<PAGE>
As filed with the Securities and Exchange Commission on September 24, 1998
Registration No. 333-_________
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
TEXAS-NEW MEXICO POWER COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 75-0204070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4100 INTERNATIONAL PLAZA
P.O. BOX 2943
FORT WORTH, TEXAS 76113
(817) 731-0099
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------
MICHAEL D. BLANCHARD
VICE PRESIDENT AND GENERAL COUNSEL
TEXAS-NEW MEXICO POWER COMPANY
4100 INTERNATIONAL PLAZA
P.O. BOX 2943
FORT WORTH, TEXAS 76113
(817) 731-0099
FAX: (817) 737-1333
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:
BRIAN D. BARNARD ROBERT B. WILLIAMS
HAYNES AND BOONE, LLP MILBANK, TWEED, HADLEY & MCCLOY
201 MAIN STREET, SUITE 2200 1 CHASE MANHATTAN PLAZA
FORT WORTH, TEXAS 76102 NEW YORK, NEW YORK 10005
(817) 347-6600 (212) 530-5000
FAX: (817) 347-6650 FAX: (212) 530-5219
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the Registration Statement becomes effective, as determined by market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior Debt Securities ................ (1) (1) (2) N/A
First Mortgage Bonds .................. (1) (1) (2) N/A
Total ............................ $200,000,000 $59,000(3)
===========================================================================================================
</TABLE>
(1) Not applicable pursuant to General Instruction II.D. to Form S-3.
(2) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $200,000,000.
(3) Calculated pursuant to Rule 457(o) under the Securities Act of 1933, as
amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
==============================================================================
<PAGE>
******************************************************************************
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
******************************************************************************
SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1998
PROSPECTUS
, 1998
$200,000,000
TEXAS-NEW MEXICO POWER COMPANY
SENIOR DEBT SECURITIES
_______________________________________
Texas-New Mexico Power Company ("TNMP" or the "Company") from time to time
may offer, in an aggregate principal amount not to exceed $200,000,000, in one
or more series, its senior debt securities (the "Senior Debt Securities").
Prior to the Release Date (as defined in "Overview of Securities" below), the
Senior Debt Securities will be secured by the issuance and delivery to the
Trustee (as defined below) in trust for the benefit of the holders of Senior
Debt Securities one or more series of first mortgage bonds (the "First Mortgage
Bonds") issued under the Company's Mortgage Indenture (as defined below). The
Senior Debt Securities will be issued under the indenture to be entered into
between TNMP and Chase Bank of Texas, N.A., as trustee (the "Trustee"), as
amended and supplemented by supplemental indentures thereto (collectively, the
"Indenture"). The Senior Debt Securities may be offered in amounts, at prices
and on terms to be determined at the time of sale. Certain terms of the Senior
Debt Securities including, where applicable, the specific designation, aggregate
principal amount, interest rate, interest payment dates, maturity, public
offering price, description of collateral, any redemption terms or other
specific terms of each series of the Senior Debt Securities in respect of which
this Prospectus is being delivered will be set forth in an accompanying
Prospectus Supplement or Supplements (a "Prospectus Supplement").
TNMP may sell the Senior Debt Securities to or through underwriters,
through dealers or directly to purchasers. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of such underwriters or dealers,
if any, any applicable commissions or discounts and the proceeds to TNMP from
such sale.
This Prospectus may not be used to consummate sales of the Senior Debt
Securities unless accompanied by a Prospectus Supplement applicable to the
Senior Debt Securities being sold.
_______________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
AVAILABLE INFORMATION
The Company and TNP Enterprises, Inc. ("TNP"), of which the Company is the
principal wholly-owned operating subsidiary, are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In accordance with the Exchange Act, the Company and TNP file reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). The reports, proxy statements and other
information can be inspected and copied at the public reference facilities that
the Commission maintains at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices located at 7 World Trade Center,
13th Floor, New York, New York 10048, and Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661. Copies of these materials can be obtained at prescribed
rates from the Public Reference Section of the Commission at the principal
offices of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Senior Debt Securities. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements made in the Prospectus concerning the contents of any documents
referred to herein are not necessarily complete. With respect to each such
document filed with the Commission as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description, and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus:
(i) Annual Report on Form 10-K for the year ended December 31, 1997;
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
and
(iii) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus from their respective dates of filing.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents which are not specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to the Company at 4100 International Plaza, P.O. Box 2943,
Fort Worth, Texas 76113. Telephone requests may be directed to Michael D.
Blanchard, Vice President and General Counsel of the Company, at (817) 731-0099.
STATEMENT REGARDING FORWARD LOOKING INFORMATION
The discussions in this document and incorporated by reference herein that
are not historical facts, including, but not limited to, the outcome of current
and future rate/regulatory proceedings, the continued application of regulatory
accounting principles, future cash flows and the potential recovery of stranded
costs, are based upon current expectations. Actual results may differ
materially. Among the facts that could cause the results to differ materially
from expectations are the following: legislation in the states TNMP serves
affecting the regulation of TNMP's business; changes in
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<PAGE>
regulations affecting TNMP's business; results of regulatory proceedings
affecting TNMP's operations; future acquisitions or strategic partnerships;
general business and economic conditions; the effectiveness of TNMP's year 2000
mitigation plan, and the timely year 2000 compliance by TNMP's vendors; and
other factors described from time to time in TNP's and TNMP's reports filed with
the Commission. The Company wishes to caution readers not to place undue
reliance on any such forward looking statements, which are made pursuant to the
Private Securities Litigation Reform Act of 1995 and, as such, speak only as of
the date made.
THE COMPANY
TNMP is a public utility engaged in generating, purchasing, transmitting,
distributing and selling electricity to approximately 226,000 customers in 85
municipalities and adjacent rural areas through three operating regions in Texas
and New Mexico. The Company's largest division, the Gulf Coast Region, includes
the area along the Texas Gulf Coast between Houston and Galveston. This
division produced 54.3% of total operating revenues in 1997. The Company's
North-Central Region produced 24.8% of total operating revenues in 1997, and the
Company's Mountain Region produced 18.5% of total operating revenues in 1997.
The remaining 2.4% of TNMP's revenues in 1997 were generated by the Company's
power marketing activities. TNMP's predecessor was organized in 1925.
TNMP, through its subsidiaries, owns one electric generating facility, TNP
One, which is located in Robertson County, Texas. TNP One consists of two 150-
megawatt units, each of which utilizes a lignite-fueled, circulating fluidized
bed technology. The two units supply, on an annualized basis, approximately 20%
of TNMP's power requirements.
TNMP has two subsidiaries, Texas Generating Company and Texas Generating
Company II, both of which were organized to facilitate TNMP's acquisitions of
Unit 1 and Unit 2 of TNP One, in 1990 and 1991, respectively. The Company and
its subsidiaries are all Texas corporations. Their executive offices are located
at 4100 International Plaza, P.O. Box 2943, Fort Worth, Texas 76113 and their
telephone number is (817) 731-0099.
The Company is subject to regulation by the Public Utility Commission of
Texas and the New Mexico Public Utility Commission. The Company is subject in
some of its activities, including the issuance of securities, to the
jurisdiction of the Federal Energy Regulatory Commission.
The Company is a wholly-owned subsidiary of TNP, a Texas corporation and a
non-utility holding company, which is listed on the New York Stock Exchange
under the ticker symbol TNP.
USE OF PROCEEDS
Except as otherwise stated in the applicable Prospectus Supplement, net
proceeds from the sale of the Senior Debt Securities offered hereby will be used
for the discharge, retirement or repayment of short or long-term debt and
borrowings made or expected to be made and for other corporate purposes.
Specific allocations of proceeds for such purposes have not been made at this
time. Funds may be borrowed in anticipation of future requirements.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth TNMP's ratio of earnings to fixed charges
for the periods indicated.
<TABLE>
<CAPTION>
Twelve Months Year Ended December 31,
Ended ----------------------------
June 30, 1998 1997 1996 1995 1994 1993
-------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges/(1)/ ... 2.13 2.15 1.53 1.87 * 1.24
</TABLE>
* Earnings were insufficient to fund fixed charges in 1994. The amount of
the shortfall was $30 million.
(1) For the purpose of computing these ratios, earnings consists of net income
plus income taxes and fixed charges. Fixed charges consist of total
interest, amortization of debt discount, premium and expense and the
estimated portion of interest implicit in rentals.
3
<PAGE>
OVERVIEW OF SECURITIES
The Senior Debt Securities may be issued from time to time and in one or
more series. Prior to the Release Date (as defined below), the Senior Debt
Securities will be secured by TNMP's First Mortgage Bonds (the "Senior Note
Mortgage Bonds"). On the Release Date, any outstanding Senior Debt Securities
will cease to be secured by the Senior Note Mortgage Bonds and will become
unsecured general obligations of TNMP.
Each series of Senior Debt Securities will be issued under the Indenture,
as supplemented by a supplemental indenture describing the particular terms of
such series. The form of Indenture is filed as an exhibit to the Registration
Statement. The new supplemental indentures will be entered into
contemporaneously with the issuance of each series of the Senior Debt Securities
to be so secured.
TNMP will issue the Senior Note Mortgage Bonds under one or more
supplemental indentures (each, a "Supplemental Mortgage Indenture") to the
Indenture of Mortgage and Deed of Trust, dated as of November 1, 1944, between
Community Public Service Co. (now known as Texas-New Mexico Power Company) and
City National Bank and Trust Company of Chicago, Chicago, Illinois (whose
current successor is U.S. Bank Trust, N.A.) (the "Mortgage Trustee"), as
supplemented and amended by the supplemental indentures thereto (collectively,
the "Mortgage Indenture").
The "Release Date" will be the date on which the Senior Debt Securities
will cease to be secured by the Senior Note Mortgage Bonds and become unsecured
general obligations of TNMP. The date will be chosen by TNMP, but will not
occur prior to the date as of which all First Mortgage Bonds, other than the
Senior Note Mortgage Bonds securing the Senior Debt Securities of all series,
have been retired through payment, redemption or otherwise, at, before or after
the maturity thereof.
Neither the Indenture nor the Mortgage Indenture (collectively, the
"Indentures") requires that TNMP issue future issues of debt securities under
the Indentures. Subject to certain restrictions that are described in
"Description of the Senior Debt Securities -- Limitations on Liens" and "--
Limitations on Sale and Lease-Back Transactions," the Company will be free to
employ other indentures or documentation, containing provisions different from
those included in the Indentures or applicable to one or more issues of Senior
Debt Securities, in connection with future issues of such other debt securities.
Certain capitalized terms herein are defined in the Indentures.
DESCRIPTION OF THE SENIOR DEBT SECURITIES
The following summaries of certain provisions of the Senior Debt Securities
and the Indenture do not purport to be complete and are subject to, and are
qualified in their entirety by express reference to, all the provisions of the
Indenture, including the definitions therein of certain terms. Capitalized
terms not defined herein are defined in the Indenture.
GENERAL
Until the Release Date, the Senior Debt Securities of each series will be
secured by one or more series of Senior Note Mortgage Bonds issued under the
Mortgage Indenture and delivered to the Trustee. See "-- Security; Release
Date." ON THE RELEASE DATE, THE SENIOR DEBT SECURITIES WILL CEASE TO BE SECURED
BY THE SENIOR NOTE MORTGAGE BONDS AND WILL BECOME UNSECURED GENERAL OBLIGATIONS
OF THE COMPANY AND WILL RANK ON A PARITY WITH OTHER UNSECURED INDEBTEDNESS OF
THE COMPANY. The Indenture provides that, in addition to the Senior Debt
Securities offered hereby, TNMP may issue additional Senior Debt Securities
thereunder, without limitation as to aggregate principal amount, from time to
time, in one or more series. Prior to the Release Date, the amount of Senior
Debt Securities that TNMP may issue cannot exceed the aggregate principal amount
of First Mortgage Bonds that the Company is able to issue under its Mortgage
Indenture. As of July 31, 1998, there were two series of First Mortgage Bonds
outstanding in an aggregate principal amount equal to $108,000,000. In addition,
at July 31, 1998, there were two series of First Mortgage Bonds in an aggregate
principal amount of $130,000,000 issued as collateral to secure two debt
facilities of the Company. At July 31, 1998, the Company could have issued
approximately $131 million of additional First Mortgage Bonds at an assumed 9%
interest rate.
The Indenture does not contain any debt covenants or provisions which would
afford holders of Senior Debt Securities protection in the event of a highly
leveraged transaction.
4
<PAGE>
Please refer to the Prospectus Supplement relating to each particular issue
of the Senior Debt Securities being offered for, among other things, the
following terms thereof:
(a) the title of the Senior Debt Securities of the series;
(b) any limit upon the aggregate principal amount of the Senior Debt
Securities of the series which may be authenticated and delivered
under the Indenture;
(c) the person to whom any interest on a Senior Debt Security of the
series shall be payable, if other than the Person in whose name the
Senior Debt Security is registered;
(d) the date or dates on which the principal or installments of principal
is payable and any rights to extend such date or dates;
(e) the rate or rates (which may be fixed or variable) per annum at which
the Senior Debt Securities of the series will bear interest or the
method by which such rate or rates shall be determined and the date
from which such interest will accrue or the method by which such date
or dates shall be determined;
(f) the obligation, if any, of the Company to redeem, repay or purchase
any Senior Debt 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, any such securities shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(g) the denominations in which any Senior Debt Securities of the series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(h) if other than the principal amount thereof, the portion of the
principal amount of Senior Debt Securities of the series which shall
be payable upon declaration of acceleration of the maturity thereof;
(i) if other than such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public or
private debts, the coin or currency in which payment of the principal
of (and premium, if any) and interest, if any, on the Senior Debt
Securities of the series shall be payable and the manner of
determining the equivalent thereof in the currency of the United
States of America for any purpose;
(j) if the principal of (and premium, if any) or interest, if any, on the
Senior Debt Securities of the series are to be payable, at the
election of the Company or a Holder thereof, in a coin or currency
other than that in which the Senior Debt Securities are stated to be
payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(k) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Senior Debt Securities of the series may be
determined with reference to an index based on a coin or currency
other than that in which such Senior Debt Securities are stated to be
payable or pursuant to a formula, the manner in which such amounts
shall be determined;
(l) any provisions permitted by the Indenture relating to Events of
Default or covenants of the Company with respect to such series of
Senior Debt Securities;
(m) if the principal amount payable at the stated maturity of any Senior
Debt Securities of the series will not be determinable as of any one
or more dates prior to the stated maturity, the amount which shall be
deemed to be the principal amount of such Senior Debt Securities as of
any such date for any purpose under the applicable Prospectus
Supplement or under the Indenture, including the principal amount
thereof which shall be due and payable upon any maturity other than
the stated maturity or which shall be deemed to be outstanding as of
any date prior to the stated maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
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<PAGE>
(n) if applicable, that the Senior Debt Securities of the series, in whole
or any specified part, shall not be defeasible pursuant to the
Indenture and the manner in which any election by the Company to
defease such Senior Debt Securities shall be evidenced;
(o) if applicable, that any Senior Debt Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities (as hereinafter defined at page 13) and, in such case, the
respective Depositaries (as hereinafter defined at page 13) for such
Global Securities, the form of any legend or legends which shall be
borne by any such Global Security and any circumstances in which any
such Global Security may be exchanged in whole or in part for Senior
Debt Securities registered, and any transfer of such Global Security
in whole or in part may be registered, in the name or names of persons
other than the Depositary for such Global Security or a nominee
thereof;
(p) providing collateral to the Trustee to secure payment of the principal
of (and premium, if any) and interest on the Senior Debt Securities of
any series, and provisions for the release of any such collateral;
and
(q) any other terms of the series.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of (and premium, if any) and interest on, the Senior Debt
Securities of each series will be payable, and the Senior Debt Securities of
each series will be exchangeable and transfers thereof will be registrable, at
the Place of Payment, provided that, if the Senior Debt Securities of each
series are not Global Securities, at the option of the Company, payment of
interest may be made by check mailed or wire transferred to the address of the
person entitled thereto as it appears in the Security Register.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Senior Debt Securities of each series will be issued in United States
dollars in fully registered form, without coupons, in denominations of $1,000 or
any integral multiple thereof. No service charge will be made for any transfer
or exchange of the Senior Debt Securities of each series, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
SECURITY; RELEASE DATE
Until the Release Date, each series of the Senior Debt Securities will be
secured by one or more series of Senior Note Mortgage Bonds issued and delivered
by the Company to the Trustee. See "Description of the First Mortgage Bonds."
When issuing Senior Debt Securities prior to the Release Date, the Company will
simultaneously issue and deliver Senior Note Mortgage Bonds to the Trustee as
security for such Senior Debt Securities. The Senior Note Mortgage Bonds will
have the same stated rate of interest (or interest calculated in the same
manner), interest payment dates, stated maturity date and redemption provisions
and will be in the same aggregate principal amount as the corresponding Senior
Debt Securities. The Trustee has agreed to hold the Senior Note Mortgage Bonds
in such capacity under all circumstances and not transfer such Senior Note
Mortgage Bonds until the earlier of the Release Date or the prior retirement of
the Senior Debt Securities through redemption, repurchase or otherwise. Any
payment made in respect to the Company's obligations under the Senior Debt
Securities shall be deemed a payment in respect of the Senior Note Mortgage
Bonds. The obligation of the Company to make payments with respect to the
principal of and interest on the Senior Note Mortgage Bonds shall be fully
satisfied and discharged to the extent that, at any time that any such payment
shall be due, the Company shall have paid fully the then due principal of and
interest on, and fees with respect to, the Senior Debt Securities.
ON THE RELEASE DATE, THE TRUSTEE WILL DELIVER ALL SENIOR NOTE MORTGAGE
BONDS TO THE COMPANY FOR CANCELLATION AND THE COMPANY WILL CAUSE THE TRUSTEE TO
PROVIDE NOTICE TO ALL HOLDERS OF SENIOR DEBT SECURITIES THAT THE RELEASE DATE
HAS OCCURRED. AS A RESULT, ON THE RELEASE DATE, THE SENIOR NOTE MORTGAGE BONDS
WILL CEASE TO SECURE THE SENIOR DEBT SECURITIES, AND THE SENIOR DEBT SECURITIES
WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY AND WILL RANK ON A
PARITY WITH OTHER UNSECURED SENIOR INDEBTEDNESS OF THE COMPANY. Each series of
Senior Note Mortgage Bonds will be secured by a lien on certain property owned
by the Company. In certain circumstances prior to the Release Date, the Company
is permitted to reduce the aggregate principal amount of an issue of Senior Note
Mortgage Bonds held by the Trustee, but in no event to an amount lower than the
aggregate outstanding principal amount of the Senior Debt Securities initially
issued contemporaneously with such Senior Note Mortgage Bonds. Following the
Release Date, the Company will cause the Mortgage Indenture to be closed, and
the Company will not issue any additional bonds under such Mortgage Indenture.
The intention of these provisions is that before the
6
<PAGE>
Release Date the Senior Debt Securities will have the benefit of being secured
by the First Mortgage Bonds, and after the Release Date the Senior Debt
Securities will have the benefit of the same security as other secured debt of
the Company, if any, subject to specified exceptions.
LIMITATIONS ON LIENS
The Indenture provides that from and after the Release Date and as long as
any Senior Debt Securities are outstanding, the Company may not, and may not
permit any Subsidiary to, incur, issue, assume, guarantee or permit to exist
Indebtedness (as hereinafter defined at page 12), that is secured by any Lien
(as hereinafter defined at page 12), created on or prior to the Release Date, of
the Company or any Subsidiary upon any of its property or assets, or upon shares
of capital stock or evidences of Indebtedness issued by any Subsidiary and owned
by the Company or any Subsidiary, whether owned at the date of the Indenture or
thereafter acquired, without making, or causing such Subsidiary to make,
effective provision to secure all of the Senior Debt Securities of each series,
issued under the Indenture and then outstanding, by such Lien, equally and
ratably with any and all other Indebtedness thereby secured so long as such
Indebtedness shall be so secured. This restriction will not apply to
Indebtedness secured by Liens existing on the date of the Indenture or to any of
the following:
(a) Liens on any property or assets acquired, constructed or improved by
the Company or any Subsidiary after the date of the Indenture which
are created or assumed contemporaneously with such acquisition,
construction or improvement, or within 180 days after the completion
thereof, to secure or provide for the payment of all or any part of
the cost of such acquisition, construction or improvement (including
related expenditures capitalized for federal income tax purposes in
connection therewith) incurred after the date of the Indenture;
(b) Liens of or upon any property, shares of capital stock or Indebtedness
existing at the time of acquisition thereof, whether by merger,
consolidation, purchase, lease or otherwise (including Liens of or
upon property, shares of capital stock or Indebtedness of a
corporation existing at the time such corporation becomes a
Subsidiary);
(c) Liens in favor of the Company or any Subsidiary;
(d) Liens in favor of the United States of America or any State thereof,
or any department, agency or instrumentality or political subdivision
of the United States of America or any State thereof or political
entity affiliated therewith, to secure partial, progress, advance or
other payments, or other obligations, pursuant to any contract or
statute or to secure any Indebtedness incurred for the purpose of
financing all or any part of the cost of acquiring, constructing or
improving the property subject to such Liens (including Liens incurred
in connection with pollution control, industrial revenue or similar
financings);
(e) Liens on any property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of the
underlying property, whether directly or indirectly, by way of share
disposition or otherwise; provided that 180 days from the creation of
such Liens the Company must have disposed of such property and any
Indebtedness secured by such Liens shall be without recourse to the
Company or any Subsidiary;
(f) Liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other similar
liens arising in the ordinary course of business, or governmental
(federal, state or municipal) liens arising out of contracts for the
sale of products or services by the Company or any Subsidiary, or
deposits or pledges to obtain the release of any of the foregoing;
(g) Liens arising out of pledges or deposits under workmen's compensation
laws or similar legislation and Liens of judgments thereunder which
are not currently dischargeable, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of money) or
leases to which the Company or any Subsidiary is a party, or deposits
to secure public or statutory obligations of the Company or any
Subsidiary, or deposits in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age pensions,
social security or similar matters, or deposits of cash or obligations
of the United States of America to secure surety, appeal or customs
bonds to which the Company or any Subsidiary
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is a party, or deposits in litigation or other proceedings such as,
but not limited to, interpleader proceedings;
(h) Liens created by or resulting from any litigation or other proceeding
which is being contested in good faith by appropriate proceedings,
including Liens arising out of judgments or awards against the Company
or any Subsidiary with respect to which the Company or such Subsidiary
is in good faith prosecuting an appeal or proceedings for review; or
Liens incurred by the Company or any Subsidiary for the purpose of
obtaining a stay or discharge in the course of any litigation or other
proceeding to which the Company or such Subsidiary is a party;
(i) Liens for taxes or assessments or governmental charges or levies not
yet due or delinquent, or which can thereafter be paid without
penalty, or which are being contested in good faith by appropriate
proceedings;
(j) Liens consisting of easements, rights-of-way, zoning restrictions,
restrictions on the use of real property, and defects and
irregularities in the title thereto, landlords' liens and other
similar liens and encumbrances none of which interferes materially
with the use of the property covered thereby in the ordinary course of
the business of the Company or such Subsidiary and which do not, in
the opinion of the Company, materially detract from the value of such
properties; and
(k) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Lien referred
to in the foregoing clauses (a), (b), or (e) to (j), inclusive;
provided that (i) such extension, renewal or replacement Lien shall be
limited to all or a part of the same property, shares of stock or
Indebtedness that secured the Lien extended, renewed or replaced (plus
improvements on such property) and (ii) the amount of Indebtedness
secured by such Lien at such time is not increased.
