<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-3
FOR APPLICATION FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
The Columbia Gas System, Inc.
- --------------------------------------------------------------------------------
(Name of Applicant)
20 Montchanin Road, Wilmington, DE 19807
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Securities to be Issued Under the Indenture to be Qualified
- --------------------------------------------------------------------------------
Title of Class Amount
- --------------------------------------------------------------------------------
Senior Debt Securities up to $2.1 Billion
___% Debentures Series A
___% Debentures Series B
___% Debentures Series C
___% Debentures Series D
___% Debentures Series E
___% Debentures Series F
___% Debentures Series G
Approximate date of proposed public offering: November 27, 1995
-----------------------------------
Name and address of agent for service:
L. J. Bainter, Treasurer
The Columbia Gas System, Inc.
20 Montchanin Road
Wilmington, DE 19807
THE APPLICANT HEREBY AMENDS THIS APPLICATION FOR QUALIFICATION ON THE DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVENESS UNTIL (i) THE 20TH DAY
AFTER THE FILING OF AN AMENDMENT WHICH SPECIFICALLY STATES THAT IT SHALL
SUPERSEDE THIS APPLICATION OR SUBSEQUENT AMENDMENT, OR (ii) SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 307(c) OF THE ACT, MAY DETERMINE UPON
WRITTEN REQUEST OF THE APPLICANT.
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION
(a) Form of organization: A CORPORATION
(b) State or other sovereign power under the laws of which
organized: DELAWARE
ITEM 2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied
upon by the applicant as a basis for the claim that registration of
the indenture securities under the Securities Act of 1933 is not
required.
The applicant is a debtor under Chapter 11 of Title 11 of the Code
(the "Bankruptcy Code"). The applicant has filed a plan of reorganization (the
"Plan") pursuant to Section 1125 of the Bankruptcy Code and the securities
being registered hereunder are being issued pursuant to the Plan to creditors
of the applicant. Accordingly, registration of the indenture securities under
the Securities Act of 1933, as amended, is not required pursuant to Section
1145 of the Bankruptcy Code.
Section 1145 of Title 11 of the United States Code (the "Bankruptcy
Code") exempts the original issuance of securities under the Plan from
registration under section 5 of the Securities Act of 1933 if three principal
requirements are satisfied; (i) the securities must be issued by the debtor or
its successors "under a plan" of reorganization, (ii) the recipients of the
securities must hold a claim against the debtor, an interest in the debtor or a
claim for an administrative expense against the debtor, and (iii) the
securities must be issued entirely in exchange for the recipient's claim
against or interest in the debtor, or "principally" in such exchange and
"partly" for cash or property.
The applicant believes that the contemplated issuances of the
indenture securities will satisfy all three conditions because (i) those
issuances are specifically required under the provisions of the applicant's
Plan pursuant to which the indenture securities will be issued, (ii) the
recipients of such securities will be holders of claims against or interest in
the applicant, and (iii) the recipients will be issued the indenture securities
entirely in exchange for their claims or interests in the applicant.
ITEM 3. AFFILIATES. Furnish a list or diagram of all affiliates of the
applicant and indicate the respective percentages of voting securities
or other bases of control. See Exhibit 1.
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<PAGE> 3
MANAGEMENT AND CONTROL
ITEM 4. DIRECTORS AND EXECUTIVE OFFICERS.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Name Address Title
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<S> <C> <C>
Richard F. Albosta c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Robert H. Beeby c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Wilson K. Cadman c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
James P. Heffernan c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Donald P. Hodel c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Malcolm T. Hopkins c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Malcolm Jozoff c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
William E. Lavery c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
George E. Mayo c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Douglas E. Oleson c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
Ernesta G. Procope c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C> <C>
Oliver G. Richard III c/o The Columbia Gas System, Inc. Chairman of the Board,
20 Montchanin Road Chief Executive Officer
Wilmington, DE 19807 and President of
Applicant
James R .Thomas, II c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
William R. Wilson c/o The Columbia Gas System, Inc. Director
20 Montchanin Road
Wilmington, DE 19807
</TABLE>
OFFICERS OF THE APPLICANT (other than stated above)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Name Address Title
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Carolyn M. Afshar c/o The Columbia Gas System, Inc. Secretary
20 Montchanin Road
Wilmington, DE 19807
Larry J. Bainter c/o The Columbia Gas System, Inc. Treasurer
20 Montchanin Road
Wilmington, DE 19807
Tejinder S. Bindra c/o The Columbia Gas System, Inc. Assistant Secretary
20 Montchanin Road
Wilmington, DE 19807
Richard A. Casali c/o The Columbia Gas System, Inc. Vice President
20 Montchanin Road
Wilmington, DE 19807
Joyce K. Hayes c/o The Columbia Gas System, Inc. Assistant Secretary
20 Montchanin Road
Wilmington, DE 19807
Richard E. Lowe c/o The Columbia Gas System, Inc. Vice President and Controller
20 Montchanin Road
Wilmington, DE 19807
Michael W. O'Donnell c/o The Columbia Gas System, Inc. Senior Vice President
20 Montchanin Road and Chief Financial Officer
Wilmington, DE 19807
Peter M. Schwolsky c/o The Columbia Gas System, Inc. Senior Vice President
20 Montchanin Road and Chief Legal Officer
Wilmington, DE 19807
</TABLE>
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<PAGE> 5
ITEM 5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following
information as to each person owning 10 percent or more of the voting
securities of the applicant as of November 1, 1995: NONE.
UNDERWRITERS
ITEM 6. UNDERWRITERS. Give the name and complete mailing address of (a) each
person who within three years prior to the date of filing the
application, acted as an underwriter of any securities of the obligor
which were outstanding on the date of filing the applications, and (b)
each proposed principal underwriter of the securities proposed to be
offered. As to each person specified in (a), give the title of each
class of securities underwritten. NONE.
CAPITAL SECURITIES
ITEM 7. CAPITALIZATION.
(a) Furnish the following information as to each authorized class
of securities of the applicant.
As of November 1, 1995. See Exhibit 2.
(b) Give a brief outline of the voting rights of each class of
voting securities referred to in paragraph (a) above.
Subject to the rights of the holders of the Preferred Stock, the
holders of Common Stock are entitled to one vote per share, in person or by
proxy, upon all matters presented to the common stockholders.
INDENTURE SECURITIES
ITEM 8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis
of indenture provisions required under Section 305(a)(2) of the Act.
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The Indenture contains the following Events of Default; (i) default in
payments of the Indenture Securities; (ii) failure to comply with covenants;
(iii) failure to discharge or otherwise provide for final, non-appealable
judgments for the payment of money exceeding $50 million in uninsured
liability; and (iv) certain events of insolvency with respect to the applicant;
all subject, as applicable, to customary grace periods (Article 5.01 of the
Indenture).
The holders of a majority in principal amount of Indenture Securities
outstanding may waive any past default under the Indenture with respect to such
securities, except a default not theretofore cured in the payment of the
principal of or interest on any Indenture Securities or in respect of any
provision which under the Indenture cannot be modified or amended without the
consent of the holder of each security affected (Article 5.04 of the
Indenture).
Within 90 days after the Trustee becomes aware of the occurrence of any
default under the Indenture, the Trustee shall transmit by mail to all holders
of Indenture Securities notice of such default, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of principal and interest on any Indenture Security (including
payments pursuant to the mandatory redemption provisions of such security), if
any, the Trustee shall be protected in withholding such notice so long as a
committee of its trust officers determines in good faith that the withholding
of such notice is in the interests of the holders of Indenture Securities. The
term "default" means any event which is, or after notice or lapse of time or
both, would become, an Event of Default with respect to Indenture Securities
(Section 6.05 of the Indenture).
At any time and from time to time after the execution and delivery of
the Indenture, the Applicant may execute and deliver Indenture Securities to the
Trustee for authentication, together with an order for the authentication and
delivery of such securities and the Trustee shall authenticate and deliver such
securities. The Indenture Securities are not valid until an authorized
signatory of the Trustee manually signs the certificate of authentication on
the security. Each Indenture Security shall be dated the date of its
authentication.
Pursuant to the applicant's Plan of Reorganization, the Trustee, upon
receipt of a Company Order from the applicant, will authenticate the Indenture
Securities for original issue in an aggregate principal amount of up to $2.1
billion. These Indenture Securities are being issued to certain creditors of
the applicant in exchange for bankruptcy claims against the applicant pursuant
to the applicant's Plan of Reorganization. (See Section 2.03 of the Indenture).
The Indenture Securities will be general senior obligations of the
applicant. Therefore, there will be no property subject to lien under the
Indenture.
When (i) the Applicant delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.09 of
the Indenture) for cancellation or (ii) all outstanding Securities have become
due and payable and the Applicant irrevocably deposits with the Trustee funds
sufficient to pay at maturity all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.09 of the
Indenture), and if in either case the Applicant pays all other sums payable
hereunder by the Applicant, then this Indenture shall, except with respect to
certain continuing obligations of the Applicant under Section 7.01(c) of the
Indenture, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Applicant
accompanied by an Officers' Certificate and an Opinion of Counsel (Section 7.01
of the Indenture). In addition, the applicant may, at any time, terminate (i)
all its obligations under the Indenture Securities and the Indenture ("Legal
Defeasance Option") or (ii) its obligations to comply with certain restrictive
covenants, provided that the applicant irrevocably deposits in trust with the
Indenture Trustee money or U.S. government obligations for the payment of
principal of and interest on the Indenture Securities to maturity or
redemption, as the case may be. The conditions to defeasance shall be that (i)
no default exists or occurs, (ii) the applicant obtains a certificate from a
firm of nationally recognized independent accountants that the deposited U.S.
government obligations will be sufficient to pay principal of the interest on
the Indenture Securities to be defeased when due and (iii) in the case of the
Legal Defeasance Option, 91 days pass after the deposit is made and no event of
bankruptcy with respect to the applicant is continuing at the end of the 91-day
period (Sections 7.01 and 7.02 of the Indenture).
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<PAGE> 7
The Applicant shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Applicant a certificate from its principal
executive officer, principal financial officer or principal accounting officer
stating that in the course of the performance by such signer of his duties as
an officer of the Applicant he would normally have knowledge of any Default by
the Applicant or any noncompliance with the conditions and covenants under the
Indenture and whether or not he knows of any Default or any such noncompliance
that occurred during such period. If such officer does, the certificate shall
describe the Default or noncompliance, its status and what action the Applicant
is taking or proposes to take with respect thereto. (Section 3.05 of the
Indenture). The Indenture also requires the applicant to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such information, documents and reports with
respect to compliance by the the applicant with the conditions and covenants
of the Indenture as may be required from time to time by such rules and
regulations (Section 3.02 of the Indenture).
ITEM 9. OTHER OBLIGORS. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities. NOT APPLICABLE.
CONTENTS OF APPLICATION FOR QUALIFICATION. This application for
qualification comprises:
(a) page number 1 to 7, consecutively.
(b) the statement of eligibility and qualification of each trustee
under the indenture to be qualified. See Exhibit 3.
(c) the following exhibits in addition to those filed as a part of
the statement of eligibility and qualification of each trustee.
Subject to Rule 7a-29 permitting incorporation of exhibits by
reference, the following exhibits are to be filed as a part of the application
for qualification:
EXHIBIT T3A. A copy of the charter as now in effect or if the applicant is not
a corporation, a copy of the correlative instruments or organization.
Restated Certificate of Incorporation (as amended) of The Columbia Gas
System, Inc filed as Exhibit 3(a) to the applicant's annual report on Form 10-K
for the year ending December 31, 1991, File No. 0-1098.
EXHIBIT T3B. A copy of the existing bylaws or instruments corresponding
thereto.
Bylaws (as amended) of The Columbia Gas System, Inc. filed as Exhibit
3(b) to the applicant's annual report on Form 10-K for the year ending December
31, 1987, File No. 0-1098.
EXHIBIT T3C. A copy of the Indenture to be qualified. The Indenture shall
include, or be accompanied by, a reasonably itemized table of contents showing
the articles, sections and subsections or other divisions of the Indenture,
together with the subject matter thereof and the pages on which they appear.
A Form of Indenture Supplement for the Debentures to be issued pursuant to the
applicant's Plan of Reorganization are attached as Exhibit 1A to the
Applicant's Amended Disclosure Statement incorporated by referenced hereto
(Exhibit T3D(a)).
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<PAGE> 8
EXHIBIT T3D. A copy of every prospectus, notice, circular, letter, or other
written communication which is to be sent or given to security holders in
connections with the issuance or distribution of the Indenture securities.
Copies of replies to inquiries from security holders, however, need not be
filed.
(a) The Amended Disclosure Statement (with exhibits) pursuant to
Section 1125 of the Bankruptcy Code for the third amended Plan
of Reorganization of The Columbia Gas System, Inc. dated July
27, 1995 filed as an Exhibit to applicant's Form 8-K
filed on August 4, 1995.
(b) Memorandum Opinion Order of the U.S. Securities and Exchange
Commission approving applicant's Plan of Reorganization dated
August 25, 1995.
EXHIBIT T3E. A cross reference sheet showing the location in the Indenture of
the provision inserted therein pursuant to Section 310 through 318(a),
inclusive, of the Act.
Filed as Page 1 of Exhibit T3C filed herewith.
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<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, THE COLUMBIA GAS SYSTEM, INC., a corporation organized and existing
under the laws of Delaware, has duly caused this application to be signed on
its behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the city of Wilmington, and State of
Delaware on the 8th day of November, 1995.
(SEAL) The Columbia Gas System, Inc.
-----------------------------
By: /s/ L. J. Bainter
---------------------------
L. J. Bainter
---------------------------
Treasurer
Attest: /s/ T.S. Bindra
-------------------------
T.S. Bindra
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<PAGE> 1
EXHIBIT 1
AFFILIATES OF THE COLUMBIA GAS SYSTEM, INC.**
- --------------------------------------------------------------------------------
Columbia Atlantic Trading Corporation
Columbia Coal Gasification Corporation
Columbia Gas Development Corporation
Columbia Gas of Kentucky, Inc.
Columbia Gas of Maryland, Inc.
Columbia Gas of Ohio, Inc.
Columbia Gas of Pennsylvania, Inc.
Columbia Gas System Service Corporation
Columbia Gas Transmission Corporation
Columbia Gulf Transmission company
Overthrust Pipeline Company (18%)
Trailblazer Pipeline Company (33%)
Columbia LNG Corporation (91.8%)
CLNG Corporation
Cove Point LNG Limited Partnership (50%)
Columbia Natural Resources, Inc.
