necessary to maintain and perfect such security interest and
stating what, if any, action of the foregoing character may reasonably be
expected to become necessary prior to the next succeeding ________________ to
maintain, perfect and make such security interest effective.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 801. SATISFACTION AND DISCHARGE OF NOTES.
Any Note or Notes, or any portion of the principal amount thereof,
shall be deemed to have been paid for all purposes of this Indenture, and the
entire indebtedness of the
-37-
<PAGE>
Company in respect thereof shall be deemed to have been satisfied and
discharged, if there shall have been irrevocably deposited with the Trustee or
any Paying Agent (other than the Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of such
Notes or portions thereof, Eligible Obligations, which shall not contain
provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will provide moneys
which, together with the money, if any, deposited with or held by the
Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Notes or portions thereof on or prior to Maturity,
provided, however, that in the case of the provision for payment or redemption
of less than all the Notes of any series or Tranche, such Notes or portions
thereof shall have been selected by the Trustee as provided herein and, in the
case of a redemption, the notice requisite to the validity of such redemption
shall have been given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements satisfactory to
the Trustee; and provided, further, that the Company shall have delivered to the
Trustee and such Paying Agent:
(x) if such deposit shall have been made prior to the Maturity
of such Notes, a Company Order stating that the money and Eligible
Obligations deposited in accordance with this Section shall be held
in trust, as provided in Section 803;
(y) if Eligible Obligations shall have been deposited, an
Opinion of Counsel that the obligations so deposited constitute
Eligible Obligations and do not contain provisions permitting the
redemption or other prepayment at the option of the issuer thereof,
and an opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that the
requirements set forth in clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity
of such Notes, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
indebtedness in respect of such Notes or portions thereof will have
been satisfied and discharged as contemplated in this Section.
If the Company shall make any deposit of money and/or Eligible
Obligations with respect to any Notes, or any portion of the principal amount
thereof, as contemplated by this section, the Company shall not deliver an
Officer's Certificate described in clause (z) above unless the Company shall
also deliver to the Trustee, together with such Officer's Certificate, an
Opinion of Counsel to the effect that, as a result of a change in law occurring
after the date of this
-38-
<PAGE>
Indenture, the Holders of such Notes, or portions thereof, will not recognize
income, gain or loss for United States federal income tax purposes as a result
of the satisfaction and discharge of the Company's indebtedness in respect
thereof and will be subject to United States federal income tax on the same
amounts, at the same times and in the same manner as if such satisfaction and
discharge had not been effected.
Upon the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(x), (y) and (z) above, the Trustee shall, upon receipt of a Company Request,
acknowledge in writing that the Note or Notes or portions thereof with respect
to which such deposit was made are deemed to have been paid for all purposes of
this Indenture and that the entire indebtedness of the Company in respect
thereof has been satisfied and discharged as contemplated in this Section. In
the event that all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Notes or portions thereof except that, for
any reason, the Officer's Certificate specified in clause (z) shall not have
been delivered, such Notes or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the Holders of such Notes
or portions thereof shall nevertheless be no longer entitled to the benefits of
this Indenture or of any of the covenants of the Company under Article Seven
(except the covenants contained in Sections 702 and 703) or any other covenants
made in respect of such Notes or portions thereof as contemplated by Section
301, but the indebtedness of the Company in respect of such Notes or portions
thereof shall not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such Notes or portions
thereof shall continue to be entitled to look to the Company for payment of the
indebtedness represented thereby; and, upon Company Request, the Trustee shall
acknowledge in writing that such Notes or portions thereof are deemed to have
been paid for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the Notes of any
series, or any Tranche thereof, is to be provided for in the manner and with the
effect provided in this Section, the Trustee shall select such Notes, or
portions of principal amount thereof, in the manner specified by Section 503 for
selection for redemption of less than all the Notes of a series or Tranche.
In the event that Notes which shall be deemed to have been paid for
purposes of this Indenture, and, if such is the case, in respect of which the
Company's indebtedness shall have been satisfied and discharged, all as provided
in this Section do not mature and are not to be redeemed within the sixty (60)
day period commencing with the date of the deposit of moneys or Eligible
Obligations, as aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect to such Notes,
to the Holders of such Notes to the effect that such deposit has been made and
the effect thereof.
Notwithstanding that any Notes shall be deemed to have been paid for
purposes of this Indenture, as aforesaid, the obligations of the Company and the
Trustee in respect of such Notes under Sections 304, 305, 306, 504, 603 (as to
notice of redemption), 702, 703, 1007, 1014 and 1015 and this Article Eight
shall survive.
-39-
<PAGE>
To the extent Notes are deemed paid and discharged pursuant to this
Section 801, the obligation of the Company to make payment with respect to the
principal of and premium, if any, and interest on the related Senior Note First
Mortgage Bonds shall be satisfied and discharged, and such Senior Note First
Mortgage Bonds shall cease to secure the Notes in any manner but shall continue
to be held by the Trustee until the Release Date.
If the Company shall have paid or caused to be paid the principal of
and premium, if any, and interest on any Note, as and when the same shall have
become due and payable or the Company shall have delivered to the Trustee for
cancellation any Outstanding Note, such Note shall cease to be entitled to any
lien, benefit or security under this Indenture. Upon a Note of any series
ceasing to be entitled to any lien, benefit or security under this Indenture,
the obligation of the Company to make payment with respect to principal of and
premium, if any, and interest on a principal amount of the related series of
Senior Note First Mortgage Bonds equal to the principal amount of such Note
shall be satisfied and discharged and such portion of the principal amount of
such Senior Note First Mortgage Bonds shall cease to secure such Note in any
manner, but such Senior Note First Mortgage Bonds shall continue to be held by
the Trustee until the Release Date.
The Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Eligible Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such Eligible Obligations or the principal or interest received in
respect of such Eligible Obligations, including, but not limited to, any such
tax payable by any entity deemed, for tax purposes, to have been created as a
result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any time
after a Note would be deemed to have been paid for purposes of this Indenture,
and, if such is the case, the Company's indebtedness in respect thereof would be
deemed to have been satisfied or discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any Paying Agent, as
the case may be, shall be required to return the money or Eligible Obligations,
or combination thereof, deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy, insolvency or
other similar law, such Note shall thereupon be deemed retroactively not to have
been paid and any satisfaction and discharge of the Company's indebtedness in
respect thereof (and in respect of the related Senior Note First Mortgage Bonds)
shall retroactively be deemed not to have been effected, such Note shall be
deemed to remain Outstanding, and such Note shall continue to be secured by the
related Senior Note First Mortgage Bond until the Release Date and (b) any
satisfaction and discharge of the Company's indebtedness in respect of any Note
shall be subject to the provisions of the last paragraph of Section 703.
SECTION 802. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
-40-
<PAGE>
(a) no Notes remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
801, any Note, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 504, 603 (as to notice of redemption), 702, 703, 1007, 1014 and 1015
and this Article Eight shall survive.
Upon satisfaction and discharge of this Indenture as provided in
this Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 1007, any and all money, Notes and other
property then held by the Trustee for the benefit of the Holders of the Notes
other than money and Eligible Obligations held by the Trustee pursuant to
Section 803.
SECTION 803. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited pursuant to
Section 801, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of, and premium, if any, and
interest, if any, on, the Notes or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 703; provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default, or an event which, with the
giving of notice or the passage of time, would become an Event of Default, any
cash received from such principal or interest payments on such Eligible
Obligations, if not then needed for such purpose, shall, to the extent
practicable, be invested in Eligible Obligations of the type described in clause
(b) in the first paragraph of Section 801 maturing at such times and in such
amounts as shall be sufficient to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on such Notes or portions
thereof on and prior to the Maturity thereof, and interest earned from such
reinvestment shall be paid over to the Company as received, free and clear of
any trust, lien or pledge under this Indenture except the lien provided by
Section 1007; and provided, further, that, so long as there shall not have
occurred and be continuing an Event of Default, or an event which, with the
giving of notice or the passage of time, would become an Event of Default, any
moneys held in accordance with this Section on the Maturity of all such Notes in
excess of the amount required to pay the principal of and premium, if any, and
interest, if any, then due on such Notes shall be paid over to the Company free
and clear of any trust, lien or pledge under this Indenture except the lien
provided by Section 1007; and provided, further, that if an Event of Default, or
an event which, with the giving of notice or the passage of time, would become
an Event of Default, shall
-41-
<PAGE>
have occurred and be continuing, moneys to be paid over to the Company pursuant
to this Section shall be held until such Event of Default, or event which, with
the giving of notice or the passage of time, would become an Event of Default,
shall have been waived or cured.
ARTICLE IX
EVENTS OF DEFAULT; REMEDIES
SECTION 901. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Notes of
any series, means any one of the following events:
(a) failure to pay interest, if any, on any Note of such series
within thirty (30) days after the same becomes due and payable; or
(b) failure to pay the principal of or premium, if any, on any Note
of such series when due and payable; or
(c) failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in
the performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Notes other than
such series) for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 33% in principal amount
of the Outstanding Notes of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder, unless the Trustee, or the
Trustee and the Holders of a principal amount of Notes of such series not
less than the principal amount of Notes the Holders of which gave such
notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or
the Trustee and the Holders of such principal amount of Notes of such
series, as the case may be, shall be deemed to have agreed to an extension
of such period for a maximum of one hundred twenty (120) days if
corrective action is initiated by the Company within such period and is
being diligently pursued; or
(d) prior to the Release Date, a Default (as defined in Section 65
of the First Mortgage) has occurred and is continuing; provided, however,
that, anything in this Indenture to the contrary notwithstanding, the
waiver or cure of such Default under the First Mortgage and the rescission
and annulment of the consequences thereof shall constitute a waiver of the
corresponding Event of Default hereunder and a rescission and annulment of
the consequences thereof;
(e) the entry by a court having jurisdiction in the premises of (1)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or
-42-
<PAGE>
(2) a decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Company or for any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for relief or any
such other decree or order shall have remained unstayed and in effect for
a period of 90 consecutive days; or
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of such action by
the Board of Directors; or
(g) any other Event of Default specified with respect to Notes of
such series.
SECTION 902. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of principal
of, or premium, if any, or interest on, any series of Notes or due to the
default in the performance or breach of any other covenant or warranty of the
Company applicable to the Notes of such series but not applicable to all
Outstanding Notes shall have occurred and be continuing, either the Trustee or
the Holders of not less than 33% in principal amount of the Notes of such series
may then declare the principal amount (or, if any of the Notes of such series
are Discount Notes, such portion of the principal amount as may be specified in
the terms thereof as contemplated by Section 301) of all Notes of such series
and premium, if payment of any thereof be in default, and interest accrued
thereon to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holders). If an Event of Default due to
default in the performance of any other of the covenants or agreements herein
applicable to all Outstanding Notes or an Event of Default specified in Section
901(d), (e) or (f) shall have occurred and be continuing, either the Trustee or
the Holders of not less than 33% in principal amount of all Notes then
Outstanding (considered as one class), and not the Holders of the Notes of any
one of such series, may declare the principal amount (or, if any of the Notes
are Discount Notes, such portion of the principal amount of such Notes as may be
specified in the terms thereof as contemplated by Section 301) of all Notes and
premium, if payment of any thereof be in default, and interest accrued thereon
to be due and payable immediately, by a notice in writing to the Company (and
-43-
<PAGE>
to the Trustee if given by the Holders). As a consequence of each such
declaration (herein referred to as a declaration of acceleration) with respect
to Notes of any series, the principal amount (or portion thereof in the case of
Discount Notes) of such Notes, any such premium, and interest accrued thereon
shall become due and payable immediately. Prior to the Release Date, upon all of
the Notes becoming immediately due and payable by declaration pursuant to any of
the foregoing provisions of this Section 902, the Trustee shall immediately file
with the Mortgage Trustee a written demand for the acceleration of the payment
of principal of and premium, if any and accrued interest on all Senior Note
First Mortgage Bonds pursuant to the applicable provisions of the First
Mortgage.
At any time after such a declaration of acceleration with respect to
Notes of any series shall have been made and before a judgment or decree for
payment of the money due shall have been obtained by the Trustee as hereinafter
in this Article provided, and prior to the receipt by the Trustee from the
Mortgage Trustee of an irrevocable, valid and unconditional notice to the
Trustee of the acceleration of the payment of principal, by declaration or
otherwise, of all of the Senior Note First Mortgage Bonds issued and outstanding
under the First Mortgage, the Event or Events of Default and its consequences
(including, if given, the written demand for the acceleration of the payment of
principal of and premium, if any, and accrued interest on all such Senior Note
First Mortgage Bonds) giving rise to such declaration of acceleration shall,
without further act, be deemed to have been waived, and such declaration and its
consequences shall, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest on all Notes of such series;
(2) the principal of and premium, if any, on any Notes of such
series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in such Notes;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Notes;
(4) all amounts due to the Trustee under Section 1007;
and
(b) any other Event or Events of Default with respect to Notes of
such series, other than the non-payment of the principal of Notes of such
series which shall have become due solely by such declaration of
acceleration, shall have been cured (including any Defaults (as defined in
Section 65 of the First Mortgage) under the First Mortgage, as evidenced
by notice thereof received by the Trustee from the Mortgage Trustee) or
waived as provided in Section 913 or under the First Mortgage.
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
-44-
<PAGE>
SECTION 903. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section 901
shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Notes of the series
with respect to which such Event of Default shall have occurred, the whole
amount then due and payable on such Notes for principal and premium, if any, and
interest, if any, and, to the extent permitted by law, interest on premium, if
any, and on any overdue principal and interest, at the rate or rates prescribed
therefor in such Notes, and, in addition thereto, such further amount as shall
be sufficient to cover any amounts due to the Trustee under Section 1007.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Notes,
wherever situated.
If an Event of Default with respect to Notes of any series shall
have occurred and be continuing, the Trustee may in its discretion proceed to
protect and enforce its rights (including, prior to the Release Date, any rights
the Trustee may have as a holder of Senior Note First Mortgage Bonds) and the
rights of the Holders of Notes of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 904. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for amounts due to the Trustee under Section 1007 and, prior to the
Release Date, any claims of the Trustee as holder of Senior Note First
Mortgage Bonds) and of the Holders allowed in such judicial proceeding,
and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
-45-
<PAGE>
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 1007.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 905. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 906. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or premium, if
any, or interest, if any, upon presentation of the Notes in respect of which or
for the benefit of which such money shall have been collected and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 1007;
SECOND: To the payment of the amounts then due and unpaid upon
the Notes for principal of and premium, if any, and interest, if
any, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for
principal, premium, if any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company, or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
SECTION 907. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
-46-
<PAGE>
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Notes of such
series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes of all series in respect of which an Event
of Default shall have occurred and be continuing, considered as one class,
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Notes of all
series in respect of which an Event of Default shall have occurred and be
continuing, considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 908. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and (subject to Section 307)
interest, if any, on such Note on the Stated Maturity or Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 909. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
-47-
<PAGE>
SECTION 910. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 911. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 912. CONTROL BY HOLDERS OF NOTES.
If an Event of Default shall have occurred and be continuing in
respect of a series of Notes, the Holders of a majority in principal amount of
the Outstanding Notes of such series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Notes of such series; provided, however, that if an Event of Default
shall have occurred and be continuing with respect to more than one series of
Notes, the Holders of a majority in aggregate principal amount of the
Outstanding Notes of all such series, considered as one class, shall have the
right to make such direction, and not the Holders of the Notes of any one of
such series; and provided, further, that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not in the Trustee's
reasonable discretion be adequate, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Before proceeding to exercise any right or power hereunder at the
direction of such Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with any such direction.