The Indenture provides that notwithstanding the foregoing limitations, the
Company or its Subsidiaries may incur, issue, assume or guarantee Indebtedness
secured by Liens without equally and ratably securing the Senior Debt Securities
of each series then Outstanding, provided, that at the time of such incurrence,
issuance, assumption or guarantee of Indebtedness, after giving effect thereto
and to the retirement of any Indebtedness which is concurrently being retired,
the sum of (i) the aggregate amount of all outstanding Indebtedness secured by
Liens which could not have been incurred, issued, assumed or guaranteed by the
Company or a Subsidiary without equally or ratably securing the Senior Debt
Securities of each series then Outstanding, except for the provisions of this
paragraph, plus (ii) the Attributable Value of Sale and Leaseback Transactions
entered into pursuant to the last paragraph of "-- Limitations on Sale and
Lease-Back Transactions," does not at such time exceed the greater of 10% of the
Net Tangible Assets (as hereinafter defined at page 12) or 10% of the
Consolidated Capitalization of the Company.
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that after the Release Date, so long as any Senior
Debt Securities are Outstanding, neither the Company nor any Subsidiary will
enter into any arrangement under which the Company or a Subsidiary would lease
any property or assets which it has sold or transferred or is going to sell or
transfer (a "Sale and Leaseback Transaction") unless either: (a) the Company or
such Subsidiary would, when entering into such arrangement, be entitled, without
equally and ratably securing the Securities of each series then Outstanding, to
incur, issue, assume or guarantee Indebtedness secured by a Lien on such
property pursuant to the first paragraph of "-- Limitations on Liens" (including
clauses (a) - (k) thereof); or (b) the Company, within 180 days after such sale
or transfer applies an amount equal to the greater of (i) the net proceeds of
the sale of property or assets sold and leased back pursuant to such arrangement
or (ii) the fair market value of the property or assets so sold and leased back
at the time of entering into such arrangement (as determined by any two
Officers) to the retirement of Funded Indebtedness of the Company; provided,
that the amount to be applied to the retirement of Funded Indebtedness of the
Company shall be reduced by (i) the principal amount of any Senior Debt
Securities delivered within 120 days after such sale to the Trustee for
retirement and cancellation, and (ii) the principal amount of Funded
Indebtedness, other than Senior Debt Securities, voluntarily retired by the
Company within 120 days after such sale. This provision applies to Sale and
Leaseback Transactions with primary lease terms and possible renewal terms
exceeding three years. Notwithstanding the foregoing, the Company and its
Subsidiaries, or any of them, may enter into a Sale and Leaseback Transaction
which would otherwise be prohibited; provided, that at the time of such
transaction, after giving effect thereto, the sum of (i) the aggregate amount of
the Attributable Value in respect of all Sale and Leaseback Transactions
existing at such time which could not have been entered into except for the
provisions of this paragraph plus (ii) the aggregate amount of outstanding Debt
secured
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by Liens in reliance on the last paragraph of "--Limitations on Liens" of the
Indenture does not at such time exceed the greater of 10% of the Net Tangible
Assets or 10% of the Consolidated Capitalization of the Company. A Sale and
Leaseback Transaction shall not be deemed to result in the creation of a Lien.
VOTING OF SENIOR NOTE MORTGAGE BONDS HELD BY THE TRUSTEE
Prior to the Release Date, the Trustee, as a holder of Senior Note Mortgage
Bonds, will attend any meeting of bondholders under the Mortgage Indenture as to
which it receives due notice, or, at its option, will deliver its proxy in
connection therewith. Either at such meeting, or otherwise where the consent of
holders of Mortgage Bonds issued under the Mortgage Indenture is sought without
a meeting, the Trustee will vote all of the Senior Note Mortgage Bonds held by
it, or will consent or withhold its consent with respect thereto, as directed by
the holders of a majority in aggregate principal amount of the outstanding
Senior Debt Securities; provided, however, the Trustee may not vote the First
Mortgage Bonds pledged as collateral for any particular series in favor of, or
give consent to, any action which, in the Trustee's opinion, would materially
adversely affect such series of First Mortgage Bonds in a manner not shared
generally by all other First Mortgage Bonds, except upon notification by the
Trustee to the holders of the related series of Senior Debt Securities of such
proposal and consent thereto of the holders of a majority in principal amount of
the outstanding Senior Debt Securities of such series.
RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time with respect to any series of Senior
Debt Securities by giving written notice thereof to the Company. The Trustee
may be removed at any time with respect to any series of Senior Debt Securities
by the Holders of a majority in aggregate principal amount of the Outstanding
Senior Debt Securities of that series, delivered to the Trustee and to the
Company.
If at any time: (i) the Trustee fails to comply with the conflict of
interest provisions contained in Section 310(b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990 with respect to any
series of Senior Debt Securities after written request therefor by the Company
or by any securityholder who has been a bona fide Holder of a Senior Debt
Security of that series for at least six months, (ii) the Trustee ceases to be
eligible under the Indenture with respect to any series of Senior Debt
Securities and fails to resign after written request therefor by the Company or
by any such securityholder, (iii) the Trustee becomes incapable of acting with
respect to any series of Senior Debt Securities, or (iv) the Trustee is
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
is appointed or any public officer takes charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (1) the Company may remove the Trustee,
with respect to the Senior Debt Securities of that series, or, in the case of
clause (iv), with respect to all series, or (2) subject to the Indenture, any
securityholder who has been a bona fide Holder of a Senior Debt Security of such
series for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee with respect to the series,
or, in the case of clause (iv), with respect to all series.
If the Trustee resigns, is removed or becomes incapable of acting with
respect to any series of Senior Debt Securities, or if a vacancy occurs in the
office of the Trustee with respect to any series of Senior Debt Securities for
any cause, the Company will promptly appoint a successor Trustee or Trustees
with respect to the Senior Debt Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Senior Debt Securities of one or more or all of such series and that at any time
there will be only one Trustee with respect to the Senior Debt Securities of any
particular series). If, within one year after such resignation, removal or
incapacity, or the occurrence of such vacancy, a successor Trustee with respect
to such series of Senior Debt Securities is appointed by the Holders of a
majority in aggregate principal amount of the Outstanding Senior Debt Securities
of such series delivered to the Company and the predecessor Trustee, the
successor Trustee so appointed will, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of the Indenture,
become the successor Trustee with respect to such series and supersede the
successor Trustee appointed by the Company with respect to such series. If no
successor Trustee with respect to such series is so appointed by the Company or
the securityholders of such series and accepted appointment in the manner
required by the Indenture, any securityholder who has been a bona fide Holder of
a Senior Debt Security of that series for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
The Company will give notice of each resignation and each removal of the
Trustee with respect to the Senior Debt Securities of any series and each
appointment of a successor Trustee with respect to the Senior Debt Securities of
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any series by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Senior Debt Securities of that series as their names
and addresses appear in the Security Register. Each notice shall include the
name of the successor Trustee with respect to the Senior Debt Securities of such
series and the address of its corporate trust office.
CONCERNING THE TRUSTEE
Chase Bank of Texas, N.A. is the Trustee under the Indenture. The Trustee
is not the trustee under any other indenture pursuant to which Indebtedness
securities of the Company are outstanding. The Company maintains banking
relationships with an affiliate of the Trustee in the ordinary course of
business, and such affiliate of the Trustee is the agent for a syndicated group
of banks, which includes the Trustee, that has extended a $150,000,000 revolving
line of credit to the Company.
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to the Senior Debt
Securities of any series as: (a) default in payment of principal (or premium, if
any) of any Senior Debt Security of that series when due and payable, at its
Maturity or otherwise; (b) default in payment of any interest on any Senior Debt
Security of that series when due and payable, and continuance of such default
for a period of 30 days; (c) default in the deposit of any sinking fund payment,
when and as due by the terms of a Senior Debt Security of that series; (d)
default in the performance, or breach, of any covenant or warranty of the
Company in the Indenture (other than certain covenants or warranties) and
continuance of such default or breach by the Company for 60 days after due
notice in the performance of any covenants or warranties in the Indenture; (e)
certain events of bankruptcy, insolvency or reorganization of the Company; (f)
prior to the Release Date, a "default" under the Mortgage Indenture has occurred
and is continuing; and (g) acceleration of any Indebtedness (including Senior
Debt Securities of any other series) of the Company in an aggregate principal
amount exceeding $10 million.
The Indenture provides that, if any Event of Default with respect to Senior
Debt Securities of any series at the time Outstanding occurs and is continuing,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Senior Debt Securities of that series may, by notice
as provided in the Indenture, declare the principal amount, together with all
accrued and unpaid interest thereon, of all Senior Debt Securities of that
series to be due and payable immediately upon notice in writing to the Company
(and to the Trustee if given by Holders), but upon certain conditions such
declaration may be annulled and past defaults (except, unless theretofore cured,
a default in payment of principal of or interest on the bonds and certain other
specified defaults) may be waived by the Holders of a majority in principal
amount of the Outstanding Senior Debt Securities of that series on behalf of the
Holders of all Senior Debt Securities of such series, except that upon the
occurrence of certain bankruptcy Events of Default, such principal and interest
shall become immediately declared payable without any such declaration.
The Indenture provides that the Trustee will, within 90 days after the
Trustee has received written notice of a default with respect to Senior Debt
Securities of any series at the time Outstanding, give to the Holders of the
Outstanding Senior Debt Securities of such series, notice of such default known
to it if uncured or not waived, provided that, except in the case of default in
the payment of principal of (or premium, if any) or interest on any such Senior
Debt Securities, the Trustee will be protected in withholding of such notice if
the Trustee in good faith determines that the withholding of such notice is in
the interest of the Holders of the Outstanding bonds of such series; and,
provided further, that such notice shall not be given until 30 days after the
occurrence of a "Default" specified in clause (d) of the definition of "Event of
Default" above. The term "Default" for the purpose only of this provision means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
The Holders of a majority in aggregate principal amount of the outstanding
Senior Debt Securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Senior Debt Securities of such series; provided that (a) the Trustee
will have the right to decline to follow any such direction if the Trustee,
being advised by counsel, determines that the action so directed may not
lawfully be taken or would conflict with the Indenture; (b) the Trustee will
have the right to decline to follow such direction if the Trustee in good faith
determines that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction; (c) such direction will be presented by such Holders to the Trustee
in a timely manner; (d) such direction will not be in conflict with any rule
of law or with the Indenture; and (e) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
The Indenture includes a covenant that the Company will file at least
annually with the Trustee a certificate of no Default, or specifying any Default
that exists.
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DISCHARGE; DEFEASANCE
The Indenture provides that the Company, at its option (to the extent
provided), (a) will be discharged from any and all obligations with respect to
the Senior Debt Securities (except for certain obligations, including
registering the transfer or exchange of the Senior Debt Securities, replacing
stolen, lost or mutilated Senior Debt Securities, maintaining paying agencies
and holding monies for payment in trust) or (b) need not comply with certain
restrictive covenants of the Indenture (and the occurrence of certain Events of
Default with respect to such restrictive covenants), upon the deposit with the
Trustee (and in the case of a defeasance, 91 days after such deposit), in trust,
of money, or U.S. Government Obligations, or a combination thereof, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
of and interest on the Senior Debt Securities on the date such payments are due
in accordance with the terms of the Senior Debt Securities to their stated
maturities. Upon such defeasance and discharge, the Trustee will deliver to the
Company for cancellation all Senior Note Mortgage Bonds securing such Senior
Debt Securities, after which time such Senior Debt Securities will no longer be
secured by Senior Note Mortgage Bonds. To exercise any such option, the Company
is required to meet certain conditions, including delivering to the Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the Holders of the Senior Debt Securities to recognize income, gain or
loss for federal income tax purposes as a result of such deposit and defeasance,
and will be subject to federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit and defeasance
were not to occur.
MODIFICATION OF THE INDENTURE
The Indenture permits the Company and the Trustee to execute supplemental
indentures that add, change or eliminate provisions of the Indenture or modify
the rights of the Holders of Outstanding Senior Debt Securities. Such execution
may be without the consent of the Holders of the Senior Debt Securities in some
cases and in others with the consent of the Holders of at least a majority in
principal amount of Outstanding Senior Debt Securities of each series of Senior
Debt Securities affected by the supplemental indenture. No such supplemental
indenture, however, may, without the consent of Holders of 100% in Principal
Amount of Outstanding Senior Debt Securities of each series affected thereby
(a) change the Stated Maturity of any Senior Debt Security, (b) reduce the
principal amount of, or the rate of interest on, any Senior Debt Security, (c)
change the place or currency of payment on any Senior Debt Security, (d) impair
the right to institute suit for the enforcement of any payment on or after the
Stated Maturity thereof, (e) prior to the Release Date, impair the interest of
the Trustee in the Senior Note Mortgage Bonds, (f) reduce the stated percentage
of Outstanding Senior Debt Securities necessary to modify or amend the Indenture
or related documents, or (g) reduce the percentage of aggregate principal amount
of Outstanding Senior Debt Securities necessary for waiver of compliance with
certain provisions of the Indenture or for the waiver of certain covenants and
defaults.
OUTSTANDING SECURITIES
The Indenture provides that Senior Debt Securities owned by the Company or
any of its affiliates shall not be deemed to be Outstanding when determining
whether the Holders of the requisite principal amount of Outstanding Senior Debt
Securities have given any request, demand, authorization, direction, notice
consent or waiver under the Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company may, without the consent of the
Holders of any of the Outstanding Senior Debt Securities under the Indenture,
consolidate with or merge with or into any other corporation, or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, provided that: (i) the successor is a corporation organized under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the successor corporation, if other than the Company, assumes the Company's
obligations on the Senior Debt Securities and under the Indenture, (iii) if
prior to the Release Date, the successor corporation assumes the Company's
obligations on the Senior Note Mortgage Bonds and under the Mortgage Indenture;
(iv) after giving effect to the transaction, no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing; (v) if the Company's assets would become
subject to a lien not permitted by the Indenture, the Senior Debt Securities are
secured equally and ratably with all indebtedness secured thereby; and (vi) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger, conveyance, transfer and
lease and such supplemental indenture comply with the Indenture and that all
conditions precedent therein provided for relating to such transaction have been
complied with.
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CERTAIN DEFINITIONS
"Attributable Value" in respect of any Sale and Leaseback Transaction
means, as of the time of determination, the lesser of (i) the sale price of the
property so leased multiplied by a fraction the numerator of which is the
remaining portion of the base term of the lease included in such Sale and
Leaseback Transaction and the denominator of which is the base term of such
lease, and (ii) the total obligation (discounted to present value at the rate of
interest specified by the terms of such lease) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes as well as
maintenance, repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining portion of the
base term of the lease included in such Sale and Leaseback Transaction.
"Consolidated Capitalization" of the Company means consolidated total
assets less consolidated non-interest bearing current liabilities, all as shown
by a consolidated balance sheet of the Company and all Subsidiaries prepared in
accordance with generally accepted accounting principles at the date of such
balance sheet.
"Funded Indebtedness" means notes, bonds, debentures or other similar
evidences of indebtedness for Indebtedness which by its terms matures at or is
extendible or renewable at the option of the obligor to a date more than 12
months after the date of the creation of such Indebtedness.
"Indebtedness" means, with respect to any Person (without duplication),
(a) any liability of such Person (1) for borrowed money or under any
reimbursement obligation relating to a letter of credit, financial bond or
similar instrument or agreement, (2) evidenced by a bond, note, debenture or
similar instrument or agreement (including a purchase money obligation) given in
connection with the acquisition of any business, properties or assets of any
kind (other than a trade payable or a current liability arising in the ordinary
course of business or a performance bond or similar obligation), (3) for the
payment of money relating to any obligations under any capital lease of real or
personal property or (4) any agreement or instrument in respect of an interest
rate or currency swap, exchange or hedging transaction or other financial
derivatives transaction; (b) any liability of others described in the preceding
clause (a) that the Person has guaranteed or that is otherwise its legal
liability; and (c) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
and (b) above. For the purpose of determining any particular amount of
Indebtedness under this definition, guarantees of (or obligations with respect
to letters of credit or financial bonds supporting) Indebtedness otherwise
included in the determination of such amount shall not be included.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security arrangement of any kind or nature whatsoever on
or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Net Tangible Assets" means the amount shown as total assets on the
consolidated balance sheet of the Company prepared in accordance with generally
accepted accounting principles on the date of such balance sheet, less the
following: (i) intangible assets including, but without limitation, such items
as goodwill, trademarks, tradenames, patents and unamortized debt discount and
expense and other regulatory assets carried as an asset on the balance sheet;
and (ii) appropriate adjustments, if any, on account of minority interests.
"Outstanding," when used with respect to Senior Debt Securities of any
series, means, as of the date of determination, all such Senior Debt Securities
theretofore authenticated and delivered under this Indenture, except:
(a) such Senior Debt Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(b) such Senior Debt Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Senior Debt Securities; provided
--------
that, if such Senior Debt Securities are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture of provision
therefor satisfactory to the Trustee has been made;
(c) Senior Debt Securities as to which Defeasance has been effected
pursuant to the Indenture; and
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(d) such Senior Debt Securities in exchange for or in lieu of which
other Senior Debt Securities have been authenticated and delivered pursuant
to the Indenture, or which shall have been paid in accordance with the
provisions of the Indenture governing mutilated, destroyed, lost or stolen
Senior Debt Securities (except with respect to any such Senior Debt
Security as to which proof satisfactory to the Trustee is presented that
such Senior Debt Security is held by a Person in whose hands such Senior
Debt Security is a legal, valid and binding obligation of the Company).
"Person" means any individual, corporation, partnership, joint venture,
association, company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Sale and Lease-Back Transaction" means any arrangement with any Person,
providing for the leasing by the Company or a Subsidiary for a period, including
renewals, in excess of three years of any property or assets which have been or
are to be sold or transferred by the Company or any Subsidiary to such Person.
"Subsidiary" means any corporation or other business entity of which the
Company owns or controls (either directly or through one or more other
Subsidiaries) more than 50% of the issued share capital or other ownership
interests, in each case having ordinary voting power to elect or appoint
directors, managers or trustees of such corporation or other business entity
(whether or not capital stock or other ownership interests or any other class or
classes shall or might have voting power upon the occurrence of any
contingency).
BOOK-ENTRY SECURITIES
Each series of Senior Debt Securities may be issued in the form of one or
more global notes (the "Global Securities") representing all or part of such
series of Senior Debt Securities and which will be deposited with or on behalf
of The Depository Trust Company as depositary (the "Depositary") and registered
in the name of the Depositary or nominee of the Depositary. Certificated Senior
Debt Securities will not be exchangeable for Global Securities and, except under
the circumstances described below, the Global Securities will not be
exchangeable for certificated Senior Debt Securities.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
holds securities that its participants ("Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The
Depositary is owned by a number of its Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange Inc. and the National Association of
Securities Dealers, Inc. Access to The Depository Trust Company system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. The rules applicable to the
Depositary and its Participants are on file with the Commission.
