<PAGE> 1
As filed with the Securities and Exchange Commission on July 18, 1997.
Registration No. 333-29391
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
IES UTILITIES INC.
(Exact Name of Registrant as Specified in Its Charter)
IOWA 42-0331370
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
IES TOWER
200 FIRST STREET S.E.
CEDAR RAPIDS, IOWA 52401
(319) 398-4411
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-----------------------
STEPHEN W. SOUTHWICK
VICE PRESIDENT, GENERAL COUNSEL & SECRETARY
IES UTILITIES INC.
200 FIRST STREET S.E.
CEDAR RAPIDS, IOWA 52401
(319) 398-8147
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
RICHARD L. HARDEN
WINTHROP, STIMSON, PUTNAM & ROBERTS
ONE BATTERY PARK PLAZA
NEW YORK, NY 10004-1490
(212) 858-1228
-----------------------
Approximate date of commencement of proposed sale of securities to the
public: From time to time after this Registration Statement becomes effective.
-----------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box./ /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box./x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering./ /
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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./ /
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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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 by 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.
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PROSPECTUS
Subject to Completion, Dated July 18, 1997
$135,000,000
IES UTILITIES INC.
DEBT SECURITIES
IES Utilities Inc. (the "Company") may from time to time issue up to
$135,000,000 aggregate principal amount of its various debt securities,
including Collateral Trust Bonds, Senior Debentures and Junior Subordinated
Debentures (collectively referred to as "Securities"), in one or more series, at
prices and on terms to be determined at the time of sale. The terms of the
Securities in respect of which this Prospectus is being delivered, including,
where applicable, the series designation, the principal amount of the series,
the maturity, the rate and time of payment of interest, the initial public
offering price, the provisions for redemption and other provisions, will be set
forth in one or more Prospectus Supplements (each a "Prospectus Supplement"),
together with the terms of offering of the Securities.
-------------------
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
THE SECURITIES MAY BE SOLD BY THE COMPANY THROUGH UNDERWRITERS, DEALERS
OR AGENTS, OR DIRECTLY TO ONE OR MORE PURCHASERS PURSUANT TO TERMS FIXED AT THE
TIME OF SALE. THE PROSPECTUS SUPPLEMENT WILL SET FORTH THE NAMES OF THE
UNDERWRITERS, DEALERS OR AGENTS, IF ANY, ANY APPLICABLE COMMISSIONS OR
DISCOUNTS, AND THE NET PROCEEDS TO THE COMPANY FROM ANY SUCH SALE. SEE "PLAN OF
DISTRIBUTION" FOR POSSIBLE INDEMNIFICATION ARRANGEMENTS FOR UNDERWRITERS,
DEALERS OR AGENTS.
THE DATE OF THIS PROSPECTUS IS ___________,1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "SEC"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; and
at the SEC's regional offices located at 1400 Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60601 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can be obtained at prescribed
rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. In addition, such
reports and other information concerning the Company can be inspected at the
principal office of the Company, 200 First Street S.E., Cedar Rapids, Iowa
52401.
The Company has filed with the SEC a registration statement on Form S-3
(herein together with all amendments and exhibits referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information, reference is made to the
Registration Statement and to the exhibits and schedules filed therewith, which
may be inspected without charge at the office of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such documents may also be obtained from
the SEC at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; and
3. The Company's Current Report on Form 8-K dated April 28,
1997.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents; provided, however, that documents filed by the Company pursuant
to Sections 13, 14 or 15(d) of the Exchange Act prior to the end of the fiscal
year covered by the most recent Annual Report on Form 10-K of the Company shall
not be deemed to be incorporated herein by reference or to be a part hereof from
and after the date of the filing of such Annual Reports on Form 10-K. The
documents incorporated herein by reference are sometimes hereinafter called the
"Incorporated Documents." Any statement contained herein or in an Incorporated
Document shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in a Prospectus
Supplement or in any subsequently filed Incorporated Document 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 information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more Incorporated Documents; accordingly, such information
contained herein is qualified in its entirety by reference to Incorporated
Documents and should be read in conjunction therewith.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all of the Incorporated
Documents (not including exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Requests for such
copies should be directed to William Jurgensen, Director of
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Shareholder Services, IES Industries Inc., 200 First Street S.E., Cedar Rapids,
Iowa 52401, telephone (319) 398-7755.
No person has been authorized to give any information or make any
representation not contained in this Prospectus or, with respect to any
Security, the Prospectus Supplement relating thereto, and, if given or made,
such information or representation must not be relied upon as having been
authorized by the Company or any underwriter. This Prospectus and any Prospectus
Supplement do not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus and a Prospectus Supplement nor any sale made
thereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date of that Prospectus
Supplement.
TABLE OF CONTENTS
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
THE COMPANY 3
THE MERGER 4
USE OF PROCEEDS 4
SELECTED CONSOLIDATED FINANCIAL INFORMATION 5
PLAN OF DISTRIBUTION 6
DESCRIPTION OF THE COLLATERAL TRUST BONDS 6
DESCRIPTION OF THE 1940 INDENTURE 17
DESCRIPTION OF THE ISU 1923 INDENTURE 22
DESCRIPTION OF THE SENIOR UNSECURED INDENTURE 27
DESCRIPTION OF THE SUBORDINATED INDENTURE 36
GLOBAL SECURITIES 45
EXPERTS 46
LEGAL MATTERS 46
THE COMPANY
The Company was incorporated under the laws of the State of Iowa on May
25, 1925. The Company is a public utility operating company with all of its
operations in the State of Iowa and is a wholly-owned subsidiary of IES
Industries Inc. ("Industries"), a public utility holding company. The Company is
the surviving corporation following the merger on December 31, 1993 of Iowa
Southern Utilities Company ("Iowa Southern" or "ISU") with and into Iowa
Electric Light and Power Company ("IE"). The surviving corporation was
subsequently renamed IES Utilities Inc.
The Company supplies electric energy and natural gas to a service area
with an estimated population of approximately one million. For the twelve months
ended March 31, 1997, the Company derived approximately 75% of its revenues from
the sale of electric energy, approximately 22% from the sale of natural gas and
approximately
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3% from the sale of steam gas. At March 31, 1997, the Company provided service
to approximately 336,000 electric, 176,000 natural gas and 226 steam retail
customers as well as 30 resale customers in more than 550 Iowa communities. The
Company's principal executive offices are located at 200 First Street S.E.,
Cedar Rapids, Iowa 52401, telephone (319) 398-4411.
Additional information concerning the Company and its operations is
contained in the Incorporated Documents, to which reference is hereby made.
THE MERGER
On November 10, 1995, Industries, WPL Holdings, Inc. ("WPLH") and
Interstate Power Company ("IPC") entered into an Agreement and Plan of Merger,
as amended ("Merger Agreement"), providing for: (a) IPC becoming a wholly-owned
subsidiary of WPLH, and (b) the merger of Industries with and into WPLH, which
merger will result in the combination of Industries and WPLH as a single holding
company (collectively, the "Proposed Merger"). The new holding company will be
named Interstate Energy Corporation ("Interstate Energy") and Industries will
cease to exist. The Proposed Merger, which will be accounted for as a pooling of
interests and is intended to be tax-free for federal income tax purposes, has
been approved by the respective Boards of Directors and shareholders. It is
still subject to approval by several federal and state regulatory agencies. The
companies expect to receive such regulatory approvals by the third or fourth
quarter of 1997.
WPLH is a holding company headquartered in Madison, Wisconsin, and is
the parent company of Wisconsin Power and Light Company ("WP&L") and Heartland
Development Corporation ("HDC"). WP&L supplies electric and gas service to
approximately 385,000 and 150,000 customers, respectively, in south and central
Wisconsin. HDC and its principal subsidiaries are engaged in businesses in three
major areas: environmental engineering and consulting, affordable housing and
energy services. IPC, an operating public utility headquartered in Dubuque,
Iowa, supplies electric and gas service to approximately 165,000 and 49,000
customers, respectively, in northeast Iowa, northwest Illinois and southern
Minnesota.
Interstate Energy will be the parent company of Utilities, WP&L and IPC
and will be registered under the Public Utility Holding Company Act of 1935, as
amended. The Merger Agreement provides that these operating utility companies
will continue to operate as separate entities for a minimum of three years
beyond the effective date of the merger. In addition, the non-utility operations
of the Company and WPLH will be combined shortly after the effective date of the
merger under one entity to manage the diversified operations of Interstate
Energy. The corporate headquarters of Interstate Energy will be in Madison,
Wisconsin.
The Securities and Exchange Commission historically has interpreted the
1935 Act to preclude registered holding companies, with limited exceptions, from
owning both electric and gas utility systems. Although the Securities and
Exchange Commission has recommended that registered holding companies be allowed
to hold both gas and electric utility operations if the affected states agree,
it remains possible that the Securities and Exchange Commission may require as a
condition to its approval of the Proposed Merger that the Company, WPLH and IPC
divest their gas utility properties, and possibly certain non-utility ventures
of the Company and WPLH, within a reasonable time after the effective date of
the Proposed Merger.
Additional information concerning the Proposed Merger is contained in
the Incorporated Documents, to which reference is hereby made.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement or
a supplement thereto, the Company intends to use the net proceeds to be received
from the issuance and sale of the Securities offered hereby (i) to reduce
short-term debt and (ii) for general corporate purposes.