Columbia Propane Corporation
Commonwealth Gas Services, Inc.
Commonwealth Propane, Inc.
Atlantic Energy, Inc. (50%)
Columbia Energy Services Corporation
Columbia Energy Marketing
TriStar Capital Corporation
TriStar Gas Technologies, Inc.
Enertek Partners, L.P. (16.1%)
TriStar Ventures Corporation
TriStar Pedrick General Corporation
Pedricktown Cogeneration Ltd. (15%)
TriStar Pedrick Limited Corporation
Pedricktown Cogeneration Ltd. (35%)
TriStar Fuel Cells Corporation
TriStar Binghamton General Corporation
Binghamton Cogeneration Ltd (10%)
TriStar Georgetown General Corporation
Georgetown Cogeneration Ltd. (1%)
TriStar Georgetown Limited Corporation
Georgetown Cogeneration Ltd. (49%)
TriStar Vineland General Corporation
Vineland Cogeneration Ltd. (5%)
TriStar Vineland Limited Corporation
Vineland Cogeneration Limited Partnership (45%)
TriStar Rumford Limited Corporation
Rumford Cogeneration Company (10.2%)
TriStar System, Inc.
TriStar Ten Corporation (Inactive company)
Cogeneration Partners of America (50%)
Provided for information purposes only. The applicant disclaims
any conclusion that the indicated entities are "affiliates" of the applicant
within the meaning of the federal securities laws.
- -------------------------------
** Ownership of 100% of common stock or partnership interests unless
otherwise indicated.
<PAGE> 1
EXHIBIT 2
THE COLUMBIA GAS SYSTEM, INC.
November 1, 1995
<TABLE>
<CAPTION>
AMOUNT AMOUNT
AUTHORIZED OUTSTANDING
---------- -----------
($000) ($000)
<S> <C> <C>
6 1/4% Series Due Oct. 1991 . . . . . . . . . . . . . . . . 40,000 11,998
6 5/8% Series Due Oct. 1992 . . . . . . . . . . . . . . . . 25,000 7,404
7 1/4% Series Due May 1993 . . . . . . . . . . . . . . . . 50,000 14,990
7% Series Due Oct. 1993 . . . . . . . . . . . . . . . . . . 40,000 12,000
9% Series Due Oct. 1994 . . . . . . . . . . . . . . . . . . 50,000 20,232
8 3/4% Series Due Apr. 1995 . . . . . . . . . . . . . . . . 40,000 16,187
9 1/8% Series Due Oct. 1995 . . . . . . . . . . . . . . . . 50,000 22,000
8 3/8% Series Due Mar. 1996 . . . . . . . . . . . . . . . . 75,000 32,935
8 1/4% Series Due Sep. 1996 . . . . . . . . . . . . . . . . 60,000 26,392
7 1/2% Series Due Mar. 1997 . . . . . . . . . . . . . . . . 50,000 23,326
7 1/2% Series Due June 1997 . . . . . . . . . . . . . . . . 60,000 26,283
7 1/2% Series Due Oct. 1997 . . . . . . . . . . . . . . . . 60,000 28,389
7 1/2% Series Due May 1998 . . . . . . . . . . . . . . . . 50,000 23,731
9 7/8% Series Due June 1999 . . . . . . . . . . . . . . . . 40,000 21,800
10 1/8% Series Due Nov. 1995 . . . . . . . . . . . . . . . 75,000 18,600
9 1/8% Series Due May 1996 . . . . . . . . . . . . . . . . 75,000 18,600
10 1/4% Series Due May 1999 . . . . . . . . . . . . . . . . 75,000 25,000
10 1/4% Series Due Aug. 2011 . . . . . . . . . . . . . . . 100,000 100,000
9% Series Due Aug. 1993 . . . . . . . . . . . . . . . . . . 150,000 150,000
10 1/2% Series Due June 2012 . . . . . . . . . . . . . . . 200,000 200,000
10.15% Series Due Nov. 2013 . . . . . . . . . . . . . . . . 100,000 100,000
Medium-Term Notes, Series A . . . . . . . . . . . . . . . . 200,000 200,000
Medium-Term Notes, Series B . . . . . . . . . . . . . . . . 200,000 200,000
Medium-Term Notes, Series C . . . . . . . . . . . . . . . . 50,000 50,000
Employees' Thrift Plan of Columbia Gas System Trust 9.875%
Amortizing Debentures, Series A, Due November 30, 2001
(Guaranteed on a subordinated basis by The Columbia Gas
System, Inc.) . . . . . . . . . . . . . . . . . . . . . . . 91,750 86,993
Common Stock $10 Par Value (No. of shares) . . . . . . . . 100,000,000 50,575,835
</TABLE>
<PAGE> 1
EXHIBIT 3
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)
------------------
MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Eric Parets
Senior Vice President
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-6560
(Name, address and telephone number of agent for service)
THE COLUMBIA GAS SYSTEM, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-1594808
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
20 Montchanin Road
Wilmington, Delaware 19807
(302) 429-5000 (Zip Code)
(Address of principal executive offices)
SENIOR DEBT SECURITIES
(Title of Indenture Securities)
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<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington,
D.C.
(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.
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<PAGE> 3
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C> <C>
T1A(i) * - Copy of the Organization Certificate of Marine Midland Bank.
T1A(ii) * - Certificate of the State of New York Banking Department dated December
31, 1993 as to the authority of Marine Midland Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine Midland Bank as adopted on January
20, 1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank required by Section 321(b) of the Trust
Indenture Act of 1939.
T1A(vii) - Copy of the latest report of condition of the trustee (June 30, 1995),
published pursuant to law or the requirement of its supervisory or
examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
</TABLE>
* Exhibits previously filed with the Securities and Exchange
Commission with Registration No. 33-53693 and incorporated herein
by reference thereto.
- 14 -
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized 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 3rd day of
November, 1995.
MARINE MIDLAND BANK
By: /s/ Metin Caner
-----------------------------
Metin Caner
Vice President
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<PAGE> 5
EXHIBIT T1A (VII)
<TABLE>
<S> <C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
/ 1 /
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS JUNE 30, 1995 (950630)
------------
(RCRI 9999)
</TABLE>
<TABLE>
<S> <C>
This report is required by law; 12 U.S.C. Section 324 (State This report form is to be filed by banks with branches and
member banks); 12 U.S.C. Section 1817 (State nonmember consolidated subsidiaries in U.S. territories and
banks); and 12 U.S.C. Section 161 (National banks). possessions, Edge or Agreement subsidiaries, foreign
branches, consoli-dated foreign subsidiaries, or
International Banking Facilities.
NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in
an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions.
attested to by not less than two directors (trustees) for NOTE: These instructions may in some cases differ from
State nonmember banks and three directors for State member generally accepted accounting principles.
and National Banks.
I, Gerald A. Ronning, Executive VP & Controller We, the undersigned directors (trustees), attest to the
-------------------------------------------- correctness of this Report of Condition (including the
Name and Title of Officer Authorized to Sign Report supporting schedules) and declare that it has been examined by
of the named bank do hereby declare that these Reports of us and to the best of our knowledge and belief has been
Condition and Income (including the supporting schedules) prepared in conformance with the instructions issued by the
have been prepared in conformance with the instructions appropriate Federal regulatory authority and is true and
issued by the appropriate Federal regulatory authority and correct.
are true to the best of my knowledge and believe.
/s/ James H. Cleave
-------------------------------------
Director (Trustee)
/s/ Gerald A. Ronning /s/ Northrup R. Knox
- ------------------------------------- -------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)
07/25/95 /s/ Bernard J. Kennedy
- ------------------------------------- -------------------------------------
Date of Signature Director (Trustee)
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
- ------------------------------------------------------------------------------------------------------------------------------------
STATE MEMBER BANK: Return the original and one copy to the NATIONAL BANKS: Return the original only in the special return
appropriate Federal Reserve District Bank. address envelope provided. If express mail is used in lieu of
the special return address envelope, return the original only
STATE NONMEMBER BANKS: Return the original only in the to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite
special return address envelope provided. If express mail is 204, Crofton, MD 21114.
used in lieu of the special return address envelope, return
the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
FDIC Certificate Number 0 0 5 8 9
-- -- -- -- --
(RCRI 9030)
</TABLE>
- 16 -
<PAGE> 6
NOTICE
This form is intended to assist institutions with state publication
requirements. It has not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your state publication
requirements.
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
June 30, 1995.
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
- ----------------------------------------------------------- -------------
<S> <C>
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin . . . . . . . . . . . . . . . . . . . $ 865,542
Interest-bearing balances . . . . . . . . . . . . . . . 899,767
Held-to-maturity securities . . . . . . . . . . . . . . 1,855,665
Available-for-sale securities . . . . . . . . . . . . . 43,871
Federal Funds sold and securities purchased . . . . . . . .
under agreements to resell in domestic . . . . . . . . . .
offices of the bank and of its Edge and . . . . . . . . . .
Agreement subsidiaries, and in IBFs: . . . . . . . . . . .
Federal funds sold . . . . . . . . . . . . . . . . . . . 1,236,600
Securities purchased under . . . . . . . . . . . . . . .
agreements to resell . . . . . . . . . . . . . . . . . . 236,688
Loans and lease financing receivables: . . . . . . . . . .
Loans and leases net of unearned income . . . . . . . . 12,821,266
LESS: Allowance for loan and lease . . . . . . . . . . .
losses . . . . . . . . . . . . . . . . . . . . . . . . . 487,904
LESS: Allocated transfer risk reserve . . . . . . . . . 0
Loans and lease, net of unearned . . . . . . . . . . . .
income, allowance, and reserve . . . . . . . . . . . . . 12,333,362
Trading assets . . . . . . . . . . . . . . . . . . . . . 505,035
Premises and fixed assets (including . . . . . . . . . .
capitalized leases) . . . . . . . . . . . . . . . . . . 175,557
Other real estate owned . . . . . . . . . . . . . . . . . . 18,821
Investments in unconsolidated . . . . . . . . . . . . . . .
subsidiaries and associated companies . . . . . . . . . . . 0
Customers' liability to this bank on . . . . . . . . . . .
acceptances outstanding . . . . . . . . . . . . . . . . . . 19,281
Intangible assets . . . . . . . . . . . . . . . . . . . . . 56,590
Other assets . . . . . . . . . . . . . . . . . . . . . . . 597,058
Total assets . . . . . . . . . . . . . . . . . . . . . . . 18,843,837
</TABLE>
- 17 -
<PAGE> 7
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits: . . . . . . . . . . . . . . . . . . . . . . . . .
In domestic offices . . . . . . . . . . . . . . . . . . 13,282,857
Noninterest-bearing . . . . . . . . . . . . . . . . . . 3,201,517
Interest-bearing . . . . . . . . . . . . . . . . . . . . 10,081,340
In foreign offices, Edge, and Agreement . . . . . . . . . .
subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . 2,063,737
Noninterest-bearing . . . . . . . . . . . . . . . . . . 0
Interest-bearing . . . . . . . . . . . . . . . . . . . . 2,063,737
Federal funds purchased and securities sold . . . . . . . .
under agreements to repurchase in domestic . . . . . . . .
offices of the bank and its Edge and . . . . . . . . . . .
Agreement subsidiaries, and in IBFs: . . . . . . . . . . .
Federal funds purchased . . . . . . . . . . . . . . . . 670,610
Securities sold under agreements to . . . . . . . . . .
repurchase . . . . . . . . . . . . . . . . . . . . . . . 296,580
Demand notes issued to the U.S. Treasury . . . . . . . . . 300,000
Trading Liabilities. . . . . . . . . . . . . . . . . . . . 33,836
Other borrowed money: . . . . . . . . . . . . . . . . . . .
With original maturity of one year . . . . . . . . . . .
or less . . . . . . . . . . . . . . . . . . . . . . . . 42,269
With original maturity of more than . . . . . . . . . .
one year . . . . . . . . . . . . . . . . . . . . . . . . 0
Mortgage indebtedness and obligations . . . . . . . . . . .
under capitalized leases . . . . . . . . . . . . . . . . . 36,162
Bank's liability on acceptances . . . . . . . . . . . . . .
executed and outstanding . . . . . . . . . . . . . . . . . 19,281
Subordinated notes and . . . . . . . . . . . . . . . . . . 225,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . 289,820
Total liabilities . . . . . . . . . . . . . . . . . . . . . 17,260,152
Limited-life preferred stock and . . . . . . . . . . . . .
related surplus . . . . . . . . . . . . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related . . . . . . . . . . .
surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 185,000
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758,098
Undivided profits and capital reserves . . . . . . . . . . (359,413)
Net unrealized holding gains (losses) . . . . . . . . . . .
on available-for-sale securities . . . . . . . . . . . . . 0
Cumulative foreign currency translation . . . . . . . . . .
adjustments . . . . . . . . . . . . . . . . . . . . . . . . 0
Total equity capital . . . . . . . . . . . . . . . . . . . 1,583,685
Total liabilities, limited-life . . . . . . . . . . . . . .
preferred stock, and equity capital . . . . . . . . . . . . 18,843,837
</TABLE>
- 18 -
<PAGE> 1
EXHIBIT T-3C
PAGE 1 DRAFT
================================================================================
THE COLUMBIA GAS SYSTEM, INC.
Senior Debt Securities
------------------------
INDENTURE
Dated as of _________, 19__
------------------------
Marine Midland Bank
------------------------------------------
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
- --------------------------------------------------------------------------------
The Columbia Gas System, Inc. and Marine Midland Bank, Trustee
Indenture dated ___________, 1995
<TABLE>
<CAPTION>
TIA Section Indenture Section
- ----------- ------------------
<S> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08, 6.10, 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06, 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05, 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02, 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05, 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.06
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
<PAGE> 3
PAGE 2
TABLE OF CONTENTS 1/
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1]
ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1]
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]
ARTICLE 2
The Securities
--------------
SECTION 2.01. Amount; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . [9]
SECTION 2.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11]
SECTION 2.03. Execution, Authentication and
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11]
SECTION 2.04. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [13]
SECTION 2.05. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . [14]
SECTION 2.06. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . . . . . . . . . . [14]
SECTION 2.07. Securityholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15]
SECTION 2.08. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15]
SECTION 2.09. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [17]
SECTION 2.10. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18]
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18]
SECTION 2.12. Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
</TABLE>
____________________
1/ The Table of Contents is included herein for convenience only and is not to
be considered a part of the Indenture.