Upon the issuance of the Global Securities in registered form, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Senior Debt Securities represented by the
Global Securities to the accounts of Participants. The accounts to be credited
shall be designated by the underwriters. Ownership of beneficial interests in
the Global Securities will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests by
Participants in the Global Securities will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee. Ownership of beneficial interests in the Global
Securities by persons that hold through Participants will be shown on, and the
transfer of that ownership interest within such Participant will be effected
only through, records maintained by such Participant. Owners of beneficial
interests in the Global Securities will not receive written confirmation
providing details of the transaction, as well as periodic statements of their
holdings, from the Participants through which they purchased beneficial
interests in the Global Securities. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in the Global Securities.
So long as the Depositary, or its nominee, is the registered owner of the
Global Securities, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Senior Debt Securities represented
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by the Global Securities for all purposes under the Indenture. Except as set
forth below, owners of beneficial interests in the Global Securities will not be
entitled to have Senior Debt Securities registered in their names, will not
receive or be entitled to receive physical delivery of the Senior Debt
Securities in definitive form and will not be considered the owner or holders
thereof under the Senior Note Indenture.
Payment of principal of, premium, if any, and any interest on the Senior
Debt Securities will be made to the Depositary or its nominee, as the case may
be, as the registered owner or the holder of the Global Securities representing
the Senior Debt Securities. None of the Company, the Trustee, any paying agent
or the registrar for the Senior Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Depositary has advised the Company that, upon receipt of any payment of
principal, premium or interest in respect of the Global Securities, the
Depositary will credit immediately Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Global Securities as shown on the records of the Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in the Global Securities held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name" and will be the responsibility of such Participants.
The Global Securities may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor of the Depositary or a nominee of such successor.
If the Depositary is at any time unwilling or unable to continue as Depositary
and a successor Depositary is not appointed by the Company within ninety days,
the Company will issue certificated notes in definitive registered form in
exchange for the Global Securities representing the Senior Debt Securities. In
addition, the Company may at any time and in its sole discretion determine not
to have any Senior Debt Securities in registered form represented by one or more
Global Securities and, in such event, will issue certificated notes in
definitive form in exchange for the Global Securities representing the Senior
Debt Securities. In any such instance, an owner of a beneficial interest in the
Global Securities will be entitled to physical delivery in definitive form of
certificated Senior Debt Securities represented by the Global Securities equal
in principal amount to such beneficial interest and to have such certificated
notes registered in its name.
DESCRIPTION OF THE FIRST MORTGAGE BONDS
First Mortgage Bonds, including any series of Senior Note Mortgage Bonds
issued as security for the Senior Debt Securities, will be issued in one or more
series under the Company's Mortgage Indenture.
The following summaries of certain provisions of the First Mortgage Bonds
and the Mortgage Indenture do not purport to be complete and are subject to, and
are qualified in their entirety by express reference to, all the provisions of
the Mortgage Indenture, including the definitions therein of certain terms.
Certain capitalized terms herein are defined in the Mortgage Indenture.
REDEMPTION AND IMPROVEMENT FUND
Redemption provisions, if any, for each series of Senior Note Mortgage
Bonds will be described in the Prospectus Supplement relating thereto. Except
as provided below, the First Mortgage Bonds outstanding on the date of the
Indenture may not be redeemed at the option of the Company prior to maturity.
Under the Mortgage Indenture, the First Mortgage Bonds may be redeemed by
application of cash deposited with the Mortgage Trustee in connection with the
taking, purchase or sale of mortgage property, by or pursuant to the direction
of a municipal or governmental body.
As an Improvement Fund, the Company must pay to the Mortgage Trustee on or
before May 1, in each year, cash equal to the amount of the Minimum Provision
for Depreciation for the preceding calendar year (i.e., as to each full calendar
month included in such period the greater of (1) the amount recorded on the
books of the Company during such calendar month as charged to income for
depreciation of Public Utility Property or (2) 1/12 of 2% of the Book Cost of
Depreciable Public Utility Property at the beginning of such calendar month),
less credits consisting of (i) Available Additions, (ii) bonds of any series
(taken at principal amount) available as the basis for the issue of First
Mortgage Bonds under the Mortgage Indenture, and/or (iii) appropriations
required for prior lien improvement funds and improvements
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and/or additions to Public Utility Property which is subject to Prior Liens, not
previously used under such Prior Liens. First Mortgage Bonds used as a credit as
aforesaid (or retired by the application of cash in the Improvement Fund) may be
reinstated by using credits of the character referred to in (i) and (ii) above
or by the deposit of cash. Cash in the Improvement Fund may be withdrawn by
using credits of the character referred to in (i) and (ii) above or may be
applied to the retirement of First Mortgage Bonds of any series. Cash held in
such fund may not be applied to the redemption of the First Mortgage Bonds. The
Company intends to meet future Improvement Fund requirements with Available
Additions.
The First Mortgage Bonds are not subject to any sinking and additions fund.
KIND AND PRIORITY OF LIEN
The Senior Note Mortgage Bonds will be secured equally and ratably with all
First Mortgage Bonds of other series by the first lien of the Mortgage Indenture
on Public Utility Property and other property owned by the Company (but not its
Subsidiaries), which includes substantially all the permanent physical
properties and franchises of the Company (except as stated below), subject,
however, to Permitted Encumbrances and minor exceptions. The Mortgage Indenture
requires that there shall be subjected to the lien thereof all after-acquired
property (except as to property of the character expressly excepted and subject
to certain limitations in cases of mergers and consolidations), subject,
however, to Permitted Encumbrances and Prior Liens. Prior Liens may consist
only of existing liens or purchase money liens on after-acquired property, and
the principal amount of all such liens may not exceed 10% of the principal
amount of the outstanding First Mortgage Bonds.
There are excepted from the lien of the Mortgage Indenture bills, notes,
accounts receivable, cash, contracts, shares of stock, bonds, evidences of
indebtedness and other securities, and all other choses in action, unless
specifically mortgaged and pledged or expressly required so to be; goods,
merchandise and appliances held for sale; materials and supplies; automobiles
and trucks and similar equipment; oil, coal and other minerals (other than gas)
underlying mortgaged lands; oil properties, oil leases and royalties and income
therefrom and rights under oil and gas leases to explore for and produce oil;
property used principally in the oil business; office equipment; and all other
after-acquired property which is not Public Utility Property. While wholly-
owned subsidiaries of the Company own interests in Unit 1 or Unit 2 of TNP One,
the interest owned by such subsidiaries will not be subject to the lien of the
Mortgage Indenture.
REPORTS
The Mortgage Indenture requires periodic inspections and reports to the
Mortgage Trustee by an independent engineer as to maintenance. A certificate of
the Company as to absence of default is required to be furnished to the Mortgage
Trustee annually.
ISSUANCE OF ADDITIONAL BONDS AND WITHDRAWAL OF CASH DEPOSITED AGAINST SUCH
ISSUANCE
The principal amount of First Mortgage Bonds which may be issued under the
Mortgage Indenture is unlimited. First Mortgage Bonds of any series may be
issued from time to time on the basis of (1) 60% of the amount of Available
Additions, (2) the deposit of cash, and (3) First Mortgage Bonds of any series
paid, redeemed or otherwise retired (or for whose payment or redemption cash has
been deposited with the Mortgage Trustee) other than First Mortgage Bonds the
retirement of which has previously been made the basis for the issuance of
additional First Mortgage Bonds or the withdrawal of cash or First Mortgage
Bonds retired through the operation of any sinking, improvement or analogous
fund to the extent that the terms of any such fund preclude such use.
With certain exceptions in the case of (3) above, additional First Mortgage
Bonds may not be issued under the Mortgage Indenture unless Net Earnings
Available for Interest of the Company for 12 consecutive months out of the
preceding 15 months are at least two-and-one-half times the aggregate amount of
annual Interest Charges on Bonded Indebtedness which gives effect to the
interest on the additional First Mortgage Bonds to be issued (the "Interest
Coverage Ratio"). Based upon this requirement and assuming an interest rate of
9.0%, the Company could have issued approximately $127 million principal amount
of First Mortgage Bonds as of June 30, 1998. Assuming an interest rate of 9.0%,
and with the availability of Available Additions, the Company could have issued
approximately $131 million principal amount of First Mortgage Bonds as of June
30, 1998.
Cash deposited with the Mortgage Trustee pursuant to (2) above may be
withdrawn to the extent of 60% of Available Additions and 100% of First Mortgage
Bonds retired and not previously used exclusive of First Mortgage
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Bonds retired through sinking fund operations, to the extent the Mortgage
Indenture precludes such use of First Mortgage Bonds, or through the Improvement
Fund.
RESTRICTIONS ON DECLARATION OF DIVIDENDS
The Mortgage Indenture provides that, so long as any First Mortgage Bonds
of Series U remain outstanding, the Company is prohibited from declaring
dividends on any shares of its common stock (other than dividends payable solely
in common stock of the Company), or making any payment on account of the
purchase, redemption, or other retirement of any shares of any class of its
stock (other than pursuant to any sinking, purchase or analogous fund for its
preferred stock) or, directly or indirectly, making any other distribution in
respect thereof (other than cash dividends on its preferred stock), unless such
dividends on common stock ("Stock Payments") are declared to be payable not more
than ninety days after the date of declaration, and unless, at the date of such
declaration of dividends on common stock or the date of such payment or
distribution (after giving effect, as if paid, to the proposed Stock Payment),
the sum of $1.5 million, plus (or minus, in the case of a deficit) the net
income of the Company computed for the period from December 31, 1969, to and
including the date of declaration (in the case of dividends on common stock) or
the making of such proposed Stock Payment, is greater than the sum of the
aggregate of all Stock Payments declared or made during such period plus the
aggregate amount of all cash dividends on, and payments pursuant to any sinking,
purchase or analogous fund for, preferred stock of the Company declared or made
during such period. At June 30, 1998, pursuant to the terms of the Mortgage
Indenture, approximately $19 million of the Company's $63 million of retained
earnings at such date was restricted.
MODIFICATION OF BONDHOLDERS' RIGHTS
The rights of the bondholders may be modified with the consent of the
holders of 75% of the First Mortgage Bonds, including not less than 60% of each
series affected. In general, no modification of the terms of maturity or
payment of principal, premium or interest is effective against any bondholder
without his consent.
THE MORTGAGE TRUSTEE
The holders of a majority in principal amount of the First Mortgage Bonds
outstanding may require the Mortgage Trustee to enforce the Mortgage Indenture,
but the Mortgage Trustee is not required to expend its own funds or incur
liability if it has reasonable grounds to believe that repayment of such funds
or liability is not reasonably assured.
No holder of any First Mortgage Bond has the right to institute suit to
enforce the Mortgage Indenture (other than with respect to the unconditional
obligation of the Company to pay the principal of, and interest accrued on,
First Mortgage Bonds to the holders thereof) unless the holders of at least 25%
in principal amount of the First Mortgage Bonds outstanding shall have filed a
request with the Mortgage Trustee for it to institute such action, together with
an offer of adequate security and indemnity.
DEFAULTS
An Event of Default is defined in the Mortgage Indenture as (a) failure to
pay principal or premium when due, (b) failure to pay interest for 30 days after
becoming due, (c) failure to discharge or satisfy any sinking or improvement
fund obligation when due, (d) failure to observe (i) the 10% restriction on
Prior Lien Indebtedness, (ii) certain restrictions on the payment of dividends,
(iii) the covenants as to sale, merger or lease, or (iv) the provisions as to
investment of certain trust funds, (e) failure to perform or observe other
covenants, agreements or conditions for 60 days after notice, (f) entry of an
order for reorganization or appointment of a trustee or receiver and continuance
of such order or appointment, unstayed, for 60 days, (g) certain adjudications,
petitions or consents in bankruptcy, insolvency or reorganization proceedings,
and (h) rendering of a judgment in excess of $100,000 and its continuance
unsatisfied for 60 days after any stay of execution thereon has been terminated.
Upon the occurrence of an Event of Default and until it shall have been
remedied, the Mortgage Trustee or the holders of not less than 25% in principal
amount of the First Mortgage Bonds outstanding may declare the principal of, and
interest accrued on, all First Mortgage Bonds to be due and payable immediately.
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<PAGE>
PLAN OF DISTRIBUTION
The Company may sell any series of the Senior Debt Securities (i) to or
through underwriters; (ii) to or through dealers; or (iii) directly to
purchasers. A Prospectus Supplement will set forth the terms of the offering of
the Senior Debt Securities; including the name or names of any underwriters or
dealers, the purchase price of such Senior Debt Securities and the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchange on which such Senior Debt Securities may be listed. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time. Only firms named
in the Prospectus Supplement or a related pricing supplement, if applicable,
will be deemed to be underwriters or dealers in connection with the Senior Debt
Securities offered thereby.
If underwriters are used in the sale, the Senior Debt Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Senior Debt Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Senior Debt Securities will be
named in the Prospectus relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Senior Debt Securities offered thereby will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all of such Senior
Debt Securities if any are purchased.
The Senior Debt Securities may be sold directly by the Company to investors
or others who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or dealers to solicit offers from certain types of institutions to
purchase the Senior Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters and dealers may be entitled under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such underwriters or dealers may be required to
make in respect thereof. Underwriters and dealers may engage in transactions
with, or perform services for the Company in the ordinary course of business.
The Senior Debt Securities may or may not be listed on a national
securities exchange. No assurance can be given that there will be a market for
the Senior Debt Securities.
VALIDITY OF SECURITIES
The validity of the Senior Debt Securities offered hereby and the Indenture
will be passed upon for the Company by Michael D. Blanchard, Vice President and
General Counsel of the Company and by Haynes and Boone, LLP. Certain other
matters will be passed upon for the Company by Haynes and Boone, LLP, Fort
Worth, Texas. Certain legal matters in connection with the offering will be
passed upon for any underwriters by Milbank, Tweed, Hadley & McCloy, New York,
New York. All matters pertaining to local laws in connection with the issuance
of the Senior Debt Securities offered hereby will be passed upon only by Haynes
and Boone, LLP as to Texas law, and Rubin, Katz, Salazar, Alley & Rouse, Santa
Fe, New Mexico, as to New Mexico law.
EXPERTS
The consolidated financial statements of Texas-New Mexico Power Company as
of and for the year ended December 31, 1997, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, have been incorporated
by reference herein and in the registration statement in reliance upon the
report of Arthur
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Andersen LLP, independent public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Texas-New Mexico Power Company as
of December 31, 1996 and 1995, and for each of the years in the two-year period
ended December 31, 1996, included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, have been incorporated by reference herein
and in the registration statement in reliance upon the report of KPMG Peat
Marwick LLP, independent auditors, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the Company's consolidated
financial statements refers to a change in the method of accounting for
operating revenues in 1995.
18
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===============================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to buy any securities
other than the securities described in this Prospectus or any offer to sell or a
solicitation of an offer to buy such securities in any circumstances in which
such offer or solicitation is unlawful. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that the information contained herein or therein is correct as of
any time subsequent to the date of such information.
______________
TABLE OF CONTENTS
Page
----
Available Information .................................................... 2
Incorporation of Certain ................................................. 2
Documents by Reference ................................................... 2
Statement Regarding Forward
Looking Information .................................................... 2
The Company ............................................................... 3
Use of Proceeds ........................................................... 3
Ratio of Earnings to Fixed Charges ........................................ 3
Overview of Securities .................................................... 4
Description of the Senior Debt Securities ................................. 4
Description of the First Mortgage Bonds ................................... 14
Plan of Distribution ...................................................... 17
Validity of Securities .................................................... 17
Experts ................................................................... 17
===============================================================================
===============================================================================
$200,000,000
TEXAS-NEW MEXICO
POWER COMPANY
SENIOR DEBT SECURITIES
------------
PROSPECTUS
------------
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission Registration Fee .. $ 59,000
Printing Expenses .................................... 10,500
Accounting Fees and Expenses ......................... 45,000
Legal Fees and Expenses .............................. 150,000
Blue Sky Fees and Expenses ........................... 5,000
Rating Agency Fees ................................... 92,500
Trustee Fees ......................................... 20,000
Miscellaneous Expenses ............................... 20,000
--------
Total ............................................. $402,000
========
All of the above expenses except the Securities and Exchange Commission
registration fee are estimated. All of such expenses will be borne by the
Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides
that any director or officer of a Texas corporation may be indemnified against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with or in defending any action, suit or
proceeding in which he was, is or is threatened to be made a party by reason of
his position. With respect to any proceeding arising from actions taken in his
official capacity, as a director or officer, he may be indemnified so long as it
shall be determined that he conducted himself in good faith and that he
reasonably believed that such conduct was in the corporation's best interest.
In cases not concerning conduct in his official capacity as a director or
officer, a director or officer may be indemnified so long as it shall be
determined that he conducted himself in good faith and that he reasonably
believed that his conduct was not opposed to the corporation's best interest.
In the case of any criminal proceeding, a director or officer may be indemnified
if he had no reasonable cause to believe his conduct was unlawful. If a
director or officer is found liable to the corporation on the basis that
personal benefit was improperly received by him, the indemnification is limited
to reasonable expenses actually incurred in connection with such proceeding. No
indemnification may be made if such officer or director is found liable for
willful or intentional misconduct in the performance of his duty to the
corporation. If a director or officer is wholly successful, on the merits or
otherwise, in connection with such a proceeding, such indemnification is
mandatory.
Section 5 of Article 7 of the Company's Bylaws requires the indemnification
of officers and directors to the fullest extent permitted by the TBCA or any
other applicable Act. The Company also has policies insuring its officers and
directors against certain liabilities for actions taken in such capacities,
including liabilities under the Act.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
the articles of incorporation of a corporation may provide that a director of
the corporation shall not be liable, or shall be liable only to the extent
provided in the articles of incorporation, to the corporation or its
shareholders or members for monetary damages for an act or omission in the
director's capacity as a director, except that this article does not authorize
the elimination or limitation of the liability of a director to the extent the
director is found liable for:
(i) a breach of the director's duty of loyalty to the corporation
or its shareholders or members;
(ii) an act or omission not in good faith that constitutes a
breach of duty of the director to the corporation or an act or omission
that involves intentional misconduct or a knowing violation of the law;
(iii) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken within
the scope of the director's office;
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(iv) an act or omission for which the liability of a director is
expressly provided for by an applicable statute.
Article X of the Company's Articles of Incorporation provides that, to the
fullest extent allowed pursuant to the Texas Miscellaneous Corporation Laws Act,
or any other applicable laws as presently or hereafter in effect, no director of
the Company shall be personally liable to the Company or its shareholders for
monetary damages for or with respect to any acts or omissions in his capacity as
director of the Company.
ITEM 16. EXHIBITS
Exhibits filed with this registration statement are denoted by "*."
Exhibit
No. Description
------- -----------
1(a) - Form of Underwriting Agreement.
*4(a) - Form of Indenture (the "Indenture") between Texas-New Mexico
Power Company and Chase Bank of Texas, N.A., related to the
Senior Debt Securities.
4(b) - Form of First Supplemental Indenture related to Senior Debt
Securities.
4(c) - Indenture of Mortgage and Deed of Trust (the "Mortgage
Indenture") dated as of November 1, 1944 (Exhibit 2(d) to
Community Public Service Co. ("CPS") 1978 Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(d) - Seventh Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1963 (Exhibit 2(k) to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(e) - Eighth Supplemental Indenture to the Mortgage Indenture dated
as of July 1, 1963 (Exhibit 2(1), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(f) - Ninth Supplemental Indenture to the Mortgage Indenture dated
as of August 1, 1965 (Exhibit 2(m), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(g) - Tenth Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1966 (Exhibit 2(n), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(h) - Eleventh Supplemental Indenture to the Mortgage Indenture
dated as of October 1, 1969 (Exhibit 2(o), to CPS Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(i) - Twelfth Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1971 (Exhibit 2(p), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(j) - Thirteenth Supplemental Indenture to the Mortgage Indenture
dated as of July 1, 1974 (Exhibit 2(q), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(k) - Fourteenth Supplemental Indenture to the Mortgage Indenture
dated as of March 1, 1975 (Exhibit 2(r), to CPS Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(l) - Fifteenth Supplemental Indenture to the Mortgage Indenture
dated as of September 1, 1976 (Exhibit 2(e), File
No. 2-57034) and incorporated by reference herein.
4(m) - Sixteenth Supplemental Indenture to the Mortgage Indenture
dated as of November 1, 1981 (Exhibit 4(x), File No. 2-74332)
and incorporated by reference herein.
4(n) - Seventeenth Supplemental Indenture to the Mortgage Indenture
dated as of December 1, 1982 (Exhibit 4(cc), File
No. 2-80407) and incorporated by reference herein.
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4(o) - Eighteenth Supplemental Indenture to the Mortgage Indenture
dated as of September 1, 1983 (Exhibit (a) to Form 10-Q of the
Company for the quarter ended September 30, 1983, File
No. 1-4756) and incorporated by reference herein.
4(p) - Nineteenth Supplemental Indenture to the Mortgage Indenture
dated as of May 1, 1985 (Exhibit 4(v), File No. 2-97230) and
incorporated by reference herein.
4(q) - Twentieth Supplemental Indenture to the Mortgage Indenture
dated as of July 1, 1987 (Exhibit 4(o) to Form 10-K of the
Company for the year ended December 31, 1987, File
No. 2-97230) and incorporated by reference herein.
4(r) - Twenty-First Supplemental Indenture to the Mortgage
Indenture dated as of July 1, 1989 (Exhibit 4(p) to Form
10-Q of the Company for the quarter ended June 30, 1989,
File No. 2-97230) and incorporated by reference herein.