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except percentages and ratios)
The financial data presented below should be read in conjunction with the
Company's consolidated financial statements and notes thereto which are
incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
TWELVE YEAR ENDED DECEMBER 31,
MONTHS ENDED ------------------------------------------------------------
MARCH 31, 1997
(UNAUDITED) 1996 1995 1994 1993 1992
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income Summary:
Operating revenues ....... $782,609 $754,979 $709,826 $685,366 $713,750 $610,262
Operating income ......... 152,110 153,725 142,265 135,591 143,329 100,361
Net income ............... 61,452 63,729 59,278 61,210 67,970 45,291
Dividend requirements on
preferred stock ........ 914 914 914 914 914 1,729
Net income available for
common stock(1) ........ 60,538 62,815 58,364 60,296 67,056 43,562
Cash dividends declared
on common stock ..... 48,000 44,000 43,000 52,000 31,300 24,721
Ratio of earnings to fixed
charges(2) ............... 3.09 3.23 3.04 3.18 3.41 2.49
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1997 (UNAUDITED) (3)
-----------------------------------
PERCENT OF
ACTUAL CAPITALIZATION
------ --------------
<S> <C> <C>
Capitalization Summary:
Long-term debt(4)........ $525,529 48.4%
Preferred stock.......... 18,320 1.7%
Common equity............ 541,428 49.9%
---------- ------
Total................. $1,085,277 100.0%
========== ======
</TABLE>
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(1) All of the Company's common stock is owned by IES Industries Inc.
(2) For purposes of computation of these ratios, (a) earnings have been
calculated by adding fixed charges and federal and state income taxes
to net income; (b) fixed charges consist of interest (including
amortization of debt expense, premium and discount) on long-term and
other debt, and the estimated interest component of rents.
(3) Does not reflect the issuance of the Securities or the use of the
proceeds thereof.
(4) Includes $63,140,000 of current maturities.
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PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters or dealers, (ii) directly to one or more purchasers, or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms of
any offering of the Securities, including the names of any underwriters or
agents, the purchase price of such Securities, the proceeds to the Company from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, the initial public offering price, and any discounts or
concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale, the 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. Such
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all of such Securities if any of such Securities are purchased. The initial
public offering prices and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Securities may also be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Securities will be named, and any commissions payable by
the Company to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will act on a reasonable efforts basis for the period of its
appointment.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize agents, underwriters, or dealers to solicit offers by certain
specified institutions to purchase the Securities at the public offering price
set forth in such Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in such Prospectus
Supplement or a supplement thereto. Such contracts will be subject only to those
conditions set forth in the applicable Prospectus Supplement, and such
Prospectus Supplement will set forth the commissions payable for solicitation of
such contracts.
Any underwriters, dealers, or agents participating in the distribution
of the Securities may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of the Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Agents and underwriters may be entitled under agreements entered into with the
Company to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. Agents and underwriters may be customers
of, engage in transactions with, or perform services for the Company or its
affiliates in the ordinary course of business.
DESCRIPTION OF THE COLLATERAL TRUST BONDS
GENERAL
If the Securities are issued as Collateral Trust Bonds, those
Collateral Trust Bonds will be issued in one or more series as fully registered
bonds, without coupons, under an Indenture of Mortgage and Deed of Trust, dated
as of September 1, 1993 (the "Original Mortgage"), between the Company and The
First National Bank of Chicago, as Trustee (the "Trustee"), as amended and
supplemented. As used herein, the term "Bonds" refers to any series of
Collateral Trust Bonds in respect of which this Prospectus is being delivered.
The Original Mortgage as amended and supplemented by various supplemental
indentures including one or more supplemental indentures relating to any
issuance of Collateral Trust Bonds, is hereinafter referred to as the
"Mortgage." The summaries herein concerning the Collateral Trust Bonds do not
purport to be complete and are subject to the detailed provisions of the
Mortgage, a copy of which was previously filed with the Commission, is listed as
an exhibit to the Registration Statement of which this Prospectus is a part, and
is incorporated herein by reference. Capitalized terms used herein which are not
otherwise defined in this Prospectus have the meanings ascribed thereto in the
Mortgage. Wherever particular provisions of the Mortgage or terms defined
therein are referred to, such provisions or definitions are incorporated
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by reference as a part of the statements made herein and such statements are
qualified in their entirety by such reference. References to article and section
numbers herein, unless otherwise indicated, are references to article and
section numbers of the Mortgage.
The Mortgage provides that, in addition to Collateral Trust Bonds,
additional debt securities may be issued thereunder, without limitation as to
the aggregate principal amount. (See "Issuance of Additional Securities" below.)
The Bonds will be secured equally and ratably with all other securities issued
under the Mortgage.
TERMS OF SPECIFIC SERIES OF THE BONDS
Reference is made to the applicable Prospectus Supplement, or a
supplement thereto, for a description of the following terms of the Bonds: (i)
the title of such Bonds; (ii) the limit, if any, upon the aggregate principal
amount of such Bonds; (iii) the date or dates on which the principal of such
Bonds is payable; (iv) the rate or rates at which such Bonds will bear interest,
if any; the date or dates from which such interest will accrue; the dates on
which such interest will be payable ("Interest Payment Dates"); and the regular
record dates for the interest payable on such Interest Payment Dates; (v) the
option, if any, of the Company to redeem such Bonds and the periods within which
or the dates on which, the prices at which and the terms and conditions upon
which, such Bonds may be redeemed, in whole or in part, upon the exercise of
such option; (vi) the obligation, if any, of the Company to redeem or purchase
Bonds pursuant to any sinking fund or analogous provisions or at the option of
the Holder (as hereinafter defined) and the periods within which or the dates on
which, the prices at which and the terms and conditions upon which, such Bonds
will be redeemed, in whole or in part, pursuant to such obligation; (vii) the
denominations in which such Bonds will be issuable; (viii) whether such Bonds
are to be issued in whole or in part in the form of one or more global Bonds
and, if so, the identity of the depositary for such global Bonds; and (ix) any
other terms of such Bonds not inconsistent with the provisions of the Mortgage.
PAYMENT OF BONDS; TRANSFERS; EXCHANGES
Except as may be provided in the applicable Prospectus Supplement, or a
supplement thereto, interest, if any, on each Bond payable on each Interest
Payment Date will be paid to the person in whose name such Bond is registered
(the registered holder of any Bond being hereinafter called a "Holder") as of
the close of business on the regular record date relating to such Interest
Payment Date; provided, however, that interest payable at maturity (whether at
stated maturity, upon redemption or acceleration of maturity or otherwise,
hereinafter "Maturity") will be paid to the person to whom principal is paid.
However, if there has been a default in the payment of interest on any Bond,
such defaulted interest may be payable to the Holder of such Bond as of the
close of business on a date selected by the Trustee which is not more than 15
days and not less than 10 days prior to the date proposed by the Company for
payment of such defaulted interest or in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such Bond
may be listed, if the Trustee deems such manner of payment practicable. (Section
307)
Principal of and premium, if any, and interest on the Bonds at Maturity
will be payable upon presentation of the Bonds at the office of the Trustee in
Chicago, Illinois or, at the option of the Holder, at the principal corporate
trust office of The First National Bank of Chicago in New York, New York. The
transfer of Bonds may be registered, and the Bonds may be exchanged for other
Bonds of the same series and tranche, of authorized denominations of like tenor
and aggregate principal amount, at the office of The First National Bank of
Chicago in New York, New York as Bond Registrar for the Bonds. The Company will
not be required to issue, and no Bond Registrar will be required to register the
transfer of or to exchange (a) Collateral Trust Bonds of any series (including
the Bonds offered hereby) during a period of 15 days prior to giving any notice
of redemption thereof or (b) any Bond selected for redemption in whole or in
part, except the unredeemed portion of any Bond being redeemed in part.
(Section 305)
The Company may change the place for payment or registration of
transfer or exchange of the Bonds, may appoint one or more additional Paying
Agents or Bond Registrars (including, without limitation, the Company) and may
remove any Paying Agent or Bond Registrar, all at its discretion. The applicable
Prospectus Supplement or a supplement thereto, will identify any such changes
prior to the date of such Prospectus Supplement or supplement thereto. (Section
602)
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REDEMPTION
Any terms for the optional or mandatory redemption of the Bonds will be
set forth in a Prospectus Supplement or a supplement thereto. Except as will
otherwise be provided with respect to Bonds redeemable at the option of the
Holder, redeemable Bonds will be redeemed only upon notice by mail not less than
30 nor more than 60 days prior to the date fixed for redemption and, if less
than all the Bonds of a series, or any tranche thereof, are to be redeemed, the
particular Bonds to be redeemed will be selected by such method as will be
provided for any particular series, or in the absence of any such provision, by
such method as the Bond Registrar deems fair and appropriate. (Sections 503 and
504)
Any notice of redemption of Bonds, at the option of the Company, may
state that such redemption will be conditional upon receipt by the Trustee, on
or prior to the date fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Bonds and that
if such money has not been so received, such notice will be of no force and
effect and the Company will not be required to redeem such Bonds. (Section 504)
NO MAINTENANCE, REPLACEMENT OR SINKING FUNDS
While the Mortgage contains provisions for the maintenance of the
Mortgage Property (Section 601), it does not contain any provisions for any
maintenance, replacement, sinking or analogous fund and, except as may be
provided in the applicable Prospectus Supplement, or a supplement thereto, there
will be no provisions for any such funds for the Bonds.