<PAGE> 4
PAGE 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 3
Covenants
---------
SECTION 3.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.03. Limitation on Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.04. Limitation on Funded Debt
of Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . [21]
SECTION 3.05. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [22]
ARTICLE 4
Successor Company
-----------------
SECTION 4.01. When Company May Merge or Transfer
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [23]
SECTION 4.02. Successor Entity Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . [23]
ARTICLE 5
Defaults and Remedies
---------------------
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [24]
SECTION 5.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25]
SECTION 5.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25]
SECTION 5.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.07. Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28]
SECTION 5.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . [28]
</TABLE>
<PAGE> 5
PAGE 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 6
Trustee
-------
SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28]
SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . [31]
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . [31]
SECTION 6.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [32]
SECTION 6.09. Successor Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 6.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 6.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
ARTICLE 7
Discharge of Indenture; Defeasance
----------------------------------
SECTION 7.01. Discharge of Liability on
Securities; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 7.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [34]
SECTION 7.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]
SECTION 7.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]
ARTICLE 8
Amendments
----------
SECTION 8.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]
SECTION 8.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [36]
SECTION 8.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . [37]
SECTION 8.04. Revocation and Effect of Consent
and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [37]
SECTION 8.05. Notation on or Exchange of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 8.06. Trustee To Sign Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
</TABLE>
<PAGE> 6
PAGE 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 9
Redemption
----------
SECTION 9.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 9.02. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 9.03. Selection of Securities To Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39]
SECTION 9.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39]
SECTION 9.05. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 9.06. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 9.07. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
ARTICLE 10
Sinking Funds
-------------
SECTION 10.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 10.02. Satisfaction of Sinking
Fund Payment with Securities . . . . . . . . . . . . . . . . . . . . . . . . . . [41]
SECTION 10.03. Redemption of Securities
for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [41]
ARTICLE 11
Miscellaneous
-------------
SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . [42]
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [42]
SECTION 11.03. Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.05. Statements Required in Certificate
or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.06. When Securities Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.08. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.12. Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
SECTION 11.13. Table of Contents; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
</TABLE>
<PAGE> 7
PAGE 6
<TABLE>
<CAPTION>
Page
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TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [46]
</TABLE>
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THIS INDENTURE dated ____________________________ between The
Columbia Gas System, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter called the "Company"), having its
principal office at 20 Montchanin Road, Wilmington, Delaware 19807-0020, and
Marine Midland Bank, a banking corporation and trust company organized and
existing under the laws of the State of New York (hereinafter called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its Securities (hereinafter called the "Securities") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed
by the Company and authenticated and delivered by the Trustee hereunder and
duly issued by the Company, the valid obligations of the Company, and to make
this Indenture a valid agreement of the Company, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all holders of the Securities as
follows:
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"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.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board
of Directors in respect hereof.
"Board Resolution" means a resolution duly adopted by the
Board of Directors of the Company, a copy of which shall be certified by the
Secretary or an Assistant Secretary, as being in full force and effect on the
date of such certification and delivered to the Trustee.
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"Business Day" means each day which is not a Legal Holiday.
"Bylaws" means the "Bylaws of The Columbia Gas System,
Inc." as amended from time to time.
"Capital Lease Obligations" of a person means any
obligation which is required to be classified and accounted for as a capital
lease obligation on the balance sheet of such person prepared in accordance
with generally accepted accounting principles; the amount of such obligation
shall be the capitalized amount thereof, determined in accordance with
generally accepted accounting principles; and the stated maturity thereof shall
be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock.
"Company" means The Columbia Gas System, Inc., a Delaware
corporation, unless and until a successor replaces it pursuant to Article 4
and, thereafter, means the successor (or any subsequent successor pursuant to
said Article) and, for purposes of any provision contained herein and required
by the TIA, each other Obligor on the Securities.
"Company Request", "Request of the Company", "Company
Order" or "Order of the Company" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Debt" of any person means, without duplication,
(i) the principal of and premium, if applicable, in respect
of (a) indebtedness of such person for money borrowed and (b)
indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such person is
responsible or liable;
(ii) all Capital Lease Obligations of such person;
(iii) all obligations of such person issued or assumed as
the deferred purchase price of property (but excluding trade
accounts payable arising in the ordinary course of business);
(iv) all obligations of such person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations
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with respect to letters of credit securing obligations (other
than obligations described in (i) through (iii) above) entered
into in the ordinary course of business of such person to the
extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than
the third Business Day following receipt by such person of a
demand for reimbursement following payment on the letter of
credit);
(v) all obligations of the type referred to in clauses (i)
through (iv) of other persons for the payment of which such
person is responsible or liable as obligor or guarantor; and
(vi) all obligations of the type referred to in clauses (i)
through (v) of other persons secured by any Lien on any asset
of such person (whether or not such obligation is assumed by
such person), the amount of any such obligation which is not
assumed being deemed to be the lesser of the amortized cost of
such assets or the amount of the obligation so secured.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default as more fully described
in Section 5.01 of this Indenture.
"Depository" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository by the Company pursuant to
Section 2.01 until a successor Depository shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Depository" shall
mean or include each person who is then a Depository hereunder, and if at any
time there is more than one such person, "Depository" as used with respect to
the Securities of any such series shall mean the Depository with respect to the
Securities of that series.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Funded Debt" means all Debt created, assumed or guaranteed
by a Significant Subsidiary which matures by its terms, or is renewable at the
option of such Subsidiary to a date, more than one year after the date of the
original creation, assumption or guarantee of such Debt by such Subsidiary.
"Global Security" means with respect to any series of
Securities issued hereunder, a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depository or pursuant to the
Depository's instruction, all in accordance with this Indenture, an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Order, which shall be registered in the name of the Depository or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate Principal Amount of, all of the outstanding Securities of such series
or any portion thereof, in either case having the same Terms, including,
without limitation, the same issue date, date or dates on which principal is
due, and interest rate or method of determining interest.
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"Holder" or "Securityholder" means the person in whose name
a Security is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Payment Date" means the date specified in the
Securities as the fixed date on which interest is due and payable.
"Issue" or "issue" means, with respect to Debt, issue,
assume, guarantee, incur or otherwise become liable for.
"Lien" means any mortgage, pledge, deposit for security,
security interest or other similar lien, other than the following: (i) liens
for taxes or assessments or other local, state or federal governmental charges
or levies; (ii) any lien to secure obligations under workmen's compensation or
unemployment insurance laws or similar legislation, including liens of
judgments thereunder which are not currently dischargeable; (iii) any lien to
secure performance in connection with bids, tenders, contracts (other than
contracts for the payment of Debt) or leases made in the ordinary course of
business; (iv) liens to secure public or statutory obligations; (v)
materialmen's, mechanics', carriers', workmen's, repairmen's, construction, or
other liens or charges arising in the ordinary course of business, which may or
may not be filed or asserted or the payment of which has been adequately
secured or which are not material in amount; or deposits to obtain the release
of such liens; (vi) any lien to secure indemnity, performance, surety or
similar bonds to which the Company or any Affiliate of the Company is a party;
(vii) liens created by or resulting from court or administrative proceedings
which are currently being contested in good faith by appropriate actions or
proceedings or for the purpose of obtaining a stay or discharge in the course
of any court or legal proceedings; (viii) leases made, or existing on property
acquired, constructed or improved, in the ordinary course of business, together
with repairs and additions thereto and improvements thereof; (ix) landlords'
liens; (x) zoning restrictions, easements, licenses, reservations or
restrictions in respect of currently owned or hereafter acquired, constructed,
or improved tangible property or defects or irregularities (including any
terms, conditions, agreements, covenants, exceptions and reservations expressed
or provided in deeds or other agreements) in title thereto, which do not
materially impair the business of the Company; (xi) any lien on accounts
receivable, inventories or customers' installment paper or the proceeds thereof
incurred to secure Debt permitted under Section 3.03; (xii) any of such liens,
whether or not delinquent, whose validity or applicability is at the time being
contested in good faith by the Company or any Subsidiary; (xiii) liens securing
obligations neither assumed by the Company or any Subsidiary nor on account of
which any of them customarily pays interest directly or indirectly, existing,
either at the date hereof, or, as to property hereafter acquired, constructed,
or improved at the time of acquisition construction or improvement by the
Company or a Subsidiary; (xiv) any right which any municipal or governmental
body or agency may have by virtue of any franchise, license, contract or
statute to purchase, or designate a purchaser of or order the sale of, any
property of the Company or any Subsidiary upon payment of reasonable
compensation therefor, or to terminate any franchise,
<PAGE> 12
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license or other rights or to regulate the property and business of the Company
or any Subsidiary; (xv) the lien of judgments covered by insurance, or upon
appeal and covered, if necessary, by the filing of an appeal bond, or if not so
covered, not exceeding at any one time [$1,000,000] in aggregate amount; (xvi)
any lien or encumbrance, moneys sufficient for the discharge of which have been
deposited in trust with the Trustee hereunder or with the trustee or mortgagee
under the instrument evidencing such lien or encumbrance, with irrevocable
authority to the Trustee hereunder or to such other trustee or mortgagee to
apply such moneys to the discharge of such lien or encumbrance to the extent
required for such purpose; (xvii) rights reserved to or vested in others to
take or receive any part of the gas, by-products of gas or steam generated or
produced by or from any properties of the Company or any Subsidiary with
respect to any other rights concerning gas supply, transportation, or storage
which are in use in the ordinary course of the natural gas business; (xviii)
liens created or assumed by the Company or a Subsidiary in connection with (a)
the issuance of debt securities, the interest on which is excludable from the
gross income of the holders of such securities pursuant to Section 103 of the
Internal Revenue Code of 1986, or any successor section, or (b) the issuance of
other debt securities, whether or not the interest thereon is excluded from the
gross income of the holders of such securities, through any public or
governmental authority, in each case for purpose of financing, in whole or in
part, the acquisition or construction of the property to be used by the Company
or a Subsidiary, but such liens shall be limited to the property so financed
(and the real estate on which such property is to be located), together with
repairs and additions thereto and improvements thereof; and (xix) liens
attaching to property of the Company or a Subsidiary at the time a person
consolidates with or merges into, or transfers all or substantially all of its
assets to, the Company or a Subsidiary, together with repairs and additions
thereto and improvements thereon, provided that, based on an Officers'
Certificate such property acquired pursuant to the consolidation, merger or
asset transfer is adequate security for the lien.
"Officer" means the Chairman of the Board, the President,
any Vice President, the Treasurer, the Secretary, the Controller, any Assistant
Treasurer, any Assistant Secretary, any Assistant Controller, or any officers
of the Company designated by Board Resolution or the Bylaws.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who may be an employee of or counsel to the Company (or any subsidiary
or affiliate) or other counsel acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.02.
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"Principal Amount" of a Security means the principal amount
of the Security plus the premium, if applicable, payable on the Security which
is due or overdue or is to become due at the relevant time.
"Production Payment" means any economic interest in oil,
gas or mineral reserves which (a) entitles the holder thereof to a specified
share of future production from such reserves, free of the costs and expenses
of such production, and (b) terminates when a specified quantity of such share
of future production from such reserves has been delivered or a specified sum
has been realized from the sale of such share of future production from such
reserves.
"SEC" means the United States Securities and Exchange
Commission.
"Secured Debt" means Debt secured by a Lien.
"Securities" means the Securities issued under this
Indenture.
"Significant Subsidiary" means a Subsidiary that meets the
conditions for being classified as a "significant subsidiary" under Regulation
S-X of the SEC as such regulation reads as of the date of this Indenture.
"Subsidiary" means a corporation or limited liability
company of which a majority of the Capital Stock, having voting power under
ordinary circumstances to elect directors, is owned by the Company and/or one
or more Subsidiaries.
"Terms" means the maturity date, interest rate or method of
determining the interest rate, interest payment dates, redemption provisions
(optional or mandatory) and any other terms of any Securities established
pursuant to Sections 2.01 and 2.03.
"TIA" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990 (15 U.S.C. Section Section
77aaa-77bbbb), as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
SECTION 1.02. Other Definitions.
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<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Bankruptcy Law" ............................................ 5.01
"Consolidated Tangible Assets" .............................. 3.03
"Covenant Defeasance Option" ................................ 7.01(b)
"Custodian" ................................................. 5.01
"Event of Default" .......................................... 5.01
"Legal Defeasance Option" ................................... 7.01(b)
"Legal Holiday" ............................................. 11.08
"Mandatory Sinking Fund Payment ............................. 10.01
"Notice of Default" ......................................... 5.01
"Optional Sinking Fund Payment .............................. 10.01
</TABLE>
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<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Paying Agent" .............................................. 2.05
"Registrar" ................................................. 2.05
"Tangible Assets" ........................................... 3.03
</TABLE>
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act. Whenever this Indenture refers to a provision of the TIA or a
provision of the TIA provides that an indenture to be qualified thereunder
shall be deemed to include such provision, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings as if fully set forth herein and
in any supplement hereto:
"Commission" means the SEC.
"Obligor" on the Securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(3) "including" means including, without limitation;
(4) "person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
(5) "or" is not exclusive;
(6) words in the singular include the plural and words in
the plural include the singular; and
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal
amount thereof that would be shown on a balance sheet of
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the issuer dated such date prepared in accordance with
generally accepted accounting principles and accretion of
principal on such security shall not be deemed to be the
issuance of Debt.
ARTICLE 2
The Securities
SECTION 2.01. Amount; 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 and
Securities of the same series may have different Terms. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series, except as contemplated by the
fourth paragraph of Section 2.03:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all Securities
of other series);
(2) any limit upon the aggregate Principal Amount of the
Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 2.04, 2.08, 2.09, 8.05 and 9.07;
(3) the date or dates on which the principal and premium,
if applicable, of any of the Securities of the series are
payable or the method of determination thereof;
(4) the rate or rates, or the method of determination
thereof, at which any of the Securities of the series shall
bear interest, if any, 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 for
the interest payable on any Interest Payment Date;
(5) the place or places where the principal of and
interest, if any, on any of the Securities of the series shall
be payable and the office or agency for the Securities of the
series maintained by the Company pursuant to Section 2.05;
(6) the period or periods within which, the price or prices
at which and the Terms and conditions upon which any of the
Securities of the series may be redeemed, in whole or in part,
at the option of the Company;
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(7) the Terms of any sinking fund and the obligation, if
any, of the Company to redeem or purchase Securities of the
series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the Terms and
conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part;
(8) if other than denominations authorized by Section 2.02,
the denominations in which the Securities of the series shall
be issuable;
(9) if other than the Principal Amount thereof, the portion
of the Principal Amount of any of the Securities of the series
which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 5.02;
(10) any deletions or modifications of or additions to the
Events of Default set forth in Section 5.01 or covenants of
the Company set forth in Article 3 pertaining to the
Securities of the series;
(11) Whether the Securities are secured or unsecured
obligations of the Company;
(12) the forms of the Securities of the series;
(13) whether the Securities of the series shall be issued
in whole or in part in the form of one or more Global
Securities and, in such case, the Depository for such Global
Security or Securities;
(14) if Securities of the series are to be convertible into
other securities, the Terms of such conversion; and
(15) any other Terms of any of the Securities of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above, or the Company Order
contemplated by the fourth paragraph of Section 2.03, and set forth in the
Officers' Certificate referred to above or in any such indenture supplemental
hereto.