4(s) - Twenty-Second Supplemental Indenture to the Mortgage
Indenture dated as of January 15, 1992 (Exhibit 4(q) to Form
10-K of the Company for the year ended December 31, 1991,
File No. 2-97230) and incorporated by reference herein.
4(t) - Twenty-Third Supplemental Indenture to the Mortgage
Indenture dated as of September 15, 1993 (Exhibit 4(r) to
Form 10-K of the Company for the year ended December 31,
1993, File No. 2-97230) and incorporated by reference
herein.
4(u) - Twenty-Fourth Supplemental Indenture to the Mortgage
Indenture dated as of November 3, 1995 (Exhibit 4(s) to Form
10-K of the Company for the year ended December 31, 1993,
File No. 2-97230) and incorporated by reference herein.
4(v) - Twenty-Fifth Supplemental Indenture to the Mortgage
Indenture dated as of September 10, 1996 (Exhibit 4(t) to
Form 10-Q of the Company for the quarter ended September 30,
1996, File No. 2-97230) and incorporated by reference
herein.
4(w) - Indenture and Security Agreement for 12 1/2% Secured
Debentures dated as of January 15, 1992 (Exhibit 4(r) to
Form 10-K of the Company for the year ended December 31,
1991, File No. 2-97230) and incorporated by reference
herein.
4(x) - Indenture and Security Agreement for 10 3/4% Secured
Debentures dated as of September 15, 1993 (Exhibit 4(t) to
Form 10-K of the Company for the year ended December 31,
1993, File No. 2-97230) and incorporated by reference
herein.
4(y) - Form of Supplemental Indenture to the Mortgage Indenture
related to the Senior Note Mortgage Bonds.
5(a) - Opinion of Haynes and Boone, LLP as to the validity of the
Senior Debt Securities.
*12(a) - Computation of Ratio of Earnings to Fixed Charges.
23(a) - Consent of Haynes and Boone, LLP contained in the opinion
filed as Exhibit 5(a).
23(b) - Consent of Rubin, Katz, Salazar, Alley & Rouse.
*23(c) - Consent of KPMG Peat Marwick LLP, independent auditors.
*23(d) - Consent of Arthur Andersen LLP, independent public
accountants.
*24(a) - Power of Attorney appears on the signature page hereof.
*25(a) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Chase Bank of Texas, N.A., as
Trustee under the Indenture relating to the Senior Debt
Securities.
*25(b) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of U.S. Bank Trust, N.A., as
Trustee under the Mortgage Indenture relating to the Senior
Note Mortgage Bonds.
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ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement
notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, State of Texas, on the 24th day of
September, 1998.
TEXAS-NEW MEXICO POWER COMPANY
By: /s/ Manjit S. Cheema
-----------------------------------------
Manjit S. Cheema
Senior Vice President and Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Manjit S. Cheema, Michael D. Blanchard
and Paul W. Talbot, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign, execute and file
with the Securities and Exchange Commission and any state securities regulatory
board or commission any documents relating to the proposed issuance and
registration of the securities offered pursuant to this Registration Statement
on Form S-3 and any registration statement of the Company relating to the Senior
Debt Securities filed after the date hereof pursuant to Rule 462(b) under the
Securities Act of 1933, including any amendment or amendments, including post-
effective amendments, relating thereto, with all exhibits and any and all
documents required to be filed with respect thereto with any regulatory
authority, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he or she might or
could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Kervern R. Joyce Chairman, President and September 24, 1998
- --------------------------------- Chief Executive Officer
Kevern R. Joyce
/s/ Manjit S. Cheema Senior Vice President and September 24, 1998
- --------------------------------- Chief Financial Officer
Manjit S. Cheema
/s/ Michael J. Ricketts Controller and September 24, 1998
- --------------------------------- Chief Accounting Officer
Michael J. Ricketts
/s/ R. Denny Alexander Director September 24, 1998
- ---------------------------------
R. Denny Alexander
/s/ John A. Fanning Director September 24, 1998
- ---------------------------------
John A. Fanning
</TABLE>
II-6
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Sidney M. Gutierrez Director September 24, 1998
- --------------------------------
Sidney M. Gutierrez
/s/ Harris L. Kempner Director September 24, 1998
- --------------------------------
Harris L. Kempner, Jr.
/s/ J.R. Holland, Jr. Director September 24, 1998
- --------------------------------
J. R. Holland, Jr.
/s/ Dr. Carol D. Smith Surles Director September 24, 1998
- --------------------------------
Dr. Carol D. Smith Surles
/s/ Larry G. Wheeler Director September 24, 1998
- --------------------------------
Larry G. Wheeler
/s/ Dennis H. Withers Director September 24, 1998
- --------------------------------
Dennis H. Withers
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
Exhibits filed with this registration statement are denoted by "*."
Exhibit
No. Description
------- -----------
1(a) - Form of Underwriting Agreement.
*4(a) - Form of Indenture (the "Indenture") between Texas-New Mexico
Power Company and Chase Bank of Texas, N.A., related to the
Senior Debt Securities.
4(b) - Form of First Supplemental Indenture related to Senior Debt
Securities.
4(c) - Indenture of Mortgage and Deed of Trust (the "Mortgage
Indenture") dated as of November 1, 1944 (Exhibit 2(d) to
Community Public Service Co. ("CPS") 1978 Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(d) - Seventh Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1963 (Exhibit 2(k) to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(e) - Eighth Supplemental Indenture to the Mortgage Indenture dated
as of July 1, 1963 (Exhibit 2(1), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(f) - Ninth Supplemental Indenture to the Mortgage Indenture dated
as of August 1, 1965 (Exhibit 2(m), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(g) - Tenth Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1966 (Exhibit 2(n), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(h) - Eleventh Supplemental Indenture to the Mortgage Indenture
dated as of October 1, 1969 (Exhibit 2(o), to CPS Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(i) - Twelfth Supplemental Indenture to the Mortgage Indenture dated
as of May 1, 1971 (Exhibit 2(p), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(j) - Thirteenth Supplemental Indenture to the Mortgage Indenture
dated as of July 1, 1974 (Exhibit 2(q), to CPS Form S-7, File
No. 2-61323) and incorporated by reference herein.
4(k) - Fourteenth Supplemental Indenture to the Mortgage Indenture
dated as of March 1, 1975 (Exhibit 2(r), to CPS Form S-7,
File No. 2-61323) and incorporated by reference herein.
4(l) - Fifteenth Supplemental Indenture to the Mortgage Indenture
dated as of September 1, 1976 (Exhibit 2(e), File
No. 2-57034) and incorporated by reference herein.
4(m) - Sixteenth Supplemental Indenture to the Mortgage Indenture
dated as of November 1, 1981 (Exhibit 4(x), File No. 2-74332)
and incorporated by reference herein.
4(n) - Seventeenth Supplemental Indenture to the Mortgage Indenture
dated as of December 1, 1982 (Exhibit 4(cc), File
No. 2-80407) and incorporated by reference herein.
4(o) - Eighteenth Supplemental Indenture to the Mortgage Indenture
dated as of September 1, 1983 (Exhibit (a) to Form 10-Q of the
Company for the quarter ended September 30, 1983, File
No. 1-4756) and incorporated by reference herein.
4(p) - Nineteenth Supplemental Indenture to the Mortgage Indenture
dated as of May 1, 1985 (Exhibit 4(v), File No. 2-97230) and
incorporated by reference herein.
<PAGE>
4(q) - Twentieth Supplemental Indenture to the Mortgage Indenture
dated as of July 1, 1987 (Exhibit 4(o) to Form 10-K of the
Company for the year ended December 31, 1987, File
No. 2-97230) and incorporated by reference herein.
4(r) - Twenty-First Supplemental Indenture to the Mortgage
Indenture dated as of July 1, 1989 (Exhibit 4(p) to Form
10-Q of the Company for the quarter ended June 30, 1989,
File No. 2-97230) and incorporated by reference herein.
4(s) - Twenty-Second Supplemental Indenture to the Mortgage
Indenture dated as of January 15, 1992 (Exhibit 4(q) to Form
10-K of the Company for the year ended December 31, 1991,
File No. 2-97230) and incorporated by reference herein.
4(t) - Twenty-Third Supplemental Indenture to the Mortgage
Indenture dated as of September 15, 1993 (Exhibit 4(r) to
Form 10-K of the Company for the year ended December 31,
1993, File No. 2-97230) and incorporated by reference
herein.
4(u) - Twenty-Fourth Supplemental Indenture to the Mortgage
Indenture dated as of November 3, 1995 (Exhibit 4(s) to Form
10-K of the Company for the year ended December 31, 1993,
File No. 2-97230) and incorporated by reference herein.
4(v) - Twenty-Fifth Supplemental Indenture to the Mortgage
Indenture dated as of September 10, 1996 (Exhibit 4(t) to
Form 10-Q of the Company for the quarter ended September 30,
1996, File No. 2-97230) and incorporated by reference
herein.
4(w) - Indenture and Security Agreement for 12 1/2% Secured
Debentures dated as of January 15, 1992 (Exhibit 4(r) to
Form 10-K of the Company for the year ended December 31,
1991, File No. 2-97230) and incorporated by reference
herein.
4(x) - Indenture and Security Agreement for 10 3/4% Secured
Debentures dated as of September 15, 1993 (Exhibit 4(t) to
Form 10-K of the Company for the year ended December 31,
1993, File No. 2-97230) and incorporated by reference
herein.
4(y) - Form of Supplemental Indenture to the Mortgage Indenture
related to the Senior Note Mortgage Bonds.
5(a) - Opinion of Haynes and Boone, LLP as to the validity of the
Senior Debt Securities.
*12(a) - Computation of Ratio of Earnings to Fixed Charges.
23(a) - Consent of Haynes and Boone, LLP contained in the opinion
filed as Exhibit 5(a).
23(b) - Consent of Rubin, Katz, Salazar, Alley & Rouse.
*23(c) - Consent of KPMG Peat Marwick LLP, independent auditors.
*23(d) - Consent of Arthur Andersen LLP, independent public
accountants.
*24(a) - Power of Attorney appears on the signature page hereof.
*25(a) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Chase Bank of Texas, N.A., as
Trustee under the Indenture relating to the Senior Debt
Securities.
*25(b) - Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of U.S. Bank Trust, N.A., as
Trustee under the Mortgage Indenture relating to the Senior
Note Mortgage Bonds.
<PAGE>
EXHIBIT 4(a)
================================
TEXAS-NEW MEXICO POWER COMPANY
and
CHASE BANK OF TEXAS, N.A.
as Trustee
INDENTURE
Dated as of
, 1998
------
Providing for Issuance of Securities
================================================================================
<PAGE>
TEXAS-NEW MEXICO POWER COMPANY
Reconciliation and tie between the Trust Indenture Act and Indenture,
dated as of [______________], 1998
Trust Indenture Indenture
Act Section Section
- --------------- ---------
(S)310 (a)(1).................................................... 6.9
(a)(2).................................................... 6.9
(a)(3).................................................... Not Applicable
(a)(4).................................................... Not Applicable
(a)(5).................................................... 6.9
(b)....................................................... 6.8, 6.10
(c)....................................................... Not Applicable
(S)311 .......................................................... 6.13
(S)312 (a)....................................................... 7.1
(b)....................................................... 7.2(a)
(c)....................................................... 7.2(c)
(S)313 (a)....................................................... 7.3(a)
(b)....................................................... 7.3(b)
(c)....................................................... 7.3(a)
(d)....................................................... 7.3(c)
(S)314 (a)(1)(2)(3)............................................... 7.4
(a)(4).................................................... 10.4
(b)....................................................... Not Applicable
(c)(1).................................................... 1.2
(c)(2).................................................... 1.2
(c)(3).................................................... Not Applicable
(d)....................................................... Not Applicable
(e)....................................................... 1.2
(S)315 (a)....................................................... 6.1(a), 6.1(c)
(b)....................................................... 6.2
(c)....................................................... 6.1(b)
(d)....................................................... 6.1(c)
(d)(1).................................................... 6.1(a)
(d)(2).................................................... 6.1(c)(2)
(d)(3).................................................... 6.1(c)(3)
(e)....................................................... 5.14
(S)316 (a)....................................................... 1.1
(a)(1)(A)................................................. 5.12, 5.14
(a)(1)(B)................................................. 5.13
(a)(2).................................................... Not Applicable
(b)....................................................... 5.8
(c)....................................................... 1.4(d)
(S)317 (a)(1).................................................... 5.3
(a)(2).................................................... 5.4
(b)....................................................... 10.3
(S)318 (a)....................................................... 1.7
-i-
<PAGE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
Definitions and Other Provisions of General Application.... 1
Section 1.1 Definitions.....................................................1
"ACT"..........................................................2
"AFFILIATE"....................................................2
"ATTRIBUTABLE VALUE"...........................................2
"AUTHENTICATING AGENT".........................................2
"BOARD OF DIRECTORS"...........................................2
"BOARD RESOLUTION".............................................2
"BUSINESS DAY".................................................2
"COMMISSION"...................................................2
"COMPANY"......................................................3
"COMPANY REQUEST" and "COMPANY ORDER"..........................3
"CONSOLIDATED CAPITALIZATION"..................................3
"CORPORATE TRUST OFFICE".......................................3
"CORPORATION"..................................................3
"COVENANT DEFEASANCE"..........................................3
"DEFAULTED INTEREST"...........................................3
"DEFEASANCE"...................................................3
"DEPOSITARY"...................................................3
"EVENT OF DEFAULT".............................................3
"EXCHANGE ACT".................................................3
"FEDERAL BANKRUPTCY ACT".......................................3
"FUNDED DEBT"..................................................4
"GLOBAL SECURITY"..............................................4
"HOLDER".......................................................4
"INDEBTEDNESS".................................................4
"INDENTURE"....................................................4
"INDEPENDENT"..................................................5
"INTEREST".....................................................5
"INTEREST PAYMENT DATE"........................................5
"INVESTMENT COMPANY ACT".......................................5
"LIEN".........................................................5
"MATURITY".....................................................5
"NET TANGIBLE ASSETS"..........................................5
"NOTICE OF DEFAULT"............................................5
"OFFICER"......................................................5
"OFFICERS' CERTIFICATE"........................................5
"OPINION OF COUNSEL"...........................................6
"ORIGINAL ISSUE DISCOUNT SECURITY".............................6
"OUTSTANDING"..................................................6
"PAYING AGENT".................................................7
"PERIODIC OFFERING"............................................7
"PERSON".......................................................7
-ii-
<PAGE>
"PLACE OF PAYMENT".............................................7
"PREDECESSOR SECURITIES".......................................7
"REDEMPTION DATE"..............................................7
"REDEMPTION PRICE".............................................7
"REGULAR RECORD DATE"..........................................8
"REPAYMENT DATE"...............................................8
"REPAYMENT PRICE"..............................................8
"RESPONSIBLE OFFICER"..........................................8
"SALE AND LEASEBACK TRANSACTION"...............................8
"SECURITIES ACT"...............................................8
"SECURITY" or "SECURITIES".....................................8
"SECURITY REGISTER"............................................8
"SECURITY REGISTRAR"...........................................8
"SECURITYHOLDER"...............................................8
"SPECIAL RECORD DATE"..........................................8
"STATED MATURITY"..............................................9
"SUBSIDIARY"...................................................9
"TRUST INDENTURE ACT"..........................................9
"TRUSTEE"......................................................9
"U.S. GOVERNMENT OBLIGATIONS"..................................9
"VICE PRESIDENT"...............................................9
Section 1.2 Compliance Certificates and Opinions............................9
Section 1.3 Form of Documents Delivered to Trustee.........................10
Section 1.4 Acts of Securityholders........................................10
Section 1.5 Notices, etc., to Trustee and Company..........................11
Section 1.6 Notices to Securityholders; Waiver.............................12
Section 1.7 Conflict with Trust Indenture Act..............................12
Section 1.8 Effect of Headings and Table of Contents.......................12
Section 1.9 Successors and Assigns.........................................12
Section 1.10 Separability Clause...........................................12
Section 1.11 Benefits of Indenture.........................................13
Section 1.12 Governing Law.................................................13
Section 1.13 Legal Holidays................................................13
Section 1.14 Counterparts..................................................13
Section 1.15 No Recourse Against Others....................................13
ARTICLE 2
Security Forms..............................................13
Section 2.1 Forms Generally................................................13
Section 2.2 Forms of Securities............................................14
Section 2.3 Form of Trustee's Certificate of Authentication................14
Section 2.4 Securities Issuable in the Form of a Global Security...........14
ARTICLE 3
The Securities..............................................16
Section 3.1 General Title; General Limitations; Issuable in
Series; Terms of Particular Series...........................16
Section 3.2 Denominations..................................................18
Section 3.3 Execution, Authentication, Delivery and Dating.................18
-iii-
<PAGE>
Section 3.4 Temporary Securities...........................................21
Section 3.5 Registration, Transfer and Exchange............................21
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities...............22
Section 3.7 Payment of Interest; Interest Rights Preserved.................23
Section 3.8 Persons Deemed Owners..........................................24
Section 3.9 Cancellation...................................................24
Section 3.10 Computation of Interest.......................................25
Section 3.11 Periodic Offering of Securities...............................25
Section 3.12 CUSIP Numbers.................................................25
ARTICLE 4
Satisfaction and Discharge..................................25
Section 4.1 Satisfaction and Discharge of Indenture........................25
Section 4.2 Application of Trust Money.....................................27
ARTICLE 5
Remedies....................................................27
Section 5.1 Events of Default..............................................27
Section 5.2 Acceleration of Maturity; Rescission and Annulment.............28
Section 5.3 Collection of Indebtedness and Suits
for Enforcement by Trustee...................................29
Section 5.4 Trustee May File Proofs of Claim...............................30
Section 5.5 Trustee May Enforce Claims Without
Possession of Securities.....................................30
Section 5.6 Application of Money Collected.................................31
Section 5.7 Limitation on Suits............................................31
Section 5.8 Unconditional Right of Securityholders to
Receive Principal, Premium and Interest......................31
Section 5.9 Restoration of Rights and Remedies.............................32
Section 5.10 Rights and Remedies Cumulative................................32
Section 5.11 Delay or Omission Not Waiver..................................32
Section 5.12 Control by Securityholders....................................32
Section 5.13 Waiver of Defaults............................................32
Section 5.14 Undertaking for Costs.........................................33
Section 5.15 Waiver of Stay or Extension Laws..............................33
ARTICLE 6
The Trustee.................................................33
Section 6.1 Certain Duties and Responsibilities............................33
Section 6.2 Notice of Defaults.............................................34
Section 6.3 Certain Rights of Trustee......................................35
Section 6.4 Not Responsible for Recitals or Issuance of Securities.........36
Section 6.5 May Hold Securities............................................36
Section 6.6 Money Held in Trust............................................36
Section 6.7 Compensation and Reimbursement.................................36
Section 6.8 Disqualification; Conflicting Interests........................37
Section 6.9 Corporate Trustee Required; Eligibility........................37
Section 6.10 Resignation and Removal; Appointment of Successor.............37
Section 6.11 Acceptance of Appointment by Successor........................39
Section 6.12 Merger, Conversion, Consolidation or Successor
to Business.................................................40
-iv-
<PAGE>
Section 6.13 Preferential Collection of Claims Against Company.............40
Section 6.14 Appointment of Authenticating Agent...........................43
Section 6.15 No Conflict...................................................44
ARTICLE 7
Securityholders' Lists and Reports by
Trustee and Company.........................................46
Section 7.1 Company to Furnish Trustee Names and Addresses of
Securityholders..............................................46
Section 7.2 Preservation of Information; Communications to
Securityholders..............................................46
Section 7.3 Reports by Trustee.............................................47
Section 7.4 Reports by Company.............................................48
Section 7.5 Statement by Officers as to Default............................49
ARTICLE 8
Consolidation, Merger, Conveyance, Transfer or Lease........49
Section 8.1 Company May Consolidate, etc. Only on Certain Terms............49
Section 8.2 Successor Corporation Substituted..............................50
ARTICLE 9
Supplemental Indentures.....................................50
Section 9.1 Supplemental Indenture Without Consent
of Securityholders...........................................50
Section 9.2 Supplemental Indentures With Consent
of Securityholders...........................................51
Section 9.3 Execution of Supplemental Indentures...........................52
Section 9.4 Effect of Supplemental Indentures..............................52
Section 9.5 Conformity with Trust Indenture Act............................52
Section 9.6 Reference in Securities to Supplemental Indentures.............53
ARTICLE 10
Covenants...................................................53
Section 10.1 Payment of Principal, Premium and Interest....................53
Section 10.2 Maintenance of Office or Agency...............................53
Section 10.3 Money for Security Payments to Be Held in Trust...............53
Section 10.4 Statement as to Compliance....................................55
Section 10.5 Corporate Existence...........................................55
Section 10.6 Maintenance of Properties.....................................55
Section 10.7 Maintenance of Insurance......................................55
Section 10.8 Waiver of Certain Covenants...................................55
Section 10.9 Further Assurances............................................56
Section 10.10 Restrictions on Liens.........................................56
Section 10.11 Restrictions on Sale and Leaseback Transactions...............58
Section 10.12 Compliance with Laws..........................................58
Section 10.13 Payment of Taxes and Claims...................................59
ARTICLE 11
Redemption of Securities....................................59
Section 11.1 Applicability of Article......................................59
-v-
<PAGE>
Section 11.2 Election to Redeem; Notice to Trustee.........................59
Section 11.3 Selection by Trustee of Securities to Be Redeemed.............59
Section 11.4 Notice of Redemption..........................................60
Section 11.5 Deposit of Redemption Price...................................60
Section 11.6 Securities Payable on Redemption Date.........................61
Section 11.7 Securities Redeemed in Part...................................61
ARTICLE 12
Sinking Funds...............................................61
Section 12.1 Applicability of Article......................................61
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.........61
Section 12.3 Redemption of Securities for Sinking Fund.....................62
ARTICLE 13
Defeasance and Covenant Defeasance..........................62
Section 13.1 Company's Right with Respect to Defeasance
or Covenant Defeasance.......................................62
Section 13.2 Defeasance and Discharge......................................62
Section 13.3 Covenant Defeasance...........................................63
Section 13.4 Conditions to Defeasance or Covenant Defeasance...............63
Section 13.5 Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions................65
Section 13.6 Reinstatement.................................................65
-vi-
<PAGE>
INDENTURE dated as of [ ], 1998 (the "Indenture"), between TEXAS-
NEW MEXICO POWER COMPANY, a corporation duly organized and existing under the
laws of the State of Texas (hereinafter called the "Company"), having its
principal place of business at 4100 International Plaza, Fort Worth, Texas 76113
and CHASE BANK OF TEXAS, N.A., a national banking association, duly organized
and existing under the laws of the United States of America, as trustee
hereunder (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness (herein called the "Security" or
the "Securities"), to be issued in one or more fully registered series as in
this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
AGREEMENTS OF THE PARTIES
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE 1
Definitions and Other Provisions
of General Application
Section 1.1 Definitions.