SECTION 913. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series may on behalf of the Holders of all the Notes of
such series waive any past default hereunder with respect to such series and its
consequences, except a default
-48-
<PAGE>
(a) in the payment of the principal of or premium, if any, or
interest, if any, on any Note of such series, or
(b) in respect of a covenant or provision hereof which under Section
1302 cannot be modified or amended without the consent of the Holder of
each Outstanding Note of such series affected.
Upon any such waiver, such default shall cease to exist, and any and
all Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 914. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Notes of all series in respect of which such
suit may be brought, considered as one class, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Note on or after the Stated Maturity or
Maturities expressed in such Note (or, in the case of redemption, on or after
the Redemption Date).
SECTION 915. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 916. DEFAULT UNDER THE FIRST MORTGAGE.
In addition to every other right and remedy provided herein, the
Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and holder of Senior Note First Mortgage Bonds which arises as
a result of a Default (as defined in Section 65 of the
-49-
<PAGE>
First Mortgage) whether or not an Event of Default hereunder shall then have
occurred and be continuing.
ARTICLE X
THE TRUSTEE
SECTION 1001. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee in the
Trust Indenture Act and no implied covenants or obligations shall be read
into this Indenture against the Trustee. For purposes of Sections 315(a)
and 315(c) of the Trust Indenture Act, the term "default" is hereby
defined as an Event of Default which has occurred and is continuing.
(b) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture to the
contrary, the duties and responsibilities of the Trustee under this
Indenture shall be subject to the protections, exculpations and
limitations on liability afforded to the Trustee under the provisions of
the Trust Indenture Act, including those provisions of such Act deemed by
such Act to be included herein.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 1002. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder
with respect to the Notes of any series to the Holders of Notes of such series
of which it has knowledge (within the meaning of Section 1003(h) hereof) in the
manner and to the extent required to do so by the Trust Indenture Act, unless
such default shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 901(c), no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time, or both, would become, an Event of Default.
SECTION 1003. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 1001 and to the applicable
provisions of the Trust Indenture Act:
-50-
<PAGE>
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate,
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall (subject to applicable legal requirements) be
entitled to examine, during normal business hours, the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of any default
or Event of Default with respect to the Notes of any series for which it
is acting as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of Default or
(2) written notice of such default or Event of Default (which shall state
that such notice is a "Notice of Default" or a "Notice of an Event of
Default"
-51-
<PAGE>
hereunder, as the case may be) shall have been given to the Trustee by the
Company, any other obligor on such Notes or by any Holder of such Notes,
or in the case of an Event of Default described in Section 901(d), by the
Mortgage Trustee or Holders of at least 25% in principal amount of the
outstanding Notes.
SECTION 1004. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes (except the Trustee's
certificates of authentication) shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes or as to the value, title or
validity of any Senior Note First Mortgage Bonds or other securities at any time
pledged or deposited with the Trustee hereunder or as to the security offered
thereby or hereby. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Notes or the proceeds
thereof.
SECTION 1005. MAY HOLD NOTES.
Each of the Trustee, any Authenticating Agent, any Paying Agent, any
Note Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 1008
and 1013, may otherwise deal with the Company with the same rights it would have
if it were not the Trustee, Authenticating Agent, Paying Agent, Note Registrar
or such other agent.
SECTION 1006. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds, except to the extent required by law. The Trustee shall be
under no liability for interest on investment of any money received by it
hereunder except as expressly provided herein or otherwise agreed with, and for
the sole benefit of, the Company.
SECTION 1007. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any
provision of this Indenture, including the costs of collection and
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except to the extent that any such expense,
disbursement or advance may be attributable to its negligence, willful
misconduct or bad faith; and
-52-
<PAGE>
(c) indemnify the Trustee and hold it harmless from and against, any
losses, demands, claims, liabilities, causes of action or expenses
(including reasonable attorney's fees and expenses) incurred by it arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder or the performance of its duties hereunder, including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss, demand,
claim, liabilities, causes of action or expense may be attributable to its
negligence, willful misconduct or bad faith. The Company shall assume the
defense of the Trustee with counsel acceptable to the Trustee, unless the
Trustee shall have been advised by counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the Company.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Notes upon all
property and funds held or collected by the Trustee as such other than property
and funds held in trust under Section 803 (except as otherwise provided in
Section 803). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided; however, that the negligence, willful misconduct
or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
When a Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 901(e) or Section 901(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section 1007 shall survive termination of
this Indenture.
SECTION 1008. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and subject to the conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a Trustee under (i) this Indenture with
respect to Notes of more than one series, (ii) the Indenture dated as of
______________, 199_, or (iii) the First Mortgage or with respect to the Senior
Note First Mortgage Bonds issued thereunder.
SECTION 1009. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia,
authorized under such
-53-
<PAGE>
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $100,000,000 and subject to supervision or examination
by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $100,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision
or examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the Trust
Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 1010. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 1011.
(b) The Trustee may resign at any time with respect to the Notes of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 1011
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Notes of such series.
(c) The Trustee may be removed at any time with respect to the Notes
of any series by Act of the Holders of a majority in principal amount of
the Outstanding Notes of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 1008 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder for at least six months, or
(2) the Trustee shall cease to be eligible under Section 1009
and shall fail to resign after written request therefor by the
Company or by any such Holder, or
-54-
<PAGE>
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Notes or (y) subject to Section 914, any Holder who
has been a bona fide Holder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Notes and the appointment of
a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Notes of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Notes of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Notes
of one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Notes of any particular series) and
shall comply with the applicable requirements of Section 1011. If, within
one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Notes
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Notes of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 1011, become the successor
Trustee with respect to the Notes of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Notes of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner required by Section 1011, any Holder who has been a bona fide
Holder of a Note of such series for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to
the Notes of such series.
(f) So long as no event which is, or after notice or lapse of time,
or both, would become, an Event of Default shall have occurred and be
continuing, and except with respect to a Trustee appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a successor
Trustee, effective as of a date specified therein, and (ii) an instrument
of acceptance of such appointment, effective as of such date, by such
successor Trustee in accordance with Section 1011, the Trustee shall be
deemed to have resigned as contemplated in subsection (b) of this Section,
the successor Trustee shall be deemed to have been appointed by the
Company pursuant to subsection (e) of this Section and such appointment
shall be deemed to have been accepted as contemplated in Section 1011, all
as of such date, and all other provisions of this Section and Section 1011
shall be
-55-
<PAGE>
applicable to such resignation, appointment and acceptance except to the
extent inconsistent with this subsection (f).
(g) The Company or, should the Company fail so to act promptly, the
successor Trustee at the expense of the Company shall give notice of each
resignation and each removal of the Trustee with respect to the Notes of
any series and each appointment of a successor Trustee with respect to the
Notes of any series by mailing written notice of such event by first-class
mail, postage prepaid, to all Holders of Notes of such series as their
names and addresses appear in the Note Register. Each notice shall include
the name of the successor Trustee with respect to the Notes of such series
and the address of its corporate trust office.
SECTION 1011. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of all series, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee, including rights, title and interest in the Senior Note
First Mortgage Bonds; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all sums owed to it,
execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Notes of
one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to
the Notes of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Notes, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Notes of
that or those series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee and (3) shall add to
or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become
-56-
<PAGE>
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Notes of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee, upon payment of all sums owed to it, shall
duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the
Notes of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such successor
Trustee all such rights, powers and trusts referred to in subsection (a)
or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 1012. MERGER, CONVERSATION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
SECTION 1013. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Notes (other than by reason of a relationship described
in Section 311(b) of the Trust Indenture Act), the Trustee shall be subject to
any and all applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor. For purposes of
Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for goods or Notes sold is made within seven days after delivery
of the goods or Notes in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing
-57-
<PAGE>
title to, possession of, or a lien upon, the goods, wares or merchandise
or the receivables or proceeds arising from the sale of the goods, wares
or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 1014. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of any applicable jurisdiction, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or of the
Holders of at least thirty-three per centum (33%) in principal amount of the
Notes then Outstanding, the Company shall for such purpose join with the Trustee
in the execution and delivery of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Trustee either to act as
co-trustee, jointly with the Trustee, or to act as separate trustee, in either
case with such powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any property,
title, right or power deemed necessary or desirable, subject to the other
provisions of this Section. If the Company does not join in such appointment
within 15 days after the receipt by it of a request so to do, or if an Event of
Default shall have occurred and be continuing, the Trustee alone shall have
power to make such appointment.
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following
conditions:
(a) the Notes shall be authenticated and delivered, and all rights,
powers, duties and obligations hereunder in respect of the custody of
Notes, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee
-58-
<PAGE>
or separate trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 1015. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Notes of one or more series, or any Tranche thereof, which shall
be authorized to act on behalf of the Trustee to authenticate Notes of such
series or Tranche issued upon original issuance, exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and Notes so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States, any State or territory thereof or the District of Columbia or the
Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
-59-
<PAGE>
An Authenticating Agent may resign at any time by giving 45 days
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
The provisions of Sections 308, 1004 and 1005 shall be applicable to
each Authenticating Agent.
If an appointment with respect to the Notes of one or more series,
or any Tranche thereof, shall be made pursuant to this Section, the Notes of
such series or Tranche may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication
substantially in the following form:
This is one of the Notes of the series designated therein referred
to in the within-mentioned Indenture.
Dated:
____________________________________
As Trustee
By ___________________________________
As Authenticating Agent
By ___________________________________
Authorized Signatory
If all of the Notes of a series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating Notes
upon original issuance located in a Place of Payment where the Company wishes to
have Notes of such series authenticated upon original issuance, the Trustee, if
so requested by the Company in writing (which writing need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel), shall
appoint,
-60-
<PAGE>
in accordance with this Section and in accordance with such procedures as shall
be acceptable to the Trustee, an Authenticating Agent having an office in a
Place of Payment designated by the Company with respect to such series of Notes.
ARTICLE XI
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1101. LISTS OF HOLDERS.
Semiannually, not later than ___________ and ____________ in each
year, commencing __________, and at such other times as the Trustee may request
in writing, the Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the Trust
Indenture Act; provided, however, that no such list need be furnished so long as
the Trustee shall be the Note Registrar.
SECTION 1102. REPORTS BY TRUSTEE AND COMPANY.
Not later than ____________ in each year, commencing
__________________, the Trustee shall transmit to the Holders, the Commission
and each Notes exchange upon which any Notes are listed, a report, dated as of
the next preceding _____________, with respect to any events and other matters
described in Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee shall transmit to
the Holders, the Commission and each Notes exchange upon which any Notes are
listed, and the Company shall file with the Trustee (within thirty (30) days
after filing with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and furnished to the
Trustee) and transmit to the Holders, such other information, reports and other
documents, if any, at such times and in such manner, as shall be required by the
Trust Indenture Act. The Company shall notify the Trustee of the listing of any
Notes on any Notes exchange. Delivery of such reports, information and documents
by the Company to the Trustee is for informational purposes only, and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).
-61-
<PAGE>
ARTICLE XII
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1201. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer or lease its properties and assets
substantially as an entirety to any Person, unless
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety shall be a Person organized and existing under the laws of the
United States, any State thereof or the District of Columbia, and (a)
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest,
if any, on all Outstanding Notes and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed, and
(b) if such consolidation, merger, conveyance, transfer, or lease occurs
prior to the Release Date, shall expressly assume, by an indenture
supplemental to the First Mortgage, executed and delivered to the Trustee
and the Mortgage Trustee, in form satisfactory to the Trustee and the
Mortgage Trustee, the due and punctual payment of the principal of, and
premium, if any, and interest on all of the Senior Note First Mortgage
Bonds and the performance of every covenant of the First Mortgage on the
part of the Company to be performed or observed.
(b) immediately after giving effect to such transaction and treating
any indebtedness for borrowed money which becomes an obligation of the
Company as a result of such transaction as having been incurred by the
Company at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1202. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any conveyance, or other transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 1201, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such
-62-
<PAGE>
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Notes Outstanding hereunder.
ARTICLE XIII
SUPPLEMENTAL INDENTURES
SECTION 1301. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Notes, all as provided in Article Twelve; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be Outstanding, Notes of one
or more specified series, or one or more specified Tranches thereof, or to
surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default with respect to all or
any series of Notes Outstanding hereunder; or
(d) to change or eliminate any provision of this Indenture or to add
any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of
the Holders of Notes of any series or Tranche Outstanding on the date of
such indenture supplemental hereto in any material respect, such change,
elimination or addition shall become effective with respect to such series
or Tranche only pursuant to the provisions of Section 1302 hereof or when
no Note of such series or Tranche remains Outstanding; or
(e) to provide collateral security for the Notes; or
(f) to establish the form or terms of Notes of any series or Tranche
as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer Notes
and coupons appertaining thereto representing interest, if any, thereon
and for the procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the solicitation of the vote
or consent of, the holders thereof, and for any and all other matters
incidental thereto; or
-63-
<PAGE>
(h) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Notes of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 1011(b); or
(i) to provide for the procedures required to permit the Company to
utilize, at its option, a non-certificated system of registration for all,
or any series or Tranche of, the Notes; or to provide for the
authentication and delivery of bearer Notes and coupons appertaining
thereto representing interest, if any, thereon and for the procedures for
the registration, exchange and replacement thereof and for the giving of
notice to, and the solicitation of the vote or consent of, the holders
thereof, and for any and all other matters incidental thereto; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of Notes, or
any Tranche thereof, shall be payable, (2) all or any series of Notes, or
any Tranche thereof, may be surrendered for registration of transfer, (3)
all or any series of Notes, or any Tranche thereof, may be surrendered for
exchange and (4) notices and demands to or upon the Company in respect of
all or any series of Notes, or any Tranche thereof, and this Indenture may
be served; or
(k) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein; provided that no such changes or additions shall adversely affect
the interests of the Holders of Notes of any series or Tranche in any
material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended so as to conform
to such amendment to the Trust Indenture Act, and the Company and
the Trustee may, without the consent of any Holders, enter into an
indenture supplemental hereto to effect or evidence such changes or
additional provisions; or
(y) if any such amendment shall permit one or more changes to,
or the elimination of, any provisions hereof which, at the date of
the execution and delivery hereof or at any time thereafter, are
required by the Trust Indenture Act to be contained herein, this
Indenture shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee may, without
the consent of any Holders, enter into an indenture supplemental
hereto to evidence such amendment hereof.
-64-
<PAGE>
SECTION 1302. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of all series then Outstanding under
this Indenture, considered as one class, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture; provided, however, that if
there shall be Notes of more than one series Outstanding hereunder and if a
proposed supplemental indenture shall directly affect the rights of the Holders
of Notes of one or more, but less than all, of such series, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Notes of all series so directly affected, considered as one class,
shall be required; and provided, further, that if the Notes of any series shall
have been issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of Notes of one or
more, but less than all, of such Tranches, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding Notes of all
Tranches so directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon (or the amount of
any installment of interest thereon) or change the method of calculating
such rate or reduce any premium payable upon the redemption thereof, or
reduce the amount of the principal of a Discount Note that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 902, or change the coin or currency (or other
property), in which any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity of any Note (or, in the case
of redemption, on or after the Redemption Date), without, in any such
case, the consent of the Holder of such Note, or
(b) prior to the Release Date, impair the interest hereunder of the
Trustee in any Senior Note First Mortgage Bonds, reduce the principal
amount of any series of Senior Note First Mortgage Bonds to an amount less
than the principal amount of the related series of Notes or alter the
payment provisions of such Senior Note First Mortgage Bonds in a manner
adverse to the Holders of the Senior Notes, without, in any such case,
the consent of each Holder of such Notes; or
(c) reduce the percentage in principal amount of the Outstanding
Notes of any series or any Tranche thereof, the consent of the Holders of
which is required for any such supplemental indenture, or the consent of
the Holders of which is required for any waiver of compliance with any
provision of this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1404 for quorum or
voting, without, in any such case, the consent of the Holders of each
Outstanding Note of such series or Tranche, or
-65-
<PAGE>
(d) modify any of the provisions of this Section, Section 707 or
Section 913 with respect to the Notes of any series, or any Tranche
thereof (except to increase the percentages in principal amount referred
to in this Section or such other Sections or to provide that other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby);
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 1011(b), 1014 and
1301(h).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Notes, or of one or more Tranches
thereof, or which modifies the rights of the Holders of Notes of such series or
Tranches with respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Notes of any other
series or Tranche.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof. A waiver by
a Holder of such Holder's right to consent under this Section shall be deemed to
be a consent of such Holder.