At the option of the Company, interest on any series that
bears interest may be paid by mailing a check to the address of, or making a
wire transfer to the account of, any Holder as such address shall appear in the
register maintained pursuant to Section 2.05.
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The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company).
If any of the Terms of the series are established by action
taken pursuant to a Board Resolution, except as to those contemplated by the
fourth paragraph of Section 2.03, a copy of an appropriate record of such
action together with such Board Resolution shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the Terms of
the series.
SECTION 2.02. Denominations. The Securities of each
series shall be issuable in such denominations as shall be specified as
contemplated by Section 2.01. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and in any integral multiple thereof.
Securities of each series shall be numbered, lettered or otherwise
distinguished in such manner in accordance with such plan as the Officers of
the Company executing the same may determine with the approval of the Trustee.
SECTION 2.03. Execution, Authentication and Delivery. One
Officer shall sign the Securities for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer
holds that office at the time the Trustee authenticates the Security, the
Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
At any time after the execution and delivery of this
Indenture, the Company may execute and deliver to the Trustee Securities of any
series, together with a Company Order for the authentication and delivery of
such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; provided that, if all Securities of a
series are not to be originally issued at one time, the Trustee shall
authenticate and deliver Securities of such series for original issue from time
to time in the aggregate Principal Amount established for such series pursuant
to such procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by Company Order. The maturity date, original
issuance date, interest rate and any other Terms of the Securities of such
series shall be determined by or pursuant to such Company Order and procedures.
If provided for in such procedures, such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Company or its duly authorized agents, which instructions, if given orally,
shall be promptly confirmed in writing.
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If the forms or Terms of the Securities of the series have
been established by or pursuant to one or more Board Resolutions as permitted
by Section 2.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) that such forms and/or Terms have been established in
conformity with the provisions of this Indenture; and
(b) that such Securities, when authenticated and delivered
by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to such exceptions as counsel may specify.
If such forms or Terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 2.01 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 2.01 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraph
at or prior to the time of authentication of each Security of such series if
such documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued; provided that
paragraph (a) of said Opinion of Counsel shall, in such case, read as follows:
"(a) that such forms have been established in conformity
with the provisions of this Indenture and the procedures for
determining the Terms of such Securities as set forth in the
procedures hereinabove referred to have been established in
conformity with the provisions of this Indenture."
If the Company shall establish pursuant to Section 2.01
that the Securities of a series are to be issued in whole or in part in the
form of a Global Security, then the Company shall execute and the Trustee shall
in accordance with this Section and the Company Order with respect to such
series authenticate and deliver the Global Security that (i) shall represent
and shall be denominated in an aggregate amount equal to the aggregate
principal amount of Outstanding Securities of such series to be represented by
the Global Security, (ii) shall be registered in the name of the Depository or
its nominee, and (iii) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instruction.
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Each Depository designated pursuant to Section 2.01 for a
Global Security in registered form must, at the time of its designation and at
all times while it serves as Depository, be a clearing agency registered under
the Exchange Act and any other applicable statute or regulation.
SECTION 2.04. Temporary Securities. Pending the
preparation of definitive Securities of any series, 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, in registered
form and with such appropriate insertions, omissions, substitutions and other
variations as the Officers executing such Securities may determine, as
evidenced conclusively by their execution of such Securities. Such temporary
Securities may be in global form.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company maintained pursuant to
Section 2.05 for the purpose of exchanges of Securities of such series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like aggregate Principal
Amount of definitive Securities of the same series and of like tenor or
authorized denominations and having the same Terms and conditions.
Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the same series
and of like tenor authenticated and delivered hereunder.
SECTION 2.05. Registrar and Paying Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of any such agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 6.07. The Company or any
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Subsidiary or Affiliate of the Company may act as Paying Agent, Registrar,
co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.06. Paying Agent To Hold Money in Trust. On or
prior to each due date of the principal and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. If the Company or any Subsidiary or Affiliate of the Company
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.07. Securityholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, in writing at
least five Business Days before each May 15 and November 15 and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.08. Transfer and Exchange. The Securities shall
be issued in registered form and shall be transferable only upon the surrender
of a Security with similar Terms of the same series for registration of
transfer. When a Security is presented to the Registrar or a co-registrar with
a request to register a transfer, the Registrar shall register the transfer as
requested, subject to compliance with this paragraph. When Securities of a
series are presented to the Registrar or a co-registrar with a request to
exchange them for an equal Principal Amount of Securities of such series with
similar Terms of other denominations, the Registrar shall make the exchange as
requested, subject to such compliance. To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities of the applicable series with similar Terms at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges. Every Security
presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing. The Company shall not be required (i) to Issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of
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Securities of that series selected for redemption under Section 9.03 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.
If at any time the Depository for the whole or part of the
Securities of a series notifies the Company that it is unwilling or unable to
continue as Depository for such Securities or if at any time the Depository for
such Securities shall no longer be eligible under Section 2.03, the Company
shall appoint a successor Depository with respect to such Securities. If a
successor Depository for such Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 2.01 shall no longer
be effective with respect to such Securities and the Company will execute, and
the Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, corresponding Securities in definitive form in an aggregate principal
amount equal to the Principal Amount of the Global Security representing such
Securities in exchange for such Global Security.
If specified by the Company pursuant to Section 2.01 with
respect to a series of Securities, the Company may at any time and in its sole
discretion determine that Securities of any series issued in the form of one or
more Global Securities shall no longer be represented by such Global Security
or Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of corresponding
definitive Securities, will authenticate and deliver such Securities in
definitive form and in an aggregate Principal Amount equal to the Principal
Amount of such Global Security or Securities in exchange for such Global
Security or Securities.
If specified by the Company pursuant to Section 2.01 with
respect to the whole or part of a series of Securities, the Depository for such
Securities may surrender a Global Security for such Securities with similar
Terms in exchange in whole or in part for Securities of such series with
similar Terms in definitive form on such terms as are acceptable to the Company
and such Depository. Thereupon, the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series with similar Terms, shall authenticate and
deliver, without charge to the Holders,
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(i) to each person specified by such Depository a new
Security or Securities of the series with similar Terms of any
authorized denomination as requested by such person in
aggregate Principal Amount equal to and in exchange for such
person's beneficial interest in the Global Security; and
(ii) to such Depository a new Global Security in a
denomination equal to the difference, if any, between the
Principal Amount of the surrendered Global Security and the
aggregate Principal Amount of Securities with similar Terms
delivered to Holders thereof.
In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver Securities in definitive form in authorized denominations.
Upon the exchange of a Global Security for Securities in
definitive form, such Global Security shall be cancelled by the Trustee.
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the persons in whose names such Securities are
so registered.
Notwithstanding any other provision of this Section to the
contrary, unless and until a Global Security is exchanged in whole for
Securities in definitive form, a Global Security representing all or a portion
of the Securities of a series may not be transferred except as a whole by the
Depository for such series to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository or by
such Depository or any such nominee to a successor Depository for such series
or a nominee of such successor Depository.
SECTION 2.09. Replacement Securities. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall Issue and the Trustee shall authenticate a replacement Security of the
applicable series with similar Terms if the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish evidence to their satisfaction of the
destruction, loss or wrongful taking of any Security so claimed to be lost,
destroyed or wrongfully taken, and an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of
the Company.
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SECTION 2.10. Outstanding Securities. Securities
outstanding at any time are all Securities authenticated by the Trustee except
for those cancelled by it, those delivered to it for cancellation and those
described in this Section as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal, premium (if applicable) and interest payable
on that date with respect to the Securities to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture, then
on and after that date such Securities cease to be outstanding and interest on
them ceases to accrue.
In determining whether the Holders of the requisite
Principal Amount of outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder the Principal
Amount of an Original Issue 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 5.02.
SECTION 2.11. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver cancelled
Securities to the Company. The Company may not Issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.12. Default Interest. If the Company defaults
in a payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful at the
rate or rates prescribed therefor in the Securities) in any lawful manner. The
Company may also pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date in which case the Company
shall fix or cause to be fixed any such special record date and payment date,
and, at least 15 days before any such special record date, the Company shall
mail to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
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ARTICLE 3
Covenants
SECTION 3.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.
SECTION 3.02. SEC Reports. The Company shall file with
the Trustee, within 30 days after it files them with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Company shall also comply with
the other provisions of TIA Section 314(a)(1),(2) and (3).
SECTION 3.03. Limitation on Secured Debt. The Company
shall not issue any Secured Debt unless contemporaneously therewith effective
provision is made to secure the Securities equally and ratably with such
Secured Debt for so long as such Secured Debt is secured by a Lien. The
preceding sentence shall not require the Company to equally and ratably secure
the Securities upon the incurrence of the following Secured Debt:
(1) Debt of the Company which is incurred to finance the
acquisition, construction or improvement of assets of the
Company and its Subsidiaries, which acquisition is
consummated, or which construction or improvement is
commenced, after the date of this Indenture; provided,
however, that such Debt shall not be secured by any assets of
the Company other than assets so acquired, constructed or
improved (together with (i) to the extent the terms of Secured
Debt so provides, repairs and additions thereto and
improvements thereof, and (ii) with respect to construction
and improvement, if any theretofore unimproved real property on
which the property so constructed or improved is located);
(2) Debt of the Company which is secured by assets of a
person where such Debt was existing at the time such person
was merged or consolidated with the Company or at the time of
sale, other disposition, or lease, of the properties of such
person as an entirety (or substantially as an entirety) to the
Company; provided, however, that such Debt shall not be
secured by any assets of the Company other than the assets
subject thereto at the time of the acquisition (together with,
to the extent the terms of Secured Debt so provides, repairs
and additions thereto and improvements thereof);
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(3) Debt of the Company issued to refinance such Debt
incurred under paragraphs (1) and (2) provided that the Debt
so issued is not secured by a Lien on assets other than those
which secure the Debt being refinanced (together with, to the
extent the terms of new Secured Debt so provides, repairs and
additions thereto and improvements thereof);
(4) Debt of the Company which is secured by inventory,
accounts receivable, or customers' installment paper including
by means of asset securitizations;
(5) Obligations arising with respect to Production
Payments; and
(6) Other Debt with a Principal Amount not exceeding, in
the aggregate at any one time outstanding, ten percent (10%)
of the Consolidated Tangible Assets of the Company and its
consolidated subsidiaries, as of the end of the most recent
fiscal quarter of the Company ending not less than 45 days
from the date of determination.
The term "Consolidated Tangible Assets" means that sum of
the Tangible Assets of the Company and its consolidated
Subsidiaries after eliminating intercompany items.
The term "Tangible Assets", as applied to any person on any
date shall mean the gross book value as shown on the books of
such person of all its property both real and personal
(exclusive of licenses, patents, patent applications,
copyrights, trademarks, trade names, good will, experimental
or organizational expense and other like intangibles, treasury
stock and unamortized debt discount and expense but including
regulatory assets properly recorded on the balance sheet of
such person.)
SECTION 3.04. Limitations on Funded Debt of Significant
Subsidiaries. The Company shall not permit any Significant Subsidiary to
issue, directly or indirectly, any Funded Debt except:
(1) Funded Debt issued and outstanding on or prior to the
date of this Indenture;
(2) Funded Debt issued to and held by the Company or a
Subsidiary; provided, however, that any subsequent issuance or
transfer of any common stock which results in any such
Subsidiary ceasing to be a Subsidiary and any subsequent
transfer of such Debt (other than to the Company or a
Subsidiary) shall be deemed the issuance of such Debt by the
issuer thereof;
(3) Funded Debt of a Significant Subsidiary issued and
outstanding on or prior to the date on which such Subsidiary
was acquired by the Company or on which it became a
Significant Subsidiary;
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(4) Funded Debt issued to finance the acquisition by such
Significant Subsidiary of any assets or Capital Stock of any
person or the construction or improvement of assets of such
Significant Subsidiary, which acquisition is consummated, or
which construction or improvement is commenced, after the date
of this Indenture;
(5) Funded Debt issued in exchange for, or the proceeds of
which are used to refund or refinance, Debt referred to in the
foregoing clauses (1) through (4) or to reacquire equity of
such Significant Subsidiary held by the Company or a
Subsidiary;
(6) Funded Debt issued with respect to (a) obligations that
are tax-exempt pursuant to Section 103 of the Internal Revenue
Code of 1986 as from time to time amended and that are issued
in connection with pollution control or other facilities of
such Significant Subsidiary or (b) other obligations, whether
taxable to tax-exempt, that are issued through any public or
governmental authority in connection with pollution control or
other facilities of such Significant Subsidiary;
(7) Funded Debt in an aggregate amount not exceeding the
sum of (a) total inventory of the Significant Subsidiary; (b)
total accounts receivable of the Significant Subsidiary; and
(c) the total amount of customers' installment paper of such
Significant Subsidiary, in accordance with generally accepted
accounting principles, in each case, as of the end of the most
recent fiscal quarter of such Significant Subsidiary ending
not less than 45 days from the date of determination;
(8) Obligations with respect to Production Payments; and
(9) Funded Debt in an aggregate Principal Amount which,
when added to the aggregate Principal Amount of Funded Debt of
all other Significant Subsidiaries (other than Funded Debt
referred to in clauses (1) through (8) above) does not exceed,
at any one time outstanding, ten percent (10%) of the sum of
the Tangible Assets of such Significant Subsidiary and all
other Significant Subsidiaries determined on a consolidated
basis, as of the end of the most recent fiscal quarter of each
such Significant Subsidiary ending not less than 45 days from
the date of determination.