SECURITY
GENERAL. Except as discussed below, securities (including the Bonds)
now or hereafter issued under the Mortgage will be secured primarily by:
(a) first mortgage bonds issued under the Company's Indenture
of Mortgage and Deed of Trust, dated as of August 1, 1940 (as amended
and supplemented, the "1940 Indenture"), to The First National Bank of
Chicago, as trustee (the "1940 Indenture Trustee"), and delivered to
the Trustee under the Mortgage. As discussed under "DESCRIPTION OF THE
1940 INDENTURE - Security," the 1940 Indenture constitutes, subject to
certain exceptions, a first mortgage lien on substantially all of the
properties of the Company except properties of Iowa Southern at the
time of the IE-ISU merger;
(b) first mortgage bonds issued under Iowa Southern's
Indenture or Deed of Trust, dated as of February 1, 1923 (as amended
and supplemented, the "ISU 1923 Indenture"), with The Northern Trust
Company (The First National Bank of Chicago, successor) (the "ISU
Corporate Trustee") and Harold H. Rockwell (Richard D. Manella,
successor) as trustees (the "ISU Indenture Trustees"), and delivered to
the Trustee under the Mortgage; as discussed under "DESCRIPTION OF THE
ISU 1923 INDENTURE Security," the ISU 1923 Indenture constitutes,
subject to certain exceptions, a first mortgage lien on substantially
all of the properties owned by Iowa Southern at the time of the IE-ISU
merger (which are now, subsequent to such merger, properties of the
Company); and
(c) the Lien of the Mortgage on the Company's properties used
in the generation, purchase, transmission, distribution or sale of
electric energy by the Company, or in the manufacture of manufactured
gas, or in the purchase, transportation, distribution or sale of
manufactured gas or natural gas, or in the generation, manufacture,
distribution or sale of steam and hot water, which Lien is junior to
the liens of the 1940 Indenture and the ISU 1923 Indenture.
(Granting Clause First)
As discussed below under "Class "A" Bonds," following a merger or
consolidation of another corporation into the Company, or the transfer by
another corporation of property to the Company, the Company could issue and
deliver to the Trustee bonds issued under an existing mortgage on the properties
of such other corporation in lieu of or in addition to bonds issued under the
1940 Indenture or the ISU 1923 Indenture. In such event, the securities
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(including the Bonds) issued under the Mortgage would be secured, additionally,
by such bonds and by the Lien of the Mortgage on the properties of such other
corporation, which would be junior to the liens of the existing mortgage of such
corporation, the 1940 Indenture and the ISU 1923 Indenture. The 1940 Indenture
and the ISU 1923 Indenture and all such other mortgages are hereinafter,
collectively, called the "Class "A" Mortgages," and all bonds outstanding under
the Class "A" Mortgages are hereinafter collectively called the "Class "A"
Bonds." If and when no Class "A" Mortgages are in effect, the Mortgage will
constitute a first mortgage lien on all property of the Company subject thereto.
(Sections 101 and 706)
CLASS "A" BONDS. Any Class "A" Bonds issued after the date of the
Mortgage (other than in substitution or exchange for previously outstanding
Class "A" Bonds) will be issued and delivered to, and registered in the name of,
the Trustee or its nominee and will be owned and held by the Trustee, subject to
the provisions of the Mortgage, for the benefit of the Holders of all securities
issued under the Mortgage and Outstanding from time to time. Class "A" Bonds
issued as the basis of authentication and delivery of securities under the
Mortgage (a) will mature on the same dates, and in the same principal amounts,
as such securities and (b) will contain, in addition to any mandatory redemption
provisions applicable to all Class "A" Bonds Outstanding under the related Class
"A" Mortgage, mandatory redemption provisions correlative to provisions for
mandatory redemption, or for redemption at the option of the Holder, of such
securities. Class "A" Bonds issued as the basis for authentication and delivery
of a series or tranche of securities under the Mortgage (x) may, but need not,
bear interest, any such interest to be payable at the same times as interest on
the securities of such series or tranche and (y) may, but need not, contain
provisions for the redemption thereof at the option of the Company, any such
redemption to be made at a redemption price or prices not less than the
principal amount of such Class "A" Bonds. (Sections 402 and 701)
Any payment by the Company of principal of or premium or interest on
the Class "A" Bonds held by the Trustee will be applied by the Trustee to the
payment of any principal, premium or interest, as the case may be, in respect of
any Mortgage securities which is then due and, to the extent of such
application, the obligation of the Company under the Mortgage to make such
payment in respect of such securities will be deemed satisfied and discharged.
If, at the time of any such payment of principal of Class "A" Bonds, such
payment shall exceed the amount of principal then due in respect of the
securities, the excess of such payment will be deemed to constitute Funded Cash
and will be held by the Trustee as part of the Mortgaged Property, to be
withdrawn, used or applied as provided in the Mortgage. If, at the time of any
such payment of premium or interest on Class "A" Bonds held by the Trustee, such
payment shall exceed the amount of premium or interest then due in respect of
such securities, the excess of such payments will be remitted to the Company at
its request. Any payment by the Company of principal of or premium or interest
on any Mortgage securities authenticated and delivered on the basis of the
deposit with the Trustee of Class "A" Bonds (other than by application of the
proceeds of a payment in respect of such Class "A" Bonds) will, to the extent
thereof, be deemed to satisfy and discharge the obligation of the Company, if
any, to make a payment of principal, premium or interest, as the case may be, in
respect of such Class "A" Bonds which is then due. (Section 702; see "Withdrawal
of Cash" below.)
The Trustee may not sell, assign or otherwise transfer any Class "A"
Bonds held by the Trustee except to a successor trustee under the Mortgage.
(Section 704) At the time any Mortgage securities of any series or tranche which
have been authenticated and delivered upon the basis of Class "A" Bonds cease to
be Outstanding (other than a result of the application of the proceeds of the
payment or redemption of such Class "A" Bonds), the Trustee shall surrender to,
or upon the order of, the Company an equal principal amount of such Class "A"
Bonds having the same Stated Maturity and mandatory redemption provisions as
such securities. (Section 703)
At the date of this Prospectus, the only Class "A" Mortgages are the
1940 Indenture and the ISU 1923 Indenture and the only Class "A" Bonds issuable
are first mortgage bonds issuable thereunder. The Mortgage provides that in the
event of the merger or consolidation of another company with or into the
Company, an existing mortgage constituting a lien on properties of such other
company prior to the Lien of the Mortgage may be designated by the Company as an
additional Class "A" Mortgage. Any bonds thereafter issued under such additional
mortgage would be Class "A" Bonds and (other than in substitution or exchange
for previously Outstanding Class "A" Bonds) could be issued only to provide the
basis for the authentication and delivery of securities under the Mortgage.
(Section 706)
When no bonds are Outstanding under a Class "A" Mortgage except for
Class "A" Bonds held by the Trustee, then, at the request of the Company and
subject to satisfaction of certain conditions, the Trustee will surrender such
Class "A" Bonds for cancellation and the related Class "A" Mortgage will be
satisfied and
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discharged; whereupon, the lien of such Class "A" Mortgage on the property owned
by the Company will cease to exist and the Lien of the Mortgage will become a
first mortgage lien on such property, subject to Permitted Liens. (Section 707)
So long as any securities are Outstanding under the Mortgage, the
Company will not (a) issue any additional Class "A" Bonds except (i) to replace
any mutilated, destroyed, lost or stolen securities of the same series or to
effect exchanges and transfers of such securities or (ii) to the Trustee as the
basis for the authentication and delivery of securities or (b) subject to the
lien of any Class "A" Mortgage any property which is excepted and excluded from,
or not included in or subject to, the lien of such Class "A" Mortgage. (Section
610) First mortgage bonds may be issued under the 1940 Indenture on the basis of
property additions, retirements of bonds previously issued under the 1940
Indenture and cash deposited with the 1940 Indenture Trustee. (See "DESCRIPTION
OF THE 1940 INDENTURE - Issuance of Additional Bonds.") First mortgage bonds may
be issued under the ISU 1923 Indenture on the basis of property additions,
retirements of bonds previously issued under the ISU 1923 Indenture and cash
deposited with the ISU Corporate Trustee. (See "DESCRIPTION OF THE ISU 1923
INDENTURE - Issuance of Additional Bonds.")
LIEN OF THE MORTGAGE. At the date of this Prospectus, substantially all
of the Company's property subject to the Lien of the Mortgage is also subject to
the prior lien of the 1940 Indenture or the ISU 1923 Indenture. Any Bonds
offered hereby will have the benefit of the first mortgage lien of the 1940
Indenture and the ISU 1923 Indenture on such property, and the benefit of the
prior lien of any additional Class "A" Mortgage on any property subject thereto,
to the extent of the aggregate principal amount of Class "A" Bonds issued under
the respective Class "A" Mortgage and held by the Trustee.