For all purposes of this Indenture and of any indenture supplemental hereto,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such United States accounting
principles as are generally accepted at the date of such computation;
(d) all references in this instrument to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this instrument. The
<PAGE>
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(e) "INCLUDING" and words of similar import shall be deemed to be
followed by "without limitation."
"ACT", when used with respect to any Securityholder, has the meaning
specified in Section 1.4.
"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.
"ATTRIBUTABLE VALUE" in respect of any Sale and Leaseback Transaction
means, as of the time of determination, the lesser of (i) the sale price of the
Property so leased multiplied by a fraction the numerator of which is the
remaining portion of the base term of the lease included in such Sale and
Leaseback Transaction and the denominator of which is the base term of such
lease, and (ii) the total obligation (discounted to present value at the rate of
interest specified by the terms of such lease) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes as well as
maintenance, repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining portion of the
base term of the lease included in such Sale and Leaseback Transaction.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series under Section 6.14.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Board of Directors of the Company to
have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"BUSINESS DAY" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized or required by law or executive order to be closed.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
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"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written
request or order signed in the name of the Company by any two of the following:
its Chairman of the Board, its Vice Chairman of the Board, President or a Vice
President, its Treasurer, Assistant Treasurer, its Controller, Assistant
Controller, its Secretary or Assistant Secretary, its principal financial
officer, its principal accounting officer or any other officer, employee or
agent of the Company duly authorized by a Board Resolution and delivered to the
Trustee.
"CONSOLIDATED CAPITALIZATION" of the Company means consolidated total
assets less consolidated non-interest bearing current liabilities, all as shown
by a consolidated balance sheet of the Company and all Subsidiaries prepared in
accordance with generally accepted accounting principles at the date of such
balance sheet.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
Dallas, Texas at which at any particular time its corporate trust business shall
be administered, which office at the date hereof is located at 2200 Ross Avenue,
5th Floor, Dallas, Texas 75201, except that with respect to presentation of
Securities for payment or for registration of transfer or exchange, such term
shall mean the office or agency of the Trustee at which at any particular time
its corporate agency business shall be conducted; and such other officer as the
Trustee may designate from time to time.
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COVENANT DEFEASANCE" has the meaning specified in Section 13.3.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEFEASANCE" has the meaning specified in Section 13.2.
"DEPOSITARY" means, unless otherwise specified by the Company pursuant
to either Section 2.4 or 3.1, with respect to Securities of any series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Exchange Act or other applicable statute or regulation.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FEDERAL BANKRUPTCY ACT" has the meaning specified in Section 6.13.
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"FUNDED DEBT" means notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed which by its terms matures at or is
extendible or renewable at the option of the obligor to a date more than 12
months after the date of the creation of such debt.
"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 Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Request, which
shall be registered in the name of the Depositary 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 the same
original issue date, date or dates on which principal is due, and interest rate
or method of determining interest.
"HOLDER", when used with respect to any Security, means a
Securityholder.
"INDEBTEDNESS" means, with respect to any Person (without
duplication), (a) any liability of such Person (1) for borrowed money or under
any reimbursement obligation relating to a letter of credit, financial bond or
similar instrument or agreement, (2) evidenced by a bond, note, debenture or
similar instrument or agreement (including a purchase money obligation) given in
connection with the acquisition of any business, properties or assets of any
kind (other than a trade payable or a current liability arising in the ordinary
course of business or a performance bond or similar obligation), (3) for the
payment of money relating to any obligations under any capital lease of real or
personal property or (4) for purposes of Sections 10.6 and 10.7, under any
agreement or instrument in respect of an interest rate or currency swap,
exchange or hedging transaction or other financial derivatives transaction; (b)
any liability of others described in the preceding clause (a) that the Person
has guaranteed or that is otherwise its legal liability; and (c) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a) and (b) above. For the
purpose of determining any particular amount of Indebtedness under this
definition, guarantees of (or obligations with respect to letters of credit or
financial bonds supporting) Indebtedness otherwise included in the determination
of such amount shall not be included.
"INDENTURE" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 3.1; provided, however, that if at any
time more than one Person is acting as Trustee under this instrument due to the
appointment of one or more separate Trustees for any one or more separate series
of Securities pursuant to Section 6.10, "Indenture" shall mean, with respect to
such series of Securities for which any such Person is Trustee, this instrument
as originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of
Securities for which such Person is Trustee established as contemplated by
Section 3.1, exclusive, however, of any provisions or terms which relate solely
to other series of Securities for which such Person is not Trustee, regardless
of when such terms or provisions were adopted, and exclusive of any provisions
or terms adopted by means of one or more indentures supplemental hereto executed
and delivered after such Person had become such Trustee but to which such
Person, as such Trustee, was not a party.
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"INDEPENDENT", when used with respect to any specified Person, means
such a Person who (1) is in fact independent, (2) does not have any direct
financial interest or any material indirect financial interest in the Company or
in any other obligor upon the Securities or in any Affiliate of the Company or
of such other obligor, and (3) is not at the relevant time connected with the
Company or such other obligor or any Affiliate of the Company or of such other
obligor, as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. Whenever it is herein provided
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by a Company Order, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"INTEREST", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"INTEREST PAYMENT DATE", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"LIEN" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
encumbrance, or other security arrangement of any kind or nature whatsoever on
or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"MATURITY", when used with respect to any Securities, means the date
on which the principal of any such Security or an installment of principal
becomes due and payable as therein or herein provided, whether on a Repayment
Date, at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"NET TANGIBLE ASSETS" means the amount shown as total assets on the
consolidated balance sheet of the Company prepared in accordance with generally
accepted accounting principles on the date of such balance sheet, less the
following: (i) intangible assets including, but without limitation, such items
as goodwill, trademarks, tradenames, patents and unamortized debt discount and
expense and other regulatory assets carried as an asset on the balance sheet;
and (ii) appropriate adjustments, if any, on account of minority interests.
"NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 5.1(d).
"OFFICER" means the Chairman of the Board, the Vice Chairman of the
Board, the President or a Vice President, the Treasurer, an Assistant Treasurer,
the Controller, an Assistant Controller, the Secretary or an Assistant Secretary
of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by any two of the
following: the Chairman of the Board, the Vice Chairman of the Board, the
President or a Vice President, the
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Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the
Secretary or an Assistant Secretary of the Company, its principal financial
officer, its principal accounting officer or any other officer, employee or
agent of the Company duly authorized by a Board Resolution, and delivered to the
Trustee. Wherever this Indenture requires that an Officers' Certificate be
signed also by an engineer or an accountant or other expert, such engineer,
accountant or other expert (except as otherwise expressly provided in this
Indenture) may be in the employ of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
counsel to the Company. Such counsel shall be acceptable to the Trustee, whose
acceptance shall not be unreasonably withheld.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security deemed an
Original Issue Discount Security for United States federal income tax purposes.
"OUTSTANDING", when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(a) such Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(b) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture and provision
therefor satisfactory to the Trustee has been made;
(c) Securities as to which Defeasance has been effected pursuant to
Section 13.2; and
(d) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture, or
which shall have been paid pursuant to the terms of Section 3.6 (except with
respect to any such Security as to which proof satisfactory to the Trustee is
presented that such Security is held by a Person in whose hands such Security is
a legal, valid and binding obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given, made or taken any request, demand,
authorization, direction, notice, consent or waiver hereunder as of any date,
(A) the principal amount of an Original Issue Discount Security which shall be
deemed to be Outstanding shall be the amount of the principal thereof which
would be due and payable as of such date upon acceleration of the Maturity
thereof to such date pursuant to Section 5.2, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not
determinable, the principal amount of such Security which shall be deemed to be
Outstanding shall be the amount as specified or determined as contemplated by
Section 3.1, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding
shall be the U.S. dollar equivalent, determined as of such date in the manner
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provided as contemplated by Section 3.1, of the principal amount of such
Security (or, in the case of a Security described in Clause (A) or (B) above, of
the amount determined as provided in such Clause), and (D) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities which a Responsible Officer of
the Trustee actually knows to be owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or such other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee certifies to the Trustee the pledgee's
right to act as owner with respect to such Securities and that the pledgee is
not the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest (or formula for determining the rate or
rates of interest), if any, thereon, the Stated Maturity or Maturities thereof
and the redemption provisions, if any, with respect thereto, are to be
determined by the Company or its agents upon the issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, association, company, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"PLACE OF PAYMENT" means, with respect to any series of Securities
issued hereunder, the city or political subdivision in which the Paying Agent is
located and so designated with respect to the series of Securities in question
in accordance with the provisions of Section 3.1, which if not so designated
shall be The City of New York.
"PREDECESSOR SECURITIES" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a lost, mutilated, destroyed or stolen Security shall be deemed to
evidence the same debt as the lost, mutilated, destroyed or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price specified in such Security or pursuant to this
Indenture at which it is to be redeemed pursuant to this Indenture or, if not
specified, at 100% of the outstanding principal amount thereof.
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"REGULAR RECORD DATE" for the interest payable on the Securities of
any series on any Interest Payment Date means the date specified in such
Securities of any series or pursuant to this Indenture as the Regular Record
Date, irrespective of whether such date is a Business Day.
"REPAYMENT DATE", when used with respect to any Security to be repaid
at the option of the Holder, means the date fixed for such repayment in such
Security or pursuant to this Indenture.
"REPAYMENT PRICE", when used with respect to any Security to be repaid
at the option of the Holder, means the price specified in such Security or
pursuant to this Indenture at which it is to be repaid pursuant to such
Security.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer or trust officer, the controller and any assistant controller, or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers, and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"SALE AND LEASEBACK TRANSACTION" has the meaning specified in Section
10.11.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" or "SECURITIES" has the meaning stated in the first recital
of this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that if at
any time there is more than one Person acting as Trustee under this Indenture,
"Security" or "Securities" with respect to the Indenture as to which such
Person is Trustee shall have the meaning stated in the first recital of this
Indenture and shall more particularly mean Security or Securities authenticated
and delivered under this Indenture, exclusive, however, of Security or
Securities of any series as to which such Person is not Trustee.
"SECURITY REGISTER" shall have the meaning specified in Section 3.5.
"SECURITY REGISTRAR" means the Person who keeps the Security Register
specified in Section 3.5.
"SECURITYHOLDER" means a Person in whose name a Security is
registered in the Security Register.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest (as
defined in Section 3.7) means a date fixed by the Trustee pursuant to Section
3.7.
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"STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means any corporation or other business entity of which
the Company owns or controls (either directly or through one or more other
Subsidiaries) more than 50% of the issued share capital or other ownership
interests, in each case having ordinary voting power to elect or appoint
directors, managers or trustees of such corporation or other business entity
(whether or not capital stock or other ownership interests or any other class or
classes shall or might have voting power upon the occurrence of any
contingency).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed;
provided, however, that in the event that such Act is amended after such date,
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean and include each Person who is then a Trustee hereunder.
If at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
the Securities of that series.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof or any other
Person, and shall also include a depository receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act), as custodian with respect to any
obligation or a specific payment of principal of or interest on any such
obligation held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the obligation or the specific payment of principal of or interest on the
obligation evidenced by such depository receipt.
"VICE PRESIDENT", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president," including an
assistant vice president.
Section 1.2 Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee (a) an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and (b) an Opinion of Counsel stating that in the opinion of counsel providing
such Opinion all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance by or on
behalf of the Company with a condition or covenant provided for in this
Indenture (except for the written statement required by Section 10.4) shall
include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such officer, the
officer has made such examination or investigation as is necessary to enable the
person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to the other matters, and any such Person may certify or give an opinion as
to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless counsel
providing such Opinion of Counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing
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appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by an officer of a corporation or a member of a partnership,
on behalf of such corporation or partnership, such certificate or affidavit
shall also constitute sufficient proof of his or her authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
action may be given before or after the record date, but only the Holders of
record at the close of business on the record date shall be deemed to be Holders
for the purposes of determining whether Holders of the requisite proportion of
Securities Outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other action, and
for that purpose the Securities Outstanding shall be computed as of the record
date; provided that no such authorization, agreement or consent by the Holders
on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than 180 days after the
record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder and the Holder of every Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance thereon
whether or not notation of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any such action with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
Section 1.5 Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of
Securityholders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(a) the Trustee by any Securityholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attn: Corporate
Trust Department, with a courtesy copy to the Trustee's counsel (which
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shall not constitute Notice to the Trustee): McGuire, Craddock, Strother & Hale,
P.C., 3550 Lincoln Plaza, Dallas, Texas 75201, Attn: Charles J. McGuire, or
(b) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as otherwise expressly provided
herein or, in the case of a request for repayment, as specified in the Security
carrying the right to repayment) if in writing and mailed by courier to the
Company addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company or telecopied and confirmed by mail.
Section 1.6 Notices to Securityholders; Waiver. Where this Indenture
or any Security provides for notice to Securityholders of any event, such notice
shall be sufficiently given (unless otherwise herein or in such Security
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Securityholder affected by such event, at its address as it appears in the
Security Register, not later than the latest date (if any), and not earlier than
the earliest date (if any), prescribed for the giving of such notice. In any
case where notice to Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Securityholders shall be
filed with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
Section 1.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under the Trust Indenture Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
Section 1.8 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 1.9 Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.10 Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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Section 1.11 Benefits of Indenture. Nothing in this Indenture or in
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent, any
Paying Agent, the Security Registrar, and their successors hereunder and the
Holders of Securities (or such of them as may be affected thereby), any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 1.13 Legal Holidays. Except as may be otherwise specified
with respect to any particular Securities, in any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date, Redemption Date
or at the Stated Maturity, and no interest shall accrue on such payment for the
period from and after such Interest Payment Date, Redemption Date or at the
Stated Maturity, as the case may be.
Section 1.14 Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 1.15 No Recourse Against Others. A director, officer,
employee or shareholder, as such, of the Company, shall not have liability for
any obligations of the Company under the Securities or 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 Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
ARTICLE 2
Security Forms
Section 2.1 Forms Generally. The Securities of each series shall be
in substantially the forms set forth in this Article 2, or in such other form as
shall be established by or pursuant to a Board Resolution and set forth in an
Officers' Certificate or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable laws or
regulations or with the rules of any securities exchange or Depositary therefor,
or as may, consistently herewith, be determined by the Officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
3.3 for the authentication and delivery of such Securities.
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The definitive Securities shall be printed, typewritten, mimeographed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner, all as determined
by the Officers of the Company executing such Securities, as evidenced by their
execution of such Securities, subject, with respect to the Securities of any
series, to the rules of any securities exchange on which such Securities are
listed.
Section 2.2 Forms of Securities. Each Security shall be in the form
of Exhibit A hereto or in one of the forms approved from time to time by or
pursuant to a Board Resolution or established in one or more indentures
supplemental hereto. Prior to the delivery of a Security to the Trustee for
authentication in any form approved by or pursuant to a Board Resolution, the
Company shall deliver to the Trustee the Board Resolution by or pursuant to
which such form of Security has been approved, which Board Resolution shall have
attached thereto a true and correct copy of the form of Security which has been
approved thereby or, if a Board Resolution authorizes a specific person or
persons to approve a form of Security, a certificate of such person or persons
approving the form of Security attached thereto. Any form of Security approved
by or pursuant to a Board Resolution must be acceptable as to form to the
Trustee, such acceptance to be evidenced by the Trustee's authentication of
Securities in that form or a certificate signed by a Responsible Officer of the
Trustee and delivered to the Company.
Section 2.3 Form of Trustee's Certificate of Authentication. The
form of Trustee's Certificate of Authentication for any Security issued pursuant
to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: [ ],
----------------------------- ----------------------------------
as Trustee
By:
----------------------------------
Authorized Signatory
Section 2.4 Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Sections 2.2 and 3.1 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 3.3 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and make
available for delivery such Global Security or Securities which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Securities of such series to be represented
by such Global Security or Securities or such portion thereof as the Company
shall specify in a Company Request, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or its nominee, (iii) shall be
made available for delivery by the Trustee or its agent to the Depositary or
pursuant to the Depositary's instruction and (iv) shall bear the legends with
respect to Global Securities substantially to the effect set forth in Exhibit A.
(b) Notwithstanding any other provisions of this Section 2.4 or of
Section 3.5, but subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global
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Security may be transferred, in whole but not in part and in the manner provided
in Section 3.5, only to a nominee of the Depositary for such Global Security, to
the Depositary, to a successor Depositary for such Global Security selected or
approved by the Company or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Exchange Act or other
applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to such Global Security. If a successor Depositary for
such Global Security is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
will execute, and the Trustee or its agent, upon receipt of a Company Request
for the authentication and delivery of individual Securities of such series in
exchange for such Global Security, will authenticate and make available for
delivery, individual Securities of such series of like tenor and terms in an
aggregate principal amount equal to the principal amount of the Global Security
in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion determine
that the Securities of any series or portion thereof issued or issuable 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 or its agent, upon receipt of a Company Request for the authentication
and delivery of individual Securities of such series in exchange in whole or in
part for such Global Security, will authenticate and make available for delivery
individual Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities representing such series or portion thereof in exchange
for such Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.2 and 3.1
with respect to Securities issued or issuable in the form of one or more Global
Securities, the Depositary for such Global Security or Securities may surrender
such Global Security or Securities in exchange in whole or in part for
individual Securities of such series of like tenor and terms in definitive form
on such terms as are acceptable to the Company and such Depositary. Thereupon
the Company shall execute, and the Trustee or its agent shall authenticate and
make available for delivery, without service charge, (1) to each Person
specified by such Depositary a new Security or Securities of the same series of
like tenor and terms and 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 or Securities and (2) to such
Depositary a new Global Security or Securities of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security or Securities and the aggregate
principal amount of Securities delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding four
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and make available for delivery individual Securities in definitive
registered form in authorized denominations. Upon the exchange of the entire
principal amount of a Global Security for individual Securities, such Global
Security shall be cancelled by the Trustee or its agent. Except as provided in
the immediately preceding paragraph, 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 Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or the Security Registrar. The Trustee or the Security
Registrar shall deliver such Securities to the Persons in whose names such
Securities are so registered.
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ARTICLE 3
The Securities
Section 3.1 General Title; General Limitations; Issuable in Series;
Terms of Particular Series. The aggregate principal amount of securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. The Securities issued under this Indenture shall be direct,
unsecured (unless one or more series of Securities is secured pursuant to the
provision of a supplement to this Indenture) obligations of the Company and
shall rank without preference or priority among themselves and pari passu with
all existing and future unsecured and unsubordinated indebtedness of the
Company, provided, that if any future indebtedness of the Company is secured,
then the Securities issued under this Indenture shall be secured to the extent
provided in Section 10.10 hereof. All Securities of each series under this
Indenture shall in all respects be equally and ratably entitled to the benefits
hereof with respect to such series without preference, priority or distinction
on account of the actual time of the authentication and delivery or Stated
Maturity of the Securities of such series.