SECTION 1303. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 1001) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 1304. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby. Any supplemental indenture permitted by this Article may
restate this Indenture in its entirety, and, upon the execution and delivery
thereof, any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1305. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
-66-
<PAGE>
SECTION 1306. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes of any series, or any Tranche thereof, authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Notes of any series, or any
Tranche thereof, so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes of such series or Tranche.
SECTION 1307. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Notes shall have been
established in a Board Resolution or an Officer's Certificate pursuant to a
Board Resolution as contemplated by Section 301, and not in an indenture
supplemental hereto, additions to, changes in or the elimination of any of such
terms may be effected by means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or Officer's
Certificate shall not be accepted by the Trustee or otherwise be effective
unless all conditions set forth in this Indenture which would be required to be
satisfied if such additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied. Upon the
acceptance thereof by the Trustee, any such supplemental Board Resolution or
Officer's Certificate shall be deemed to be a "supplemental indenture" for
purposes of Section 1304 and 1306.
ARTICLE XIV
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1401. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Notes of one or more, or all, series, or any
Tranche or Tranches thereof, may be called at any time and from time to time
pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Notes of such series or
Tranches.
SECTION 1402. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Notes
of one or more, or all, series, or any Tranche or Tranches thereof, for
any purpose specified in Section 1401, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, as the Trustee
shall determine, or, with the approval of the Company, at any other place.
Notice of every such meeting, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall
-67-
<PAGE>
be given, in the manner provided in Section 106, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of
the Holders of Notes of one or more, or all, series, or any Tranche or
Tranches thereof, by the Company or by the Holders of 33% in aggregate
principal amount of all of such series and Tranches, considered as one
class, for any purpose specified in Section 1401, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have given the notice of such meeting
within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Notes of such series and Tranches in the amount
above specified, as the case may be, may determine the time and the place
in the Borough of Manhattan, The City of New York, or in such other place
as shall be determined or approved by the Company, for such meeting and
may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
(c) Any meeting of Holders of Notes of one or more, or all, series,
or any Tranche or Tranches thereof, shall be valid without notice if the
Holders of all Outstanding Notes of such series or Tranches are present in
person or by proxy and if representatives of the Company and the Trustee
are present, or if notice is waived in writing before or after the meeting
by the Holders of all Outstanding Notes of such series, or by such of them
as are not present at the meeting in person or by proxy, and by the
Company and the Trustee.
SECTION 1403. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Notes of one or
more, or all, series, or any Tranche or Tranches thereof, a Person shall be (a)
a Holder of one or more Outstanding Notes of such series or Tranches, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Notes of such series or Tranches by such Holder or
Holders. The only Persons who shall be entitled to attend any meeting of Holders
of Notes of any series or Tranche shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
SECTION 1404. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Notes of the series and Tranches with respect to which
a meeting shall have been called as hereinbefore provided, considered as one
class, shall constitute a quorum for a meeting of Holders of Notes of such
series and Tranches; provided, however, that if any action is to be taken at
such meeting which this Indenture expressly provides may be taken by the Holders
of a specified percentage, which is less than a majority, in principal amount of
the Outstanding Notes of such series and Tranches, considered as one class, the
Persons entitled to vote such specified percentage in principal amount of the
Outstanding Notes of such series and Tranches, considered as one class, shall
constitute a quorum. In the absence of a quorum within one hour of the time
-68-
<PAGE>
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Notes of such series and Tranches, be dissolved. In any other case
the meeting may be adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for such period as may be determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Except as provided by
Section 1405(e), notice of the reconvening of any meeting adjourned for more
than 30 days shall be given as provided in Section 1402(a) not less than ten
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding Notes
of such series and Tranches which shall constitute a quorum.
Except as limited by Section 1302, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Notes of the series
and Tranches with respect to which such meeting shall have been called,
considered as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture expressly provides
may be taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Notes of such series and
Tranches, considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Notes of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of Holders of
Notes duly held in accordance with this Section shall be binding on all the
Holders of Notes of the series and Tranches with respect to which such meeting
shall have been held, whether or not present or represented at the meeting.
SECTION 1405. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS; CONDUCT
AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Notes may be in person or
by proxy; and, to the extent permitted by law, any such proxy shall remain
in effect and be binding upon any future Holder of the Notes with respect
to which it was given unless and until specifically revoked by the Holder
or future Holder of such Notes before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Notes in regard to proof of the holding of such
Notes and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Notes shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be proved in the
manner specified in Section 104. Such regulations may provide that written
-69-
<PAGE>
instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other
proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1402(b), in
which case the Company or the Holders of Notes of the series and Tranches
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a
majority in aggregate principal amount of the Outstanding Notes of all
series and Tranches represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one
vote for each $1 principal amount of Notes held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a Note or proxy.
(e) Any meeting duly called pursuant to Section 1402 at which a
quorum is present may be adjourned from time to time by Persons entitled
to vote a majority in aggregate principal amount of the Outstanding Notes
of all series and Tranches represented at the meeting, considered as one
class; and the meeting may be held as so adjourned without further notice.
SECTION 1406. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Notes, of the series and Tranches with respect
to which the meeting shall have been called, held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports of all votes cast at the meeting. A record of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
-70-
<PAGE>
SECTION 1407. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by Holders
by written instruments as provided in Section 104.
ARTICLE XV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1501. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Notes, or any part thereof, or for
any claim based thereon or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or agreement under this
Indenture, against any incorporator, stockholder, officer or director, as such,
past, present or future of the Company or of any predecessor or successor
corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this Indenture and all
the Notes are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or be incurred by, any incorporator, stockholder,
officer or director, past, present or future, of the Company or of any
predecessor or successor corporation, either directly or indirectly through the
Company or any predecessor or successor corporation, because of the indebtedness
hereby authorized or under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the Notes or to be implied
herefrom or therefrom, and that any such personal liability is hereby expressly
waived and released as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Notes.
--------------------
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
-71-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CAROLINA POWER & LIGHT COMPANY
By:______________________________________
[SEAL]
ATTEST:
- ---------------------------------
____________________, Trustee
By:______________________________________
[SEAL]
ATTEST:
- ---------------------------------
-72-
<PAGE>
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On the _____ day of ___________, 1998, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________________ of Carolina Power & Light Company, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------
Notary Public
[Notarial Seal]
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On the _____ day of ___________, 1998, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________________ of ______________________________, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------
Notary Public
[Notarial Seal]
-73-
EXHIBIT 4(E)
--------------------------------------------------
CAROLINA POWER & LIGHT COMPANY
TO
-------------------------------,
TRUSTEE
------------
INDENTURE
(FOR [SUBORDINATED] DEBT SECURITIES)
DATED AS OF ______________,199__
--------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
<S> <C>
PARTIES......................................................................1
RECITAL OF THE COMPANY.......................................................1
ARTICLE I Definitions and Other Provisions of General Application...........1
Section 101. Definitions...............................................1
Section 102. Compliance Certificates and Opinions......................7
Section 103. Form of Documents Delivered to Trustee....................8
Section 104. Acts of Holders...........................................9
Section 105. Notices, Etc. to Trustee and Company.....................10
Section 106. Notice to Holders of Securities; Waiver..................11
Section 107. Conflict with Trust Indenture Act........................12
Section 108. Effect of Headings and Table of Contents.................12
Section 109. Successors and Assigns...................................12
Section 110. Separability Clause......................................12
Section 111. Benefits of Indenture....................................12
Section 112. Governing Law............................................13
Section 113. Legal Holidays...........................................13
ARTICLE II Security Forms..................................................13
Section 201. Forms Generally..........................................13
Section 202. Form of Trustee's Certificate of Authentication..........14
ARTICLE III The Securities.................................................14
Section 301. Amount Unlimited; Issuable in Series.....................14
Section 302. Denominations............................................18
Section 303. Execution, Authentication, Delivery and Dating...........18
Section 304. Temporary Securities.....................................20
Section 305. Registration, Registration of Transfer and Exchange......21
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.........22
Section 307. Payment of Interest; Interest Rights Preserved...........23
Section 308. Persons Deemed Owners....................................24
Section 309. Cancellation by Security Registrar.......................24
Section 310. Computation of Interest..................................25
Section 311. Payment to be in Proper Currency.........................25
</TABLE>
- --------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
<TABLE>
<S> <C>
[Section 312. Extension of Interest Payment...........................25
ARTICLE IV Redemption of Securities........................................26
Section 401. Applicability of Article.................................26
Section 402. Election to Redeem; Notice to Trustee....................26
Section 403. Selection of Securities to be Redeemed...................26
Section 404. Notice of Redemption.....................................27
Section 405. Securities Payable on Redemption Date....................28
Section 406. Securities Redeemed in Part..............................28
ARTICLE V Sinking Funds....................................................29
Section 501. Applicability of Article.................................29
Section 502. Satisfaction of Sinking Fund Payments with Securities....29
Section 503. Redemption of Securities for Sinking Fund................29
ARTICLE VI Covenants.......................................................30
Section 601. Payment of Principal, Premium and Interest...............30
Section 602. Maintenance of Office or Agency..........................30
Section 603. Money for Securities Payments to be Held in Trust........31
Section 604. Corporate Existence......................................32
Section 605. Maintenance of Properties................................32
Section 606. Annual Officer's Certificate as to Compliance............33
Section 607. Waiver of Certain Covenants..............................33
ARTICLE VII Satisfaction and Discharge.....................................33
Section 701. Satisfaction and Discharge of Securities.................33
Section 702. Satisfaction and Discharge of Indenture..................36
Section 703. Application of Trust Money...............................37
ARTICLE VIII Events of Default; Remedies...................................37
Section 801. Events of Default........................................37
Section 802. Acceleration of Maturity; Rescission and Annulment.......39
Section 803. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................40
Section 804. Trustee May File Proofs of Claim.........................41
Section 805. Trustee May Enforce Claims Without Possession of
Securities................................................41
Section 806. Application of Money Collected...........................42
Section 807. Limitation on Suits......................................42
Section 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................43
Section 809. Restoration of Rights and Remedies.......................43
Section 810. Rights and Remedies Cumulative...........................43
Section 811. Delay or Omission Not Waiver.............................44
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 812. Control by Holders of Securities.........................44
Section 813. Waiver of Past Defaults..................................44
Section 814. Undertaking for Costs....................................45
Section 815. Waiver of Stay or Extension Laws.........................45
ARTICLE IX The Trustee.....................................................45
Section 901. Certain Duties and Responsibilities......................45
Section 902. Notice of Defaults.......................................46
Section 903. Certain Rights of Trustee................................46
Section 904. Not Responsible for Recitals or Issuance of Securities...47
Section 905. May Hold Securities......................................47
Section 906. Money Held in Trust......................................48
Section 907. Compensation and Reimbursement...........................48
Section 908. Disqualification; Conflicting Interests..................49
Section 909. Corporate Trustee Required; Eligibility..................49
Section 910. Resignation and Removal; Appointment of Successor........49
Section 911. Acceptance of Appointment by Successor...................51
Section 912. Merger, Conversation, Consolidation or Succession to
Business..................................................52
Section 913. Preferential Collection of Claims Against Company........53
Section 914. Co-trustees and Separate Trustees........................53
Section 915. Appointment of Authenticating Agent......................54
ARTICLE X Holders'Lists and Reports by Trustee and Company.................56
Section 1001. Lists of Holders........................................56
Section 1002. Reports by Trustee and Company..........................56
ARTICLE XI Consolidation, Merger, Conveyance or Other Transfer.............57
Section 1101. Company May Consolidate, Etc., Only on Certain Terms....57
Section 1102. Successor Corporation Substituted.......................58
ARTICLE XII Supplemental Indentures........................................58
Section 1201. Supplemental Indentures Without Consent of Holders......58
Section 1202. Supplemental Indentures With Consent of Holders.........60
Section 1203. Execution of Supplemental Indentures....................61
Section 1204. Effect of Supplemental Indentures.......................61
Section 1205. Conformity With Trust Indenture Act.....................62
Section 1206. Reference in Securities to Supplemental Indentures......62
Section 1207. Modification Without Supplemental Indenture.............62
ARTICLE XIII Meetings of Holders; Action Without Meeting...................63
Section 1301. Purposes for Which Meetings May be Called...............63
Section 1302. Call, Notice and Place of Meetings......................63
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 1303. Persons Entitled to Vote at Meetings....................64
Section 1304. Quorum; Action..........................................64
Section 1305. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings.............65
Section 1306. Counting Votes and Recording Action of Meetings.........66
Section 1307. Action Without Meeting..................................66
ARTICLE XIV Immunity of Incorporators, Stockholders, Officers and
Directors.............................................................66
Section 1401. Liability Solely Corporate..............................66
[ARTICLE XV Subordination of Securities.....................................67
Section 1501. Securities Subordinate to Senior Indebtedness...........67
Section 1502. Payment Over of Proceeds of Securities..................67
Section 1503. Disputes with Holders of Certain Senior Indebtedness....69
Section 1504. Subrogation.............................................69
Section 1505. Obligation of the Company Unconditional.................70
Section 1506. Priority of Senior Indebtedness Upon Maturity...........70
Section 1507. Trustee as Holder of Senior Indebtedness................71
Section 1508. Notice to Trustee to Effectuate Subordination...........71
Section 1509. Modification, Extension, etc. of Senior Indebtedness....71
Section 1510. Trustee Has No Fiduciary Duty to Holders of Senior
Indebtedness..............................................72
Section 1511. Paying Agents Other than the Trustee....................72
Section 1512. Rights of Holders of Senior Indebtedness Not Impaired...72
Section 1513. This Article Not to Prevent Events of Default...........72
Section 1514. Effect of Subordination Provisions; Termination.........72]
Testimonium.................................................................73
Signature and Seals.........................................................74
Acknowledgments.............................................................75
</TABLE>
(iv)
<PAGE>
<TABLE>
<CAPTION>
CAROLINA POWER & LIGHT COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ___________, 199__
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
ss.310 (a)(1).............................................. 909
(a)(2)................................................ 909
(a)(3)................................................ 914
(a)(4)................................................ Not Applicable
(b) ................................................ 908
910
ss.311 (a) .............................................. 913
(b) ................................................ 913
(c) ................................................ 913
ss.312 (a) .............................................. 1001
(b) ................................................ 1001
(c) ................................................ 1001
ss.313 (a) .............................................. 1002
(b) ................................................ 1002
(c) ................................................ 1002
(d) ................................................ 1002
ss.314 (a) .............................................. 1002
(a)(4)................................................ 606
(b) ................................................ Not Applicable
(c)(1)................................................ 102
(c)(2)................................................ 102
(c)(3)................................................ Not Applicable
(d) ................................................ Not Applicable
(e) ................................................ 102
ss.315 (a) .............................................. 901
903
(b) ................................................ 902
(c) ................................................ 901
(d) ................................................ 901
(e) ................................................ 814
ss.316 (a) .............................................. 812
................................................ 813
(a)(1)(A)............................................. 802
812
(a)(1)(B)............................................. 813
(a)(2)................................................ Not Applicable
(b) ................................................ 808
ss.317 (a)(1).............................................. 803
(a)(2)................................................ 804
(b) ................................................ 603
ss.318 (a) .............................................. 107
</TABLE>
(v)
<PAGE>
INDENTURE, dated as of ________________, 199__, between CAROLINA
POWER & LIGHT COMPANY, a corporation duly organized and existing under the laws
of the State of North Carolina (herein called the "Company"), having its
principal office at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
and ___________________________, a ________________________, having its
principal corporate trust office at __________________, _______________,
_________________, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its [subordinated]*
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), in an unlimited aggregate principal amount, to be issued in one
or more series as contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
--------------------------------------------------------
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in
the Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
<PAGE>
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at
the date of such computation or, at the election of the Company from time
to time, at the date of the execution and delivery of this Indenture;
provided, however, that in determining generally accepted accounting
principles applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any administrative
agency, regulatory authority or other governmental body having
jurisdiction over the Company; and
(d) the words "herein", "hereof' and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are defined in that
Article.