SECTION 3.05. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company a certificate from its principal executive officer, principal
financial officer or principal accounting officer stating that in the course
of the performance by such signer of his duties as an officer of the Company
he would normally have knowledge of any Default by the Company or any
noncompliance with the conditions and covenants under the Indenture and
whether or not he knows of any Default or any such noncompliance that occurred
during such period. If such officer does, the certificate shall describe the
Default or non-compliance, its status and what action the Company is taking or
proposes to take with respect thereto. For purposes of this Section 3.05,
such noncompliance
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shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture.
ARTICLE 4
Successor Company
SECTION 4.01. When Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into, or convey or
otherwise transfer, or lease, its assets as an entirety (or substantially as an
entirety) to, any person, unless:
(i) the resulting, surviving or transferee person (if not
the Company) shall be a person organized and existing under
the laws of the United States of America, 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 reasonably satisfactory to the Trustee, all
the obligations of the Company under the Securities and this
Indenture;
(ii) immediately after giving effect to such transaction
(and treating any Debt, other than Debt referred to in clause
(2) of Section 3.03, which becomes an obligation of the
resulting, surviving or transferee person as a result of such
transaction as having been incurred by such person at the time
of such transaction and, in the case of Debt of the type
described in clause (1) of Section 3.03, the relevant
acquisition, construction or improvement as having then
occurred no Default shall have happened and be continuing; and
(iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, transfer, or lease and such
supplemental indenture (if any) comply with this Indenture.
SECTION 4.02. Successor Entity Substituted. Upon any
consolidation by the Company with or merger by the Company into any other
entity or any conveyance or other transfer, or lease, of the assets of the
Company as an entirety (or substantially as an entirety) in accordance with
Section 4.01, the successor entity formed by such consolidation or into which
the Company is merged or to which such conveyance or other 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 entity had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor entity shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE 5
Defaults and Remedies
SECTION 5.01. Events of Default. An "Event of Default"
occurs if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its
stated maturity, upon declaration or otherwise;
(3) the Company fails to comply with Section 4.01;
(4) the Company fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred
to in (1), (2), or (3) above) and such failure continues for
60 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case;
(B) appoints a Custodian of the Company or for any
substantial part of its property; or
(C) orders the winding up or liquidation of the
Company;
and the order or decree remains unstayed and in effect for 60
days.
The term "Bankruptcy Law" means Title 11, United States
Code, or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
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A Default under clause (4) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such Notice. Such Notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (4), its status and what action
the Company is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 5.01(5) or (6)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of (or, in connection with Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such Securities) and accrued interest on all the Securities to
be due and payable. Upon such a declaration, such principal (or portion
thereof) and interest shall be due and payable immediately. If an Event of
Default specified in Section 5.01(5) or (6) occurs and is continuing, the
principal of and interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. If all existing Events of Default have
been cured or waived, except nonpayment of principal or interest that has
become due solely because of acceleration, any such acceleration and its
consequences shall be automatically rescinded unless such rescission would
conflict with any judgment or decree. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 5.03. Other Remedies. If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal of or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 5.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (1) a Default in the
payment of the principal of or interest on a Security or (2) a Default in
respect of a provision that under Section 8.02 cannot be amended without the
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consent of each Securityholder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 5.05. Control by Majority. The Holders of a
majority in Principal Amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 6.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 5.06. Limitation on Suits. A Securityholder may
not pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in Principal Amount of the
Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority of Principal Amount of the
Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 5.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 5.08. Collection Suit by Trustee. If an Event of
Default in payment of interest or principal specified in Section 5.01(1) or (2)
occurs and is continuing, the Trustee
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may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal and interest remaining unpaid
(together with interest on such unpaid interest as provided in Section 3.01, to
the extent lawful) and the amounts provided for in Section 6.07.
SECTION 5.09. Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 6.07.
SECTION 5.10. Priorities. If the Trustee collects any
money pursuant to this Article 5, it shall pay out the money in the following
order:
FIRST: to the Trustee for amounts due under Section 6.07;
SECOND: to Securityholders for amounts due and unpaid on
the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 5.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 5.07 or a suit
by Holders of more than 10% in Principal Amount of the Securities.
SECTION 5.12. Waiver of Stay or Extension Laws. The
Company (to the extent it may lawfully do so) shall not at any time insist
upon, or plead, or in any manner whatsoever
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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 shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 6
Trustee
SECTION 6.01. Duties of Trustee. (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
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(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur 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 to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) 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 and to the provisions of the
TIA.
SECTION 6.02. Rights of Trustee. (a) The Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel, subject to Section
6.02(e).
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. Individual Rights of Trustee. The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 6.10 and 6.11.
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SECTION 6.04. Trustee's Disclaimer. The Trustee shall not
be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and
is continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders.
SECTION 6.06. Reports by Trustee to Holders. Prior to
November 1 in each year, the Trustee shall mail to each Securityholder a brief
report dated as of the preceding September 1 that complies with TIA Section
313(a), if so required by such Section of the TIA. The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which
the Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 6.07. Compensation and Indemnity. The Company
shall pay to the Trustee from time to time reasonable compensation for its
services, including those arising in the Trustee's performance of its duties
under Sections 5.02, 5.03 and 5.08 hereof, and to the extent permitted by law,
Section 5.09 hereof. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it believes it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense to the extent incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
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To secure the Company's payment obligations in this
Section, the Trustee shall have a Lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture.
For purposes of this Section, the term "Trustee" shall
include any predecessor Trustee, provided that any Trustee hereunder shall not
be liable for the willful misconduct, negligence or bad faith of any other
Trustee hereunder.
SECTION 6.08. Replacement of Trustee. The Trustee may
resign at any time by so notifying the Company. The Holders of a majority in
Principal Amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
Lien provided for in Section 6.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in Principal Amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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If the Trustee fails to comply with Section 6.10, any
Securityholder (subject to compliance with TIA Section 310(b)(iii)) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 6.07 shall continue for
the benefit of the retiring Trustee.
SECTION 6.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 6.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report. The Trustee shall comply
with TIA Section 310(b).
SECTION 6.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE 7
Discharge of Indenture; Defeasance
SECTION 7.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.09) for
cancellation or (ii) all outstanding Securities have become due and payable and
the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity all outstanding Securities, including interest thereon (other than
Securities replaced pursuant to Section 2.09), and if in either case the
Company pays all other sums payable hereunder by the
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Company, then this Indenture shall, subject to Section 7.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel.
(b) Subject to Sections 7.01(c) and 7.02, the Company at
any time may terminate (i) all its obligations under this Indenture with
respect to the Securities of a series ("Legal Defeasance Option") or (ii) its
obligations under Sections 3.03 and 3.04 and the operation of Section 5.01(4)
("Covenant Defeasance Option") with respect to a series of Securities. The
Company may exercise its Legal Defeasance Option notwithstanding its prior
exercise of its Covenant Defeasance Option.
If the Company exercises its Legal Defeasance Option,
payment of the Securities of such series may not be accelerated because of an
Event of Default. If the Company exercises its Covenant Defeasance Option,
payment of the Securities of such series may not be accelerated because of an
Event of Default specified in Section 5.01(4).
Upon satisfaction of the conditions set forth herein and
upon request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the
Company's obligations with respect to such series in Sections 2.05, 2.06, 2.07,
2.08, 2.09, 6.07, 6.08, 7.03 and 7.04 shall survive until the Securities of
such series have been paid in full. Thereafter, the Company's obligations in
Sections 6.07 and 7.04 with respect to such series shall survive.
SECTION 7.02. Conditions to Defeasance. The Company may
exercise its Legal Defeasance Option or its Covenant Defeasance Option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities of the series to
be defeased to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from
a nationally recognized firm of independent accountants
expressing its opinion that the payments of principal and
interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts
(but, in the case of the Legal Defeasance Option only, not
more than such amounts) as will be sufficient to pay principal
and interest when due on all the Securities of such series to
maturity or redemption, as the case may be;
(3) in the case of the Legal Defeasance Option, 91 days
pass after the deposit is made and during the 91-day period
no Default specified in Section 5.01(5) or (6) occurs which is
continuing at the end of the period;
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(4) no Default has occurred and is continuing on the date
of such deposit and after giving effect thereto; and
(5) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
Securities of such series as contemplated by this Article 7
have been complied with.
Before or after a deposit, the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article 9.
SECTION 7.03. Application of Trust Money. The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article 7. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of and interest on the relevant
Securities.
SECTION 7.04. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time not required for the payment of
the Securities.
With respect to the money or securities held under Sections
7.01 and 7.02, in determining whether such money or securities are excess, the
Trustee may rely on the certificate provided to it under Section 7.02(2).
Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
ARTICLE 8
Amendments
SECTION 8.01. Without Consent of Holders. The Company and
the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 4;
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; provided, however,
that the uncertificated Securities are issued in registered
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form for purposes of Section 163(f) of the Internal Revenue
Code of 1986, as amended, or in a manner such that the
uncertificated Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended;
(4) to add guarantees with respect to the Securities;
(5) to add to the covenants of the Company for the benefit
of the Holders or to surrender any right or power herein
conferred upon the Company;
(6) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA; or
(7) to make any change that does not adversely affect the
rights of any Securityholder in any material respect.
After an amendment under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 8.02. With Consent of Holders. The Company and
the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities. However, without the consent
of each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the fixed maturity of
any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may or shall
be redeemed;
(5) make any Security payable in money other than that
stated in the Security; or
(6) make any change in Section 5.04 or this Section;
and, provided further, that in case more than one series of Securities (or
Securities of a single series which have different Terms) shall be outstanding
under this Indenture, and any such proposed amendment shall affect the rights
of Holders of the Securities of one or more series (or Securities of a single
series which have different Terms) and shall not affect the rights of Holders
of the Securities of one or more of the other series (or Securities of a
single series which have
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different Terms), then only Holders of Securities to be affected shall have
authority or be required to consent to or approve such amendment. Any waiver
of a default provided for in Section 5.04 shall be deemed to affect the
Securities of all series, and, subject to the foregoing, any modification of
the provisions of any sinking fund or covenant established in respect of
Securities of a particular series (or Securities of a single series having the
same Terms) shall be deemed to affect only such Securities.
It shall not be necessary for the consent of the Holders
under this Section 8.02 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment under this Section becomes effective,
the Company shall mail to Holders of the affected Securities a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders (or all Holders of the affected Securities), or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 8.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 8.04. Revocation and Effect of Consents and
Waivers. A consent to an amendment or any other action hereunder or a waiver
by a Holder of a Security shall bind the Holder and every subsequent Holder of
that Security or portion of the Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective,
it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Securityholders entitled to take
any action under this Indenture by vote or consent. Such record date shall be
the later of 30 days prior to the first solicitation of such consent or vote or
the date of the most recent list of Holders of the affected Securities
furnished to the Trustee pursuant to Section 2.07 prior to such solicitation.
If a record date is fixed, those persons who were Securityholders at such
record date (or their duly designated proxies), and only those persons, shall
be entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be
Securityholders after such record date.
SECTION 8.05. Notation on or Exchange of Securities. If
an amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new
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Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 8.06. Trustee To Sign Amendments. The Trustee
shall sign any amendment authorized pursuant to this Article 8 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 6.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
ARTICLE 9
Redemption
SECTION 9.01. Applicability. Securities of any series
which are redeemable before their final maturity shall be redeemable in
accordance with their Terms and (except as otherwise specified as contemplated
by Section 2.01 for Securities of any series) in accordance with this Article.
SECTION 9.02. Notice to Trustee. The Company may, with
respect to any series of Securities (or Securities of a series having the same
Terms), reserve the right to redeem and pay such Securities or any part
thereof, or may covenant to redeem and pay the series of Securities (or
Securities of a series having the same Terms) or any part thereof, before
maturity at such time and on such terms as provided for in such Securities. If
a series of Securities (or Securities of a series having the same Terms) is
redeemable and the Company wants or is obligated to redeem all or part of the
series of Securities (or Securities of a series having the same Terms) pursuant
to the Terms of such Securities, the Company shall notify the Trustee of the
redemption date and the Principal Amount of the series of Securities (or
Securities of a series having the same Terms) to be redeemed. The Company
shall give such notice at least 60 days before the redemption date (or such
shorter notice as may be acceptable to the Trustee in its sole discretion).
SECTION 9.03. Selection of Securities To Be Redeemed. If
less than all the Securities of a series (or Securities of a series having the
same Terms) are to be redeemed, the Trustee, not more than 60 days prior to the
redemption date, shall select the Securities of the series (or Securities of a
series having the same Terms) to be redeemed pro rata or by lot or by such
other method as the Trustee shall deem fair and appropriate. The Trustee shall
make the selection from Securities that are outstanding and that have not
previously been called for redemption. Securities of the series (or Securities
of a series having the same Terms) and portions of them selected by the Trustee
shall be in amounts of $1,000 or integral multiples of $1,000 or with respect
to Securities of any Series issuable in other denominations pursuant to Section
2.01(8), in amounts equal to the minimum principal denomination for each such
series
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and in integral multiples thereof. Provisions of this Indenture that apply to
Securities of that series (or Securities of a series having the same Terms)
called for redemption also apply to portions of Securities of that series (or
Securities of a series having the same Terms) called for redemption. The
Trustee shall promptly notify the Company in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the Principal Amount thereof to be redeemed.
SECTION 9.04. Notice of Redemption. (a) At least 30 days
but not more than 60 days before a redemption date, unless a shorter period is
specified in the Terms of the Securities to be redeemed, the Company shall
cause to be mailed a notice of redemption by first-class mail to each Holder
of Securities that are to be redeemed.
(b) All notices of redemption shall identify the
Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price and interest, if any, payable upon
such redemption;
(3) if less than all the outstanding Securities of a series
(or Securities of a series having the same Terms) are to be
redeemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular
Securities to be redeemed;
(4) the name and address of the Paying Agent;
(5) that the Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price; and
(6) that interest on Securities called for redemption
ceases to accrue on and after the redemption date.
(c) If at the time of any notice of redemption the Company
shall not have deposited or caused to be deposited with the Trustee moneys
sufficient to redeem all the Debentures called for redemption, such notice
shall state that it is subject to the deposit of the redemption moneys with the
Trustee not later than the opening of business on the redemption date and shall
be of no effect unless such moneys are so deposited. If such moneys are not
deposited by such date and time, the Trustee shall promptly notify the holders
of all Debentures called for redemption of such fact.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense.