Each series of Securities shall be created either by or pursuant to a
Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, bear interest at such
rate or rates (which may be fixed or floating), from such date or dates, payable
in such installments and on such dates and at such place or places to the
Holders of Securities registered as such on the related Regular Record Dates, or
may bear no interest, and may be redeemable or repayable at such Redemption
Price or Prices or Repayment Price or Prices, as the case may be, whether at the
option of the Holder or otherwise, and upon such terms, all as shall be provided
for in or pursuant to the Board Resolution or in or pursuant to the supplemental
indenture creating that series. There may also be established in or pursuant to
a Board Resolution and, subject to Section 3.3, set forth, or determined in the
manner provided, in an Officers' Certificate, or pursuant to a supplemental
indenture prior to the issuance of Securities of each such series, provision
for:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other series of
Securities);
(b) 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 3.4, 3.5, 3.6, 9.6 or 11.7 hereof and except
for any Securities which, pursuant to Section 3.3 hereof, are deemed never
to have been authenticated and delivered hereunder);
(c) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name the Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(d) the date or dates on which the principal or installments of
principal of any Securities of the series is payable and any rights to
extend such date or dates;
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(e) the rate or rates (which may be fixed or variable) per annum at
which the Securities of the series will bear interest or the method by
which such rate or rates shall be determined and the date from which such
interest will accrue or the method by which such date or dates shall be
determined;
(f) the obligation, if any, of the Company to redeem, repay or
purchase any 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 any Securities of the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(g) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(h) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2
hereof;
(i) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency in which payment of the principal of
(and premium, if any) and interest, if any, on the Securities of the series
shall be payable and the manner of determining the equivalent thereof in
the currency of the United States of America for any purpose, including for
purposes of the definition of "Outstanding" in Section 1.1;
(j) if the principal of (and premium, if any) or interest, if any, on
the Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than that in which
the Securities are stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be made;
(k) if the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined with
reference to an index based on a coin or currency other than that in which
the Securities are stated to be payable or pursuant to a formula, the
manner in which such amounts shall be determined;
(l) any provisions permitted by this Indenture relating to Events of
Default or covenants of the Company with respect to such series of
Securities;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or
which shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to
be the principal amount shall be determined);
(n) if applicable, that the Securities of the series, in whole or any
specified part, shall not be defeasible pursuant to Section 13.2 or Section
13.3 or both such Sections and, if other than by a Company Order, the
manner in which any election by the Company to defease such Securities
shall be evidenced;
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(o) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Exhibit A and any
circumstances in addition to or in lieu of those set forth in Sections 2.4,
3.4 and 3.5 in which any such Global Security may be exchanged in whole or
in part for Securities registered, and any transfer of such Global Security
in whole or in part may be registered, in the name or names of Persons
other than the Depositary for such Global Security or a nominee thereof;
(p) providing collateral to the Trustee to secure payment of the
principal of (and premium, if any) and interest on the Securities of any
series, and provisions for the release of any such collateral; and
(q) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture), including, without
limitation, any terms required or appropriate to establish one or more
series of Securities issued in a Periodic Offering.
All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution
referred to above and set forth in the Officers' Certificate referred to above
or in any such indenture supplemental hereto.
If any of the terms of the series, including the form of Security of
such series, are established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action setting forth the terms of such
series shall be certified by the Secretary or an Assistant Secretary or other
authorized officer of the Company, and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 hereof for the
authentication and delivery of such series of Securities.
With respect to Securities of a series offered in a Periodic Offering,
such Board Resolution and Officers' Certificate or supplemental indenture may
provide general terms or parameters for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a Company
Order as contemplated by the third paragraph of Section 3.3.
Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.
Section 3.2 Denominations. The Securities of each series shall be
issuable in registered form without coupons, except as otherwise expressly
provided in an applicable Officers' Certificate or a supplemental indenture, in
such denominations as shall be specified as contemplated by Section 3.1 hereof.
In the absence of any such provisions with respect to the Securities of any
series, the Securities of that series shall be issuable only in U.S. dollars in
fully registered form without coupons in denominations of $1,000 and any
integral multiple thereof.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by: its Chairman of the
Board, its Vice Chairman of the Board, its President, one of its Vice Presidents
or its Treasurer. The signature of any of these Officers or agents on the
Securities may be manual or facsimile.
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Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers, employees or agents of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such Securities.
The Company may at any time and from time to time after the execution
and delivery of this Indenture deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, or, in the case of Securities
offered in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents, promptly
confirmed in writing by the Company) acceptable to the Trustee as may be
specified from time to time by a Company Order for the specific terms of the
Securities being so offered; and the Trustee shall, in accordance with a Company
Order, authenticate and make available for delivery such Securities as provided
in this Indenture and not otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 1.2, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 2.2, and shall be fully
protected in relying upon, an Opinion of Counsel stating that:
(a) if the form or forms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 2.1 hereof, that
such form has been established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities have been established in conformity
with the provisions of this Indenture; and
(c) such Securities, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee
in accordance with this Indenture and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights, to general equitable principles and to such other qualifications as
such counsel shall conclude do not materially affect the rights of Holders
of such Securities;
provided, however, that, with respect to Securities of a series offered in
a Periodic Offering, the Trustee shall be entitled to receive such Opinion
of Counsel in connection only with the first authentication of Securities
of such series, and in such case the opinions described in Clauses (b) and
(c) above may state, respectively, that
(i) if the terms of such Securities are to be established
pursuant to a Company Order or pursuant to such procedures as may be
specified from time to time by a Company Order, all as contemplated by
a Board Resolution or action taken pursuant thereto, such terms will
have been duly authorized by the Company and established in conformity
with the provisions of this Indenture; and
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(ii) that such Securities, when completed by appropriate
insertions and executed and delivered by the Company to the Trustee in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture, and issued and delivered by
the Company and paid for, all in accordance with any agreement of the
Company relating to the offering, issuance and sale of such
Securities, will be duly issued under this Indenture and will
constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting generally the enforcement of
creditors' rights, to general equitable principles and to such other
qualifications as such counsel shall conclude do not materially affect
the rights of Holders of such Securities and any coupons;
and, if the authentication and delivery relates to a new series of
Securities created by an indenture supplemental hereto, also stating that
all laws and requirements with respect to the form and execution by the
Company of the supplemental indenture with respect to that series of
Securities have been complied with; the Company has corporate power to
execute and deliver any such supplemental indenture and has taken all
necessary corporate action for those purposes; and any such supplemental
indenture has been executed and delivered and constitutes the legal, valid
and binding obligation of the Company enforceable in accordance with its
terms (subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of equity);
and.
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body
having jurisdiction over the Company is required for the execution and
delivery of such Securities by the Company, except such as have been
obtained (except that no opinion need be expressed as to the state
securities or Blue Sky laws).
The Trustee shall not be required to authenticate and deliver any 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.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an Authenticating Agent, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of the Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, together
with a written statement (which need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
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Section 3.4 Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 3.3, together with a Company Order, the
Trustee shall authenticate and make available for delivery, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such 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 in a Place of Payment for that
series, without charge to the Holder; and upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and make available for delivery in exchange therefor
a like principal amount of definitive Securities of the same series of
authorized denominations and of like tenor and aggregate principal amount.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series and tenor.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Securities represented thereby
pursuant to this Section 3.4 or Section 3.5, the temporary Global Security shall
be endorsed by the Trustee to reflect the reduction of the principal amount
evidenced thereby, whereupon the principal amount of such temporary Global
Security shall be reduced for all purposes by the amount so exchanged and
endorsed.
Section 3.5 Registration, Transfer and Exchange. The Company shall
keep or cause the Security Registrar to keep a register (herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities, or of Securities of a particular series, and for transfers of
Securities or of Securities of such series. Any such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. If the Company maintains such Security Register, at
all reasonable times the information contained in such register or registers
shall be available for inspection by the Trustee at the office or agency to be
maintained by the Company as provided in Section 10.2.
Subject to Section 2.4, upon surrender for registration of transfer of
any Security of any series at the office or agency of the Company in a Place of
Payment for that series, the Company shall execute, and the Trustee or its agent
shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like tenor, aggregate principal
amount and Stated Maturity.
Subject to Section 2.4, at the option of the Holder, Securities of any
series may be exchanged for other Securities of the same series of any
authorized denominations and of a like tenor, aggregate principal amount and
Stated Maturity, upon surrender of the Securities to be exchanged at such office
or agency maintained by the Company in any Place of Payment for such series.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee or its agent shall authenticate and make available for
delivery, the Securities which the Securityholder making the exchange is
entitled to receive.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Security to be registered for
transfer or exchange, no service charge shall be imposed on any Securityholder
for any registration of transfer or exchange of Securities, but the Company may
(unless otherwise provided in such Security) require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with registration of any transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company may but shall not be required (i) to issue, register the
transfer of or exchange any Security 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 Securities of such series selected for redemption under Section
11.3 and ending at the close of business on the date of such mailing, (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except for the portion of such Security not so selected for
redemption or (iii) to register the transfer of or exchange any Security between
any Regular Record Date and the related Interest Payment Date.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Neither the Company nor the Trustee shall have any responsibility or
obligation to any participant in the Depositary, any Person claiming a
beneficial ownership interest in the Securities under or through the Depositary
or any such participant, or any other Person which is not shown on the Security
Register as being a Holder, with respect to (1) the Securities; (2) the accuracy
of any records maintained by the Depositary or any such participant; (3) the
payment by the Depositary or any such participant of any amount in respect to
the principal of or premium or interest on the Securities; (4) any notice which
is permitted or required to be given to Holders of Securities under this
Indenture; or (5) any consent given or other action taken by the Depositary as
Holder of Securities.
The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and
from time to time authorize any Person to act as Security Registrar in place of
the Trustee with respect to any series of Securities issued under this
Indenture.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If (a)
any mutilated Security is surrendered to the Trustee or the Company, and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Security, and (b) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them and their
agents harmless, then, in the absence of actual notice to the Company and the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee or its agents shall
authenticate and deliver, in lieu of any such destroyed, lost or
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stolen Security or in exchange for such mutilated Security, a new Security of
like tenor, series, Stated Maturity and principal amount, bearing a number not
contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee, any Paying Agent and
any Securities Registrar) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security or in exchange for such mutilated
Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and such new Security shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Securityholder with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Section 3.7 Payment of Interest; Interest Rights Preserved. Unless
otherwise provided with respect to any series of Securities pursuant to Section
3.1, interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of its having
been such Holder; and, except as hereinafter provided, such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in clause
(a) or clause (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on each
such Security of such series and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted
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Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to each
Securityholder of such series in the manner set forth in Section 1.6, not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
clause (b).
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.8 Persons Deemed Owners. Prior to the due presentment for
registration of transfer of any Security, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any Security is
registered in the Security Register as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any), and (subject
to Section 3.7) interest on, such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary (or its nominee) shall have any rights under this
Indenture with respect to such Global Security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the owner of such Global Security or any
Security represented thereby for all purposes whatsoever.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary, as a Holder, with respect to
such Global Security or impair, as between such Depositary and owners of
beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such Global Security.
Section 3.9 Cancellation. All Securities surrendered for payment,
redemption, repurchase, registration of transfer, conversion or exchange or for
credit against any sinking fund, if any, shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by the Trustee. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to
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any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Security shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order.
Section 3.10 Computation of Interest. Unless otherwise provided as
contemplated in Section 3.1, interest on the Securities of any series shall be
calculated on the basis of a 360-day year of twelve 30-day months.
Section 3.11 Periodic Offering of Securities. Notwithstanding any
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental
indenture, Opinion of Counsel or Company Request otherwise required pursuant to
Sections 2.2, 3.1 and 3.3 at or prior to the time of authentication of each
Security of such series if such documents are delivered to the Trustee or its
agent at or prior to the authentication upon original issuance of the first
Security of such series to be issued; provided that any subsequent request by
the Company to the Trustee to authenticate Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
and its counsel that as of the date of such request, the statements made in the
Officers' Certificate and opinions made in the Opinion of Counsel delivered
pursuant to Section 1.2 and 3.3, respectively, shall be true and correct as if
made on such date.
An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
immediately preceding paragraph may provide that Securities which are the
subject thereof will be authenticated and delivered by the Trustee or its agent
on original issue from time to time upon the written order of a person or
persons designated in such Officers' Certificate, supplemental indenture or
Board Resolution (any such telephonic instructions to be confirmed promptly in
writing by such person or persons) and that such person or persons are
authorized to determine, consistent with such Officers' Certificate,
supplemental indenture or Board Resolution, such terms and conditions of said
Securities as are specified in such Officers' Certificate, supplemental
indenture or Board Resolution.
Section 3.12 CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use "CUSIP" numbers in addition to serial
numbers in notices of redemption as a convenience to Securityholders; provided
that any such notice may state that no representation is made as to the
correctness of such "CUSIP" numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the serial or other identification numbers printed on the Securities, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in such
"CUSIP" numbers.
ARTICLE 4
Satisfaction and Discharge
--------------------------
Section 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall, upon Company Request, cease to be of further effect with respect to any
series of Securities (except as to any surviving rights of registration of
transfer or exchange or replacement of Securities of such series expressly
provided for herein or in the form of security for such series), and the
Trustee, on
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written demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(a) either
(i) all Securities of that series theretofore authenticated and
delivered (other than (1) Securities of such series which have been
mutilated, destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, and (2) Securities of such series for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
10.3) have been delivered to the Trustee or its agent cancelled or for
cancellation; or
(ii) all such Securities of that series not theretofore
delivered to the Trustee or its agent cancelled or for cancellation
(1) have become due and payable,
(2) will become due and payable at their Stated
Maturity within one year,
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(4) are deemed paid and discharged pursuant to Section
13.2, as applicable,
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee, as trust funds in trust for the purpose, money
in an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee canceled or for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due and payable), or
to the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Securities of such series; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to the Securities of such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the Company to the Trustee with
respect to that series under Section 6.7, the obligations of the Trustee to any
Authenticating Agent under Section 6.14 and, if money shall have been deposited
with the Trustee pursuant to subclause (ii) of Clause (a) of this Section, the
obligations of the Trustee under Sections 4.2 and 10.3 shall survive.
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Section 4.2 Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.3, all money deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by it, in accordance
with the provisions of the series of Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee.
ARTICLE 5
Remedies
--------
Section 5.1 Events of Default. "Event of Default," wherever used
herein with respect to Securities of any series, and unless otherwise provided
with respect to Securities of any series pursuant to Section 3.1(l), means with
respect to any series of Securities any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is either inapplicable
to a particular series (to the extent expressly provided in the form of Security
for such series) or it is specifically deleted or modified in the supplemental
indenture creating such series of Securities or in the form of Security for such
series:
(a) default by the Company in the payment of any principal (or
premium, if any) of the Securities of that series when due and payable,
whether at Maturity or otherwise; or
(b) default by the Company in the payment of any interest upon any
Security of that series when it becomes due and payable, and the continuance
of such default for a period of 30 consecutive days; or
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(d) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 60
consecutive days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) a default under any Indebtedness by the Company or any Subsidiary
(including a default with respect to Securities of any series other than
that series) or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company (including this Indenture) or any Subsidiary,
whether such Indebtedness now exists or shall hereafter be created, in an
aggregate principal amount exceeding $10,000,000 (or its equivalent in any
other currency
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or currencies) which default shall have resulted in such Indebtedness
becoming or being declared due and payable; or
(f) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(g) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of any
such action; or
(h) any other Event of Default provided with respect to Securities of
that series.
Section 5.2 Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 5.1(e)
or 5.1(f)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Outstanding Securities of
that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such lesser portion of the principal amount of such Securities as
may be specified by the terms thereof) to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable. If an Event of Default specified in Section
5.1(e) or 5.1(f) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of that series
(or, if any Securities of that series are Original Issue Discount Securities,
such lesser portion of the principal amount of such Securities as may be
specified by the terms thereof) shall automatically, and without any declaration
or other action on the part of the Trustee or any Holder, become immediately due
and payable.
At any time after such a declaration of acceleration with respect to
Outstanding Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority
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in aggregate principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on all Securities of that series,
(ii) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or
rates prescribed therefor in such Securities,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(b) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
then the Company will, upon written demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
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If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Securityholders of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, moratorium of payments, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of, and any
interest on, the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceedings
or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and take such other actions, including participating as a member, voting or
otherwise, of any official committee of creditors appointed in such matter,
to file such other papers or documents as may be necessary and advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 6.7) and of the Securityholders allowed in such judicial proceeding,
and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official, in any such judicial proceeding is hereby authorized by
each Securityholder to make such payment to the Trustee and in the event that
the Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding;
provided, however, that the Trustee may on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or, the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.
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Section 5.6 Application of Money Collected. Any money collected by
the Trustee with respect to a series of Securities pursuant to this Article 5
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7; and
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (premium, if any) and interest,
respectively.
Section 5.7 Limitation on Suits. No Holder of any Security of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to Securities of such series;
(b) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have furnished to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to
be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and furnishing of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of all Securities of such series.
Section 5.8 Unconditional Right of Securityholders to Receive
Principal, Premium and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Sections 3.7 and 12.1) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on the Redemption Date or Repayment Date, as the case
may be) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
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Section 5.9 Restoration of Rights and Remedies. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such
Securityholder, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.6, no right or
remedy herein conferred upon or reserved to the Trustee or to the
Securityholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No delay in exercising or
omission to exercise any remedy, right or power accruing upon the occurrence of
any Event of Default shall impair the remedy, right or power, or shall be
construed to be a waiver of any Event of Default or acquiescence therein. Every
remedy, right and power may be exercised from time to time and as often as may
be deemed to be expedient. No waiver of any Event of Default, whether by the
Trustee or by the Securityholders, shall extend to or shall affect any
subsequent Event of Default or shall impair any remedy, right or power
consequent thereon.
Section 5.12 Control by Securityholders. The Holders of a majority
in aggregate principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series;
provided that
(a) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture;
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to Holders not taking part in such action;
(c) such direction shall be presented by such Holders to the Trustee
in a timely manner;
(d) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(e) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.13 Waiver of Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of any
series may on behalf of the Holders
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of all the Securities of such series waive any past or existing default
hereunder with respect to such series and its consequences, except a default not
theretofore cured
(a) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking or
purchase fund or analogous obligation with respect to the Securities of such
series, or
(b) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 5.14 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by such Holder's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, however, that the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities of any series to which the suit relates against the
Company and not the Trustee, or to any suit instituted by any Securityholder
against the Company and not the Trustee for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date).
Section 5.15 Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 6
The Trustee
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Section 6.1 Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default with respect to any series of Securities,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, 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; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of mathematical
calculations, or other facts or contents stated therein).
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee shall exercise with respect to
the Securities of such series such of 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 man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this subsection (c) shall not be construed to limit the effect
of subsection (a) of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of any series (or such lesser percentage as
provided in this Indenture) relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.1.
Section 6.2 Notice of Defaults. Within 90 days after the Trustee has
received written notice of any default hereunder with respect to Securities of
any series, the Trustee shall transmit by mail to all Securityholders of such
series, as their names and addresses appear in the Security Register, notice of
such default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest, if any, on any
Security of such series, or in the payment of any sinking fund installment with
respect to Securities of such series, the Trustee shall be protected
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in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Securityholders of such series; and provided
further that in the case of any default of the character specified in Section
5.1(d) with respect to Securities of such series, no such notice to
Securityholders of such series shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section 6.2, the term "default,"
with respect to Securities of any series, means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
Section 6.3 Certain Rights of Trustee. Except as otherwise provided
in Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or other
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note or other evidence of Indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have furnished to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its sole discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled
upon reasonable request to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
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(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(i) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture; and
(j) the permissive right of the Trustee to take or refrain from taking
any actions enumerated in this Indenture shall not be construed as a duty and
the Trustee shall not be answerable in such actions other than for its own
negligence, bad faith or willful misconduct in exercising any such right.
Section 6.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, (except the Trustee's
certificates of authentication) shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. Neither the Trustee nor any Authenticating Agent makes any
representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
Section 6.5 May Hold Securities. The Trustee, any Authenticating
Agent, any Paying Agent, the Security Registrar or any other agent of the
Company or the Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
The Trustee may become and act as Trustee under other indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding in the same manner as if it were not
Trustee hereunder.
Section 6.6 Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as the Trustee has otherwise agreed in writing
with the Company.
Section 6.7 Compensation and Reimbursement. The Company agrees
(a) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree to in
writing for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, including taxes (other
than taxes based upon, measured by, or determined by the income of the Trustee),
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
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(c) to indemnify the Trustee (and its directors, officers, employees
and agents) and any predecessor Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the reasonable costs and expenses and
reasonable attorneys' fees of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
The obligations of the Company under this Section 6.7 to compensate
the Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of the obligations
of the Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
Any Paying Agent or Authenticating Agent appointed hereunder shall be
entitled to the benefits of Section 6.7(c) as if the indemnity set forth
therefor were specifically afforded to such Paying Agent or Authenticating
Agent.
The provisions of this Section shall survive the termination of this
Indenture.
Section 6.8 Disqualification; Conflicting Interests. The Trustee for
the Securities of any series issued hereunder shall be subject to the provisions
of Section 310(b) of the Trust Indenture Act during the period of time provided
for therein. In determining whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act with respect to the
Securities of any series, there shall be excluded for purposes of the
conflicting interest provisions of such Section 310(b) the Securities of every
other series issued under this Indenture. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
Section 6.9 Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder with respect to the Securities of each series,
which may be Trustee hereunder for Securities of one or more other series. Each
Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least $50,000,000.
If any such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of its supervising or examining authority, then for
the purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section 6.9, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article 6.
Section 6.10 Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this
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Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to any one or
more series of Securities by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee required by Section 6.11 hereof
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to any one
or more series of Securities by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series, delivered to the
Trustee and to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.11 hereof shall not have been delivered to the
Trustee within 30 days after the delivery of such Act, the removed Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act pursuant to Section 6.8 with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.9 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities, or
(iv) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (1) the Company by a Board Resolution may remove the
Trustee, with respect to the Securities of that series, or in the case of clause
(iv), with respect to all series, or (2) subject to Section 5.14, any
Securityholder who has been a Holder of a Security of such series for at least
six months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the series, or, in the case
of clause (iv), with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 6.11.