"ACT", when used with respect to any Holder of a Security, has the
meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person (other than the Company or
an Affiliate of the Company) authorized by the Trustee pursuant to Section 915
to act on behalf of the Trustee to authenticate one or more series of Securities
or Tranche thereof.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President,
any Vice President, the Treasurer or any other duly authorized officer of the
Company.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof or any director or directors and/or officer or
officers of the Company to whom that board or committee shall have duly
delegated its authority duly authorized to act in respect of matters relating to
this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or any
other particular location specified in the Securities or this Indenture, means
any day, other than a
-2-
<PAGE>
Saturday or Sunday, which is not a day on which banking institutions or trust
companies in such Place of Payment or other location are generally authorized or
required by law, regulation or executive order to remain closed, except as may
be otherwise specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body, if any, performing such duties at such
time.
"COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by an Authorized Officer and delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution and delivery of this
Indenture is located at 101 Barclay Street, New York, New York 10286.
"CORPORATION" means a corporation, association, company, limited
liability company, joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DISCOUNT SECURITY" means any Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 802. "Interest" with
respect to a Discount Security means interest, if any, borne by such Security at
a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars, Government
Obligations; or
(b) with respect to Securities denominated in a currency other than
Dollars or in a composite currency, such other obligations or instruments
as shall be specified with respect to such Securities, as contemplated by
Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section 801.
-3-
<PAGE>
"GOVERNMENTAL AUTHORITY" means the government of the United States
or of any State or Territory thereof or of the District of Columbia or of any
county, municipality or other political subdivision of any thereof, or any
department, agency, authority or other instrumentality of any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in clause
(a) above or in any specific interest or principal payments due in respect
thereof; provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or trust company
(which may include the Trustee or any Paying Agent) subject to Federal or
state supervision or examination with a combined capital and surplus of at
least $100,000,000; and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to the holders
of such certificates, depositary receipts or other instruments the full
amount received by such custodian in respect of such obligations or
specific payments and shall not be permitted to make any deduction
therefrom.
"HOLDER" means a Person in whose name a Security is registered in
the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"MATURITY", when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal becomes
due and payable as provided in such Security or in this Indenture, whether at
the Stated Maturity, by declaration of acceleration, upon call for redemption or
otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, or other counsel acceptable to the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
-4-
<PAGE>
(a) Securities theretofore canceled by the Trustee or the Security
Registrar or delivered to the Trustee or the Security Registrar for
cancellation;
(b) Securities deemed to have been paid in accordance with Section
701; and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are held by a bona
fide purchaser or purchasers in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture,
or the Outstanding Securities of any series or Tranche, have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or whether
or not a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other
obligor (unless the Company, such Affiliate or such obligor owns all
Securities Outstanding under this Indenture, or all Outstanding
Securities of each such series and each such Tranche, as the case
may be, determined without regard to this clause (x)) shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent
or waiver or upon any such determination as to the presence of a
quorum, only Securities which the Trustee knows to be so owned shall
be so disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor;
and
(y) the principal amount of a Discount Security that shall be
deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date
of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 802;
provided, further, that, in the case of any Security the principal of which is
payable from time to time without presentment or surrender, the principal amount
of such Security that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount thereof less
the aggregate amount of principal thereof theretofore paid.
"PAYING AGENT" means any Person, including the Company, authorized
by the Company to pay the principal of and premium, if any, or interest, if any,
on any Securities on behalf of the Company.
-5-
<PAGE>
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time any or all of the specific terms of which Securities, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents upon the
issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Securities of any
series, or Tranche thereof, means the place or places, specified as contemplated
by Section 301, at which, subject to Section 602, principal of and premium, if
any, and interest, if any, on the Securities of such series or Tranche are
payable.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed (to the
extent lawful) to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means
any officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.
"SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any securities authenticated and delivered
under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
["SENIOR INDEBTEDNESS" means all obligations (other than
non-recourse obligations and the indebtedness issued under this Indenture) of,
or guaranteed or assumed by, the Company for borrowed money, including both
senior and subordinated indebtedness for borrowed money (other than the
Securities), or for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Company and its
subsidiaries in accordance with generally accepted accounting principles as in
effect from time to time, or
-6-
<PAGE>
evidenced by bonds, debentures, notes or other similar instruments, and in each
case, amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of this Indenture
or subsequently incurred by the Company.]*
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on
the Securities of any series means a date fixed by the Trustee pursuant to
Section 307.
"STATED INTEREST RATE" means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear interest. Any calculation or
other determination to be made under this Indenture by reference to the Stated
Interest Rate on a Security shall be made without regard to the effective
interest cost to the Company of such Security and without regard to the Stated
Interest Rate on, or the effective cost to the Company of, any other
indebtedness in respect of which the Company's obligations are evidenced or
secured in whole or in part by such Security.
"STATED MATURITY", when used with respect to any obligation or any
installment of principal thereof or interest thereon, means the date on which
the principal of such obligation or such installment of principal or interest is
stated to be due and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"TRANCHE" means a group of Securities which (a) are of the same
series and (b) have identical terms except as to principal amount.
"TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act
of 1939, or any successor statute, as in effect at such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
with respect to one or more series of Securities pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"UNITED STATES" means the United States of America, its Territories,
its possessions and other areas subject to its political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-7-
<PAGE>
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion are
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
-8-
<PAGE>
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders duly called and held in accordance with the provisions
of Article Thirteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments and so voting at any such meeting. Proof of execution of any
such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and (subject to Section 901) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
The record of any meeting of Holders shall be proved in the manner
provided in Section 1306.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which the Trustee
and the Company deem sufficient. Where such execution is by a signer
acting in a capacity other
-9-
<PAGE>
than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The principal amount (except as otherwise contemplated in clause
(y) of the proviso to the definition of Outstanding) and serial numbers of
Securities held by any Person, and the date of holding the same, shall be
proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
(e) Until such time as written instruments shall have been delivered
to the Trustee with respect to the requisite percentage of principal
amount of Securities for the action contemplated by such instruments, any
such instrument executed and delivered by or on behalf of a Holder may be
revoked with respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series, or any Tranche thereof, authenticated
and delivered after any Act of Holders may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any action
taken by such Act of Holders. If the Company shall so determine, new
Securities of any series, or any Tranche thereof, so modified as to
conform, in the opinion of the Trustee and the Company, to such action may
be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series or
Tranche.
(g) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on the record date shall be
deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of the Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon,
-10-
<PAGE>
given or furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and delivered personally to an officer or other responsible employee of
the addressee, or transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic communications
address as the parties hereto shall from time to time designate, or transmitted
by certified or registered mail, charges prepaid, to the applicable address set
opposite such party's name below or to such other address as either party hereto
may from time to time designate:
If to the Trustee, to:
-----------------------------
-----------------------------
-----------------------------
Attention: ________________________________
Telephone: _______________________________
Telecopy: _______________________________
If to the Company, to:
Carolina Power & Light Company
411 Fayetteville Street
Raleigh, North Carolina 27601-1768
Attention: Mark F. Mulhern, Treasurer
Telephone: (919) 546-6373
Telecopy: (919) 546-7826
Any communication contemplated herein shall be deemed to have been
made, given, furnished and filed if personally delivered, on the date of
delivery, if transmitted by facsimile transmission or other direct written
electronic means, on the date of transmission, and if transmitted by certified
or registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given, and shall be deemed given, to Holders if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Security Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders is given by mail, neither the
-11-
<PAGE>
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders.
Any notice required by this Indenture may be waived in writing by
the Person entitled to receive such notice, either before or after the event
otherwise to be specified therein, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts
with another provision hereof which is required or deemed to be included in this
Indenture by, or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall
control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder, the Holders, [and so long as the notice described in Section 1514
hereof has not been given, the holders of Senior Indebtedness,]* any benefit or
any legal or equitable right, remedy or claim under this Indenture.
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-12-
<PAGE>
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, except to the extent that
the law of any other jurisdiction shall be mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities other than a provision in Securities of any series, or any Tranche
thereof, or in the Board Resolution or Officer's Certificate which establishes
the terms of the Securities of such series or Tranche, which specifically states
that such provision shall apply in lieu of this Section) payment of interest or
principal and premium, if any, need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and, if such payment is made or
duly provided for on such Business Day, no interest shall accrue on the amount
so payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to such Business Day.
ARTICLE II
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in substantially
the form or forms thereof established in the indenture supplemental hereto
establishing such series or in a Board Resolution establishing such series, or
in an Officer's Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form or forms of Securities of any series
are established in a Board Resolution or in an Officer's Certificate pursuant to
a Board Resolution, such Board Resolution and Officer's Certificate, if any,
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
Unless otherwise specified as contemplated by Sections 301 or
1201(g), the Securities of each series shall be issuable in registered form
without coupons. The definitive Securities shall be produced in such manner as
shall be determined by the officers executing such Securities, as evidenced by
their execution thereof.
-13-
<PAGE>
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
-----------------------------------
. as Trustee
By: _____________________________
Authorized [Officer] [Signatory]
ARTICLE III
THE SECURITIES
----------------
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Subject to the
last paragraph of this Section, prior to the authentication and delivery of
Securities of any series there shall be established by specification in a
supplemental indenture or in a Board Resolution, or in an Officer's Certificate
pursuant to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all other
series);
(b) any limit upon the aggregate principal amount of the Securities
of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 406 or 1206
and, except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(c) the Person or Persons (without specific identification) to whom
interest on Securities of such series, or any Tranche thereof, shall be
payable on any Interest Payment Date, if other than the Persons in whose
names such Securities (or one or more Predecessor Securities) are
registered at the close of business on the Regular Record Date for such
interest;
-14-
<PAGE>
(d) the date or dates on which the principal of the Securities of
such series or any Tranche thereof, is payable or any formulary or other
method or other means by which such date or dates shall be determined, by
reference to an index or other fact or event ascertainable outside of this
Indenture or otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such series, or any
Tranche thereof, shall bear interest, if any (including the rate or rates
at which overdue principal shall bear interest, if different from the rate
or rates at which such Securities shall bear interest prior to Maturity,
and, if applicable, the rate or rates at which overdue premium or interest
shall bear interest, if any), or any formulary or other method or other
means by which such rate or rates shall be determined, by reference to an
index or other fact or event ascertainable outside of this Indenture or
otherwise; the date or dates from which such interest shall accrue; the
Interest Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on such Securities
on any Interest Payment Date; [; the right of the Company, if any, to
extend the interest payment periods and the duration of any such extension
as contemplated by Section 312]* and the basis of computation of interest,
if other than as provided in Section 310;
(f) the place or places at which or methods by which (1) the
principal of and premium, if any, and interest, if any, on Securities of
such series, or any Tranche thereof, shall be payable, (2) registration of
transfer of Securities of such series, or any Tranche thereof, may be
effected, (3) exchanges of Securities of such series, or any Tranche
thereof, may be effected and (4) notices and demands to or upon the
Company in respect of the Securities of such series, or any Tranche
thereof, and this Indenture may be served; the Security Registrar for such
series; and if such is the case, that the principal of such Securities
shall be payable without presentment or surrender thereof;
(g) the period or periods within which, or the date or dates on
which, the price or prices at which and the terms and conditions upon
which the Securities of such series, or any Tranche thereof, may be
redeemed, in whole or in part, at the option of the Company and any
restrictions on such redemptions, including but not limited to a
restriction on a partial redemption by the Company of the Securities of
any series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;
(h) the obligation or obligations, if any, of the Company to redeem
or purchase the Securities of such series, or any Tranche thereof,
pursuant to any sinking fund or other mandatory redemption provisions or
at the option of a Holder thereof and the period or periods within which
or the date or dates on which, the price or prices at which and the terms
and conditions upon which such Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligation, and applicable
exceptions to
----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-15-
<PAGE>
the requirements of Section 404 in the case of mandatory redemption or
redemption at the option of the Holder;
(i) the denominations in which Securities of such series, or any
Tranche thereof, shall be issuable if other than denominations of $1,000
and any integral multiple thereof;
(j) the currency or currencies, including composite currencies, in
which payment of the principal of and premium, if any, and interest, if
any, on the Securities of such series, or any Tranche thereof, shall be
payable (if other than in Dollars);
(k) if the principal of or premium, if any, or interest, if any, on
the Securities of such series, or any Tranche thereof, are to be payable,
at the election of the Company or a Holder thereof, in a coin or currency
other than that in which the Securities are stated to be payable, the
period or periods within which and the terms and conditions upon which,
such election may be made;
(l) if the principal of or premium, if any, or interest, if any, on
the Securities of such series, or any Tranche thereof, are to be payable,
or are to be payable at the election of the Company or a Holder thereof,
in securities or other property, the type and amount of such securities or
other property, or the formulary or other method or other means by which
such amount shall be determined, and the period or periods within which,
and the terms and conditions upon which, any such election may be made;
(m) if the amount payable in respect of principal of or premium, if
any, or interest, if any, on the Securities of such series, or any Tranche
thereof, may be determined with reference to an index or other fact or
event ascertainable outside this Indenture, the manner in which such
amounts shall be determined to the extent not established pursuant to
clause (e) of this paragraph;
(n) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series, or any Tranche thereof,
which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 802;
(o) any Events of Default, in addition to those specified in Section
801, with respect to the Securities of such series, and any covenants of
the Company for the benefit of the Holders of the Securities of such
series, or any Tranche thereof, in addition to those set forth in Article
Six;
(p) the terms, if any, pursuant to which the Securities of such
series, or any Tranche thereof, may be converted into or exchanged for
shares of capital stock or other securities of the Company or any other
Person;
(q) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the Securities of such
series, or any Tranche thereof, denominated in a currency other than
Dollars or in a composite currency, and any additional or alternative
provisions for the reinstatement of the Company's indebtedness
-16-
<PAGE>
in respect of such Securities after the satisfaction and discharge thereof
as provided in Section 701;
(r) if the Securities of such series, or any Tranche thereof, are to
be issued in global form, (i) any limitations on the rights of the Holder
or Holders of such Securities to transfer or exchange the same or to
obtain the registration of transfer thereof, (ii) any limitations on the
rights of the Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and all other
matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche thereof, are to
be issuable as bearer securities, any and all matters incidental thereto
which are not specifically addressed in a supplemental indenture as
contemplated by clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r) of this
paragraph, any limitations on the rights of the Holders of the Securities
of such Series, or any Tranche thereof, to transfer or exchange such
Securities or to obtain the registration of transfer thereof; and if a
service charge will be made for the registration of transfer or exchange
of Securities of such series, or any Tranche thereof, the amount or terms
thereof;
(u) any exceptions to Section 113, or variation in the definition of
Business Day, with respect to the Securities of such series, or any
Tranche thereof;
(v) any collateral security, assurance or guarantee for such series
of Notes; and
(w) any other terms of the Securities of such series, or any Tranche
thereof, not inconsistent with the provisions of this Indenture.