SECTION 9.05. Effect of Notice of Redemption. Once notice
of redemption is mailed, Securities called for redemption become due and
payable on the redemption date at the redemption price. Any failure to mail
notice of redemption or any defect therein shall not affect the redemption of
any other Securities called for redemption. Upon surrender to the Paying Agent
of such Securities, such Securities shall be paid at the redemption price plus
accrued interest to the redemption date, but installments of interest due on or
prior to the redemption date will be payable to the Holders of such Securities
of record at the close of business on the relevant record dates, unless
otherwise specified in the Terms of such Securities.
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SECTION 9.06. Deposit of Redemption Price. On or before
the redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of and interest accrued to the
redemption date on all Securities to be redeemed on that date.
SECTION 9.07. Securities Redeemed in Part. Upon surrender
of a Security that is redeemed in part, the Company shall issue and the Trustee
shall authenticate for the Holder of that Security a new Security or Securities
of the same series and terms in authorized denominations equal in aggregate
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 10
Sinking Funds
SECTION 10.01. Applicability. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Securities, except as otherwise specified as contemplated by Section 2.01 for
Securities of any series.
The minimum amount of any sinking fund payment provided for
by the Terms of any Securities is herein referred to as a "Mandatory Sinking
Fund Payment", and any payment in excess of such minimum amount provided for by
the terms of such Securities is herein referred to as an "Optional Sinking Fund
Payment". If provided for by the Terms of Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 10.02.
Each sinking fund payment shall be applied to the redemption of Securities of
any series (or Securities of a series having the same Terms) as provided for by
the Terms of such Securities.
SECTION 10.02. Satisfaction of Sinking Fund Payments with
Securities. The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities to be made pursuant to the Terms of
such Securities as provided for by such Terms, (1) deliver outstanding
Securities of such series having the same Terms (other than any of such
Securities previously called for redemption) and (2) apply as credit Securities
of such series having the same Terms 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, provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
in lieu of cash payments pursuant to this Section 10.02, the Principal Amount
of Securities to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities for
redemption, except upon receipt of a Company Order that such action be taken,
and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment with
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respect to such series of Securities (or Securities of such series having the
same Terms), provided, however, that the Trustee or such Paying Agent shall at
the request of the Company from time to time pay over and deliver to the
Company any cash payment so being held by the Trustee or such Paying Agent upon
delivery by the Company to the Trustee of Securities of that series having the
same Terms purchased by the Company having an unpaid Principal Amount equal to
the cash payment required to be released to the Company.
SECTION 10.03. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of
Securities (or Securities of such series having the same Terms), the Company
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing Mandatory Sinking Fund Payment for that series (or Securities
of such series having the same Terms) pursuant to the Terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
of Securities of that series (or Securities of such series having the same
Terms) pursuant to Section 10.02, and the optional amount, if any, to be added
in cash to the next ensuing Mandatory Sinking Fund Payment, and the Company
shall thereupon be obligated to pay the amount therein specified. Not less
than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 9.03 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 9.04. Such notice having been duly given, the redemption
of such Securities shall be made upon the terms and in the manner stated in
Sections 9.05, 9.06 and 9.07.
<PAGE> 46
PAGE 45
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by operation of TIA Section 318(c), the imposed duties shall control.
SECTION 11.02. Notices. Any notice or communication shall
be in writing and delivered in person or mailed by first-class mail addressed
as follows:
if to the Company: The Columbia Gas System, Inc.
20 Montchanin Road
Wilmington, DE 19807
Attention: Corporate Secretary
if to the Trustee: Marine Midland Bank
140 Broadway
New York, NY 10005
Attention: Corporate Trust
Administrator
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 11.03. Communication by Holders with Other
Holders. Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
<PAGE> 47
PAGE 46
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of
such counsel, all such conditions precedent have been complied
with.
SECTION 11.05. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such person, such covenant or condition has been complied
with.
SECTION 11.06. When Securities Disregarded. In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders or for evidencing the due execution of consents or waivers by
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of New York. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not
<PAGE> 48
PAGE 47
a Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of Delaware but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 11.10. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities of this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be
part of the consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company
in this Indenture and the Securities shall bind its successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is
enough to prove this Indenture.
SECTION 11.13 Table of Contents; Headings. The table of
contents and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not intended to be considered a
part hereof and shall not modify or restrict any of the terms or provisions
hereof.
<PAGE> 49
PAGE 48
IN WITNESS WHEREOF, the parties have caused this Indenture
to be duly executed as of the date first written above.
THE COLUMBIA GAS SYSTEM, INC.,
Attest:
by
- ------------------------- ---------------------------
Title: Title:
MARINE MIDLAND BANK, as Trustee
Attest:
by
- ------------------------- ---------------------------
Title: Title:
<PAGE> 50
PAGE 49
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this ____ day of ______, 199_, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he resides at Wilmington, Delaware 19807; that he is Executive Vice
President of THE COLUMBIA GAS SYSTEM, INC., 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 bearing the corporate
name of said corporation 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.
----------------------------
Notary Public
STATE OF ___________ )
) ss.:
COUNTY OF ___________ )
On the ____ day of ________, 199_, before me personally came
______________________, to me known, who, being by me duly sworn, did depose
and say that he resides at __________________________, and that he is an
____________________________________________ 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 bearing the corporate name of said corporation 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
<PAGE> 1
EXHIBIT T-3D(b)
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-26361; 70-8627)
The Columbia Gas System, Inc.
Memorandum Opinion and Order Approving Plan of Reorganization of Registered
Holding Company Under Section 11(f) and Registered Holding Company's
Participation in Subsidiary's Plan of Reorganization and Related Transactions;
Issuing Report Under Section 11(g); and Reserving Jurisdiction
August 25, 1995
THIS ORDER AND REPORT IS REQUIRED BY THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935. SECURITY HOLDERS SHOULD READ THE DISCLOSURE STATEMENTS PROVIDED TO THEM
BY THE DEBTORS-IN-POSSESSION BEFORE DETERMINING WHETHER OR NOT TO ACCEPT THE
PLANS.
The Columbia Gas System, Inc. ("Columbia"), a registered holding company,
Wilmington, Delaware, has filed an application-declaration, as amended, with
the Commission under sections 6, 7, 9, 10, 11(f), 11(g), 12(b), 12(c) and 12(e)
of the Public Utility Holding Company Act of 1935, as amended ("Act"), and
rules 42, 43, 45, 49, 54, 62, 64 and 65 thereunder, seeking approval of its
Plan of Reorganization, as amended ("Columbia Plan"), first filed with the U.S.
Bankruptcy Court for the District of Delaware ("Bankruptcy Court") on April 17,
1995 and its participation in a plan of reorganization ("TCO Plan") filed with
the Bankruptcy Court on the same date by its wholly owned nonutility
subsidiary, Columbia Gas Transmission Corporation ("Columbia Transmission").(1)
The Commission issued a notice of the filing on June 23, 1995 (Holding Co. Act
Release No. 26318). No request for a hearing was received.
- --------------------
(1) The plans and the respective disclosure statements were
filed pursuant to the provisions of Chapter 11 of the United
States Bankruptcy Code ( Bankruptcy Code"), 11 U.S.C. Section 101 et
seq.
Rule 49(c) exempts the TCO Plan from the requirement of
Commission approval.
<PAGE> 2
I. BACKGROUND
Columbia is engaged, through subsidiary companies, in the exploration,
production,purchase, marketing, storage, transmission and distribution of
natural gas, and in other energy operations, such as electric power generation
and propane distribution.(2) Columbia Transmission owns and operates an
approximately 19,000 mile natural gas transmission pipeline network and related
extensive underground gas storage fields that serve parts of thirteen states in
the Northeastern, Mid-Atlantic, Midwestern and Southeastern regions of the
United States and the District of Columbia.(3) Columbia Transmission is
currently engaged almost entirely in the business of transporting and storing
gas for various affiliated and nonaffiliated gas distribution companies, gas
marketers, producers and end users of gas ("Customers").(4)
Columbia, as a holding company, has provided debt and equity financing for
all its operating subsidiaries, including Columbia Transmission, and has served
as the principal vehicle for raising funds in the capital markets for the
Columbia system companies. Columbia has generally reinvested in its operating
subsidiaries the proceeds of its equity and debt issues, as well as cash flows
from its subsidiaries.
- --------------------
(2) Columbia has five wholly owned public-utility subsidiary
companies: Columbia Gas of Ohio, Inc., Columbia Gas of Kentucky,
Inc., Columbia Gas of Maryland, Inc., Columbia Gas of
Pennsylvania, Inc. and Commonwealth Gas Service, Inc.
(3) Columbia Transmission is one of two interstate pipeline
companies owned by Columbia.
(4) The rates, charges, services and facilities of Columbia
Transmission are subject to relation by the Federal Energy
Regulatory Commission ("FERC"), primarily pursuant to the Natural
Gas Act, 15 U.S.C. Section Section I7 et seq.
<PAGE> 3
Prior to June 1985, Columbia made loans to Columbia Transmission on an
unsecured basis and, at the Petition Date, held unsecured obligations of
Columbia Transmission aggregating $351 million, including prepetition accrued
interest. Loans made to Columbia Transmission after June 1985 were secured by
first mortgage liens on substantially all of Columbia Transmission's assets.
As of July 31, 1991 ("Petition Date"), Columbia held secured obligations of
Columbia Transmission aggregating approximately $1.34 billion in principal.
Prepetition and postpetition interest accrued through December 31, 1995 (the
assumed "Effective Date" of the Columbia and TCO Plans and the date to which
all financial projections have been made in this filing)(5) on such secured
obligations are projected to be approximately $644 million.
Both Columbia and Columbia Transmission have been debtors-in-possession
pursuant to Sections 1107 and 1108 of the Bankruptcy Code since the Petition
Date.(6) The Chapter 11 filings were precipitated by a combination of events
that adversely affected Columbia Transmission's physical operations and
financial viability and, in turn, caused a liquidity shortfall for Columbia and
the Columbia system.(7)
- --------------------
(5) The Plans allow for the Effective Date to occur as late as
June 28, 1996.
(6) The Commission filed a Notice of Appearance under Section
1109 of the Bankruptcy Code in each proceeding. Except for the
appointment of a fee examiner to review the reasonableness of
fees and expenses incurred by certain professionals involved in
the case, no trustee or examiner has been appointed by the
Bankruptcy Court.
(7) As chief among these events, Columbia identifies federal
legislative and regulatory actions affecting Columbia
Transmission's ability to sell the gas it had contracted to buy
and to recover its costs from its Customers, and Columbia
Transmission's continuing contractual obligations to purchase gas
at prices above those at which it was able to market gas. These
problems were exacerbated by record-setting warm weather that led
to an unexpected and persistent oversupply of gas.
<PAGE> 4
As a result of Columbia Transmission's bankruptcy filing and its rejection
of more than 4,800 above-market gas purchase contracts with producers
("Producers"), Columbia Transmission recorded liabilities of approximately $1
billion for estimated contract rejection costs. In addition, approximately
$200 million of take-or-pay and other miscellaneous Producer claims were
recorded. The Producer counterparties to those contracts filed claims for
rejection damages and other prepetition contractual amounts in excess of $13
billion.
II. COLUMBIA'S SUPPORT OF THE TCO PLAN
The TCO Plan incorporates terms of an agreement reached by Columbia
Transmission with its major Producer creditors ("Producer Agreement") and
approved by the Bankruptcy Court on June 16, 1995.(8) The Producer Agreement
also provides for Columbia Transmission's agreement, backed by Columbia, as to
the minimum distribution to be paid to Producers and other creditors under the
TCO Plan. Distributions to these producers ("Initial Accepting Producers")
represent more than 80 of the approximately $1.2 billion that would be
distributed to Producer creditors under the TCO Plan to resolve all Producer
claims. The TCO Plan offers to all the remaining Producers proposals for
settlement of the allowable amounts of their claims. Remaining Producers that
ultimately reject the settlement offers ("Dissenting Producers") will be free
to litigate the amount of their claims before the Bankruptcy Court and will
receive the same percentage payout ultimately allowed by the Bankruptcy Court
on their claims as that received by the Initial Accepting Producers and
subsequent settling Producers (together, "Accepting
- --------------------
(8) The Producer Agreement reflects settlements of the
allowable amount of the claims filed against Columbia
Transmission by 17 major Southwest gas producers and a large
group of Appalachian producers.
<PAGE> 5
Producers"). As of June 30, 1995, Accepting Producers represented
approximately 92% of the aggregate amount of allowed claims proposed in the TCO
Plan.(9)
The TCO Plan also incorporates the terms of a settlement among Columbia
Transmission and virtually all of its Customers ("Customer Settlement") on
numerous FERC Order No. 636 transition cost, rate and other bankruptcy matters.
Remaining Customers can either accept a settlement on terms similar to those of
the Customer Settlement, or dissent and litigate the amount and priority of
their claims.(10)
To facilitate the TCO Plan, and in exchange for settlement of the claims
asserted in a complaint filed with the Bankruptcy Court on March 18, 1992 by
the Official Committee of Unsecured Creditors of Columbia Transmission
("Intercompany Complaint")(11) and
- --------------------
(9) It is a waivable condition to the TCO Plan that the
settlement values of Accepting Producers as of the Effective Date
equal 90% of the total settlement values proposed therein.
(10) Columbia states that Columbia Transmission's Customer
Settlement has the support of all of its major customers. While
the settlement permits non-supporting parties to litigate their
claims, Columbia Transmission's financial exposure from such
litigation is considered de minimis.
(11) The complaint, filed against Columbia and Columbia Natural
Resources, Inc. ("CNR"), its oil and gas exploration and
development subsidiary, alleged that the $1.7 billion of Columbia
Transmission's secured and unsecured debt securities held by
Columbia should be recharacterized as capital contributions
(rather than loans) and equitably subordinated to the claims of
Columbia Transmission's other creditors. The complaint also
challenged interest and dividend payments of approximately $500
million by Columbia Transmission to Columbia during the period
from 1988 to the Petition Date. Finally, the complaint alleged
that a 1990 transfer of gas properties from Columbia Transmission
to CNR was a fraudulent transfer.
At the Bankruptcy Court's request, the trial proceedings for
the Intercompany Complaint were transferred to and tried by the
U.S. District Court for the District of Delaware. The District
<PAGE> 6
Columbia's retention of the ownership of Columbia Transmission, the Columbia
Board of Directors authorized a settlement ("Columbia Omnibus Settlement"),
whereby Columbia will:
(1) make a capital infusion of approximately $1 billion into
Columbia Transmission. The capital infusion will have two components.