The Lien of the Mortgage is subject to Permitted Liens which include
tax liens and other governmental charges which are not delinquent or which can
thereafter be paid without penalty or which are being contested, construction
and materialmen's liens, certain judgment liens, easements, reservations and
rights of others (including governmental entities) in, and defects of title in,
certain property of the Company, certain leasehold interests, liens on the
Company's pollution control and sewage and solid waste disposal facilities which
were previously financed with industrial development revenue bonds and certain
other liens and encumbrances. (Granting Clauses and Section 101)
There are excepted from the Lien of the Mortgage, among other things,
cash and securities not paid, deposited or held under the Mortgage; contracts,
leases and other agreements of all kinds, contract rights, bills, notes and
other instruments, accounts receivable, claims, judgments, certain intellectual
property rights and other general intangibles; automobiles, aircraft and
vessels; all goods, wares, merchandise, equipment, spare parts, tools,
materials, supplies and fuel held for sale or lease in the ordinary course of
business or for use or consumption in, or in the operation of, any properties of
or for the benefit of the Company; nuclear fuel; computers, machinery and
equipment used exclusively for corporate administrative or clerical purposes;
all gas, oil, minerals and timber, and rights thereto; electric energy, gas,
steam, water and other products generated, produced or purchased; property
installed on the premises of customers of the Company and designed to aid in
conservation or efficient use of energy; leasehold interests and leasehold
improvements of the Company; and all property which is located outside of the
State of Iowa and is neither specifically described in the Granting Clauses of
the Mortgage nor specifically subjected or required to be subjected to the Lien
of the Mortgage by any provision thereof. (Granting Clauses)
Without the consent of the Holders, the Company and the Trustee may
enter into supplemental indentures to subject to the Lien of the Mortgage
additional property (including property which would otherwise be excepted from
such Lien). (Section 1401) Such property, so long as the same would otherwise
constitute Property Additions, would thereupon constitute Property Additions and
be available as a basis for the issuance of securities under the Mortgage. (See
"Issuance of Additional Securities" below.) Property Additions generally include
any unit or element of property which is owned by the Company and is subject to
the Lien of the Mortgage except (i) any property, the cost of acquisition or
construction of which is property chargeable to an operating expense account of
the Company and (ii) goodwill, going concern value rights and intangible
property, unless the cost thereof is included in the cost of such unit or
element of property and no separate consideration was paid or apportioned
therefor, in which case Property Additions may include such goodwill, going
concern rights and intangible property. (Section 103)
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The Mortgage contains provisions subjecting after-acquired property
(other than Excepted Property) to the Lien thereof. These provisions are limited
in the case of consolidation or merger or sale of substantially all of the
Company's assets. In the event of consolidation or merger or the transfer of all
of the Mortgaged Property as or substantially as an entirety, the Mortgage will
not be required to be a lien upon any of the properties then owned or thereafter
acquired by the successor corporation except properties acquired from the
Company in or as a result of such transaction and properties which are an
integral part of, or essential to the use or operation of, any Mortgaged
Property, and renewals, replacements and substitutions of or for any part
thereof. (Article Thirteen; see "Consolidation, Merger, Conveyance, Transfer or
Lease" below.) In addition, after-acquired property may be subject to vendors'
liens, purchase money mortgages and other liens thereon at the time of
acquisition thereof, including the lien of any Class "A" Mortgage.
The Mortgage provides that the Trustee will have a lien, prior to the
lien on behalf of the holders of securities issued under the Mortgage, upon
Mortgaged Property, for the payment of its reasonable compensation and expenses
and for indemnity against certain liabilities. (Section 1107)
ISSUANCE OF ADDITIONAL SECURITIES
The maximum principal amount of securities which may be issued under
the Mortgage is unlimited. (Section 301) Under the Mortgage, securities of any
series may be issued from time to time on the basis of, and in an aggregate
principal amount not exceeding:
(1) the aggregate principal amount of Class "A" Bonds issued and
delivered to the Trustee for such purpose;
(2) 75% of the Cost or fair value (whichever is less) of Property
Additions (as described below) which do not constitute Funded Property
(generally, Funded Property includes Property Additions which have been made, or
deemed to have been made, the basis of the authentication and delivery of
securities, the release of Mortgaged Property from the Lien of the Mortgage or
cash withdrawals, or which have been substituted for retired property), after
certain deductions and additions, primarily including adjustments to offset
property retirements;
(3) the aggregate principal amount of Retired Securities (which
consist of securities no longer outstanding under the Mortgage which have not
been used for certain other purposes under the Mortgage and which are not to be
paid, redeemed, purchased or otherwise retired by the application thereto of
Funded Cash) or Retired Prior Lien Bonds; and
(4) the amount of cash deposited with the Trustee.
(Article Four)
THE COMPANY IS NOT REQUIRED TO SATISFY A NET EARNINGS REQUIREMENT PRIOR
TO THE ISSUANCE OF SECURITIES UNDER THE MORTGAGE.
Unless otherwise provided in the applicable Prospectus Supplement, or
supplement thereto, the Company will issue the Bonds on the basis of Class "A"
Bonds issued under the 1940 Indenture. (See "DESCRIPTION OF THE 1940 INDENTURE -
Issuance of Additional Bonds" for a description of the requirements for the
issuance of bonds under the 1940 Indenture, which requirements are generally
more restrictive than those for the issuance of securities under the Mortgage.)
RELEASE OF PROPERTY
Unless an Event of Default (hereinafter defined) shall have occurred
and be continuing, the Company may obtain the release from the Lien of the
Mortgage of any Funded Property, except for cash held by the Trustee, upon
delivery to the Trustee of cash equal in amount to the amount, if any, that the
Cost of the property to be released (or, if less, the fair value of such
property at the time it became Funded Property) exceeds the aggregate of:
(1) the principal amount, subject to certain limitations, of
obligations secured by purchase money mortgages upon the property to be
released delivered to the Trustee;
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(2) the Cost or fair value (whichever is less) of certified Property
Additions not constituting Funded Property after certain deductions and
additions, primarily including adjustments to offset property retirements
(except that such adjustments need not be made if such Property Additions
were acquired or made within the 90-day period preceding the request for
such release);
(3) an amount equal to 133-1/3% of the aggregate principal amount of
securities the Company would be entitled to issue on the basis of Retired
Securities or Retired Prior Lien Bonds (with such entitlement being waived
by operation of such release);
(4) the amount of cash deposited with, or the principal amount of
obligations secured by purchase money mortgages upon the property released
and delivered to, the Trustee or other holder of a lien prior to the Lien
of the Mortgage;
(5) an amount equal to 133-1/3% of the aggregate principal amount of
securities Outstanding under the Mortgage and delivered to the Trustee
(with such Securities to be canceled by the Trustee); and
(6) any taxes and expenses incidental to any sale, exchange,
dedication or other disposition of the property to be released.
(Section 803)
Unless an Event of Default shall have occurred and be continuing,
property which is not Funded Property may generally be released from the Lien of
the Mortgage without depositing any cash or property with the Trustee as long as
(a) the aggregate amount of Cost or fair value (whichever is less) of all
Property Additions which do not constitute Funded Property (excluding the
property to be released) after certain deductions and additions, primarily
including adjustments to offset property retirements, is not less than zero or
(b) the Cost or fair value (whichever is less) of property to be released does
not exceed the aggregate amount of the Cost or fair value (whichever is less) of
Property Additions acquired or made within the 90-day period preceding the
release. (Section 804)
The Mortgage provides simplified procedures for the release of property
which has been released from the lien of Class "A" Mortgages, minor properties
and property taken by eminent domain, and provides for dispositions of certain
obsolete property and grants or surrender of certain rights without any release
or consent by the Trustee.
If any property released from the Lien of Mortgage continues to be
owned by the Company after such release, the Mortgage will not become a lien on
any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property.
(Article Eight)
WITHDRAWAL OF CASH
Subject to certain limitations, unless an Event of Default shall have
occurred and be continuing, cash held by the Trustee may (1) be withdrawn by the
Company (a) to the extent of the Cost or fair value (whichever is less) of
Property Additions not constituting Funded Property, after certain deductions
and additions, primarily including adjustments to offset retirements or (b) in
an amount equal to 133-1/3% of the aggregate principal amount of securities that
the Company would be entitled to issue under the Mortgage on the basis of
Retired Securities or Retired Prior Lien Bonds (with the entitlement to such
issuance being waived by operation of such withdrawal) or (c) in an amount equal
to 133-1/3% of the aggregate principal amount of any securities Outstanding
under the Mortgage and issued under the Mortgage and delivered to the Trustee,
or (2) upon the request of the Company, be applied to (a) the purchase of
securities issued under the Mortgage (at prices not exceeding 133-1/3% of the
principal amount thereof) or (b) the redemption or payment at Stated Maturity of
securities issued under the Mortgage (with any securities received by the
Trustee pursuant to these provisions being canceled by the Trustee) (Section
806); provided, however, that cash deposited with the Trustee as the basis for
the authentication and delivery of securities, as well as cash representing a
payment of principal of Class "A" Bonds, may only be withdrawn in an amount
equal to the aggregate principal amount of securities the Company would be
entitled to issue under the Mortgage on any basis (with the entitlement to such
issuance being waived by operation of such withdrawal), or may, upon the request
of the Company, be applied to the purchase redemption or payment of securities
issued under the Mortgage at prices not exceeding, in the aggregate, the
principal amount thereof. (Sections 405 and 702)
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CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company may not consolidate with or merge into any other
corporation or convey, transfer or lease the Mortgaged Property as or
substantially as an entirety to any Person unless (a) such transaction is on
such terms as will fully preserve in all material respects the Lien and security
of the Mortgage and the rights and powers of the Trustee and the Holders and (b)
the corporation formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or other transfer, or which leases,
the Mortgaged Property as or substantially as an entirety is a corporation
organized and existing under the laws of the United States of America, any State
or Territory thereof or the District of Columbia, and such corporation executes
and delivers to the Trustee a supplemental indenture, which contains an
assumption by such corporation of the Company's obligations under the Mortgage
and which contains a grant, conveyance, transfer and mortgage by such
corporation confirming the Lien of the Mortgage on the Mortgaged Property and
subjecting to such Lien all property thereafter acquired by such corporation
which shall constitute an integral part, or be essential to the use or operation
of, any Mortgage Property or a renewal, replacement or substitution of or for
any part thereof. (Section 1301)
MODIFICATION OF THE MORTGAGE
Without the consent of any Holders, the Company and the Trustee may
enter into one or more supplemental indentures for certain purposes, including
any of the following:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in the
Mortgage and in the securities; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be outstanding, securities
issued under the Mortgage of one or more specified series, or one or more
tranches thereof, or to surrender any right or power conferred upon the
Company by the Mortgage; or
(c) to correct or amplify the description of any property at any
time subject to the Lien of the Mortgage, or to subject to the Lien of the
Mortgage additional property; or
(d) to change or eliminate any provision of the Mortgage or to add
any new provision to the Mortgage, provided that, if such change,
elimination or addition adversely affects the interests of the Holders of
the securities of any series or tranche in any material respect, such
change, elimination or addition will become effective with respect to such
series or tranche only when no security of such series or tranche remains
Outstanding under the Mortgage; or
(e) to establish the form or terms of the securities of any series
or tranche as permitted by the Mortgage; or
(f) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provision
therein, or to comply with the rules or regulations of any national
securities exchange on which any of the securities issued under the
Mortgage may be listed, or to change, alter, modify, vary or eliminate any
of the provisions thereof or to add other provisions to the Mortgage, so
long as such other changes, alterations, modifications, variations,
eliminations or additions do not adversely affect the interests of the
Holders of securities of any series or tranche in any material respect,
unless they are expressly stated to become effective only as to securities
which are not then Outstanding.
Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after
the date of the Mortgage in such a way as to require changes to the Mortgage or
the incorporation therein of additional provisions or so as to permit changes
to, or the elimination of, provisions which, at the date of the Mortgage or at
any time thereafter, were required by the Trust Indenture Act to be contained in
the Mortgage, the Company and the Trustee may, without the consent of any
Holders, enter into one or more supplemental indentures to evidence or effect
such amendments. (Section 1401)
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For most purposes not described above, the consent of the Holders of
not less than a majority in aggregate principal amount of the securities of all
affected series then Outstanding under the Mortgage is required for the purpose
of amending or modifying the Mortgage pursuant to one or more supplemental
indentures; provided, however, that no such amendment or modification may,
without the consent of each Holder of the Outstanding securities of each series
or tranche directly affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any security
issued under the Mortgage, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof, (b) permit the
creation of any lien ranking prior to the Lien of the Mortgage with respect to
all or substantially all of the Mortgaged Property or terminate the Lien of the
Mortgage, or (c) reduce the percentage in principal amount of the Outstanding
securities of such series or tranche, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with any provision of the
Mortgage or of any default thereunder and its consequences, or reduce the
requirements for quorum or voting. A supplemental indenture which changes or
eliminates any covenant or other provision of the Mortgage which has expressly
been included solely for the benefit of the Holders of, or which is to remain in
effect only so long as there shall be Outstanding securities of one or more
specified series, or one or more tranches thereof, or modifies the rights of the
Holders of securities such series or tranches with respect to such covenants or
other provision, will not be deemed to affect the rights under the Mortgage of
Holders of the securities of any other series or tranche. (Section 1402)
WAIVER
The Holders of at least a majority in aggregate principal amount of all
affected Outstanding securities issued under the Mortgage may waive the
Company's obligations to comply with certain covenants of the Mortgage, provided
that such waiver occurs before the time such compliance is required. (Section
609)
EVENTS OF DEFAULT
Each of the following events constitutes an Event of Default under the
Mortgage:
(1) failure to pay interest on any security issued under the Mortgage
within 90 days after the same becomes due;
(2) failure to pay principal or premium, if any, on any security
issued under the Mortgage within three business days after its due date;
(3) failure to perform or breach of any covenant or warranty of the
Company in the Mortgage (other than as referred to in (1) or (2) above) for
a period of 90 days after there has been given to the Company by the
Trustee, or to the Company and the Trustee by the Holders of at least 30%
in principal amount of Outstanding securities issued under the Mortgage, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default," unless the
Trustee, or the Trustee and the Holders of a principal amount of securities
not less than the principal amount of securities the Holders of which gave
such notice, as the case may be, agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or the
Trustee and such Holders, as the case may be, will be deemed to have agreed
to an extension of such period if corrective action has been initiated by
the Company within such period and is being diligently pursued;
(4) certain events relating to reorganization, bankruptcy and
insolvency of the Company and appointment of a receiver or trustee for its
property; and
(5) the occurrence of a matured event of default under any Class "A"
Mortgage; provided that the waiver or cure of any such event of default and
the rescission and annulment of the consequences thereof shall constitute a
waiver of the corresponding Event of Default under the Mortgage and a
rescission and annulment of the consequences thereof.
(Section 1001)
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The Trust Indenture Act currently requires that the Company give the
Trustee, not less often than annually, a brief statement as to the Company's
compliance with the conditions and covenants under the Mortgage.
REMEDIES
If an Event of Default occurs and is continuing, then the Trustee or
the Holders of not less than a majority in principal amount of securities then
Outstanding under the Mortgage may declare the principal amount (or if the
securities are Discount Securities, such portion of the principal amount as may
be provided for such Discount Securities pursuant to the terms of the Mortgage)
of all of the securities Outstanding under the Mortgage together with premium,
if any, and interest accrued, if any, thereon to be immediately due and payable.
At any time after such declaration of the maturity of the securities then
Outstanding, but before the sale of any of the Mortgaged Property and before a
judgment or decree for payment of money shall have been obtained by the Trustee
as provided in the Mortgage, the Event or Events of Default giving rise to such
declaration of maturity will, without further act, be deemed to have been
waived, and such declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest, if any, on all securities then
Outstanding under the Mortgage;
(2) the principal of and premium, if any, on any securities
then Outstanding under the Mortgage which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in such securities; and
(3) all amounts due to the Trustee as compensation and
reimbursement as provided in the Mortgage; and
(b) any other Event or Events of Default other than the non-payment
of the principal of securities which shall have become due solely by such
declaration of acceleration, shall have been cured or waived as provided in the
Mortgage.
(Sections 1002 and 1017)
The Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
Trustee has the power to take possession of, and to hold, operate and manage,
the Mortgaged Property, or with or without entry, sell the Mortgaged Property.
If the Mortgaged Property is sold, whether by the Trustee or pursuant to
judicial proceedings, the principal of the securities Outstanding under the
Mortgage, if not previously due, will become immediately due, together with
premium, if any, and any accrued interest (including interest upon overdue
installments of interest at the same rates respectively as were born by the
respective securities on which installments of interest were overdue). (Sections
1003, 1004 and 1005)
If an Event of Default occurs and is continuing, the Holders of a
majority in principal amount of the securities then Outstanding under the
Mortgage will have the right to direct the time, method and place of conducting
any proceedings for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that (a) such direction does not
conflict with any rule of law or with the Mortgage, and could not involve the
Trustee in personal liability in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate and (b) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
discretion. (Section 1016)
The Mortgage provides that no Holder of any security will have any
right to institute any proceeding, judicial or otherwise, with respect to the
Mortgage for the appointment of a receiver or for any other remedy thereunder
unless (a) such Holder has previously given to the Trustee written notice of a
continuing Event of Default; (b) the Holders of not less than a majority in
aggregate principal amount of the securities then Outstanding under the Mortgage
have made written request to the Trustee to institute proceedings in respect of
such Event of Default and have offered the Trustee reasonable indemnity against
costs and liabilities incurred in complying with such request; and (c) the
Trustee has refused, or for sixty days after receipt of such Notice, the Trustee
has failed, to institute any such proceeding and no direction inconsistent with
such request has been given to the Trustee by the
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Holders of a majority in aggregate principal amount of securities then
Outstanding under the Mortgage. Furthermore, no Holder will be entitled to
institute any such action if and to the extent that such action would disturb or
prejudice the rights of the other Holders. (Section 1011)
Notwithstanding that the right of a Holder to institute a proceeding
with respect to the Mortgage is subject to certain conditions precedent, each
Holder of a security has the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and interest (including
interest upon overdue interest), if any, on such security when due and to
institute suit for the enforcement of any such payment, and such rights may not
be impaired without the consent of such Holder. (Section 1012)
The Mortgage obligates the Trustee to give the Holders notice of any
default under the Mortgage to the extent required by the Trust Indenture Act,
unless such default shall have been cured or waived, except that no such notice
to Holders of a default of the character described in paragraph (3) under "Event
of Default" shall be given until at least 60 days after the occurrence thereof.
(Section 1102) The Trust Indenture Act currently permits the Trustee to withhold
notices of default (except for certain payment defaults) if the Trustee in good
faith determines the withholding of such notice to be in the interests of the
Holders.
As a condition precedent to certain actions by the Trustee in the
enforcement of the Lien of Mortgage and institution of action on the securities
Outstanding under the Mortgage, the Trustee may require adequate indemnity
against costs, expenses and liabilities to be incurred in connection therewith.
(Sections 1011 and 1101)
In addition to every other right and remedy provided in the Mortgage,
the Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and Holder of Class "A" Bonds which arises as a result of a
default or matured event of default under any Class "A" Mortgage, whether or not
an Event of Default under the Mortgage has occurred and is continuing. (Section
1020)
DEFEASANCE
Upon request of the Company, any securities Outstanding under the
Mortgage, or any portion of the principal amount thereof, will be deemed to have
been paid for purposes of the Mortgage, and the entire indebtedness of the
Company in respect thereof will be deemed to have been satisfied and discharged,
if there has been irrevocably deposited with the Trustee or any Paying Agent
(other than the Company), in trust: (a) money in the amount which will be
sufficient, or (b) Eligible Obligations (as described below), which do not
contain provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide monies which,
together with the money, if any, deposited with or held by the Trustee, will be
sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay
when due the principal of and premium, if any, and interest, if any, due and to
become due on such securities or portions thereof. (Section 901) For this
purpose, Eligible Obligations include direct obligations of, or obligations
unconditionally guaranteed by, the United States of America, entitled to the
benefit of the full faith and credit thereof, and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due in respect
thereof.
While the Company knows of no legal precedent on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related securities for
an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such securities would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their securities. In addition, such Holders thereafter would be required to
recognize for federal income tax purposes a share of the income, gain or loss of
the trust. The amount so required to be recognized could be different from the
amount that would be recognized in the absence of such deposit. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences to them of any such deposit.
RESIGNATION OF THE TRUSTEE
The Trustee may resign at any time by giving written notice thereof to
the Company or may be removed at any time by act of the Holders of a majority in
principal amount of securities then Outstanding delivered to the Trustee and the
Company. No resignation or removal of the Trustee and no appointment of a
successor trustee will
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become effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the Mortgage. So long as no Event of Default
or event which, after notice or lapse of time, or both, would become an Event of
Default has occurred and is continuing, if the Company has delivered to the
Trustee a resolution of its Board of Directors appointing a successor trustee
and such successor has accepted such appointment in accordance with the terms of
the Mortgage, the Trustee will be deemed to have resigned and the successor will
be deemed to have been appointed as trustee in accordance with the Mortgage.