[The Securities of each series, or any Tranche thereof, shall be
subordinated in the right of payment to Senior Indebtedness as provided in
Article Fifteen.]*
With respect to Securities of a series subject to a Periodic
Offering, the indenture supplemental hereto or the Board Resolution which
establishes such series, or the Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, as the case may be, may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of Securities of such series, or any Tranche thereof,
shall be specified in a Company Order or that such terms shall be determined by
the Company or its agents in accordance with procedures specified in a Company
Order as contemplated by clause (b) of the third paragraph of Section 303.
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-17-
<PAGE>
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities of
each series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities
shall be executed on behalf of the Company by an Authorized Officer and may have
the corporate seal of the Company affixed thereto or reproduced thereon attested
by any other Authorized Officer. The signature of any or all of these officers
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of execution Authorized Officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
The Trustee shall authenticate and deliver Securities of a series,
for original issue, at one time or from time to time in accordance with the
Company Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or forms and
terms of such series, as provided in Sections 201 and 301;
(b) a Company Order requesting the authentication and delivery of
such Securities and, to the extent that the terms of such Securities shall
not have been established in an indenture supplemental hereto or in a
Board Resolution, or in an Officer's Certificate pursuant to a
supplemental indenture or Board Resolution, all as contemplated by
Sections 201 and 301, either (i) establishing such terms or (ii) in the
case of Securities of a series subject to a Periodic Offering, specifying
procedures, acceptable to the Trustee, by which such terms are to be
established (which procedures may provide, to the extent acceptable to the
Trustee, for authentication and delivery pursuant to oral or electronic
instructions from the Company or any agent or agents thereof, which oral
instructions are to be promptly confirmed electronically or in writing),
in either case in accordance with the instrument or instruments delivered
pursuant to clause (a) above;
(c) the Securities of such series, executed on behalf of the Company
by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been duly
authorized by the Company and have been established in conformity
with the provisions of this Indenture;
-18-
<PAGE>
(ii) the terms of such Securities have been duly authorized by
the Company and have been established in conformity with the
provisions of this Indenture; and
(iii) such Securities, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company, entitled to the
benefits provided by this Indenture, and enforceable in accordance
with their terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of such
Securities (provided that such Opinion of Counsel addresses the authentication
and delivery of all Securities of such series) and that in lieu of the opinions
described in clauses (ii) and (iii) above Counsel may opine that:
(x) when the terms of such Securities shall have been
established pursuant to a Company Order or Orders or pursuant to
such procedures (acceptable to the Trustee) as may be specified from
time to time by a Company Order or Orders, all as contemplated by
and in accordance with the instrument or instruments delivered
pursuant to clause (a) above, such terms will have been duly
authorized by the Company and will have been established in
conformity with the provisions of this Indenture; and
(y) such Securities, when authenticated and delivered by the
Trustee in accordance with this Indenture and the Company Order or
Orders or specified procedures referred to in paragraph (x) above
and issued and delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will have been
duly issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, and enforceable in accordance with their
terms, subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general principles
of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of Counsel
and other documents delivered pursuant to Sections 201 and 301 and this Section,
as applicable, at or prior to the time of the first authentication of Securities
of such series
-19-
<PAGE>
unless and until such opinion or other documents have been superseded or revoked
or expire by their terms. In connection with the authentication and delivery of
Securities of a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to authenticate and deliver
such Securities do not violate any rules, regulations or orders of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such Securities pursuant to this
Indenture will materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, each Security shall
be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, no Security shall
be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the
Trustee or its agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder to the Company, or any Person acting on
its behalf, but shall never have been issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided
in Section 309 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, or
any Tranche thereof, the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities; provided,
however, that temporary Securities need not recite specific redemption, sinking
fund, conversion or exchange provisions.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, after the
preparation of definitive Securities of such series or Tranche, the temporary
Securities of such series or Tranche shall be exchangeable,
-20-
<PAGE>
without charge to the Holder thereof, for definitive Securities of such series
or Tranche upon surrender of such temporary Securities at the office or agency
of the Company maintained pursuant to Section 602 in a Place of Payment for such
Securities. Upon such surrender of temporary Securities, the Company shall,
except as aforesaid, execute and the Trustee shall authenticate and deliver in
exchange therefor definitive Securities of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and Tranche and of like
tenor authenticated and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated
pursuant to Section 602, with respect to the Securities of each series or any
Tranche thereof, a register (all registers kept in accordance with this Section
being collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series or Tranche and the registration of
transfer thereof. The Company shall designate one Person to maintain the
Security Register for the Securities of each series on a consolidated basis, and
such Person is referred to herein, with respect to such series, as the "Security
Registrar." Anything herein to the contrary notwithstanding, the Company may
designate one or more of its offices as an office in which a register with
respect to the Securities of one or more series, or any Tranche or Tranches
thereof, shall be maintained, and the Company may designate itself the Security
Registrar with respect to one or more of such series. The Security Register
shall be open for inspection by the Trustee and the Company at all reasonable
times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, upon surrender
for registration of transfer of any Security of such series or Tranche at the
office or agency of the Company maintained pursuant to Section 602 in a Place of
Payment for such series or Tranche, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, any Security of
such series or Tranche may be exchanged at the option of the Holder, for one or
more new Securities of the same series and Tranche, of authorized denominations
and of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities delivered upon any registration of transfer or
exchange of Securities shall be valid obligations of the Company, evidencing the
same debt, and entitled to the same
-21-
<PAGE>
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Trustee or the
Security Registrar) be duly endorsed or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, duly executed by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with
respect to Securities of any series, or any Tranche thereof, no service charge
shall be made for any registration of transfer or exchange of Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series, or
any Tranche thereof, during a period of 15 days immediately preceding the date
notice of redemption of the Securities of such series or Tranche is to be given
or (b) any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction, loss or
theft of any Security and (b) such security or indemnity as may be reasonably
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such Security, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series and
Tranche, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
-22-
<PAGE>
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone other than
the Holder of such new Security, and any such new Security shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.
[Subject to Section 312]* any interest on any Security of any series
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the related Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a date (herein called a "Special Record Date") for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall promptly cause notice of the proposed
payment of such Defaulted Interest and the Special Record
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-23-
<PAGE>
Date therefor to be mailed, first-class postage prepaid, to each Holder of
Securities of such series at the address of such Holder as it appears in
the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and premium,
if any, and (subject to Sections 305 and 307) interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Security
Registrar, be delivered to the Security Registrar and, if not theretofore
canceled, shall be promptly canceled by the Security Registrar. The Company may
at any time deliver to the Security Registrar for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever or which the Company shall not have issued and
sold, and all Securities so delivered shall be promptly canceled by the Security
Registrar. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Security
Registrar shall be disposed of in accordance with the customary practices of the
Security Registrar at the time in effect, and the Security Registrar shall not
be required to destroy any such certificates and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and the Company
unless, by a Company Order, similarly delivered, the Company shall direct that
canceled Securities be returned to it. The Security Registrar shall promptly
deliver
-24-
<PAGE>
evidence of any cancellation of a Security in accordance with this
Section 309 to the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or any Tranche thereof, interest on the Securities of
each series shall be computed on the basis of a 360-day year consisting of
twelve 30-day months and on the basis of the actual number of days elapsed
within any month in relation to the deemed 30 days of such month.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any Tranche thereof,
denominated in any currency other than Dollars or in a composite currency (the
"Required Currency"), except as otherwise specified with respect to such
Securities as contemplated by Section 301, the obligation of the Company to make
any payment of the principal thereof, or the premium or interest thereon, shall
not be discharged or satisfied by any tender by the Company, or recovery by the
Trustee, in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the Trustee timely holding the full
amount of the Required Currency then due and payable. If any such tender or
recovery is in a currency other than the Required Currency, the Trustee may take
such actions as it considers appropriate to exchange such currency for the
Required Currency. The costs and risks of any such exchange, including without
limitation the risks of delay and exchange rate fluctuation, shall be borne by
the Company, the Company shall remain fully liable for any shortfall or
delinquency in the full amount of Required Currency then due and payable, and in
no circumstances shall the Trustee be liable therefor except in the case of its
negligence or willful misconduct.
[SECTION 312. EXTENSION OF INTEREST PAYMENT.
The Company shall have the right at any time, so long as the Company
is not in default in the payment of interest on the Securities of any series
hereunder, to extend interest payment periods on all Securities of one or more
series, or Tranches thereof, if so specified as contemplated by Section 301 with
respect to such Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities.]*
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-25-
<PAGE>
ARTICLE IV
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 301
for Securities of such series or Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company shall,
at least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of such Securities
to be redeemed. In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or any Tranche
thereof, are to be redeemed, the particular Securities to be redeemed shall be
selected by the Trustee from the Outstanding Securities of such series or
Tranche not previously called for redemption, by such method as shall be
provided for any particular series, or, in the absence of any such provision, by
such method of random selection as the Trustee shall deem fair and appropriate
and which may, in any case, provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of such series or
Tranche or any integral multiple thereof) of the principal amount of Securities
of such series or Tranche of a denomination larger than the minimum authorized
denomination for Securities of such series or Tranche; provided, however, that
if, as indicated in an Officer's Certificate, the Company shall have offered to
purchase all or any principal amount of the Securities then Outstanding of any
series, or any Tranche thereof, and less than all of such Securities as to which
such offer was made shall have been tendered to the Company for such purchase,
the Trustee, if so directed by Company Order, shall select for redemption all or
any principal amount of such Securities which have not been so tendered.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected to be redeemed in part, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities
-26-
<PAGE>
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 106 to the Holders of the Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series or Tranche are to
be redeemed, the identification of the particular Securities to be
redeemed and the portion of the principal amount of any Security to be
redeemed in part,
(d) that on the Redemption Date the Redemption Price, together with
accrued interest, if any, to the Redemption Date, will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, unless
it shall have been specified as contemplated by Section 301 with respect
to such Securities that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund, if such is
the case, and
(g) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any notice of redemption of
Securities at the election of the Company, unless, upon the giving of such
notice, such Securities shall be deemed to have been paid in accordance with
Section 701, such notice may state that such redemption shall be conditional
upon the receipt by the Paying Agent or Agents for such Securities, on or prior
to the date fixed for such redemption, of money sufficient to pay the principal
of and premium, if any, and interest, if any, on such Securities and that if
such money shall not have been so received such notice shall be of no force or
effect and the Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition and such money is
not so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the
-27-
<PAGE>
Holders thereof any of such Securities which had been surrendered for payment
upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Security Registrar in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security Registrar in
the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with such notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such Security, any
installment of interest on any Security the Stated Maturity of which installment
is on or prior to the Redemption Date shall be payable to the Holder of such
Security, or one or more Predecessor Securities, registered as such at the close
of business on the related Regular Record Date according to the terms of such
Security and subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be redeemed only in
part at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities of the same series and Tranche, of
any authorized denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
-28-
<PAGE>
ARTICLE V
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of any series, or any Tranche thereof,
except as otherwise specified as contemplated by Section 301 for Securities of
such series or Tranche.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series, or any Tranche thereof, is herein referred to
as a "mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Securities of any series, or any Tranche
thereof, is herein referred to as an "optional sinking fund payment." If
provided for by the terms of Securities of any series, or any Tranche thereof,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 502. Each sinking fund payment shall be applied to the
redemption of Securities of the series or Tranche in respect of which it was
made as provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (a) may deliver to the Trustee Outstanding Securities
(other than any previously called for redemption) of a series or Tranche in
respect of which a mandatory sinking fund payment is to be made and (b) may
apply as a credit Securities of such series or Tranche which have been redeemed
either at the election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any part
of such mandatory sinking fund payment; provided, however, that no Securities
shall be applied in satisfaction of a mandatory sinking fund payment if such
Securities shall have been previously so applied. Securities so applied shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for
the Securities of any series, or any Tranche thereof, the Company shall deliver
to the Trustee an Officer's Certificate specifying:
(a) the amount of the next succeeding mandatory sinking fund payment
for such series or Tranche;
(b) the amount, if any, of the optional sinking fund payment to be
made together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
-29-
<PAGE>
(d) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by the payment of cash; and
(e) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by delivering and crediting Securities of such
series or Tranche pursuant to Section 502 and stating the basis for such
credit and that such Securities have not previously been so credited, and
the Company shall also deliver to the Trustee any Securities to be so
delivered.
If the Company shall not have delivered such Officer's Certificate
and, to the extent applicable, all such Notes, on or prior to the 45th day prior
to such sinking fund payment date, the sinking fund payment for such series or
Tranche in respect of such sinking fund payment date shall be made entirely in
cash in the amount of the mandatory sinking fund payment. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the Notes to
be redeemed upon such sinking fund payment date in the manner specified in
Section 403 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 404. Such
notice having been duly given, the redemption of such Notes shall be made upon
the terms and in the manner stated in Sections 405 and 406.
ARTICLE VI
Covenants
---------
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if any, and
interest, if any, on the Securities of each series in accordance with the terms
of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the
Securities of each series, or any Tranche thereof, an office or agency where
payment of such Securities shall be made, where the registration of transfer or
exchange of such Securities may be effected and where notices and demands to or
upon the Company in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency and prompt notice to
the Holders of any such change in the manner specified in Section 106. If at any
time the Company shall fail to maintain any such required office or agency in
respect of Securities of any series, or any Tranche thereof, or shall fail to
furnish the Trustee with the address thereof, payment of such Securities shall
be made, registration of transfer or exchange thereof may be effected and
notices and demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
for all such purposes in any such event.
-30-
<PAGE>
The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series, or any
Tranche thereof, for any or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that, unless otherwise
specified as contemplated by Section 301 with respect to the Securities of such
series or Tranche no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency for such purposes
in each Place of Payment for such Securities in accordance with the requirements
set forth above. The Company shall give prompt written notice to the Trustee,
and prompt notice to the Holders in the manner specified in Section 106, of any
such designation or rescission and of any change in the location of any such
other office or agency.
Anything herein to the contrary notwithstanding, any office or
agency required by this Section may be maintained at an office of the Company,
in which event the Company shall perform all functions to be performed at such
office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it shall, on or
before each due date of the principal of and premium, if any, and interest, if
any, on any of such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and premium
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company shall promptly notify the
Trustee of any failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or interest, if any, on
such Securities.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, or any Tranche thereof, it shall, on or before each
due date of the principal of and premium, if any, and interest, if any, on such
Securities, deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of any
series, or any Tranche thereof, other than the Company or the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
-31-
<PAGE>
(b) give the Trustee notice of any failure by the Company (or any
other obligor upon such Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent and furnish to the Trustee such
information as it possesses regarding the names and addresses of the
Persons entitled to such sums.