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If, within one year after such resignation, removal or incapacity, or the
occurrence of such vacancy, a successor Trustee with respect to such series of
Securities shall be appointed by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series delivered to the
Company and the predecessor Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11 hereof, become the successor Trustee
with respect to such series and supersede the successor Trustee appointed by the
Company with respect to such series. If no successor Trustee with respect to
such series shall have been so appointed by the Company or the Securityholders
of such series and accepted appointment in the manner required by Section 6.11
hereof, any Securityholder who has been a bona fide Holder of a Security of that
series for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of that series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
Section 6.11 Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such predecessor Trustee
hereunder with respect to all or any such series, subject nevertheless to its
lien, if any, provided for in Section 6.7. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the predecessor Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates,
(ii) if the predecessor Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of that or those series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other
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such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the predecessor Trustee shall become effective to
the extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the predecessor Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such predecessor Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such predecessor Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series under this
Article 6.
Section 6.12 Merger, Conversion, Consolidation or Successor to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and make available for delivery the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
Section 6.13 Preferential Collection of Claims Against Company. (a)
Subject to subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within three months prior to a default, as defined in subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in subsection (c) of this
Section):
(i) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as against
the Company and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph (ii)
of this subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed by
or against the Company upon the date of such default; and
(ii) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such
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property, if disposed of, subject, however, to the rights, if any, of the
Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(1) to retain for its own account (x) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon, and
(y) the proceeds of the bona fide sale of any such claim by the Trustee to a
third person, and (z) distributions made in cash, securities or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act, or applicable State law;
(2) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(3) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such three-
month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default as defined in
subsection (c) of this Section would occur within three months; or
(4) to receive payment on any claim referred to in paragraph (2) or
(3), against the release of any property held as security for such claim as
provided in paragraph (2) or (3), as the case may be, to the extent of the
fair value of such property.
For the purpose of paragraphs (2), (3) and (4), property substituted
after the beginning of such three-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have the
same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee and the Securityholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Act
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or applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustees and the
Securityholders and the holders of other indenture securities in accordance with
the provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Securityholders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to liquidate
or to appraise the value of any securities or other property held in such
special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section 6.13 a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding the
making thereof is given to the Securityholders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an Indebtedness created as a result of services rendered or
premises rented; or an Indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section 6.13;
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(5) the ownership of stock or of the other securities of a
corporation organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section 6.13.
(c) For the purpose of this Section 6.13 only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor (as defined in the Trust Indenture Act)
outstanding under any other indenture (i) under which the Trustee is also
trustee, (ii) which contains provisions substantially similar to the
provisions of this Section 6.13 and (iii) under which a default exists at
the time of the apportionment of the funds and property held in such special
account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "Federal Bankruptcy Act" means the Bankruptcy Code or
Title 11 of the United States Code.
Section 6.14 Appointment of Authenticating Agent. From time to time
the Trustee, in its sole discretion, may appoint one or more Authenticating
Agents with respect to one or more series of Securities with power to act on the
Trustee's behalf and subject to its direction in the authentication and delivery
of Securities of such series or in connection with transfers and exchanges under
Sections 3.4, 3.5, 3.6 and 11.7 hereof as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by those Sections
of this Indenture to authenticate and deliver Securities of such series. For
all purposes of this Indenture, the authentication and delivery of Securities by
an Authenticating Agent pursuant to this Section 6.14 shall be deemed to be
authentication and delivery of such Securities "by the Trustee". Each such
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State thereof or the District
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of Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal, State or District of Columbia authority.
If such corporation publishes reports of condition at least annually pursuant to
law or the requirements of such authority, then for the purposes of this Section
6.14 the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.14, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and, if other than the Company, to the Company.
The Trustee may at any time terminate the appointment of an Authenticating Agent
by giving written notice thereof to such Authenticating Agent and, if other than
the Company, to the Company. Upon receiving such a notice of resignation or
upon each a termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section 6.14, the
Trustee may appoint a successor Authenticating Agent which shall be acceptable
to the Company and shall mail written notice of such appointment by firstclass
mail, postage prepaid, to all Holders of Securities of the series with respect
to which such Authenticating Agent will serve, as their names and addresses
appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.14.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for any payments made by it subject
to the provisions of Section 6.7.
If an appointment with respect to one or more series of Securities is
made pursuant to this Section 6.14, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Section 6.15 No Conflict. Notwithstanding anything to the contrary
contained herein, it is the purpose of this Section to remove any potential
conflict of interest in the instance in which Chase Bank of Texas, N.A.
("Chase") is acting as Trustee and, in its commercial banking capacity, has or
may develop a lending relationship with the Company or any Person obligated on
the Securities of any series issued pursuant to this Indenture. Accordingly, in
the event that Chase, in its commercial banking capacity, has or may develop
such a lending relationship, Chase may, but is not obligated to, resign as
Trustee, such resignation to be effective automatically upon receipt by the
Trustee of notice from the successor Trustee evidencing its assumption of the
duties of the Trustee hereunder,
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without notice to and without prior approval of any party. In the event the
Trustee resigns pursuant to this Section, U.S. Bank Trust National Association,
a national banking association duly organized and existing under the laws of the
United States of America, eligible to act as successor Trustee hereunder, with a
corporate trust office in Chicago, Illinois, or any eligible successor appointed
pursuant to the "Acceptance of Appointment" set forth below, has agreed to and
shall automatically become successor Trustee hereunder for all purposes. The
Trustee shall give notice of its resignation in writing to the Company and the
Holders of the Securities of all series as soon as practicable but in any event
by the time and in the manner set forth in Section 6.10. The provisions of this
Section shall extend to affiliates of Chase.
"Acceptance of Appointment"
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, U.S. Bank Trust National Association, a national banking
association (the "Successor Trustee"), does hereby accept its appointment upon
the terms specified in Section 6.15 of the Indenture securing the referenced
Securities, and does hereby irrevocably agree (subject to its rights of
resignation described below) to assume the responsibilities, rights, powers and
obligations of the Trustee for the Securities immediately upon its receipt of
notice from any Person of the resignation of Chase Bank of Texas, N.A. as
Trustee, pursuant to Section 6.15 of the Indenture. Promptly upon receipt of
such notice, the Successor Trustee will notify the resigning Trustee, the
Company and the Holders of the Securities of its assumption of the duties of
Trustee.
The Successor Trustee hereby reserves the right to resign, and does hereby
acknowledge that it may be removed, in the same manner as is provided for the
resignation and removal of the Trustee pursuant to Article 6 of the Indenture;
provided that no such resignation or removal shall become effective until a
successor to the Successor Trustee shall have been appointed and shall have
accepted its appointment in the manner described in Article 6 of the Indenture.
IN WITNESS WHEREOF, the Successor Trustee has caused this Acceptance of
Appointment to be executed by its duly authorized officer as of the ___ day of
___.
Address of Successor Trustee: U.S. BANK TRUST NATIONAL ASSOCIATION
Corporate Trust Services By:____________________________
One Illinois Center Name:__________________________
111 East Wacker Drive, Suite 3000 Title:_________________________
Chicago, Illinois 60601
Telecopy (312) 228-9459
Dated:___________________________
[_______________], as Trustee
By:
As Authenticating Agent
By:
Authorized Signatory
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ARTICLE 7
Securityholders' Lists and Reports by
Trustee and Company
Section 7.1 Company to Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee with respect to the Securities of each series
(a) semi-annually, not later than 15 days after each Regular Record
Date, or, in the case of any series of Securities on which semi-annual
interest is not payable, not more than 15 days after such semi-annual dates
as may be specified by the Trustee, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Securityholders as of
such Regular Record Date or semi-annual date, as the case may be, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished, provided, however, that if and so long as the
Trustee is Security Registrar for any series of Securities, no such list
shall be required to be furnished with respect to any such series.
Section 7.2 Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.1 hereof and the names and addresses of Holders of Securities received
by the Trustee in its capacity as Security Registrar. The Trustee may destroy
any list furnished to it as provided in Section 7.1 hereof upon receipt of a new
list so furnished.
(b) If three or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.2(a) hereof, or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 7.2(a) hereof, and as to the approximate
cost of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
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If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or to all Securityholders, as
the case may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 7.2(a) hereof, a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
in connection with such mailing, unless, within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities of such series or all Securityholders, as
the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all Securityholders of such series
or all Securityholders, as the case may be, with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Securities in accordance with
Section 7.2(b) hereof, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 7.2(b) hereof.
Section 7.3 Reports by Trustee. (a) The term "reporting date" as
used in this Section means May 15. Within 60 days after the reporting date in
each year, beginning in 1999, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register, a
brief report dated as of such reporting date with respect to any of the
following events which may have occurred during the 12 months immediately
preceding the date of such report (but if no such event has occurred within such
period no report need be transmitted):
(1) any change to its eligibility under Section 6.9 hereof and its
qualifications under Section 6.8 hereof;
(2) the creation of or any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of the
Securities of such series outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the
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Trustee in its individual capacity, on the date of such report, with a
brief description of any property held as collateral security therefor,
except an indebtedness based upon a creditor relationship arising in any
manner described in Section 6.13(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 6.2.
(b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstance surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of any series, on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate 10% or less of
the principal amount of the Securities outstanding of such series at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange upon which
the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
Section 7.4 Reports by Company. The Company shall
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents or reports pursuant
to either of said Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
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(c) transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraph (a) and (b) of
this Section 7.4 as may be required by rules and regulations prescribed from
time to time by the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 7.5 Statement by Officers as to Default. The Company shall
deliver to the Trustee, as promptly as is practicable and in any event within
five days after the Company becomes aware of the occurrence of any Event of
Default, or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
ARTICLE 8
Consolidation, Merger, Conveyance, Transfer or Lease
Section 8.1 Company May Consolidate, etc. Only on Certain Terms. The
Company shall not consolidate with or merge with or into any other Person
(whether or not the Company shall be the surviving corporation) or sell, convey,
transfer or lease its properties and assets substantially as an entirety to any
Person or group of affiliated Persons, in one transaction or a series of related
transactions, unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation organized and validly 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, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the Company
to be performed or observed;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(c) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor Person, as the case may be, shall take such steps as shall
be necessary effectively to secure the Securities equally and ratably with
(or prior to) all indebtedness secured thereby; and
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(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer and lease and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
Section 8.2 Successor Corporation Substituted. Upon any
consolidation or merger, or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1 hereof, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein. In the event of any such
conveyance or transfer, but not in the case of a lease, the Company as the
predecessor corporation may be dissolved, wound up or liquidated at any time
thereafter and the Company, except in the case of a lease, shall be discharged
from all obligations under this Indenture and the Securities.
ARTICLE 9
Supplemental Indentures
Section 9.1 Supplemental Indenture Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by or pursuant to a Board Resolution or a Company
Order, and the Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders of the Securities of any or all series (and if such covenants or
the surrender of such right or power are to be for the benefit of less than
all series of Securities, stating that such covenants are expressly being
included or such surrenders are expressly being made solely for the benefit
of one or more specified series), or to surrender any right or power herein
conferred upon the Company;
(c) to cure any ambiguity or defect, to correct or supplement any
provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions
arising under this Indenture or the Securities or make any other changes
herein or therein;
(d) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series);
(e) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;
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(f) to establish any form of Security, as provided in Article 2, and
to provide for the issuance of any series of Securities as provided in
Article 3 and to set forth the terms thereof, and/or to add to the rights
of the Holders of the Securities of any series;
(g) to secure the Securities pursuant to the requirements of Section
3.1 or Section 10.10 or otherwise;
(h) to establish the form or terms of Securities of any series as
permitted by Sections 2.1, 2.2 and 3.1;
(i) to evidence and provide for the acceptance of appointment by
another Person as a successor Trustee hereunder with respect to one or more
series of Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.11 hereof; or
(j) to provide for the issuance of Securities in bearer form with
coupons as well as fully registered form.
No supplemental indenture for the purposes identified in clause (b),
(c) or (f) above may be entered into if to do so would adversely affect the
interest of the Holders of Securities of any series.
Section 9.2 Supplemental Indentures With Consent of Securityholders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
Company and the Trustee, when authorized by or pursuant to a Board Resolution or
a Company Order, the Company and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of the Securities of each
such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent or affirmative vote of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal or interest, if any, on, any Security, or reduce
the principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security or any other Security which would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity or the Stated Maturity, as the case
may be, thereof (or, in the case of redemption or repayment, on or after
the Redemption Date or the Repayment Date, as the case may be);
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain provisions of
this Indenture or with certain defaults hereunder and their
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consequences, or the declaration of certain defaults hereunder, provided
for in this Indenture; or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.8, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 10.8, or the
deletion of this proviso, in accordance with the requirements of Sections
6.11 and 9.1(i).
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 9.3 Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.1) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture and that such supplemental indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms. The Trustee may, but shall not (except to the extent required
in the case of a supplemental indenture entered into under Sections 9.1(c),
9.1(f) or 9.1(i)) be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to the
extent provided therein.
Section 9.5 Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
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Section 9.6 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE 10
Covenants
Section 10.1 Payment of Principal, Premium and Interest. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities of that
series in accordance with their terms and this Indenture, and will duly comply
with all the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
Section 10.2 Maintenance of Office or Agency. So long as any of the
Securities of a series remain outstanding, the Company will maintain an office
or agency in each Place of Payment where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange and where notice and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 10.3 Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (or premium,
if any) or interest on, any of the Securities of such series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (or premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure to so act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, not later than 10:00 A.M., New York City time, on
or prior to each due date of the principal of (and premium, if any) or interest
on, any Securities of such series, deposit with a Paying Agent a sum in
immediately available funds sufficient to pay the principal (and premium, if
any) or
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interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure to so act.
The Company will cause each Paying Agent other than the Trustee for
any series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(a) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities of such series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any such
payment of principal (and premium, if any) or interest on the Securities of
such series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent for payment in respect of the Securities of
such series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture or, if for any other purpose, all sums to be
held in trust by the Company in respect of all Securities, such sums to be held
by the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the request and expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains, a notice that such moneys remain unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such moneys then remaining will be repaid
to the Company.
The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
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Section 10.4 Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the principal executive officer, principal financial officer
or principal accounting officer of the Company, stating that
(a) a review of the activities of the Company during such year and of
the Company's performance under this Indenture and under the terms of the
Securities has been made under his supervision; and
(b) to the best of his knowledge, based on such review, the Company
has complied with all conditions and covenants under this Indenture through
such year, or, if there has been a default in the fulfillment of any such
obligation (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which he may have
knowledge, specifying each such default known to him and the nature and
status thereof.
Section 10.5 Corporate Existence. Subject to Article 8, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and will use its best efforts to do or
cause to be done all things necessary to preserve and keep in full force and
effect its rights (charter and statutory) and franchises and such rights and
franchises of its Subsidiaries; provided, however, that the Company shall not be
required to preserve or to cause its Subsidiaries to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 10.6 Maintenance of Properties. The Company will cause all
tangible properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with such necessary equipment and will cause to
be made such necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be reasonably
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 10.6 shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 10.7 Maintenance of Insurance. The Company will maintain,
and will cause each of its Subsidiaries to maintain, with insurers the Company
reasonably believes to be financially sound and reputable, insurance deemed
adequate by the Company with respect to its properties and business and the
properties and business of its Subsidiaries against loss or damage of the kinds
customarily insured against by corporations in the same or similar business.
Such insurance may be subject to co-insurance deductibility or similar clauses
which, in effect, result in self-insurance of certain losses, provided that each
self-insurance is in accord with the practices of corporations in the same or
similar business and adequate insurance reserves are maintained in connection
with such self-insurance.
Section 10.8 Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in Sections 9.1(b), 10.9, 10.10 or 10.11 hereof, inclusive, with respect
to the Securities of any series if before the time for such compliance the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance
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or generally waive compliance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision or condition except
to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
Section 10.9 Further Assurances. The Company shall, at its own cost
and expense, execute and deliver to the Trustee all such other documents,
instruments, and agreements and do all such other acts and things as may be
reasonably required, in the opinion of the Trustee, to enable the Trustee to
exercise and enforce its right under this Indenture and under the documents,
instruments and agreements required under this Indenture and to carry out the
intent of this Indenture.
Section 10.10 Restrictions on Liens. To the extent made applicable
to the Securities of a particular series, the Company will not, and will not
permit any Subsidiary to, incur, issue, assume, guarantee or permit to exist
Indebtedness secured by any Liens of the Company or any Subsidiary upon any of
its property or assets, or upon shares of capital stock or evidences of
Indebtedness issued by any Subsidiary and owned by the Company or any
Subsidiary, whether owned at the date of this Indenture or thereafter acquired,
without making, or causing such Subsidiary to make, effective provision to
secure all of the Securities then Outstanding by such Lien, equally and ratably
with any and all other Indebtedness thereby secured, so long a such Indebtedness
shall be so secured.
The foregoing restrictions shall not apply to Indebtedness secured by
Liens existing on the date of this Indenture or to any of the following:
(a) Liens on any property or assets acquired, constructed or improved
by the Company or any Subsidiary after the date of this Indenture which are
created or assumed contemporaneously with such acquisition, construction or
improvement, or within 180 days after the completion thereof, to secure or
provide for the payment of all or any part of the cost of such acquisition,
construction or improvement (including related expenditures capitalized for
federal income tax purposes in connection therewith) incurred after the
date of this Indenture;
(b) Liens of or upon any property, shares of capital stock or
Indebtedness existing at the time of acquisition thereof, whether by
merger, consolidation, purchase, lease or otherwise (including Liens of or
upon property, shares of capital stock or Indebtedness of a corporation
existing at the time such corporation becomes a Subsidiary);
(c) Liens in favor of the Company or any Subsidiary;
(d) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof or
political entity affiliated therewith to secure partial, progress, advance
or other payments, or other obligations, pursuant to any contract or
statute or to secure any Indebtedness incurred for the purpose of financing
all or any part of the cost of acquiring, constructing or improving the
property subject to such Liens (including Liens incurred in connection with
pollution control, industrial revenue or similar financings);
(e) Liens on any property created, assumed or otherwise brought into
existence in contemplation of the sale or other disposition of the
underlying property, whether directly or indirectly, by way of share
disposition or otherwise; provided that 180 days from the creation
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of such Liens the Company must have disposed of such property and any
Indebtedness secured by such Liens shall be without recourse to the Company
or any Subsidiary;
(f) Liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental (federal, state
or municipal) liens arising out of contracts for the sale of products or
services by the Company or any Subsidiary, or deposits or pledges to obtain
the release of any of the foregoing;
(g) Liens arising out of pledges or deposits under workmen's
compensation laws or similar legislation and Liens of judgments thereunder
which are not currently dischargeable, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of money) or
leases to which the Company or any Subsidiary is a party, or deposits to
secure public or statutory obligations of the Company or any Subsidiary, or
deposits in connection with obtaining or maintaining self-insurance or to
obtain the benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or similar
matters, or deposits of cash or obligations of the United States of America
to secure surety, appeal or customs bonds to which the Company or any
Subsidiary is a party, or deposits in litigation or other proceedings such
as, but not limited to, interpleader proceedings;
(h) Liens created by or resulting from any litigation or other
proceeding which is being contested in good faith by appropriate
proceedings, including Liens arising out of judgments or awards against the
Company or any Subsidiary with respect to which the Company or such
Subsidiary is in good faith prosecuting an appeal or proceedings for
review; or Liens incurred by the Company or any Subsidiary for the purpose
of obtaining a stay or discharge in the course of any litigation or other
proceeding to which the Company or such Subsidiary is a party;
(i) Liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty,
or which are being contested in good faith by appropriate proceedings;
(j) Liens consisting of easements, rights-of-way, zoning
restrictions, restrictions on the use of real property, and defects and
irregularities in the title thereto, landlords' liens and other similar
liens and encumbrances none of which interferes materially with the use of
the property covered thereby in the ordinary course of the business of the
Company or such Subsidiary and which do not, in the opinion of the Company,
materially detract from the value of such properties; and
(k) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Lien referred to
in the foregoing clauses (a), (b), or (e) to (j), inclusive; provided that
(i) such extension, renewal or replacement Lien shall be limited to all or
a part of the same property, shares of stock or Indebtedness that secured
the Lien extended, renewed or replaced (plus improvements on such property)
and (ii) the amount of Indebtedness secured by such Lien at such time is
not increased.
Notwithstanding the foregoing, the Company and its Subsidiaries, or
any of them, may incur, issue, assume, guarantee or permit to exist Indebtedness
secured by Liens without equally and ratably securing the Securities of each
series then Outstanding, provided, that at the time of such incurrence,
issuance, assumption or guarantee of Indebtedness, after giving effect thereto
and to the
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retirement of any Indebtedness which is concurrently being retired, the sum of
(i) the aggregate amount of all outstanding Indebtedness secured by Liens which
could not have been incurred, issued, assumed or guaranteed by the Company or a
Subsidiary without equally or ratably securing the Securities of each series
then Outstanding, except for the provisions of this paragraph, plus (ii) the
Attributable Value of Sale and Leaseback Transactions entered into pursuant to
the penultimate paragraph of Section 10.11, does not at such time exceed the
greater of 10% of the Net Tangible Assets or 10% of the Consolidated
Capitalization of the Company.