First, Columbia will agree to a restructuring of Columbia Transmission's
secured debt. As part of a recapitalization of Columbia Transmission,
Columbia will accept an aggregate amount of up to $1.5 billion short-term
and long-term first mortgage bonds ("TCO Mortgage Bonds"), described
below, in settlement of the approximately $2 billion claim held by
Columbia under existing Columbia Transmission first mortgage bonds.(12)
The restructuring will result in an approximately $500 million capital
contribution to Columbia Transmission of the balance of the claim.
- --------------------
Court was expected to render a decision in June 1995, but has
agreed at the parties' request to defer issuing its ruling
pending the parties' pursuit of consensual reorganization plans.
In connection with the approval of the TCO Plan, the District
Court's approval of the Columbia Omnibus Settlement will be sought.
(12) The short-term TCO Mortgage Bonds must be repaid no later
than April 30 of the year following their issuance and will bear
interest on a monthly basis equivalent to the composite weighted
average effective cost incurred by Columbia on its short-term
borrowings. The bonds may be prepaid or redeemed at any time
without prepayment penalty.
The long-term TCO Mortgage Bonds will be dated the date of
their issue and be repaid in equal annual installments over a
period not to exceed 30 years or at maturity. The bonds may be
issued in multiple series with terms similar to the New Indenture
Securities (as described below) issued by Columbia under the
Columbia Plan. Interest on the bonds will accrue from the date of
issuance and will be paid semi-annually on the unpaid principal
thereof. The interest rate will be the actual cost of money to
Columbia with respect to the issuance by Columbia of its long-
term debt securities. A default rate equal to 2% per annum in
excess of the stated rate on the unpaid principal or interest
amounts of the bonds would be assessed if any interest or
principal becomes past due. If Columbia Transmission is not a
subsidiary of Columbia at the time of prepayment, the bonds may
be prepaid with a prepayment penalty equal to the interest rate
on the bonds, declining ratably on each anniversary date over the
life of the issue.
<PAGE> 7
The TCO Mortgage Bonds will be issued under the Indenture and Deed
of Trust between Columbia Transmission and Wilmington Trust Company, dated
August 30, 1985, as amended ("Wilmington Trust Indenture"), previously
authorized by order of the Commission.(13) The TCO Mortgage Bonds will be
secured by a perfected first security interest in all of Columbia
Transmission's property with certain exceptions pursuant to the Wilmington
Trust Indenture.
Second, Columbia will agree to provide cash to Columbia
Transmission necessary to ensure that the total amount distributable under
the TCO Plan equals approximately $3.9 billion as of December 31, 1995. It
is anticipated that Columbia would provide an additional capital
contribution to Columbia Transmission of approximately $500 million.(14)
(2) guarantee the settlement reached by Columbia Transmission with
its Customers and payments to dissenting Customers with respect to the
Customer Settlement ("TCO Guarantee"), and guarantee the payment of the
distribution percentage of ultimately allowed claims of other unsecured
creditors, including Dissenting Producers.
In the event that payments required by the TCO Plan to Dissenting
Producers (and dissenting Customers) increase the total required distributions
over the projected $3.9 billion by
- -------------------
(13) Columbia Gas Transmission Corp., Holding Co. Act Release
No. 23813 (Aug. 30, 1985).
(14) Approximately $300 million of this amount could be met by
Columbia's proportionate recovery on the Columbia Transmission
unsecured debt held by it, together with a dividend out of
retained earnings by CNR to Columbia following CNR's recovery on
its claims.
<PAGE> 8
an amount that requires external funding, Columbia will have the option to
deliver its common stock in lieu of cash payments, as well as the option to
sell its common stock in the marketplace and use the proceeds for such excess
distributions. Under these circumstances, whichever technique is employed,
Columbia's investment in Columbia Transmission will be correspondingly
increased.
Initial Accepting Producers have agreed that 5% of the distributions due
to them will be held back, and, to the extent that claim values in excess of
the settlement values contained in the TCO Plan are agreed to or allowed, the
amount held back will be applied, with dollar-for-dollar matching by Columbia
Transmission and Columbia under the TCO Guarantee, to pay the ultimate
distributions to Dissenting Producers. Thus, there is a sharing by Accepting
Producers of a portion of the risk that the aggregate distribution to Producers
pursuant to the TCO Plan may exceed $1.2 billion, the settlement amount
contained in the Plan. If the holdback were to be exhausted, Columbia
Transmission would be required to pay the entire amount of any excess
distributions. Columbia states that although there is insufficient information
at present for Columbia Transmission to evaluate fully all claims, and the
outcome of litigation is subject to uncertainty, Columbia Transmission
currently estimates that its ultimate payment to Producers, after any
litigation and after giving effect to the Producer holdback, may exceed the
$1.2 billion distribution projected in the TCO Plan (which is based on 100%
Producer acceptance) but should not exceed $1.3 billion.
To the extent that additional funds are necessary to fund allowed claims
of Dissenting Producers, Columbia or Columbia Transmission may distribute cash,
or Columbia may issue its
<PAGE> 9
common stock to the Dissenting Producers on behalf of Columbia Transmission in
exchange for consideration from Columbia Transmission equal to the then current
market value of the Common Stock. Columbia may also issue its common stock or
other securities on the open market and distribute the proceeds to Columbia
Transmission as a capital contribution. To the extent that the TCO Plan
reserves the right to Columbia to issue securities other than its common stock,
Columbia requests the Commission to reserve jurisdiction over the terms of such
securities issues.
The aggregate capital contribution to Columbia Transmission by Columbia of
approximately $1 billion will result in an approximately 70%-30% debt-equity
structure for Columbia Transmission. Columbia Transmission's debt-to-equity
ratio is projected to become approximately 60%/40% by 1997 upon the repayment
of borrowings used to finance certain contingent assets created as a result of
emergence from bankruptcy.
Columbia states that in the aggregate, the consideration that it will pay
for the settlement of the claims asserted in the Intercompany Complaint and the
retention of ownership of Columbia Transmission cannot be expressed as a
precise dollar amount, but reflects substantial additional consideration from
Columbia to the Columbia Transmission estate to facilitate the reorganization
of Columbia and Columbia Transmission. Columbia further states that the
Columbia Omnibus Settlement will provide substantial benefits to Columbia, in
addition to the retention of ownership of Columbia Transmission, by resolving
numerous disputes with Customers and Producers affecting the economic value of
the Columbia Transmission estate on terms Columbia believes to be fair and
reasonable. Finally, settlement will permit both Columbia and Columbia
<PAGE> 10
Transmission to emerge from bankruptcy as promptly as possible, to pay their
creditors, and to pursue ongoing business objectives free of the burdens and
constraints of Chapter 11.
III. THE COLUMBIA PLAN
A. Introduction
Under the Columbia Plan, Columbia proposes to issue up to an aggregate
of $3.65 billion in new securities, consisting of up to $3.25 billion in debt
and up to $400 million in equity.(15) The Columbia Plan is intended to provide
for payment of substantially all liquidated allowed claims of Columbia's
creditors on the Effective Date. Holders of claims for borrowed money
generally will receive a combination of (i) cash, to the extent available (as
determined by Columbia), (ii) new debentures of Columbia, to be issued under a
new form of indenture, and (iii) equity securities of Columbia, consisting of
preferred stock and dividend enhanced convertible stock. Holders of Columbia
common stock will retain their equity interests under the Columbia Plan. The
debt and equity securities proposed to be issued are discussed hereinafter.
Under certain circumstances provided in the Columbia Plan, Columbia may redeem
the equity securities for cash.(16)
- --------------------
(15) Columbia may issue additional common stock to satisfy
certain of its obligations under the Columbia Omnibus Settlement,
as discussed in Part II above, and to fund the settlement of
securities litigation, described below.
(16) The amount of cash consideration to be distributed to
holders of borrowed money claims pursuant to the Columbia Plan
will be determined by Columbia shortly before the Effective Date,
and will be dependent upon the cash available at that time. The
financial projections contained in the Columbia disclosure
statement project the distribution of $900 million of available
cash as of the Effective Date (the majority of which is assumed
to be borrowed under the Term Facility described below) in
respect of such claims. The balance of the distribution in
respect of such claims will be in the form of New Indenture
Securities, DECS and Preferred Stock, as defined below. If the
Term Facility is available for borrowing at a cost less than the
cost of issuing new debentures, Columbia has agreed to borrow
$350 million for
<PAGE> 11
In addition to the proposed issuances of debt and equity securities by
Columbia, the Columbia Plan also contemplates certain amendments to Columbia's
Certificate of Incorporation and the assumption by Columbia and Columbia
Transmission of the Tax Allocation Agreement that provides for the allocation
of tax benefits and liabilities among Columbia system companies.
B. Debt Securities
As noted previously, Columbia proposes to issue up to $3.25 billion in
debt securities under the Columbia Plan.
1. Debentures
Columbia seeks to issue up to $2.1 billion in debentures
("New Indenture Securities") under a new indenture ("New
Indenture").(17) The New Indenture Securities will be general,
unsecured senior obligations of Columbia, issued in seven series
with maturities of approximately five, seven, ten, twelve, fifteen,
twenty and thirty years, respectively. Each New Indenture Security
will bear interest, payable semi-annually, from the Effective Date
(or from the most recent interest payment date to which interest
has been paid). The annual interest rate for each series of New
Indenture Securities will be based on market rates for comparable
securities at the time of issue. It is expected that the interest
rate on any series will not exceed 10
- --------------------
distribution to creditors in lieu of New
Indenture Securities, DECS and Preferred Stock.
(17) The New Indenture is similar to that authorized by the
Commission in Consolidated Natural Gas Holding Co. Act Release
No. 26245 (Mar. 6, 1995). Columbia states that an application on
Form T-3 for qualification of the New Indenture under the Trust
Indenture Act of 1939, as amended, will be filed and become
effective by the Effective Date.
<PAGE> 12
percent per annum. The principal amount of each series of New
Indenture Securities will be payable on their respective maturity
dates. Certain series of New Indenture Securities may be redeemable
at a premium at the option of Columbia.
2. Bank Borrowings
For the purpose of Financing shorter-term requirements under the
TCO Plan and Columbia Plan, Columbia expects to arrange two types of bank
credit facilities ("Bank Facilities") on or before the Effective Date, to
permit aggregate borrowings of up to $1.15 billion. If cash available
through the Bank Facilities or from operations is reduced from currently
projected levels, the principal amount of New Indenture Securities to be
issued pursuant to the Columbia Plan would be increased proportionately.
Under no circumstances would the aggregate of New Indenture Securities and
Bank Facilities under the Columbia Plan exceed $3.25 billion.
a. Term Facility
The first type would be a senior, unsecured term credit
facility in an aggregate principal amount of up to $450 million
("Term Facility"). Amounts available to be borrowed under the Term
Facility would be applied to payments in respect of claims of
Columbia creditors, to fund obligations of Columbia under the
Columbia Omnibus Settlement and for general corporate purposes.
Amounts borrowed under the Term Facility would rank pari passu with
all other senior, unsecured obligations of Columbia, including the
New Indenture Securities.
<PAGE> 13
It is anticipated that the initial term of the Term
Facility will be two years. Interest rates on borrowings
under the facility, depending on the nature of the borrowing,
will be the prime rate or the applicable LIBOR rate plus no
more than .75% or the applicable certificate of deposit rate
plus no more than .875%.
b. Revolving Facility
Columbia also expects to arrange one or more senior,
unsecured revolving Bank Facilities in an aggregate principal
amount of up to $700 million ("Revolving Facility") to provide (i)
working capital for Columbia and its subsidiaries and (ii) up to
$100 million face amount of letters of credit to be issued for the
account of Columbia and its subsidiaries in the ordinary course of
business. Amounts borrowed under the Revolving Facility and
reimbursement for drawings under letters of credit issued
thereunder would rank pari passu with all other senior, unsecured
obligations of Columbia, including the New Indenture Securities. At
the option of Columbia, the Term Facility and Revolving Facility
may be combined in a single facility or may be multiple facilities.
The initial term of the Revolving Facility is expected not to
exceed five years. Up to $100 million of the facility is expected
to be used solely for letters of credit to be issued for the
account of Columbia (a portion of which may be denominated in
Canadian dollars) in the ordinary course of' its business. Interest
rates on borrowings under the Revolving Facility, depending on the
nature of the borrowing, will be the prime rate or specified
margins over the applicable LIBOR rate or applicable certificate of
deposit rate on the same or similar margin and maturity terms as
the
<PAGE> 14
Term Facility. The specific terms of the Revolving Facility,
including, without limitation, interest rates, repayment terms,
conditions to borrowings, representations and warranties, covenants
and events of default will be negotiated by Columbia and
prospective providers of the Revolving Facility.
B. Equity Securities
The Columbia Plan contemplates the issuance by Columbia of up to
$400 million of equity through the issuance of up to $200 million each of
preferred stock ("Preferred Stock") and of Dividend Enhanced Convertible
Stock ("DECS"). Columbia proposes the possible issuance of its common
stock (in addition to any LESOP Shares, as defined below) on behalf of
Columbia Transmission in connection with the TCO Guarantee and, as
described below, to fund the Securities Litigation Settlement.
1. Preferred Stock
The Preferred Stock will have a liquidation value of $25 per
share and, as to dividend and liquidation rights, will rank equally
with the DECS but prior to the common stock. Holders of Preferred
Stock will be entitled to receive, when, as and if declared by
Columbia's board of directors, cumulative preferential cash
dividends accruing from the Effective Date at a rate per share that
is to be determined at the time of issuance in accordance with a
pricing formula. It is currently expected that the dividend rate
for Preferred Stock will not exceed 11 percent per annum.
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Columbia may, at its option, redeem the Preferred Stock, in
whole or in part, on or prior to the 120th day after the Effective
Date, if, after giving effect to the redemption, either (i) the
aggregate liquidation value of the Preferred Stock outstanding
would be $50 million or more, unless after giving effect thereto,
no Preferred Stock would be outstanding, or (ii) no DECS would be
outstanding. If the Preferred Stock is not so redeemed, the annual
dividend rate per share will be reset and increased by 100 basis
points, effective as of the 120th day after the Effective Date.
Columbia may also redeem the Preferred Stock in whole or in part on
or after the fifth anniversary of the Effective Date. Upon any such
redemption by Columbia, a holder of Preferred Stock will receive,
in exchange for each share so redeemed, cash in an amount equal to
the sum of the liquidation value thereof and all accrued and unpaid
dividends thereon to the date fixed for redemption.