The Company may at any time pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent and, if
so stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and premium,
if any, or interest, if any, on any Security and remaining unclaimed for two
years after such principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon such payment or
discharge, the Holder of such Security shall, as an unsecured general creditor
and not as a Holder of an Outstanding Security, look only to the Company for
payment of the amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment to the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing, any unclaimed balance of such money then
remaining will be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Eleven, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all its properties used or
useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and shall cause (or, with respect to
property owned in common with others, make reasonable effort to cause) to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the Company, may be necessary so that the
business carried on in
-32-
<PAGE>
connection therewith may be properly conducted; provided, however, that nothing
in this Section shall prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than ____________________ in each year, commencing
_________________, the Company shall deliver to the Trustee an Officer's
Certificate which need not comply with Section 102, executed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, stating whether, to such officer's knowledge, the
Company is in compliance with all conditions and covenants under this Indenture,
such compliance to be determined without regard to any period of grace or
requirement of notice under this Indenture, and making any other statements as
may be required by the provisions of Section 314(a)(4) of the Trust Indenture
Act.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in (a) Section 602 or any additional
covenant or restriction specified with respect to the Securities of any series,
or any Tranche thereof, as contemplated by Section 301 if before the time for
such compliance the Holders of at least a majority in aggregate principal amount
of the Outstanding Securities of all series and Tranches with respect to which
compliance with Section 602 or such additional covenant or restriction is to be
omitted, considered as one class, shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition and (b) Section 604, 605, 606 or Article Eleven if before
the time for such compliance the Holders of at least a majority in principal
amount of Securities Outstanding under this Indenture shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE VII
Satisfaction and Discharge
--------------------------
SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be deemed to
have been satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in
trust:
-33-
<PAGE>
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of such
Securities or portions thereof, Eligible Obligations, which shall not
contain provisions permitting the redemption or other prepayment thereof
at the option of the issuer thereof, the principal of and the interest on
which when due, without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with or held by
the Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof on or prior to
Maturity, provided, however, that in the case of the provision for payment or
redemption of less than all the Securities of any series or Tranche, such
Securities or portions thereof shall have been selected by the Trustee as
provided herein and, in the case of a redemption, the notice requisite to the
validity of such redemption shall have been given or irrevocable authority shall
have been given by the Company to the Trustee to give such notice, under
arrangements satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying Agent:
(x) if such deposit shall have been made prior to the Maturity
of such Securities, a Company Order stating that the money and
Eligible Obligations deposited in accordance with this Section shall
be held in trust, as provided in Section 703;
(y) if Eligible Obligations shall have been deposited, an
Opinion of Counsel that the obligations so deposited constitute
Eligible Obligations and do not contain provisions permitting the
redemption or other prepayment at the option of the issuer thereof,
and an opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that the
requirements set forth in clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity
of such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
indebtedness in respect of such Securities or portions thereof will
have been satisfied and discharged as contemplated in this Section.
If the Company shall make any deposit of money and/or Eligible Obligations
with respect to any Notes, or any portion of the principal amount thereof, as
contemplated by this section, the Company shall not deliver an Officer's
Certificate described in clause (z) above unless the Company shall also deliver
to the Trustee, together with such Officer's Certificate, an Opinion of Counsel
to the effect that, as a result of a change in law occurring after the date of
this Indenture, the Holders of such Notes, or portions thereof, will not
recognize income, gain or loss for United States federal income tax purposes as
a result of the satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal income tax on the
-34-
<PAGE>
same amounts, at the same times and in the same manner as if such satisfaction
and discharge had not been effected.
Upon the deposit of money or Eligible Obligations, or both, in accordance
with this Section, together with the documents required by clauses (x), (y) and
(z) above, the Trustee shall, upon receipt of a Company Request, acknowledge in
writing that the Security or Securities or portions thereof with respect to
which such deposit was made are deemed to have been paid for all purposes of
this Indenture and that the entire indebtedness of the Company in respect
thereof has been satisfied and discharged as contemplated in this Section. In
the event that all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions thereof except
that, for any reason, the Officer's Certificate specified in clause (z) shall
not have been delivered, such Securities or portions thereof shall nevertheless
be deemed to have been paid for all purposes of this Indenture, and the Holders
of such Securities or portions thereof shall nevertheless be no longer entitled
to the benefits of this Indenture or of any of the covenants of the Company
under Article Six (except the covenants contained in Sections 602 and 603) or
any other covenants made in respect of such Securities or portions thereof as
contemplated by Section 301, but the indebtedness of the Company in respect of
such Securities or portions thereof shall not be deemed to have been satisfied
and discharged prior to Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to look to the
Company for payment of the indebtedness represented thereby; and, upon Company
Request, the Trustee shall acknowledge in writing that such Securities or
portions thereof are deemed to have been paid for all purposes of this
Indenture.
If payment at Stated Maturity of less than all of the Securities of
any series, or any Tranche thereof, is to be provided for in the manner and with
the effect provided in this Section, the Trustee shall select such Securities,
or portions of principal amount thereof, in the manner specified by Section 403
for selection for redemption of less than all the Securities of a series or
Tranche.
In the event that Securities which shall be deemed to have been paid
for purposes of this Indenture, and, if such is the case, in respect of which
the Company's indebtedness shall have been satisfied and discharged, all as
provided in this Section do not mature and are not to be redeemed within the
sixty (60) day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as promptly as
practicable, give a notice, in the same manner as a notice of redemption with
respect to such Securities, to the Holders of such Securities to the effect that
such deposit has been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to have been
paid for purposes of this Indenture, as aforesaid, the obligations of the
Company and the Trustee in respect of such Securities under Sections 304, 305,
306, 404, 503 (as to notice of redemption), 602, 603, 907, 914 and 915 and this
Article shall survive.
The Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Eligible Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such Eligible Obligations or the principal or interest received in
respect of such Eligible Obligations, including, but not limited to,
-35-
<PAGE>
any such tax payable by any entity deemed, for tax purposes, to have been
created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any time
after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied or discharged, pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the money or
Eligible Obligations, or combination thereof, deposited with it as aforesaid to
the Company or its representative under any applicable Federal or State
bankruptcy, insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of
the Company's indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to remain Outstanding
and (b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
701, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 404, 503 (as to notice of redemption), 602, 603, 907, 914 and 915 and
this Article shall survive.
Upon satisfaction and discharge of this Indenture as provided in
this Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 907, any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities other than money and Eligible Obligations held by the Trustee
pursuant to Section 703.
-36-
<PAGE>
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited pursuant to
Section 701, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of, and premium, if any, and
interest, if any, on, the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 603; provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or the passage of time, would become an Event of Default, any
cash received from such principal or interest payments on such Eligible
Obligations, if not then needed for such purpose, shall, to the extent
practicable, be invested in Eligible Obligations of the type described in clause
(b) in the first paragraph of Section 701 maturing at such times and in such
amounts as shall be sufficient to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on such Securities or portions
thereof on and prior to the Maturity thereof, and interest earned from such
reinvestment shall be paid over to the Company as received, free and clear of
any trust, lien or pledge under this Indenture except the lien provided by
Section 907; and provided, further, that, so long as there shall not have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or the passage of time, would become an Event of Default, any
moneys held in accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal of and premium,
if any, and interest, if any, then due on such Securities shall be paid over to
the Company free and clear of any trust, lien or pledge under this Indenture
except the lien provided by Section 907; and provided, further, that if an Event
of Default or an event which, with the giving of notice or the passage of time,
would become an Event of Default shall have occurred and be continuing, moneys
to be paid over to the Company pursuant to this Section shall be held until such
Event of Default or event which, with the giving of notice or the passage of
time, would become an Event of Default shall have been waived or cured.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
---------------------------
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities
of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of such series
within thirty (30) days after the same becomes due and payable [(whether
or not payment is prohibited by the provisions of Article Fifteen hereof);
provided, however, that a valid extension of
-37-
<PAGE>
the interest payment period by the Company as contemplated in Section 312
of this Indenture shall not constitute a failure to pay interest for this
purpose]* ; or
(b) failure to pay the principal of or premium, if any, on any
Security of such series when due and payable [(whether or not payment is
prohibited by the provisions of Article Fifteen hereof]; or
(c) failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in
the performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than such series) for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 33% in principal amount
of the Outstanding Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, unless the Trustee, or the
Trustee and the Holders of a principal amount of Securities of such series
not less than the principal amount of Securities the Holders of which gave
such notice, as the case may be, shall agree in writing to an extension of
such period prior to its expiration; provided, however, that the Trustee,
or the Trustee and the Holders of such principal amount of Securities of
such series, as the case may be, shall be deemed to have agreed to an
extension of such period for a maximum of one hundred twenty (120) days if
corrective action is initiated by the Company within such period and is
being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of (1)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition by one or more Persons other than the Company seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
any such decree or order for relief or any such other decree or order
shall have remained unstayed and in effect for a period of 90 consecutive
days; or
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-38-
<PAGE>
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of such action by
the Board of Directors; or
(f) any other Event of Default specified with respect to Securities
of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of principal
of, or premium, if any, or interest on, any series of Securities or due to the
default in the performance or breach of any other covenant or warranty of the
Company applicable to the Securities of such series but not applicable to all
Outstanding Securities shall have occurred and be continuing, either the Trustee
or the Holders of not less than 33% in principal amount of the Securities of
such series may then declare the principal amount (or, if any of the Securities
of such series are Discount Securities, such portion of the principal amount as
may be specified in the terms thereof as contemplated by Section 301) of all
Securities of such series and premium, if payment of any thereof be in default,
and interest accrued thereon to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders). If an Event
of Default due to default in the performance of any other of the covenants or
agreements herein applicable to all Outstanding Securities or an Event of
Default specified in Section 801(d) or (e) shall have occurred and be
continuing, either the Trustee or the Holders of not less than 33% in principal
amount of all Securities then Outstanding (considered as one class), and not the
Holders of the Securities of any one of such series, may declare the principal
amount (or, if any of the Securities are Discount Securities, such portion of
the principal amount as may be specified in the terms thereof as contemplated by
Section 301) of all Securities and premium, if payment of any thereof be in
default, and interest accrued thereon to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by the Holders).
As a consequence of each such declaration (herein referred to as a declaration
of acceleration) with respect to Securities of any series, the principal amount
(or portion thereof in the case of Discount Securities) of such Securities,
premium, if any, and interest accrued thereon shall become due and payable
immediately [(provided that the payment of principal of such Securities shall
remain subordinated to the extent provided in Article Fifteen hereof)].*
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-39-
<PAGE>
At any time after such a declaration of acceleration with respect to
Securities of any series shall have been made and before a judgment or decree
for payment of the money due shall have been obtained by the Trustee as
hereinafter in this Article provided, the Event or Events of Default giving rise
to such declaration of acceleration shall, without further act, be deemed to
have been waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest on all Securities of such series;
(2) the principal of and premium, if any, on any Securities of
such series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities;
(4) all amounts due to the Trustee under Section 907;
and
(b) any other Event or Events of Default with respect to Securities
of such series, other than the non-payment of the principal of Securities
of such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section 801
shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities of the
series with respect to which such Event of Default shall have occurred, the
whole amount then due and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent permitted by law, interest on
premium, if any, and on any overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover any amounts due to the Trustee under
Section 907.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
-40-
<PAGE>
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series
shall have occurred and be continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section 907) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
-41-
<PAGE>
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
[Subject to the provisions of Article Fifteen,]* any money collected
by the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or premium, if any, or interest, if any, upon
presentation of the Securities in respect of which or for the benefit of which
such money shall have been collected and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
907;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal of and premium, if any, and interest, if any, in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal, premium,
if any, and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the Company, or
to whomsoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of
such series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one
class, shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-42-
<PAGE>
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
all series in respect of which an Event of Default shall have occurred and
be continuing, considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and (subject to Section
307 [and 312]* ) interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-43-
<PAGE>
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be continuing in
respect of a series of Securities, the Holders of a majority in principal amount
of the Outstanding Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series; provided, however, that if an Event of
Default shall have occurred and be continuing with respect to more than one
series of Securities, the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all such series, considered as one class, shall
have the right to make such direction, and not the Holders of the Securities of
any one of such series; and provided, further, that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not in the Trustee's
reasonable discretion be adequate, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Before proceeding to exercise any right or power hereunder at the
direction of such Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(a) in the payment of the principal of or premium, if any, or
interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under Section
1202 cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any and
all Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of this
-44-
<PAGE>
Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
Section 814. Undertaking for Costs.
The Company and the Trustee agree, and each Holder by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities of all series in respect of which
such suit may be brought, considered as one class, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
Section 815. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE IX
The Trustee
-----------
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee in the
Trust Indenture Act and no implied covenants or obligations shall be read
into this Indenture against the Trustee. For purposes of Sections 315(a)
and 315(c) of the Trust Indenture Act, the term "default" is hereby
defined as an Event of Default which has occurred and is continuing.
(b) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have
-45-
<PAGE>
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture to the
contrary, the duties and responsibilities of the Trustee under this
Indenture shall be subject to the protections, exculpations and
limitations on liability afforded to the Trustee under the provisions of
the Trust Indenture Act, including those provisions of such Act deemed by
such Act to be included herein.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder
with respect to the Securities of any series to the Holders of Securities of
such series of which it has knowledge (within the meaning of Section 903(h)
hereof) in the manner and to the extent required to do so by the Trust Indenture
Act, unless such default shall have been cured or waived; provided, however,
that in the case of any default of the character specified in Section 801(c), no
such notice to Holders shall be given until at least 60 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time, or both, would become, an
Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the applicable
provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate,
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect
-46-
<PAGE>
of any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall (subject to applicable legal requirements) be
entitled to examine, during normal business hours, the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of any default
or Event of Default with respect to the Securities of any series for which
it is acting as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of Default or
(2) written notice of such default or Event of Default (which shall state
that such notice is a "Notice of Default" or a "Notice of an Event of
Default" hereunder, as the case may be) shall have been given to the
Trustee by the Company, any other obligor on such Securities or by any
Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 908 and 913, may otherwise deal with
-47-
<PAGE>
the Company with the same rights it would have if it were not the Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds, except to the extent required by law. The Trustee shall be
under no liability for interest on investment of any money received by it
hereunder except as expressly provided herein or otherwise agreed with, and for
the sole benefit of, the Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any
provision of this Indenture, including the costs of collection and
including the reasonable compensation and the expenses and disbursements
of its agents and counsel, except to the extent that any such expense,
disbursement or advance may be attributable to its negligence, willful
misconduct or bad faith; and
(c) indemnify the Trustee and hold it harmless from and against, any
and all losses, demands, claims, liabilities, causes of action or expenses
(including reasonable attorney's fees and expenses) incurred by it arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder or the performance of its duties hereunder, including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss, demand,
claim, liability, cause of action or expense may be attributable to its
negligence, willful misconduct or bad faith. The Company shall assume the
defense of the Trustee with counsel acceptable to the Trustee, unless the
Trustee shall have been advised by counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the Company.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such other than
property and funds held in trust under Section 703 (except as otherwise provided
in Section 703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided; however, that the negligence, willful misconduct
or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
-48-
<PAGE>
When a Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 801(d) or Section 801(e), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section 907 shall survive termination of this
Indenture.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and subject to the conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a Trustee under (i) this Indenture with
respect to Securities of more than one series, (ii) the Indenture (For
[Subordinated] Debt Securities), dated as of _____________, 199_, or (iii) the
Mortgage and Deed of Trust, dated as of May 1, 1940, as supplemented, or with
respect to the securities issued thereunder.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $100,000,000 and subject to
supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $100,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision
or examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the Trust
Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
-49-
<PAGE>
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required
by Section 911 shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 908 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder for at least six months, or
(2) the Trustee shall cease to be eligible under Section 909 and
shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or (y) subject to Section 814, any Holder
who has been a bona fide Holder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable
-50-
<PAGE>
requirements of Section 911. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series shall be appointed by
Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 911, become the successor Trustee with respect to
the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Company
or the Holders and accepted appointment in the manner required by Section
911, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) So long as no event which is, or after notice or lapse of time,
or both, would become, an Event of Default shall have occurred and be
continuing, and except with respect to a Trustee appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a successor
Trustee, effective as of a date specified therein, and (ii) an instrument
of acceptance of such appointment, effective as of such date, by such
successor Trustee in accordance with Section 911, the Trustee shall be
deemed to have resigned as contemplated in subsection (b) of this Section,
the successor Trustee shall be deemed to have been appointed by the
Company pursuant to subsection (e) of this Section and such appointment
shall be deemed to have been accepted as contemplated in Section 911, all
as of such date, and all other provisions of this Section and Section 911
shall be applicable to such resignation, appointment and acceptance except
to the extent inconsistent with this subsection (f).