(Section 1110)
MORE RESTRICTIVE PROVISIONS OF CLASS "A" MORTGAGES
The Mortgage is less restrictive upon the Company in certain respects
than is either the 1940 Indenture or the ISU 1923 Indenture, but the Class "A"
Bonds issued under either of those indentures and delivered to the Trustee will
be entitled to the benefits of more restrictive provisions of those indentures
(see "DESCRIPTION OF THE 1940 INDENTURE" and "DESCRIPTION OF THE ISU 1923
INDENTURE" below). However, pursuant to the Mortgage, the Trustee, as holder of
the Class "A" Bonds, will vote such Class "A" Bonds in favor of certain
amendments to the 1940 Indenture and ISU 1923 Indenture. (Section 705; see
"Voting of Class "A" Bonds" under each of "DESCRIPTION OF THE 1940 INDENTURE"
and "DESCRIPTION OF THE ISU 1923 INDENTURE" below).
RELATIONSHIP WITH THE TRUSTEE
The Trustee or an affiliate provides general banking services to the
Company including (i) acting as a depositary for certain Company funds and (ii)
issuing a $15,000,000 line of credit to the Company. As of March 31, 1997, the
line of credit was being used to support commercial paper. Additionally, the
Trustee has a $45,000,000 credit agreement with the lessor of the Company's
nuclear fuel supporting the Company's nuclear fuel lease.
The Trustee is also the 1940 Indenture Trustee, the ISU 1923 Corporate
Trustee and the Subordinated Indenture Trustee (each as defined below). As such,
the Trustee would have a conflicting interest for purposes of the Trust
Indenture Act if an Event of Default were to occur under the 1940 Indenture, the
ISU 1923 Indenture or the Subordinated Indenture. In any such case, the Trustee
may be required to eliminate such conflicting interest by resigning as the
Trustee, the 1940 Indenture Trustee, the ISU 1923 Corporate Trustee or the
Subordinated Indenture Trustee. There are other instances under the Trust
Indenture Act which would require the resignation of the Trustee, such as an
affiliate of the Trustee acting as underwriter with respect to any of the
Securities.
DESCRIPTION OF THE 1940 INDENTURE
GENERAL
The summaries of the 1940 Indenture set forth below do not purport to
be complete and are subject to the detailed provisions of the 1940 Indenture, a
copy of which was previously filed with the Commission, is listed as an exhibit
to the Registration Statement of which this Prospectus is a part, and is
incorporated herein by reference. Capitalized terms used in this section which
are not otherwise defined in this Prospectus shall have the meanings ascribed to
them in the 1940 Indenture. Wherever particular provisions or terms defined in
the 1940 Indenture are referred to herein, such provisions or definitions are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference. References to
article and section numbers in this section, unless otherwise indicated, are
references to article and section numbers of the 1940 Indenture.
SECURITY
The 1940 Indenture constitutes a direct first mortgage lien on
substantially all of the property and franchises of the Company (other than
expressly excepted property and other than properties owned by Iowa Southern at
the time of the IE-ISU merger on December 31, 1993), subject only to permitted
encumbrances and liens. Substantially all property and franchises (other than
expressly excepted property) hereafter acquired by the Company will become
subject to the lien of the 1940 Indenture, subject only to permitted liens and
encumbrances and liens and encumbrances, if any, existing or placed on such
after-acquired property at the time of acquisition thereof. The lien
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of the 1940 Indenture on the property owned by Iowa Southern at the time of the
IE-ISU merger, and extensions and additions appurtenant to such property, are
junior to the lien of the ISU 1923 Indenture.
The 1940 Indenture excepts from the lien thereof all cash, securities,
contracts, and bills, notes and accounts receivable acquired in the ordinary
course of business which are not specifically pledged under the 1940 Indenture
and all tangible personal property purchased or held for sale in the ordinary
course of business or consumable in the operation of the plants or system of the
Company, automobiles, buses, trucks and similar vehicles. (Granting Clauses)
Any bonds issued under the 1940 Indenture as the basis for the issuance
of Bonds under the Mortgage will be secured equally and ratably with the bonds
of all other series then outstanding under the 1940 Indenture.
EFFECT OF THE IE-ISU MERGER ON THE 1940 INDENTURE
The merger of IE and ISU did not impair the lien of the 1940 Indenture
or any of the rights or powers of the 1940 Indenture Trustee or the bondholders
under the 1940 Indenture. (Section 133) Subsequent to that merger, the Company
became the successor to IE under the 1940 Indenture.
ISSUANCE OF ADDITIONAL BONDS
The 1940 Indenture does not fix an overall limitation on the aggregate
principal amount of the bonds of all series that may be issued or outstanding
thereunder. (Section 3) Generally, additional bonds of any series may be issued,
subject to the provisions of the 1940 Indenture, in a principal amount equal to:
(a) 60% of Net Bondable Additions not previously utilized
under the 1940 Indenture resulting from the acquisition by purchase,
construction or otherwise of Property Additions (Article IV);
(b) the principal amount of bonds, previously authenticated
under the 1940 Indenture, which have been retired or for the retirement
of which the 1940 Indenture Trustee holds the necessary funds, other
than bonds redeemed through the operation of cash sinking funds and
other than retired bonds used to satisfy the maintenance and renewal
provisions of the 1940 Indenture (Article VI); or
(c) the amount of cash deposited with the 1940 Indenture
Trustee as the basis for the issuance of such bonds, which cash may be
applied to the retirement of bonds or may be withdrawn in lieu of the
authentication of an equal principal amount of bonds to whose
authentication and delivery the Company would be entitled under the
provisions referred to in clauses (a) and (b). (Article V)
No such bonds in any event may be issued under (a) or (c), or under (b)
if the bonds to be issued bear a higher rate of interest than that borne by the
bonds retired or being retired (except in case such bonds mature within 2
years), unless (i) the Net Earnings of the Company for a 12 months' period
within the immediately preceding 15 months' period shall have been at least
equal to two times the aggregate amount of annual interest charges on all bonds
then outstanding under the 1940 Indenture, including the bonds then applied for,
and (ii) at least 85% of such required minimum amount of Net Earnings consists
of Net Operating Revenues from the Public Utility Property of the Company.
(Articles IV, V, and VI)
Bonds issuable under the 1940 Indenture are available as the basis for
the issuance of securities under the Mortgage. As of March 31, 1997, on the
basis of the most restrictive provisions described above, the Company would have
been entitled to issue an aggregate of at least $241 million of additional bonds
under the 1940 Indenture.
ACQUISITION OF PROPERTY SUBJECT TO PRIOR LIENS
The 1940 Indenture prohibits the Company from acquiring any property
subject to a prior lien, or placing any prior lien on property at the time of
acquisition thereof, if either the principal amount of indebtedness secured by
prior liens on such property exceeds 60% of the cost or the fair value of such
property, whichever shall be less, or the Net Earnings of the Company for a
period of 12 months within the 15 months immediately preceding the month in
which the property is to be acquired shall not have been at least equal to two
times the aggregate amount of the
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annual interest charges on the Secured Bonded Debt of the Company; provided,
however, that if the Net Earnings of the Company for the above-stated period
shall have been at least equal to three times the aggregate amount of the annual
interest charges on the Secured Bonded Debt of the Company, then the 60%
limitation shall not apply. In the case of each of the foregoing Net Earnings
requirements, such Net Earnings must consist of Net Operating Revenues from
Public Utility Property to an extent at least equal to 85% of two or three
times, as the case may be, the said aggregate amount of annual interest charges.
(Section 83)
MAINTENANCE AND RENEWAL
The 1940 Indenture provides that the Company will, for each year, pay
or cause to be paid to the Trustee, an amount in cash, as and for a renewal
fund, equal to 2-1/2% (or such different percentage as may be fixed upon
certification by an independent engineer that such change in percentage rate is
desirable and justified) of the average gross book value during such year of all
of the depreciable tangible Public Utility Property of the Company (with certain
specified exceptions). The percentage is currently set at 2-1/2%. The Company's
obligation to pay such amount to the Trustee in cash may at the option of the
Company be satisfied in whole or in part by the certification of unused Gross
Bondable Additions or the certification of unused bond retirements, or both.
(Section 74)
The 1940 Indenture also provides (i) that the Company shall maintain
the mortgaged properties in good repair and working order; (ii) that the
Company, upon written request served upon it and the Trustee by the holders of
at least 25% in principal amount of the bonds outstanding, shall cause such
properties to be inspected by an independent engineer (not more often than at
five-year intervals) to determine whether they have been so maintained and
whether any property, not retired on the books, should be so classified for the
purpose (among others) of computing Net Bondable Additions; and (iii) that the
Company shall make good any deficiency in maintenance disclosed by such
engineer's report as rendered or as modified by arbitration. (Section 73)
LIMITATIONS ON DIVIDENDS ON COMMON STOCK
The 1940 Indenture prohibits the Company from declaring or paying any
dividends (except stock dividends or dividends paid out of the proceeds of sale
of stock), or making other distributions on, or acquisitions of, stock unless
immediately after such dividend, distribution or acquisition the net income of
the Company available for dividends (as defined), for the period from December
31, 1945, to and including the date of such dividend, distribution or
acquisition, plus the sum of $250,000 shall at least equal all payments made in
respect of all such dividends, distributions or acquisitions during said period;
provided that such restriction shall not apply to the acquisition of stock out
of the proceeds from the sale of, or in exchange for, any other shares of stock
or securities representing an equity interest subordinate to all debts, secured
or unsecured. (Section 85) Giving effect to the use of the proceeds of the
Securities offered hereby, retained earnings are not restricted under this
provision.