Section 10.11 Restrictions on Sale and Leaseback Transactions. To
the extent made applicable to the Securities of a particular series, the Company
will not itself, and it will not permit any Subsidiary to, enter into any
arrangement with any Person, providing for the leasing by the Company or a
Subsidiary for a period, including renewals, in excess of three years of any
property or assets which have been or are to be sold or transferred by the
Company or any Subsidiary to such Person (herein referred to as a "Sale and
Leaseback Transaction") unless either:
(a) The Company or such Subsidiary would, at the time of entering
into such arrangement, be entitled, without equally and ratably securing
the Securities of each series then Outstanding, to incur, issue, assume or
guarantee Indebtedness secured by a Lien on such property, pursuant to
paragraphs (a) to (k), inclusive, of Section 10.10; or
(b) the Company, within 180 days after the sale or transfer shall
have been made by the Company or by a Subsidiary, applies an amount equal
to the greater of (i) the net proceeds of the sale of property or assets
sold and leased back pursuant to such arrangement or (ii) the fair market
value of the property or assets so sold and leased back at the time of
entering into such arrangement (as determined by any two Officers) to the
retirement of Funded Debt of the Company; provided, that the amount to be
applied to the retirement of Funded Debt of the Company shall be reduced by
(i) the principal amount of any Securities delivered within 120 days after
such sale to the Trustee for retirement and cancellation, and (ii) the
principal amount of Funded Debt, other than Securities, voluntarily retired
by the Company within 120 days after such sale.
Notwithstanding the foregoing, the Company and its Subsidiaries, or
any of them, may enter into a Sale and Leaseback Transaction which would
otherwise be prohibited by this Section 10.11, provided, that at the time of
such transaction, after giving effect thereto, the sum of (i) the aggregate
amount of the Attributable Value in respect of all Sale and Leaseback
Transactions existing at such time which could not have been entered into except
for the provisions of this paragraph plus (ii) the aggregate amount of
outstanding Indebtedness secured by Liens in reliance on the last paragraph of
Section 10.10 does not at such time exceed the greater of 10% of the Net
Tangible Assets or 10% of the Consolidated Capitalization of the Company.
A Sale and Leaseback Transaction shall not be deemed to result in the
creation of a Lien.
Section 10.12 Compliance with Laws. The Company will, and will cause
each of its Subsidiaries to, comply with all applicable laws, rules, regulations
and orders of, and all applicable restrictions imposed by any federal, state or
local governmental authority in respect of the conduct of its business and the
ownership of its properties, except to the extent that any non-compliance
therewith would not have a material adverse effect.
The Company will, and will cause each of its Subsidiaries to seek and
maintain such governmental licenses, permits and approvals as are reasonably
required to conduct the business
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engaged in by the Company or such Subsidiary and the failure of which to seek or
maintain would not have a material adverse effect.
Section 10.13 Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, pay and discharge when due all taxes or
claims imposed on it or on its income or profits or on any of its properties,
except such taxes as are being contested in good faith in appropriate
proceedings and for which appropriate reserves have been established in
accordance with generally accepted accounting principles or the failure of which
to pay and discharge would not have a material adverse effect..
ARTICLE 11
Redemption of Securities
Section 11.1 Applicability of Article. Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 3.1 for such Securities) in accordance with this Article 11.
Section 11.2 Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by a Company Order. In
case of any redemption at the election of the Company of less than all the
Securities of any series (including any such redemption affecting only a single
Security), the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
Section 11.3 Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of any series are to be redeemed (unless all the
Securities of such series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Security of such series, provided that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
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The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 11.4 Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the Holder's address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(e) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment;
(f) if applicable, that the redemption is on account of a sinking or
purchase fund, or other analogous obligation; and
(g) the "CUSIP" number, if any.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
Section 11.5 Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.3) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.
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Section 11.6 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, (premium, if any) and accrued interest and from and after
such date (unless the Company shall default in the payment of the Redemption
Price (premium, if any) and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest to the Redemption Date; provided, however,
that, unless otherwise specified as contemplated by Section 3.1, installments of
interest whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 11.7 Securities Redeemed in Part. Any Security which is to
be redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or the Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered; provided, however, that if a Global Security is so
surrendered, such new Security so issued shall be a new Global Security in a
denomination equal to the unredeemed portion of the principal of the Global
Security so surrendered.
ARTICLE 12
Sinking Funds
Section 12.1 Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of any series except as otherwise specified as contemplated by Section 3.1 for
such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 12.2.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction
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of all or any part of any sinking fund payment with respect to any Securities of
such series required to be made pursuant to the terms of such Securities as and
to the extent provided for by the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the Redemption Price, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
Section 12.3 Redemption of Securities for Sinking Fund. Not less
than 35 days prior to each sinking fund payment date for any Securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant to
the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities pursuant to Section 12.2 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 32 days prior to each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.3 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 11.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
11.6 and 11.7.
ARTICLE 13
Defeasance and Covenant Defeasance
Section 13.1 Company's Right with Respect to Defeasance or Covenant
Defeasance. The Company will have the right, at any time, to have Section 13.2
or Section 13.3 applied to any Securities or any series of Securities, as the
case may be (other than Securities of a series designated pursuant to Section
3.1 as not being defeasible pursuant to such Section 13.2 or 13.3), upon
compliance with the conditions set forth below in this Article. Any such
request shall be evidenced by a Company Order or in another manner specified as
contemplated by Section 3.1 for such Securities.
Section 13.2 Defeasance and Discharge. Upon the Company's exercise
of its right to have this Section applied to any Securities or any series of
Securities, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 13.4 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 13.4 and as more fully set forth in such Section, (i) payments in
respect of the principal of and any premium and interest on the Outstanding
Securities on the Stated Maturity of such principal or installment of principal
of and any premium or interest and (ii) the benefit of any mandatory sinking
fund payments applicable to the Securities on the day on which such payments are
due and payable in accordance with the terms of this Indenture and the
Securities, (b) the Company's obligations with respect to such Securities under
Sections 3.4, 3.5, 3.6, 10.2 and 10.3, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (d) this Article. Subject to
compliance with this Article, the Company may exercise its option to have this
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Section applied to any Securities notwithstanding the prior exercise of its
option to have Section 13.3 applied to such Securities.
Section 13.3 Covenant Defeasance. Upon the Company's exercise of its
right to have this Section applied to any Securities or any series of
Securities, as the case may be, (a) the Company shall be released from its
obligations under Sections 10.10 and 10.11, and any covenants provided pursuant
to Section 3.1(k) relating to covenants of the Company with respect to a
particular series of Securities, Section 9.1(b) or 9.1(h) for the benefit of the
Holders of such Securities and (b) the occurrence of any event specified in
Sections 5.1(d) (with respect to Sections 10.10 and 10.11, and any such
covenants provided pursuant to Section 3.1(k) relating to covenants of the
Company with respect to a particular series of Securities, Section 9.1(b) or
9.1(h)), and 5.1(g) shall be deemed not to be or result in an Event of Default,
in each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 13.4 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 5.1(d)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
Section 13.4 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 13.2 or Section
13.3 to any Securities or any series of Securities, as the case may be:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.9 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (1) money in an amount, or (2) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (3) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, (i) the principal of and any
premium and each installment of principal of and any premium and interest
on the Outstanding Securities on the respective Stated Maturities, and (ii)
any mandatory sinking fund payments applicable to the Securities on the day
on which such payments are due and payable in accordance with the terms of
this Indenture and such Securities. As used herein, "U.S. Government
Obligation" means (x) any security which is (i) a direct obligation of the
United States of America for the payment of which the full faith and credit
of the United States of America is pledged or (ii) an obligation of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so
63
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specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(b) In the event of an election to have Section 13.2 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (1)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (2) since the date of this instrument, there
has been a change in the applicable Federal income tax law, in either case
(1) or (2) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(c) In the event of an election to have Section 13.3 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
(d) Such provision would not cause any Outstanding Securities, if
then listed on any securities exchange, to be delisted as a result of such
deposit.
(e) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities shall have
occurred and be continuing at the time of such deposit or, with regard to
any such event specified in Sections 5.1(e) and (f), at any time on or
prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th
day).
(f) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning of
such Act).
(g) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(h) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(i) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
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Section 13.5 Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.3, all money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.6, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
13.4 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law. All money deposited with the Trustee pursuant to this Section may be
invested by the Trustee in U.S. Government Obligations if the Company so
instructs pursuant to a Company Order.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 13.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 13.4
with respect to any Securities which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect the Defeasance or Covenant
Defeasance, as the case may be, with respect to such Securities.
Section 13.6 Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with this Article with respect to any
Securities by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 13.2 or 13.3 shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
13.5 with respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
(Corporate Seal) TEXAS-NEW MEXICO POWER COMPANY
BY
----------------------------------
Name:
Title:
Attest:
BY
----------------------------------
Name:
Title:
(SEAL) CHASE BANK OF TEXAS, N.A., TRUSTEE
BY
----------------------------------
Name: John G. Jones
Title: Vice President
Attest:
BY
----------------------------------
Name:
Title:
66
<PAGE>
EXHIBIT A
[If the Security is to be a Global Security, insert -- Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.
THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE HEREINAFTER
REFERENCED. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
TEXAS-NEW MEXICO POWER COMPANY
%------ DUE
$
NO.
CUSIP
TEXAS-NEW MEXICO POWER COMPANY, a corporation duly organized and
existing under the laws of The State of Texas (herein called the "Company,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______________ or registered
assigns, the principal sum of $ _______ on ___________ [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
_________, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on __________ and _________ in
each year, commencing , at the rate per annum provided in the title hereof,
until the principal hereof is paid or made available for payment [if applicable,
insert -- , and, subject to the terms of the Indenture, at the rate of ___ % per
annum on any overdue principal and premium and (to the extent that the payment
of such interest shall be legally enforceable) on any overdue installment of
interest, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the _____ or ______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at
A-1
<PAGE>
the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.]
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal [and any overdue premium] of
this Security shall bear interest at the rate of ___% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue principal
or premium shall be payable on demand. Any such interest on any overdue
principal [or premium] that is not so paid on demand shall bear interest at the
rate of ___% per annum (to the extent that the payment of such interest shall
be legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided for,
and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and interest[, if
any,] on this Security will be made at the office or agency of the Company
maintained for that purpose in ____, in [such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts -- or state other currency]; [if this Security is not a
Global Security, insert -- provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee under the Indenture, this Security shall
not be entitled to any benefits under the Indenture, or be valid or obligatory
for any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, TEXAS-NEW MEXICO POWER COMPANY has caused this
Security to be duly executed.
Dated:__________ TEXAS-NEW MEXICO POWER COMPANY
by
Name:
Title:
A-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Date:____________ ,
----------------------------------
as Trustee,
BY
--------------------------------
Authorized Signatory
A-4
<PAGE>
[REVERSE OF SECURITY]
This Security is one of the duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Company (hereinafter
called the "Securities"), of the series hereinafter specified, all issued or to
be issued under and pursuant to the Indenture dated as of [__________], 1998
(hereinafter called the "Indenture"), duly executed and delivered by the Company
and [________], as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and any other
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee and any agent of the Trustee, any Paying Agent, the
Company and the Holders of the Securities and of the terms upon which the
Securities are issued and are to be authenticated and delivered. This Security
is one of the series designated on the face hereof [if applicable, insert -- ,
limited in aggregate principal amount to $--------. By the terms of the
Indenture, additional Securities [if applicable, insert -- of this series and]
of other separate series, which may vary as to date, amount, Stated Maturity,
interest rate or method of calculating the interest rate and in other respects
as therein provided, may be issued in an unlimited amount.]
[If applicable, insert -- This security is not subject to redemption
prior to the Stated Maturity.] [If applicable, insert -- The Securities of this
series are subject to redemption upon not less than 30 or more than 60 days'
notice by mail to the Holders of such Securities at their addresses in the
Security Register for such series, [if applicable, insert -- (1) on ____________
in any year commencing with the year _____ and ending with the year ____
through operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (2)] at any time [on or after
_______, 19__], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed [on or before _______, _____%, and if redeemed] during the
12-month period beginning ___________, of the years indicated:
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to ___ % of the principal amount,
together in the case of any such redemption [if applicable, insert --(whether
through operation of the sinking fund or otherwise)] with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert --The Securities of this series are subject to
redemption upon not less than 30 or more than 60 days' notice by mail to the
Holders of such Securities at their addresses
A-5
<PAGE>
in the Security Register for such series, (1) on ______________ in any year
commencing with the year ____ and ending with the year ____ through operation
of the sinking fund for this series at the Redemption Prices for redemption
through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below:
If redeemed during the 12-month period beginning _________ of the years
indicated:
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- -------------- --------------------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to _____, redeem any Securities of this series as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ___% per annum.]
[If applicable, insert -- The sinking fund for this series provides
for the redemption on ________ in each year beginning with the year ____ and
ending with the year ____ of [not less than] ______ [("mandatory sinking fund")
and, at the option of the Company, not more than _______] aggregate principal
amount of Securities of this series. [Securities of this series acquired or
redeemed by the Company otherwise than through [mandatory] sinking fund
payments
A-6
<PAGE>
may be credited against subsequent [mandatory] sinking fund payments otherwise
required to be made in the order in which they become due.]]
[If the Security is subject to redemption of any kind, insert -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert --If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series (the
"Acceleration Amount") may be declared due and payable in the manner and with
the effect provided in the Indenture. Such amount shall be equal to -- insert
formula for determining amount. Upon payment (i) of the Acceleration Amount so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[If the Security is an Original Issue Discount Security, -- In
determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver under the Indenture or whether a quorum is present at
a meeting of Holders of Securities, the principal amount of any Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon the acceleration of the Maturity thereof.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional,
A-7
<PAGE>
to pay the principal of (and premium, if any) and interest, if any, on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest, if any, on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-8
<PAGE>
Exhibit 12(a)
TEXAS-NEW MEXICO POWER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES - CONSOLIDATED
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
12 MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
EARNINGS AS DEFINED (1)
Net Income $ 41,061 $ 43,918 $ 26,862 $ 41,809 $(16,634) $ 11,523
Income Taxes 21,609 21,805 9,611 22,189 (11,932) 4,916
Fixed Charges 55,241 57,057 69,513 74,115 75,412 68,109
-------- -------- -------- -------- -------- --------
Earnings as defined 117,911 122,780 105,986 138,113 46,846 84,548
-------- -------- -------- -------- -------- --------
FIXED CHARGES AS DEFINED (2)
Interest 50,682 52,557 64,654 70,544 71,568 63,833
Amortization of debt discount, premium, & expense 4,416 4,355 4,709 3,416 3,680 4,108
Estimated portion of interest implicit in rentals (3) 143 145 150 155 164 168
-------- -------- -------- -------- -------- --------
Fixed charges as defined 55,241 57,057 69,513 74,115 75,412 68,109
-------- -------- -------- -------- -------- --------
RATIO OF EARNINGS TO FIXED CHARGES 2.13 2.15 1.52 1.86 * 1.24
</TABLE>
* Earnings were insufficient to fund fixed charges by $28.6 million.
(1) Earnings are defined as net income plus income taxes plus fixed charges.
(2) Fixed charges consist of total interest; amortization of debt discount,
premium, and expense; and the estimated portion of interest implicit in
rentals.
(3) This amount is estimated to be a reasonable approximation of the
interest portion of rentals.
<PAGE>
[LETTERHEAD OF KPMG PEAT MARWICK LLP APPEARS HERE]
EXHIBIT 23(c)
Independent Auditors' Consent
-----------------------------
The Board of Directors
Texas-New Mexico Power Company:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report refers to a change in the method of accounting for operating revenues
in 1995.
/s/ KPMG PEAT MARWICK LLP
Fort Worth, Texas
September 23, 1998
<PAGE>
Exhibit 23(d)
[LETTERHEAD OF ARTHUR ANDERSEN LLP APPEARS HERE]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our firm) included in or made a part of this (the
attached) prospectus.
/s/ Arthur Andersen LLP
Fort Worth, Texas,
September 23, 1998
<PAGE>
EXHIBIT 25(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION 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)____________.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
ORGANIZED UNDER THE LAWS OF 74-0800980
THE UNITED STATES OF AMERICA (I.R.S. EMPLOYER
(State of incorporation identification no.)
if not a National Bank)
712 MAIN STREET 77002
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
LEE BOOCKER
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002
(713) 216-2448
(Name, address and telephone
number of agent for service)
-------------------------------------
TEXAS-NEW MEXICO POWER COMPANY
(Exact name of obligor as specified in its charter)
TEXAS 75-0204070
(State or other jurisdictions of (I.R.S. employer
incorporation or organization) identification nos.)
4100 INTERNATIONAL PLAZA 76109
P.0. BOX 2943 (Zip Code)
FORT WORTH, TEXAS
(Address of obligor's principal executive offices)
$ SENIOR DEBT SECURITIES
(Title of the indenture securities)
1
<PAGE>
ITEM 1. GENERAL INFORMATION.
-------------------
FURNISH THE FOLLOWING IN FORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
NAME ADDRESS
---------------------------------------------------------------------
Comptroller of the Currency Washington, D.C.
Board of Governors of the Federal Reserve System Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes, the trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
-----------------------------
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION. (SEE NOTE ON PAGE 3)
The obligor is not an affiliate of the trustee.
ITEM 16. LIST OF EXHIBITS.
----------------
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY:
Exhibit 1. A copy of the Articles of Association of the Trustee as now
in effect.
Exhibit 2. A copy of the certificate of authority of the Trustee to
commence business.
Exhibit 3. A copy of the authorization of the Trustee to exercise
corporate trust powers.
Exhibit 4. A copy of the existing bylaws of the Trustee.
Exhibit 5. Not Applicable.
Exhibit 6. The consents of the United States institutional trustees
required by Section 321(b) of the Trust Indenture Act of
1939.
Exhibit 7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
2
<PAGE>
NOTE REGARDING INCORPORATED EXHIBIT
Effective January 20, 1998, the name of the Trustee was changed from Texas
Commerce Bank National Association to Chase Bank of Texas, National Association.
The exhibits incorporated herein by reference, except for Exhibit 7, were filed
under the former name of the Trustee.
Exhibit 1. Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and
Exchange Commission as exhibit to the Form S-3 File No.
33-56195.
Exhibit 2. Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and
Exchange Commission as exhibit to the Form S-3 File No.
33-42814.
Exhibit 3. Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and
Exchange Commission as exhibit to the Form S-11 File No.
33-25132.
Exhibit 4. Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and
Exchange Commission as exhibit to the Form S-3 File No.
33-65055.
Exhibit 6. Incorporated herewith.
Exhibit 7. Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and
Exchange Commission as exhibit to the Form S-3 File No.
333-63747.
NOTE: THE ANSWER TO ITEM 2 IS BASED IN PART ON INFORMATION PROVIDED OR
CONFIRMED BY THE OBLIGOR. THE ACCURACY AND COMPLETENESS OF SUCH
INFORMATION IS HEREBY DISCLAIMED BY THE TRUSTEE.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chase Bank of Texas, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Dallas,
and State of Texas, on the 23rd day of September 1998.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ JOHN G. JONES
--------------------------------------
Name: John G.Jones
Title: Vice President
4
<PAGE>
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under an indenture between Texas-New Mexico
Power Company, a Texas corporation (the "Company") and Chase Bank of Texas,
National Association (formerly known as Texas Commerce Bank National
Association), as Trustee, entered into in connection with the issuance of the
Company's Senior Debt Securities.
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ JOHN G. JONES
--------------------------------------
Name: John G.Jones
Title: Vice President
Date: September 23, 1998
5
<PAGE>
EXHIBIT 25(b)
================================================================================
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)
-----------------------------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
<TABLE>
<S> <C> <C>
111 EAST WACKER DRIVE, SUITE 3000
CHICAGO, ILLINOIS 60601 36-4046888
(Address of principal executive offices) (Zip Code) I.R.S. Employer Identification No.
</TABLE>
H. H. Hall, Jr.
1ll East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9448
(Name, address and telephone number of agent for service)
TEXAS-NEW MEXICO POWER COMPANY
(Exact name of obligor as specified in its charter)
TEXAS 75-0204070
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4100 INTERNATIONAL PLAZA
P.O. BOX 2943
FORT WORTH, TEXAS 76113
(Address of Principal Executive Offices) (Zip Code)
FIRST MORTGAGE BONDS
(Title of the Indenture Securities)
================================================================================
<PAGE>
FORM T-1
--------
ITEM 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
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
ITEM 3-15 There is not nor has there been a default with respect to the
securities under this Indenture. The Trustee is a Trustee under
other Indentures under which securities issued by the obligor are
outstanding. There is not and there has not been a default with
respect to the securities outstanding under such other Indentures.
ITEM 6. LIST OF EXHIBITS: List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee now in effect,
incorporated herein by reference to Exhibit 1 of Form T-1,
Registration No. 333-18235.
2. A copy of the certificate of authority of the Trustee to commence
business, incorporated herein by reference to Exhibit 2 of Form T-1,
Registration No. 333-18235.
3. A copy of the certificate of authority of the Trustee to exercise
corporate trust powers, incorporated herein by reference to Exhibit
3 of Form T-1, Registration No. 333-18235.
4. A copy of the existing bylaws of the Trustee, as now in effect,
incorporated herein by reference to Exhibit 4 of Form T-1,
Registration No. 333-18235.
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939, incorporated herein by reference to Exhibit 6
of Form T-1, Registration No. 333-18235.
7. A copy of the latest report of condition of the Trustee,
incorporated herein by reference to Exhibit 7 of Form T-1,
Registration Number 333-51675.
8. Not applicable.
9. Not applicable.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago, State of Illinois on the 23rd day of September, 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ H. H. HALL, JR.
--------------------------------------------
H. H. Hall, Jr.
Vice President and Assistant Secretary
3