(g) The Company or, should the Company fail so to act promptly, the
successor Trustee, at the expense of the Company, shall give notice of
each resignation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor Trustee with
respect to the Securities of any series by mailing written notice of such
event by first-class mail, postage prepaid, to all Holders of Securities
of such series as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its corporate
trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of all series, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed
-51-
<PAGE>
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of all sums
owed to it, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series as to which
the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to
the extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee, upon payment of all sums owed to it, shall
duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such successor
Trustee all such rights, powers and trusts referred to in subsection (a)
or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. MERGER, CONVERSATION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or
-52-
<PAGE>
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Securities (other than by reason of a relationship
described in Section 311(b) of the Trust Indenture Act), the Trustee shall be
subject to any and all applicable provisions of the Trust Indenture Act
regarding the collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of any applicable jurisdiction, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or of the
Holders of at least thirty-three per centum (33%) in principal amount of the
Securities then Outstanding, the Company shall for such purpose join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee
either to act as co-trustee, jointly with the Trustee, or to act as separate
trustee, in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons, in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Company does not join in such
appointment within 15 days after the receipt by it of a request so to do, or if
an Event of Default shall have occurred and be continuing, the Trustee alone
shall have power to make such appointment.
-53-
<PAGE>
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following
conditions:
(a) the Securities shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section,
and, if an Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Company.
Upon the written request of the Trustee, the Company shall join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities of one or more series, or any Tranche thereof, which
shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series or Tranche issued upon original issuance, exchange, registration
of transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be
-54-
<PAGE>
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States, any State or territory thereof or the District of Columbia or the
Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving 45 days
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
The provisions of Sections 308, 904 and 905 shall be applicable to
each Authenticating Agent.
If an appointment with respect to the Securities of one or more
series, or any Tranche thereof, shall be made pursuant to this Section, the
Securities of such series or Tranche
-55-
<PAGE>
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
-----------------------------
As Trustee
By___________________________
As Authenticating Agent
By___________________________
Authorized Signatory
If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel), shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee, an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.
ARTICLE X
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
-------------------------------------------------
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than ___________ and ____________ in each
year, commencing __________, and at such other times as the Trustee may request
in writing, the Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the Trust
Indenture Act; provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
-56-
<PAGE>
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than ____________ in each year, commencing
__________________, the Trustee shall transmit to the Holders, the Commission
and each securities exchange upon which any Securities are listed, a report,
dated as of the next preceding _____________, with respect to any events and
other matters described in Section 313(a) of the Trust Indenture Act, in such
manner and to the extent required by the Trust Indenture Act. The Trustee shall
transmit to the Holders, the Commission and each securities exchange upon which
any Securities are listed, and the Company shall file with the Trustee (within
thirty (30) days after filing with the Commission in the case of reports which
pursuant to the Trust Indenture Act must be filed with the Commission and
furnished to the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such manner, as shall
be required by the Trust Indenture Act. The Company shall notify the Trustee of
the listing of any Securities on any securities exchange. Delivery of such
reports, information and documents by the Company to the Trustee is for
informational purposes only, and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
ARTICLE XI
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
---------------------------------------------------
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer or lease its properties and assets
substantially as an entirety to any Person, unless
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety shall be a Person organized and existing under the laws of the
United States, any State thereof or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest,
if any, on all Outstanding Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(b) immediately after giving effect to such transaction and treating
any indebtedness for borrowed money which becomes an obligation of the
Company as a result of such transaction as having been incurred by the
Company at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
-57-
<PAGE>
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any conveyance, or other transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities Outstanding hereunder.
ARTICLE XII
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities, all as provided in Article Eleven; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be Outstanding, Securities of
one or more specified series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default with respect to all or
any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Indenture or to add
any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of
the Holders of Securities of any series or Tranche Outstanding on the date
of such indenture supplemental hereto in any material respect, such
change, elimination or addition shall become effective with respect to
such
-58-
<PAGE>
series or Tranche only pursuant to the provisions of Section 1202 hereof
or when no Security of such series or Tranche remains Outstanding; or
(e) to provide collateral security for the Securities; or
(f) to establish the form or terms of Securities of any series or
Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the Company to
utilize, at its option, a non-certificated system of registration for all,
or any series or Tranche of, the Securities; or to provide for the
authentication and delivery of bearer securities and coupons appertaining
thereto representing interest, if any, thereon and for the procedures for
the registration, exchange and replacement thereof and for the giving of
notice to, and the solicitation of the vote or consent of, the holders
thereof, and for any and all other matters incidental thereto; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of Securities,
or any Tranche thereof, shall be payable, (2) all or any series of
Securities, or any Tranche thereof, may be surrendered for registration of
transfer, (3) all or any series of Securities, or any Tranche thereof, may
be surrendered for exchange and (4) notices and demands to or upon the
Company in respect of all or any series of Securities, or any Tranche
thereof, and this Indenture may be served; or
(k) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein; provided that no such changes or additions shall adversely affect
the interests of the Holders of Notes of any series or Tranche in any
material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended
-59-
<PAGE>
so as to conform to such amendment to the Trust Indenture Act, and
the Company and the Trustee may, without the consent of any Holders,
enter into an indenture supplemental hereto to effect or evidence
such changes or additional provisions; or
(y) if any such amendment shall permit one or more changes to,
or the elimination of, any provisions hereof which, at the date of
the execution and delivery hereof or at any time thereafter, are
required by the Trust Indenture Act to be contained herein, this
Indenture shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee may, without
the consent of any Holders, enter into an indenture supplemental
hereto to evidence such amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under this Indenture, considered as one class, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture; provided,
however, that if there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on [(except as provided in Section
312 hereof)]* , any Security, or reduce the principal amount thereof or
the rate of interest thereon (or the amount of any installment of interest
thereon) or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the amount of the
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
802, or change the coin or currency (or other property), in which any
Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-60-
<PAGE>
Stated Maturity of any Security (or, in the case of redemption, on or
after the Redemption Date), without, in any such case, the consent of the
Holder of such Security, or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series or any Tranche thereof, the consent of the
Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance
with any provision of this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1304 for quorum or
voting, without, in any such case, the consent of the Holders of each
Outstanding Security of such series or Tranche, or
(c) modify any of the provisions of this Section, Section 607 or
Section 813 with respect to the Securities of any series, or any Tranche
thereof, (except to increase the percentages in principal amount referred
to in this Section or such other Sections or to provide that other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby);
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 911(b), 914 and
1201(h).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or of one or more
Tranches thereof, or which modifies the rights of the Holders of Securities of
such series or Tranches with respect to such covenant or other provision, shall
be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof. A waiver by
a Holder of such Holder's right to consent under this Section shall be deemed to
be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 901) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
-61-
<PAGE>
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by this Article may
restate this Indenture in its entirety, and, upon the execution and delivery
thereof, any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series, or any Tranche thereof, authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any series, or
any Tranche thereof, so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall have been
established in a Board Resolution or an Officer's Certificate pursuant to a
Board Resolution as contemplated by Section 301, and not in an indenture
supplemental hereto, additions to, changes in or the elimination of any of such
terms may be effected by means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or Officer's
Certificate shall not be accepted by the Trustee or otherwise be effective
unless all conditions set forth in this Indenture which would be required to be
satisfied if such additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied. Upon the
acceptance thereof by the Trustee, any such supplemental Board Resolution or
Officer's Certificate shall be deemed to be a "supplemental indenture" for
purposes of Section 1204 and 1206.
-62-
<PAGE>
ARTICLE XIII
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
-------------------------------------------
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or all, series,
or any Tranche or Tranches thereof, may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series or Tranches.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 1301, to be held at such
time and at such place in the Borough of Manhattan, The City of New York,
as the Trustee shall determine, or, with the approval of the Company, at
any other place. Notice of every such meeting, setting forth the time and
the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section
106, not less than 21 nor more than 180 days prior to the date fixed for
the meeting.
(b) If the Trustee shall have been requested to call a meeting of
the Holders of Securities of one or more, or all, series, or any Tranche
or Tranches thereof, by the Company or by the Holders of 33% in aggregate
principal amount of all of such series and Tranches, considered as one
class, for any purpose specified in Section 1301, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have given the notice of such meeting
within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series and Tranches in the
amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in such other
place as shall be determined or approved by the Company, for such meeting
and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, shall be valid without notice
if the Holders of all Outstanding Securities of such series or Tranches
are present in person or by proxy and if representatives of the Company
and the Trustee are present, or if notice is waived in writing before or
after the meeting by the Holders of all Outstanding Securities of such
series, or by such of them as are not present at the meeting in person or
by proxy, and by the Company and the Trustee.
-63-
<PAGE>
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities of
one or more, or all, series, or any Tranche or Tranches thereof, a Person shall
be (a) a Holder of one or more Outstanding Securities of such series or
Tranches, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series or
Tranches by such Holder or Holders. The only Persons who shall be entitled to
attend any meeting of Holders of Securities of any series or Tranche shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of the series and Tranches with respect to
which a meeting shall have been called as hereinbefore provided, considered as
one class, shall constitute a quorum for a meeting of Holders of Securities of
such series and Tranches; provided, however, that if any action is to be taken
at such meeting which this Indenture expressly provides may be taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Securities of such series and Tranches, considered as
one class, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series and Tranches, considered as
one class, shall constitute a quorum. In the absence of a quorum within one hour
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series and Tranches, be dissolved.
In any other case the meeting may be adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for such period as may be determined
by the chairman of the meeting prior to the adjournment of such adjourned
meeting. Except as provided by Section 1305(e), notice of the reconvening of any
meeting adjourned for more than 30 days shall be given as provided in Section
1302(a) not less than ten days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities of such series and Tranches which shall constitute
a quorum.
Except as limited by Section 1202, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of the
series and Tranches with respect to which such meeting shall have been called,
considered as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture expressly provides
may be taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of such series and Tranches, considered as one
class.
-64-
<PAGE>
Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities of the series and Tranches with respect to which such
meeting shall have been held, whether or not present or represented at the
meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in person
or by proxy; and, to the extent permitted by law, any such proxy shall
remain in effect and be binding upon any future Holder of the Securities
with respect to which it was given unless and until specifically revoked
by the Holder or future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 104 or
other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1302(b), in
which case the Company or the Holders of Securities of the series and
Tranches calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one
vote for each $1 principal amount of Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or
proxy.
(e) Any meeting duly called pursuant to Section 1302 at which a
quorum is present may be adjourned from time to time by Persons entitled
to vote a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches
-65-
<PAGE>
represented at the meeting, considered as one class; and the meeting may
be held as so adjourned without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities, of the series and Tranches with
respect to which the meeting shall have been called, held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by Holders
by written instruments as provided in Section 104.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
---------------------------------------------------------------
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Securities, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
under this Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through
-66-
<PAGE>
the Company or a predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Securities are solely corporate obligations, and
that no personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or to be implied herefrom or therefrom, and that any such
personal liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Indenture and the
issuance of the Securities.
[ARTICLE XV
SUBORDINATION OF SECURITIES
---------------------------
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of the Securities of each series, by its acceptance
thereof, likewise covenants and agrees, that the payment of the principal of and
premium, if any, and interest, if any, on each and all of the Securities is
hereby expressly subordinated, to the extent and in the manner set forth in this
Article, in right of payment to the prior payment in full of all Senior
Indebtedness.
Each Holder of the Securities of each series, by its acceptance
thereof, authorizes and directs the Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article, and appoints the Trustee its attorney-in-fact for any and all such
purposes.
Without limiting the generality of the foregoing, nothing contained
in this Article shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 802 or to pursue any rights
or remedies hereunder; provided, however, that all Senior Indebtedness then due
and payable shall first be paid in full before the Holders of the Securities or
the Trustee are entitled to receive any direct or indirect payment from the
Company of principal of, or premium, if any, or interest on the Securities.
SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES.
In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy, whether voluntary or
involuntary or (b) subject to the provisions of Section 1503, that (i) a default
shall have occurred with respect to the payment of principal of or interest on
or other monetary amounts due and payable on any Senior Indebtedness, or (ii)
there shall have occurred a default (other than a default in the payment of
principal or interest or other monetary amounts due and payable) in respect of
any Senior Indebtedness, as defined therein or in the instrument under which the
same is outstanding, permitting the holder or holders thereof to accelerate the
maturity thereof (with notice or lapse of time, or both), and such default shall
have continued beyond the period of grace, if any, in respect thereof, and, in
the cases of subclauses (i) and (ii) of this clause (b), such
-67-
<PAGE>
default shall not have been cured or waived or shall not have ceased to exist,
or (c) that the principal of and accrued interest on the Securities of any
series shall have been declared due and payable pursuant to Section 801 and such
declaration shall not have been rescinded and annulled as provided in Section
802, then:
(1) the holders of all Senior Indebtedness shall first be entitled
to receive payment of the full amount due thereon, or provision shall be
made for such payment in money or money's worth, before the Holders of any
of the Securities are entitled to receive a payment on account of the
principal of or interest on the indebtedness evidenced by the Securities,
including, without limitation, any payments made pursuant to Articles Four
and Five;
(2) any payment by, or distribution of assets of, the Company of any
kind or character, whether in cash, property or securities, to which any
Holder or the Trustee would be entitled except for the provisions of this
Article, shall be paid or delivered by the person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of such Senior Indebtedness
or their representative or representatives or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior Indebtedness
held or represented by each, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid after giving effect to
any concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any payment or distribution is
made to the Holder of the indebtedness evidenced by the Securities or to
the Trustee under this Indenture; and
(3) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Company of any kind or character,
whether in cash, property or securities, in respect of principal of or
interest on the Securities or in connection with any repurchase by the
Company of the Securities, shall be received by the Trustee or any Holder
before all Senior Indebtedness is paid in full, or provision is made for
such payment in money or money's worth, such payment or distribution in
respect of principal of or interest on the Securities or in connection
with any repurchase by the Company of the Securities shall be paid over to
the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any such Senior Indebtedness may have
been issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
Notwithstanding the foregoing, at any time after the 123rd day
following the date of deposit of cash or Eligible Obligations pursuant to
Section 701 (provided all conditions set out
-68-
<PAGE>
in such Section shall have been satisfied), the funds so deposited and any
interest thereon will not be subject to any rights of holders of Senior
Indebtedness including, without limitation, those arising under this Article;
provided that no event described in clauses (d) and (e) of Section 801 with
respect to the Company has occurred during such 123-day period.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan or reorganization or readjustment which are subordinate
in right of payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article Eleven hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Eleven hereof. Nothing in Section 1501 or in this Section 1502
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 907.
SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.
Any failure by the Company to make any payment on or perform any
other obligation in respect of Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly, by the
Company for money borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of this Section
shall have been waived by the Company in the instrument or instruments by which
the Company incurred, assumed, guaranteed or otherwise created such indebtedness
or obligation, shall not be deemed a default under clause (b) of Section 1502 if
(i) the Company shall be disputing its obligation to make such payment or
perform such obligation and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which is in full force and
effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event that a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay or
execution shall have been obtained pending such appeal or review.