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MODIFICATION OF THE 1940 INDENTURE
In general, modifications or alterations of the 1940 Indenture and
indentures supplemental thereto and of the rights and obligations of the Company
and of the holders of the bonds may, with the approval of the Company, be made
at a meeting of bondholders upon the affirmative vote of the holders of 75% or
more of the aggregate principal amount of the bonds entitled to vote with
respect to the matter involved, but no such modifications or alterations are
permitted with respect to certain basic matters, such as terms of payment of
principal or interest on the bonds or the creation of liens ranking prior to, or
on a parity with, the lien of the 1940 Indenture. (Section 167) (See "Voting of
Class "A" Bonds" below.)
DEFAULTS AND NOTICE THEREOF
Defaults under the 1940 Indenture are defined in substance as being (a)
failure to pay principal or any installment of interest on any bond on the due
date; (b) failure to observe any covenant or condition prescribed by the
provisions of any sinking fund created for the benefit of bonds of any series;
(c) failure to perform any other covenant or agreement of the 1940 Indenture,
which failure shall continue for a period of 60 days after a written demand that
such failure be cured has been mailed to the Company by the Trustee or to the
Company by the holders of 15% in principal amount of the bonds; (d) certain
events relating to reorganization, bankruptcy and insolvency of the Company or
the appointment of a receiver or trustee of the Company's property; (e) final
judgment in excess of $100,000 against the Company which is not discharged or
stayed within 30 days; or (f) the assumption by any governmental agency or any
court at the instance of any governmental agency of custody of the whole or any
substantial part of the Trust Estate or of control over the Company's affairs or
operations to the exclusion of management by the Company. (Section 105)
Upon the occurrence of a Default, the 1940 Indenture Trustee may, and
upon request of the holders of a majority in principal amount of the bonds shall
(and the holders of at least 25% in principal amount of the bonds may, by notice
in writing to the Company), declare the principal of and interest on all the
bonds to be immediately due and payable. (Section 107)
The 1940 Indenture Trustee is required to give notice of any Default to
holders of bonds whose names are on file with it within 90 days after the
occurrence of a Default known to it, unless such Default has been cured prior to
the giving of such notice and except that such notice may be withheld, other
than as to a Default in payment of principal or interest or of any installment
of any sinking fund, if the 1940 Indenture Trustee determines in good faith that
such withholding is in the interest of the holders of bonds. (Section 106)
The holders of not less than a majority in principal amount of bonds
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the 1940 Indenture Trustee, or exercise
any trust or power conferred upon the 1940 Indenture Trustee. (Section 110)
The Company must file an annual Certificate with the 1940 Indenture
Trustee as to compliance with the conditions and covenants of the 1940 Indenture
and as to the absence of default with respect to any of the covenants contained
in the 1940 Indenture. (Section 103)
VOTING OF CLASS "A" BONDS
The Trustee will, as holder of any Class "A" Bonds issued under the
1940 Indenture, attend such meetings of bondholders under the 1940 Indenture, or
deliver its proxy in connection therewith, as relate to matters with respect to
which it is entitled to vote or consent. The Mortgage provides that, so long as
no Event of Default as defined in the Mortgage has occurred or is continuing,
the Trustee will, as holder of such Class "A" Bonds, vote or consent:
(a) in favor of amendments or modifications to the 1940 Indenture of
substantially the same tenor and effect as the following, together with all
amendments and modifications required to effectuate the following:
(i) to provide that, whenever the 1940 Indenture requires
authorization by, or a resolution of, the Board of
Directors for the issuance of a series of bonds or the
determination of the
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terms thereof, the requirement shall be satisfied if the
action taken would be sufficient for the issuance of a
series of bonds, or the determination of the terms thereof,
under the Mortgage;
(ii) to eliminate the renewal fund and to provide that, to the
extent Property Additions have been taken as a credit, or
cash held by the Trustee has been deposited, to satisfy the
renewal fund requirements (or to satisfy any sinking fund
requirement which is no longer in effect), such Property
Additions and cash may be used for any purpose under the
1940 Indenture (including as a basis for the issuance of
bonds) as if they had never been so credited or deposited;
(iii) to permit bonds to be issued in a principal amount equal to
75%, instead of 60%, of Net Bondable Additions;
(iv) to eliminate the Net Earnings requirements for all
purposes, including in connection with the issuance of
bonds;
(v) to broaden the definition of "Property Additions" to
include all tangible property owned by the Company and
subject to the lien of the 1940 Indenture;
(vi) to eliminate the restrictions on the payment of dividends
on, or the making of other distributions on, or
acquisitions of, stock;
(vii) to eliminate most restrictions on purchase money
obligations which may be received as consideration for the
release of property from the lien of the 1940 Indenture;
(viii) to permit the release, without compliance with other
provisions of the 1940 Indenture, of any property provided
that (1) the release will not impair the electric business
of the Company in contravention of the provisions of the
1940 Indenture and (2) the fair value of property released
pursuant to this provision, together with the fair value of
all other property so released in the then current calendar
year, shall not exceed the greater of $5,000,000 and 3% of
the aggregate principal amount of bonds then outstanding
under the 1940 Indenture;
(ix) to modify release provisions to delete the requirement that
the property to be released shall "no longer be useful,
necessary, profitable or advantageous in the judicious
management and maintenance of the Trust Estate or in the
conduct of the business of the Company" and substituting
therefor the requirement that the release of the property
would not adversely affect the Company's electric business;
(x) to permit the withdrawal by the Company, without compliance
with other provisions of the 1940 Indenture, of cash in an
amount, together with other amounts paid over to the
Company pursuant to this provision in the then current
calendar year, up to the greater of $5,000,000 and 3% of
the aggregate principal amount of the bonds then
outstanding under the 1940 Indenture; provided that such
cash must be expended for Property Additions;
(xi) to increase the amount of cash withdrawable by the Company
on the basis of retired bonds from 100% of the principal
amount of such bonds to 133-1/3% of such principal amount;
(xii) to eliminate most restrictions on the acquisition of
property subject to a prior lien;
(xiii) to limit the insurance coverage that must be maintained by
the Company to fire insurance only and to raise the minimum
dollar amount of any one fire loss which must be payable to
the 1940 Indenture Trustee from $10,000 to an amount equal
to the greater of
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$5,000,000 and 3% of the aggregate principal amount of
bonds then outstanding under the 1940 Indenture;
(xiv) to modify the definition of "Defaults" under the 1940
Indenture to be substantially the same as "Events of
Default" under the Mortgage;
(xv) to modify the provisions of the 1940 Indenture for the
acceleration of the maturity of bonds to provide that (1)
action by the holders of a majority (rather than the
current 25%) in principal amount of the then outstanding
bonds is required to accelerate the maturity of all
outstanding bonds upon Default and (2) any such
acceleration and its consequences are automatically
rescinded (rather than at the option of the holders as is
currently provided) upon the curing of all Defaults;
(xvi) to reduce the quorum requirements for bondholder meetings
from 75% to a majority; and
(xvii) to modify the remedies provisions to increase to a
majority from 25% the percentage of the principal amount
of outstanding bonds, the holders of which must have
requested that the 1940 Indenture Trustee take action
before individual holders may institute suits against the
Company.
(b) with respect to any other amendments or modifications to
the 1940 Indenture as follows:
the Trustee will vote all Class "A" Bonds issued under the 1940
Indenture then held by it, or consent with respect thereto,
proportionately with what is reasonably believed to be the vote or
consent of the holders of all other bonds Outstanding under the 1940
Indenture, the holders of which are eligible to vote or consent;
provided, however, that (i) at any time the Class "A" Bonds under the
1940 Indenture held by the Trustee constitute a majority of the
principal amount of the Outstanding bonds under the 1940 Indenture or
(ii) at any time such Class "A" Bonds held by the Trustee constitute
less than such a majority but there is a proposed amendment or
modification of the 1940 Indenture which, if it were an amendment or
modification of the Mortgage (See "DESCRIPTION OF THE COLLATERAL TRUST
BONDS - Modification of the Mortgage"), would require the consent of
Holders, then, in either case, the Trustee may only vote such Class "A"
Bonds in accordance with the vote of the Holders of at least a majority
of the principal amount of the bonds casting a vote and shall seek that
vote in accordance with the provisions of the Mortgage applicable to
required votes of Holders in respect of amendments or modifications to
the Mortgage.
DESCRIPTION OF THE ISU 1923 INDENTURE
GENERAL
The summaries of the ISU 1923 Indenture set forth below do not purport
to be complete and are subject to the detailed provisions of the ISU 1923
Indenture, a copy of which was previously filed with the Commission, is listed
as an exhibit to the Registration Statement of which this Prospectus is a part,
and is incorporated herein by reference. Capitalized terms used in this section
which are not otherwise defined in this Prospectus shall have the meanings
ascribed to them in the ISU 1923 Indenture. Wherever particular provisions or
terms defined in the ISU 1923 Indenture are referred to in this section, such
provisions or definitions are incorporated by reference as part of the
statements made in this section, and such statements are qualified in their
entirety by such reference. References to article and section numbers herein,
unless otherwise indicated, are references to article and section numbers of the
ISU 1923 Indenture.
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SECURITY
The ISU 1923 Indenture constitutes a direct first mortgage lien upon
substantially all of the property and rights of Iowa Southern existing at the
time of the IE-ISU merger on December 31, 1993 and upon extensions and additions
appurtenant to such property, with certain exceptions for certain types of
property (including accounts receivable) as provided in the ISU 1923 Indenture,
and subject only to permitted liens. (Granting Clauses)
Any bonds issued under the ISU 1923 Indenture as the basis for the
issuance of Bonds under the Mortgage will be secured equally and ratably with
the bonds of all other series then outstanding under the ISU 1923 Indenture.