The holders of Preferred Stock shall not have voting rights
except as required by law and as follows: (i) if dividends on the
Preferred Stock are in arrears and unpaid for six quarterly
dividend periods, the holders of the Preferred Stock will be
entitled to vote, on the basis of one vote for each share, for the
election of two directors of Columbia, such directors to be in
addition to the number of directors constituting the board of
directors immediately prior to the accrual of such right; and (ii)
the holders of Preferred Stock will have voting rights with respect
to certain modifications of Columbia's certificate of
incorporation.
<PAGE> 16
2. DECS
The proposed DECS will be shares of convertible preferred stock of
Columbia and will have dividend, liquidation and voting rights similar to
those of the Preferred Stock described above. The annual dividend rate
will be that required to make the market value of the DECS comparable to
the market value of the common stock and the liquidation value will be
based on the market value of the common stock, each as of a specified
date. It is currently expected that the dividend rate on the DECS will not
exceed 11 percent per annum.
Columbia will have the right to redeem the DECS, in whole or in
part, on or prior to the 120th day after the Effective Date if, after
giving effect to the redemption, either no DECS are outstanding or the
aggregate liquidation value of outstanding DECS is at least $50 million.
Upon such redemption, each holder will receive for each redeemed share
cash in an amount equal to the liquidation value plus accrued and unpaid
dividends. If Columbia fails to redeem the DECS in whole, the annual
dividend rate per unredeemed share will increase by 100 basis points
effective as of the 120th day after the Effective Date.
Columbia will also have the right to redeem the DECS, in whole or
in part, on or after either the fourth anniversary of the Effective Date
or one month prior to the fifth anniversary of the Effective Date (as
determined by Columbia), and prior to the fifth anniversary of the
Effective Date. Upon such redemption, each holder will receive for each
share a number of shares of Columbia common stock equal to the lesser of
(a) the redemption price of the DECS on the date of redemption (which
reflects liquidation price plus accrued dividends
<PAGE> 17
and, in some cases, a premium) divided by the current market price of
common stock as of the trading day prior to the public announcement of the
call for redemption, and (b) the number of shares that would be received
upon conversion into common stock (described below), as adjusted to
reflect any accrued dividends and premium payable upon redemption.
After the 120th day following the Effective Date and before the
fifth anniversary of the Effective Date ("Mandatory Conversion Date"), a
holder of DECS has the option to convert his DECS, in whole or in part,
into shares of Columbia common stock, at a conversion rate based on the
liquidation value of the DECS and the market value of the common stock. If
the DECS have not already been converted by the holder or redeemed by
Columbia as described above, all outstanding DECS will convert
automatically on the Mandatory Conversion Date into shares of common stock
at the applicable conversion rate.
3. Public Offering of Additional Columbia Equity
In the event that Columbia elects to redeem the Preferred Stock and
DECS on or prior to the 120th day after the Effective Date and elects to
fund such redemption through the issuance and sale of up to 16 million
shares of its common stock or preferred stock, Columbia requests
authorization for the issuance of such securities, subject to a
reservation of jurisdiction over the terms of any such issuance and sale
of common stock and preferred stock.
<PAGE> 18
C. Other Proposed Securities Transactions
1. Disposition of LESOP Shares
Columbia expects to repurchase from the leveraged employee
stock ownership ("LESOP") portion of the Employees' Thrift Plan
("Thrift Plan") of Columbia Gas System all shares ("LESOP Shares")
held in the common stock fund that have not been allocated to
employees,(18) to hold the LESOP Shares as treasury shares and to
use the LESOP Shares for one or more of the following purposes as
deemed appropriate by Columbia: (i) to sell the LESOP Shares on the
open market for cash, (ii) to reissue all or part of the LESOP
Shares to fund additional requirements under the TCO Guarantee,
(iii) to reissue all or part of the LESOP Shares to fund the
Securities Litigation Settlement, as described below, and (iv) to
fund an employee benefit plan.
2. Potential Offering of Columbia Common Stock
in Connection with Settlement of Securities Action
The Columbia Plan also contemplates Columbia's participation
in a settlement of securities class action litigation ("Securities
Litigation Settlement") brought against Columbia, certain present
and former officers and directors of Columbia and
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(18) The Commission authorized Columbia to establish the
LESOP by the order dated February 28, 1990 in Holding Co. Act
Release No. 25047. The LESOP was designed to prefund a portion of
the matching obligation under the terms of the Thrift Plan and to
utilize tax advantages afforded under the Internal Revenue Code.
Columbia proposes, on the Effective Date, that the LESOP be
terminated pursuant to the terms of the Trust Agreement dated as
of October 17, 1991 between Columbia and First Fidelity Bank, N.
A., as Successor Trustee. Columbia will repurchase the LESOP
Shares for cash and at the average price for Columbia common
stock over a specified period preceding the Effective Date. The
proceeds of the repurchase will be paid to the LESOP Debenture
Trustee and, in turn, to the LESOP debentureholders as required
by the LESOP Trust Agreement. The balance would be subject to the
existing guarantee by Columbia and would be paid under the
Columbia Plan.
<PAGE> 19
Columbia Transmission, the public accounting Firm of Arthur
Andersen, L.L.P. and certain underwriters for Columbia's 1990
common stock offering. Pursuant to the Securities Litigation
Settlement, Columbia and the various other defendants will
establish a settlement fund of $36.5 million (approximately $16.5
million of which will be contributed by Columbia) to settle the
class action claims. The settlement fund will be applied to pay
District Court-approved counsel fees and costs of administration,
and the remainder of the fund will be distributed to holders of the
claims based on acquisitions of Columbia common stock from January
19, 1990 to June 19, 1991. The Securities Litigation Settlement is
conditioned upon the approval of the District Court and the
Bankruptcy Court.
Holders of securities claims may elect, by submitting a form,
to opt out of the class action and not participate in, or be bound
by, the Securities Litigation Settlement. In order to preserve any
securities claims it may have against Columbia, an opt-out
securities claimant must indicate on its opt-out form that it
elects to pursue its claim against Columbia in the District Court
sitting in bankruptcy. Columbia intends to object to, and/or seek
estimation of, the claims of opt-out claimants. If and when such
claims are allowed, they will he paid by Columbia in Columbia
common stock valued at then current market prices or, at Columbia's
option, in cash, or any combination of the two.
Columbia seeks Commission authorization to issue Columbia
common stock, valued at the then current market value, in an
aggregate amount equal to all allowed
<PAGE> 20
amounts for opt-out claimants in excess of $1.5 million.
Authorization for the issuance of Columbia common stock will thus
commence when the combination of Columbia's contribution to the
settlement fund and allowed claims of opt-out claimants exceeds $18
million. The Securities Litigation Settlement provides for
termination of the settlement by the defendants in the amount of
securities as to which opt-out forms have been submitted exceeds an
undisclosed specified amount.
D. Restated Certificate of Incorporation
The Columbia Plan provides that Columbia's certificate of
incorporation will he amended and restated ("Restated Certificate of
Incorporation") in accordance with applicable provisions of the Delaware
General Corporation Law and the Bankruptcy Code. The Restated Certificate
of Incorporation, as more specifically described in the application,
would, among other things, prohibit the issuance of non-voting equity
securities as required by the Bankruptcy Code and increase the number of
authorized shares of preferred (some of which may he issued on and after
the Effective Date in order to effectuate the Columbia Plan, as described
above).
The Restated Certificate of Incorporation also includes various
provisions that are necessary to permit the issuance of Preferred Stock
and DECS under the Columbia Plan. These provisions differ from the similar
provisions in the current Certificate of Incorporation in that they (i)
decrease the par value of Preferred Stock from fifty dollars ($50) to ten
dollars ($10); (ii) delete the restriction on common stock dividends and
amounts of secured debt; (iii) remove and conform specific provisions
regarding preferred voting
<PAGE> 21
rights, dividend rights and liquidation rights; and (iv) permit the board
of directors to determine the specific rights, powers and preferences of
each series of Preferred Stock, and the limitations thereon, at the time
of issuance.
IV. ANALYSIS
The Columbia Plan requires Commission approval under Section 11(f) of the
Act.(19) The solicitation of consents or authorizations in respect of the
Columbia Pland is subject to section 11(g) of the Act and rule 62
thereunder.(20) The issuance by Columbia of New Indenture Securities, DECS,
Preferred Stock and common stock are subject to sections 6 and 7 of the Act,
as is Columbia's entering into the Bank Facilities.(21) The amendment of
Columbia's Certificate of Incorporation is subject to sections 6, 7 and 12(e)
of the Act, and rules 62 and 65 thereunder. The TCO Guarantee and the
guarantee by Columbia of the payment of the distribution percentage of
ultimately allowed claims of other unsecured creditors of Columbia Transmission
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(19) Section 11(f) of the Act requires that the Commission
approve a reorganization plan of a registered holding company or
its subsidiary. As noted previously, rule 49(c) exempts the TCO
Plan from the requirement of Commission approval.
(20) Section 11(g), in pertinent part, requires, among other
things, that the solicitation of consents or authorizations in
respect of plans be accompanied by such information as the
Commission deems necessary and appropriate in the public interest
or for the protection of investors or consumers, and that such
solicitation be accompanied by "a copy of a report on the plan
which shall be made by the Commission after an opportunity for a
being on the plan . . ., or by an abstract of such report made or
approved by the Commission.
Columbia requests that the Commission waive the filing of a
separate Form U-R-1, as all the requisite information will be
included in the disclosure statements filed as exhibits to the
application.
(21) Rule 49(c) exempts the amendment of the Wilmington Trust
Indenture by Columbia Transmission from the requirements of
sections 6 and 7 of the Act and rule 43 thereunder.
<PAGE> 22
are subject to section 12(b) of the Act and rule 45 thereunder.(22) Section 9
and 10 of the Act, and rule 43 thereunder are applicable to the acquisition of
TCO Mortgage Bonds by Columbia. The Commission has reviewed the proposed
transactions and finds that the applicable standards of the Act are satisfied.
Our review has focused in particular on the proposed securities issuances by
Columbia and Columbia's proposed participation in the TCO Plan.
Columbia projects an 8% average annual growth in operating revenues from
1996 through 1999. Earnings are expected to increase by more than 4% a year
during this period. Columbia Transmission projects a 12% annual growth in
earnings over the same four year period. It appears that the Columbia system
as a whole will be able to achieve a sustained level of financial performance.
The Commission has generally favored a consolidated debt to equity ratio
of 65%/30% for registered holding companies, the balance generally being
preferred equity.(23) Assuming that the Effective Date will, in fact, be
December 31, 1995, the ratio of Columbia's consolidated debt to equity is
expected to decline from 65% to 56.7% by 1999. Columbia's consolidated common
stock equity of 25.5% as of December 31, 1995 is expected to rise to 31% two
years after the
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(22) Rule 45(b)(4) exempts the proposed capital contributions
by Columbia to Columbia Transmission from the requirements of
section 12(b) and rule 45. The repurchase by Columbia of DECS,
Preferred Stock and LESOP Shares is exempt from section 12(c) of
the Act pursuant to Rule 42.
(23) This requirement is drawn from section 7(d), which
requires the Commission, in reviewing an issuance of securities,
to consider whether the security is reasonably adapted to the
security structure of the company issuing the security and the
other companies in the registered holding company system.
Holding Co. Act Release No. 25574 (July 7, 1992) (proposing rule
52 under the Act) and cases cited therein.
<PAGE> 23
Effective Date, and to 34.7% by 1999.(24) The increase is largely attributable
to a projected increase in Columbia's retained earnings. Under the
circumstances, the Commission does not find that Columbia's projections reflect
any excessive leveraging that could affect the Columbia system public-utility
subsidiaries and their consumers, and so require an adverse finding.
Under the TCO Plan, Columbia would guarantee the payment of all
third-party distributions require under the Plan. The principal consideration
in this regard is the value of Columbia Transmission's settlement with its
Producers. Although this amount cannot be precisely quantified at present, it
appears from the general trend of settlement of Producer claims that the
financial exposure to Columbia under the guarantee will not exceed $100
million. This amount could be financed by internally generated funds and
borrowings under the Bank Facilities.
In view of these considerations, and on the basis of the record as a
whole, the Commission does not find that any adverse findings are required
under section 7 of the Act. In particular, the Commission does not find that
the security issuances are not reasonably adapted to Columbia's earning power,
or that the guarantees contemplated by the TCO Plan would constitute an
improper risk for Columbia.
V. CONCLUSION
The Commission has carefully examined the foregoing transactions as
proposed by Columbia and has concluded, based on the complete record before it,
that the applicable
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(24) The balance of Columbia's capital structure will be
comprised of approximately $400 million of Preferred Stock and
DECS.
<PAGE> 24
standards of the Act are satisfied and that no adverse findings are warranted.
Fees and expenses in the estimated amount of $8,072,000 are expected to be
incurred in connection with this transaction.(25) It is stated that no state or
federal commission, other than this Commission, has jurisdiction over the
proposed transaction.
Due notice of the Filing of said application-declaration has been given in
the manner prescribed in Rule 23 promulgated under the Act and no hearing has
been requested of or ordered by the Commission. Upon the basis of the facts in
the record, it is hereby found that, except as to those matters over which
jurisdiction has been reserved, the applicable standards of the Act, and rules
thereunder are satisfied, and that no adverse findings are necessary:
IT IS ORDERED, pursuant to the applicable provisions of the Act and rules
thereunder, that, except as to those matters over which jurisdiction has been
reserved, the application-declaration be, and it hereby is, granted and
permitted to become effective forthwith, subject to the terms and conditions
prescribed in rule 24 under the Act, except that certificates under Rule 24 may
be Filed on a quarterly basis after the Effective Date with respect to the
proposed transactions hereafter consummated pursuant to this
application-declaration, not later than 30 days following the end of each
quarter. Furthermore, because certain contemplated transactions may be
accomplished over a period of time after this order is issued, authorization is
granted to implement the proposed transactions as described in the
application-declaration.
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25 Under Rule 63, fees and expenses approved by the
Bankrkuptcy Court need not be approved by the Commission.
<PAGE> 25
IT IS FURTHER ORDERED, that jurisdiction be and hereby is reserved over
the issuance and sale of securities, except common stock, DECS and Preferred
Stock, under the Columbia Plan to the extent not specifically authorized
pending completion of the record.
By the Commission.
Jonathan G. Katz
Secretary