SECTION 1504. SUBROGATION.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash (or securities or other
property satisfactory to such holders) in full payment of such Senior
Indebtedness then outstanding. Upon the payment in full of all Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive any further payments or
distributions of cash, property or securities of the Company applicable to the
holders of the Senior Indebtedness until all
-69-
<PAGE>
amounts owing on the Securities shall be paid in full; and such payments or
distributions of cash, property or securities received by the Holders of the
Securities, by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders, be deemed to be a payment by the Company to or on account of Senior
Indebtedness, it being understood that the provisions of this Article are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount required to make
payment in full, or provision for payment, of such Senior Indebtedness.
SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets or securities of the
Company referred to in this Article, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such bankruptcy, dissolution, winding up, liquidation or reorganization
proceedings are pending or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee agent or other person making such payment or
distribution delivered to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon, and all other facts pertinent thereto or to this Article.
SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.
Upon the maturity of the principal of any Senior Indebtedness by
lapse of time, acceleration or otherwise, all matured principal of Senior
Indebtedness and interest and premium, if any, thereon shall first be paid in
full before any payment of principal or premium or interest, if
-70-
<PAGE>
any, is made upon the Securities or before any Securities can be acquired by the
Company or any sinking fund payment is made with respect to the Securities
(except that required sinking fund payments may be reduced by Securities
acquired before such maturity of such Senior Indebtedness).
SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all rights set forth in this
Article with respect to any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness. Nothing in this Article
shall deprive the Trustee of any of its rights as such holder.
SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company that would prohibit the making of any payment to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article. Notwithstanding the provisions of this Article or any other provision
of the Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of moneys
to or by the Trustee unless and until the Trustee shall have received written
notice thereof from the Company, from a Holder or from a holder of any Senior
Indebtedness or from any representative or representatives of such holder and,
prior to the receipt of any such written notice, the Trustee shall be entitled,
subject to Section 901, in all respects to assume that no such facts exist;
provided, however, that, if prior to the fifth Business Day preceding the date
upon which by the terms hereof any such moneys may become payable for any
purpose, or in the event of the execution of an instrument pursuant to Section
702 acknowledging satisfaction and discharge of this Indenture, then if prior to
the second Business Day preceding the date of such execution, the Trustee shall
not have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Trustee may, in its discretion, receive such moneys and/or apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary, which may be received by it on or after such date; provided,
however, that no such application shall affect the obligations under this
Article of the persons receiving such moneys from the Trustee.
SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS.
The holders of Senior Indebtedness may, without affecting in any
manner the subordination of the payment of the principal of and premium, if any,
and interest, if any, on the Securities, at any time or from time to time and in
their absolute discretion, agree with the Company to change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any Senior Indebtedness, or amend or supplement any instrument pursuant to which
any Senior Indebtedness is issued, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without notice to or assent
from the Holders or the Trustee.
-71-
<PAGE>
SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and objectives as
are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if it shall mistakenly pay over or deliver to the
Holders or the Company or any other Person, cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Sections 1507, 1508 and 1510 shall not apply to the Company if it
acts as Paying Agent.
SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.
No right of any present or future holder of Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
SECTION 1513. THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, or
premium, if any, or interest on the Securities by reason of any provision of
this Article shall not be construed as preventing the occurrence of an Event of
Default specified in paragraph (a) or (b) of Section 801.
SECTION 1514. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the contrary, other
than as provided in the immediately succeeding sentence, all the provisions of
this Indenture shall be subject to the provisions of this Article, so far as the
same may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of this Article Fifteen shall be of no further effect, and the
Securities shall no longer be subordinated in right of payment to the prior
payment of Senior Indebtedness, if the Company shall have
-72-
<PAGE>
delivered to the Trustee a notice to such effect. Any such notice delivered by
the Company shall not be deemed to be a supplemental indenture for purposes of
Article Twelve.]*
--------------------
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
- ----------
* Bracketed language will be inserted in the Indenture under which
subordinated Securities will be issued.
-73-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
CAROLINA POWER & LIGHT COMPANY
By:______________________________________
[SEAL]
ATTEST:
- ---------------------------------
____________________________, Trustee
By:______________________________________
[SEAL]
ATTEST:
- ---------------------------------
-74-
<PAGE>
STATE OF __________________ )
) ss.:
COUNTY OF ________________ )
On the _____ day of ___________, 1998, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________________ of Carolina Power & Light Company, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------
Notary Public
[Notarial Seal]
STATE OF __________________ )
) ss.:
COUNTY OF ________________ )
On the _____ day of ___________, 1998, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________________ of ____________________________, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------
Notary Public
[Notarial Seal]
-75-
EXHIBIT 5
HUNTON & WILLIAMS
P.O. BOX 109
Raleigh, North Carolina 27602
December 18, 1998
Carolina Power & Light Company
411 Fayetteville Street
Raleigh, North Carolina 27601-6111
Registration Statement on Form S-3
Relating to $1,500,000,000 Issue Amount
of Unallocated Securities
-------------------------
Ladies and Gentlemen:
We have acted as counsel to Carolina Power & Light Company, a North
Carolina corporation (the "Company"), in connection with the registration by the
Company of an aggregate of $1,500,000,000 of its (i) first mortgage bonds
("First Mortgage Bonds"), (ii), debt securities that will be secured by First
Mortgage Bonds until the Release Date, as defined in the Prospectus ("Senior
Notes"), (iii) unsecured debt securities ("Debt Securities") on terms to be
determined at the time of sale (the First Mortgage Bonds, Senior Notes and Debt
Securities are referred to collectively as the "Securities"), as set forth in
the Registration Statement on Form S-3 (the "Registration Statement") that is
being filed on the date hereof with the Securities and Exchange Commission (the
"Commission") by the Company pursuant to the Securities Act of 1933, as amended.
The Securities are to be issued in one or more series and are to be sold from
time to time as set forth in the Registration Statement, the Prospectus
contained therein (the "Prospectus") and any amendments or supplements thereto.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
<PAGE>
Based upon the foregoing and the further qualifications stated below, we
are of the opinion that:
1. The Company is duly incorporated, validly existing and in good standing
under the laws of the State of North Carolina; and
2. When (a) the terms of any class or series of the Securities have been
authorized by appropriate corporate action of the Company, (b) the Securities
have been issued and sold upon the terms and conditions set forth in the
Registration Statement, the Prospectus and the applicable supplement to the
Prospectus, (c) the Securities have been duly executed, authenticated and
delivered in accordance with the applicable indenture, and (d) the North
Carolina Utilities Commission and the South Carolina Public Service Commission
have entered orders authorizing the issuance and sale of the securities, then
the Securities will be validly authorized and issued and binding obligations of
the Company.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the statement made in reference to
this firm under the caption "Legal Opinions" in the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
Hunton & Williams
<TABLE>
<CAPTION>
EXHIBIT 12
CAROLINA POWER & LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS COMBINED
AND RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
Twelve Months Ended
---------------------------------------------------------------------------
September 30, December 31,
------------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income............................................. $422,000 $385,496 $388,317 $391,277 $372,604 $313,167 $346,496
Fixed charges, as below................................ 192,406 195,883 193,632 204,593 226,833 213,821 237,098
Income taxes, as below................................. 264,285 223,591 225,340 247,405 232,046 180,518 181,653
--------- -------- --------- --------- --------- --------- --------
Total earnings, as defined........................... $878,691 $804,970 $807,289 $843,275 $831,483 $707,506 $765,247
========= ======== ========= ========= ========= ========= ========
Fixed Charges, as defined:
Interest on long-term debt............................. $170,947 $163,962 $163,468 $172,622 $187,397 $183,891 $205,182
Other interest......................................... 10,614 19,925 18,743 19,155 25,896 16,119 16,419
Imputed interest factor in rentals-charged
principally to operating expenses.................... 10,845 11,996 11,421 12,816 13,540 13,811 15,497
--------- -------- --------- --------- --------- --------- --------
Total fixed charges, as defined...................... $192,406 $195,883 $193,632 $204,593 $226,833 $213,821 $237,098
========= ======== ========= ========= ========= ========= ========
Earnings Before Income Taxes............................. $686,285 $609,087 $613,657 $638,682 $604,650 $493,685 $528,149
========= ======== ========= ========= ========= ========= ========
Ratio of Earnings Before Income Taxes to Net Income...... 1.63 1.58 1.58 1.63 1.62 1.58 1.52
Income Taxes:
Included in operating expenses......................... $311,570 $241,259 $252,897 $269,477 $258,927 $198,238 $189,535
Included in other income - Income tax expense (credit). (38,992) (9,443) (19,332) (13,847) (18,541) (9,425) 392
Included in AFUDC - deferred taxes in nuclear..........
fuel amortization and book depreciation.............. (8,293) (8,225) (8,225) (8,225) (8,340) (8,295) (8,274)
--------- --------- --------- --------- --------- --------- --------
Total income taxes................................... $264,285 $223,591 $225,340 $247,405 $232,046 $180,518 $181,653
========= ========= ========= ========= ========= ========= ========
Fixed Charges and Preferred Dividends Combined:
Preferred dividend requirements........................ $ 2,966 $7,713 $ 6,052 $ 9,609 $ 9,609 $ 9,609 $ 9,609
Portion deductible for income tax purposes............. (468) (234) (312) (312) (312) (312) (312)
--------- -------- --------- --------- --------- --------- --------
Preferred dividend requirements not deductible......... $ 2,498 $7,479 $ 5,740 $ 9,297 $ 9,297 $ 9,297 $ 9,297
========= ======== ========= ========= ========= ========= ========
Preferred dividend factor:
Preferred dividends not deductible times ratio of
earnings before income taxes to net income......... $ 4,072 $11,817 $ 9,069 $15,154 $15,061 $14,689 $14,131
Preferred dividends deductible for income taxes...... 468 234 312 312 312 312 312
Fixed charges, as above.............................. 192,406 195,883 193,632 204,593 226,833 213,821 237,098
--------- -------- --------- --------- --------- --------- --------
Total fixed charges and preferred dividends
combined.........................................$196,946 $207,934 $203,013 $220,059 $242,206 $228,822 $251,541
========= ======== ========= ========= ========= ========= ========
Ratio of Earnings to Fixed Charges and Preferred
Dividends Combined...................................... 4.46 3.87 3.98 3.83 3.43 3.09 3.04
Ratio of Earnings to Fixed Charges........................ 4.57 4.11 4.17 4.12 3.67 3.31 3.23
</TABLE>
EXHIBIT NO. 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Carolina Power & Light Company on Form S-3 of our report dated February 9, 1998,
appearing in the Annual Report on Form 10-K of Carolina Power & Light Company
for the year ended December 31, 1997 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
Raleigh, North Carolina
December 16, 1998
EXHIBIT 23(c)
Consent
Carolina Power & Light Company:
The statements of law and legal conclusions under Item 1. Business and
Item 3. Legal Proceedings in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 have been reviewed by me and are set forth therein
in reliance upon my opinion as an expert.
I hereby consent to the incorporation by reference of such statements of
law and legal conclusions in this Registration Statement and to the reference
made to me under the caption "Legal Opinions" in this Registration Statement.
/s/ William D. Johnson
- -------------------------------------
William D. Johnson
Vice President - Legal & Corporate Secretary
December 18, 1998
EXHIBIT 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New Yo 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
CAROLINA POWER & LIGHT COMPANY
(Exact name of obligor as specified in its charter)
North Carolina 56-0165465
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
(Address of principal executive offices) (Zip code)
-----------------
First Mortgage Bonds*
(Title of the indenture securities)
- ----------
*Specific title(s) to be determined in connection with sale(s) of First
Mortgage Bonds.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
<S> <C>
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of
the Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- --------
*Pursuant to General Instruction B, the Trustee has responded only to
Items 1, 2 and 16 of this form since to the best of the knowledge of the Trustee
the obligor is not in default under any indenture under which the Trustee is a
trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment
by the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the day of December, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE SCHMALZEL
-----------------------
Mary Jane Schmalzel
Vice President
- 2 -
EXHIBIT 7 (Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business June 30, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
- ------ ------------
<S> <C>
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin........................................ $ 7,301,241
Interest-bearing balances...................................... 1,385,944
Securities:
Held-to-maturity securities.................................... 1,000,737
Available-for-sale securities................................... 4,240,655
Federal funds sold and Securities
purchased under agreements to resell.......................... 971,453
Loans and lease financing
receivables:
Loans and leases, net of unearned
income............................................ 38,788,269
LESS: Allowance for loan and
lease losses...................................... 632,875
LESS: Allocated transfer risk
reserve............................................. 0
Loans and leases, net of unearned
income, allowance, and reserve............................... 38,155,394
Assets held in trading accounts................................... 1,307,562
Premises and fixed assets (including
capitalized leases)............................................. 670,445
Other real estate owned........................................... 13,598
Investments in unconsolidated subsid-
iaries and associated companies................................. 215,024
Customers' liability to this bank on
acceptances outstanding ........................................ 974,237
Intangible assets................................................. 1,102,625
Other assets...................................................... 1,944,777
-----------
Total assets...................................................... $59,283,692
===========
</TABLE>
<PAGE>
EXHIBIT 7 (Page 2 of 3)
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices............................................ $26,930,258
Noninterest-bearing............................... 11,579,390
Interest-bearing.................................. 15,350,868
In foreign offices, Edge and
Agreement subsidiaries, and IBFs............................... 16,117,854
Noninterest-bearing............................... 187,464
Interest-bearing.................................. 15,930,390
Federal funds purchased and Securities
sold under agreements to repurchase ............................ 2,170,238
Demand notes issued to the U.S.
Treasury....................................................... 300,000
Trading liabilities.............................................. 1,310,867
Other borrowed money:
With remaining maturity of one year or less.................... 2,549,479
With remaining maturity of more than
one year through three years ................................. 0
With remaining maturity of more than
three years.................................................. 46,654
Bank's liability on acceptances
executed and outstanding....................................... 983,398
Subordinated notes and debentures................................ 1,314,000
Other liabilities................................................ 2,295,520
----------
Total liabilities................................................ 54,018,268
----------
EQUITY CAPITAL
Common stock..................................................... 1,135,284
Surplus.......................................................... 731,319
Undivided profits and capital
reserves....................................................... 3,385,227
Net unrealized holding gains (losses)
on available-for-sale securities............................... 51,233
Cumulative foreign currency
translation adjustments......................................... (37,639)
-----------
Total equity capital............................................. 5,265,424
-----------
Total liabilities and equity capital............................. $59,283,692
===========
</TABLE>
<PAGE>
EXHIBIT 7 (Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
EXHIBIT 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-2
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF AN INDIVIDUAL
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
W.T. CUNNINGHAM
(Name of Trustee)
101 Barclay Street
New York, New York 10286
(Business Address, Street, City, State) (Zip Code)
-----------------
CAROLINA POWER & LIGHT COMPANY
(Exact name of obligor as specified in its charter)
North Carolina 56-0165465
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
(Address of principal executive offices) (Zip code)
-----------------
First Mortgage Bonds*
(Title of the indenture securities)
- ----------
*Specific title(s) to be determined in connection with sale(s) of First
Mortgage Bonds.
<PAGE>
Item 1. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.*
Item 11. List of Exhibits.
List below all exhibits filed as a part of this statement of
eligibility
None.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, I,
W.T. Cunningham, have signed this statement of eligibility in The City of New
York and State of New York, on the day of December, 1998.
/s/ W.T. CUNNINGHAM
-------------------------------
W.T. Cunningham
- ----------
*Pursuant to General Instruction B, the Trustee has responded only to Items 1
and 11 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
-2-