EFFECT OF THE IE-ISU MERGER ON THE ISU 1923 INDENTURE
The merger of IE and ISU did not impair the lien of the ISU 1923
Indenture or any of the rights or powers of the ISU Indenture Trustees or the
bondholders under the ISU 1923 Indenture. (Article XVI) Subsequent to that
merger, the Company became the successor to ISU under the ISU 1923 Indenture.
ISSUANCE OF ADDITIONAL BONDS
The ISU 1923 Indenture does not fix an overall limitation on the
aggregate principal amount of the bonds of all series that may be issued or
outstanding thereunder. (Section 2.01)
Provided that the Earnings Applicable to Bond Interest for a period of
twelve consecutive calendar months within the fifteen months immediately
preceding issuance are at least twice the annual interest requirements of the
bonds applied for and all bonds and Prior Lien Bonds outstanding, additional
bonds of any series may be issued:
(a) in an aggregate principal amount not exceeding 60% of the
Cost or Fair Value, whichever is less, of Property Additions after
adjustments to offset retirements and amounts removed from the utility
plant or fixed capital accounts of the former Iowa Southern (Article
V);
(b) in an aggregate principal amount not exceeding the
aggregate principal amount of bonds which shall have been retired
(other than bonds retired through the use of certain funds) (Article
VI);
(c) upon deposit of cash with the ISU Corporate Trustee, in
an amount equal to the principal amount of the bonds to be so issued
(and such cash may be withdrawn by the Company in a sum equal to the
aggregate principal amount of the bonds which could be issued under
clause (a) or (b) above). (Article VII)
Bonds issuable under the ISU 1923 Indenture are available as the basis
for the issuance of securities under the Mortgage. As of March 31, 1997, on the
basis of the most restrictive provisions described above, the Company would have
been entitled to issue at least $167 million of additional bonds under the ISU
1923 Indenture.
MAINTENANCE FUND
The ISU 1923 Indenture provides that so long as bonds shall be
outstanding, the Company will pay to the ISU Corporate Trustee annually, as a
maintenance fund, a sum of money equal to 15% of the gross operating revenue of
the Company derived during the calendar year preceding such payment from the
operation of the physical properties subject to the lien of the ISU 1923
Indenture after deducting (1) all gross operating revenue derived during such
period from the operation of property subject to a prior lien and (2) an amount
equal to the total cost to the Company of electric energy and natural gas
purchased by it (and allocable to operations of property subject to the lien of
the ISU 1923 Indenture) during such period with certain deductions. The Company
is entitled to credits against such annual payment for certain amounts expended
for maintenance and repairs and Unapplied Balance of Property Additions, retired
bonds, and other matters. Any moneys deposited by the Company with the ISU
Corporate Trustee in the maintenance fund will, upon the request of the Company,
be applied by the ISU Corporate Trustee to the purchase or redemption of bonds
or may be withdrawn by the Company in certain circumstances. (Article XII)
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SUBSTITUTIONS AND RELEASES
Generally, property subject to the lien of the ISU 1923 Indenture may
be released only upon the deposit or pledge with the ISU Corporate Trustee of
cash, purchase money obligations, securities, or the certification of property
additions or, in certain instances, upon the substitution of other property of
equivalent value. The Company may also, under certain conditions, without
release, terminate, change, or assent to the modification of leases, easements,
franchises, and governmental permits. (Article XI)
SATISFACTION AND DISCHARGE OF INDENTURE
If the Company shall pay the principal of, premium (if any), and
interest on all outstanding bonds issued under the ISU 1923 Indenture (bonds for
the payment or redemption of which necessary funds have been deposited with the
ISU Corporate Trustee being deemed paid), then the ISU Indenture Trustees may,
and upon the request of the Company shall, cancel and discharge the lien of the
ISU 1923 Indenture and reconvey to the Company the mortgaged and pledged
property. (Article XIX)
MODIFICATION OF THE ISU 1923 INDENTURE
To the extent permitted by the terms of the ISU 1923 Indenture,
modification or alteration of the ISU 1923 Indenture or any indenture
supplemental thereto, and of the rights and obligations of the Company and of
ISU bondholders, may be made with the consent of the Company by an affirmative
vote of the holders of not less than 80% in principal amount of the outstanding
bonds issued under the ISU 1923 Indenture and entitled to vote at a meeting of
bondholders and by an affirmative vote of the holders of not less than 80% of
the principal amount of such bonds of the series affected by the change;
provided, however, that no such modification or alteration intended to effect or
permit the extension of the maturity of the principal of any bond, the reduction
in the rate of interest thereon, or any other modification in the terms of
payment of such principal or interest, or the taking of certain other actions,
such as creating liens ranking prior to, or on parity with, the lien of the ISU
1923 Indenture, shall be effective as to any bond the holder of which has not
assented to such modification or alteration. (Article XX) (See "Voting of Class
"A" Bonds" below.)
The Company may fail or omit to comply with certain covenants or
conditions of the ISU 1923 Indenture with the written consent of the holders of
at least 66 2/3% of the principal amount of all outstanding bonds issued under
the ISU 1923 Indenture. (Section 15.19)
DEFAULTS AND NOTICE THEREOF
Defaults under the ISU 1923 Indenture are defined in substance as being
(a) failure to pay principal of, or premium (if any) on, any bond issued under
the ISU 1923 Indenture; (b) failure to pay any installment of interest on any
such bond, and such failure continues for 30 days; (c) failure to observe any
covenant or condition prescribed by the provisions of any sinking fund created
for the benefit of such bonds of any series; (d) failure by the Company to
perform any other covenant or agreement in such bonds or in the ISU 1923
Indenture, and such failure continues for 60 days after written notice is given;
and (e) certain events relating to reorganization, bankruptcy and insolvency of
the Company, and the appointment of a receiver. (Section 15.01)
The ISU 1923 Indenture Trustees are required to give notice of any
default to bondholders within 90 days after the occurrence thereof, unless such
default is cured before the giving of such notice (except in the case of certain
defaults, notice of which is not to be given by such Trustees until at least 60
days after the occurrence thereof). The ISU Indenture Trustees may withhold
notice of default (except in the payment of principal of, or interest or premium
(if any) on, any of the bonds or in the payment of any sinking fund or purchase
fund installment) if the ISU Corporate Trustee determines that such withholding
is in the interest of the bondholders. (Section 17.11)
Holders of a majority of the principal amount of outstanding bonds may
direct the method, time, and place of conducting any proceedings for any remedy
available to the ISU Indenture Trustees for any sale of the property subject to
the lien of the ISU 1923 Indenture, or for the foreclosure of the ISU 1923
Indenture, or for the appointment of a receiver, or for the taking of any other
action authorized by the ISU 1923 Indenture in respect of a default or
refraining therefrom. (Section 15.05)
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No holder of any bond or coupon shall have any right to any remedy
under the ISU 1923 Indenture, unless such holder has given prior written notice
to the ISU 1923 Indenture Trustees of the default, 25% in aggregate principal
amount of the bonds outstanding have made prior written request to the ISU
Corporate Trustee and have afforded reasonable opportunity to the 1923 ISU
Indenture Trustees to pursue the remedy in the trustees' own names, and the ISU
1923 Indenture Trustees have been offered adequate indemnity for costs, expenses
and liabilities which may be incurred thereby. (Section 15.15)
The Company must file an annual Certificate with the ISU Corporate
Trustee as to compliance with the conditions and covenants of the ISU 1923
Indenture and as to the absence of default with respect to any of the covenants
contained in the ISU 1923 Indenture. (Section 14.03)
VOTING OF CLASS "A" BONDS
The Trustee will, as holder of any Class "A" Bonds issued under the ISU
1923 Indenture, attend such meetings of bondholders under the ISU 1923
Indenture, or deliver its proxy in connection therewith, as relate to matters
with respect to which it is entitled to vote or consent. The Mortgage provides
that, so long as no Event of Default as defined in the Mortgage has occurred or
is continuing, the Trustee will, as holder of such Class "A" Bonds, vote or
consent:
(a) in favor of amendments or modifications to the ISU 1923 Indenture
of substantially the same tenor and effect as the following, together with all
amendments and modifications required to effectuate the following:
(i) to provide that, whenever the ISU 1923 Indenture requires
authorization by, or a resolution of, the Board of
Directors or an Executive Committee thereof for the
issuance of a series of bonds or the determination of the
terms thereof, the requirement shall be satisfied if the
action taken would be sufficient for the issuance of a
series of bonds, or the determination of the terms
thereof, under the Mortgage;
(ii) to eliminate the maintenance fund and to provide that, to
the extent Property Additions or bonds previously
outstanding have been taken as a credit, or cash held by
the ISU Corporate Trustee has been deposited, in each
case to satisfy the Maintenance Fund Requirements, such
Property Additions, previously outstanding bonds and cash
may be used for any purpose under the ISU 1923 Indenture
(including as a basis for the issuance of bonds) as if
they had never been so credited or deposited;
(iii) to permit bonds to be issued in a principal amount equal
to 75%, instead of 60%, of Property Additions;
(iv) to eliminate the Net Earnings requirements for all
purposes, including in connection with the issuance of
bonds;
(v) to broaden the definition of "Property Additions" to
include property not used by the Company in its electric,
gas or steam business;
(vi) to permit the release, without compliance with other
provisions of the ISU 1923 Indenture, of any property,
provided that (1) the fair value of property released
pursuant to this provision, together with the fair value
of all other property so released in the then current
calendar year, shall not exceed an amount equal to the
greater of $5,000,000 and 3% of the aggregate principal
amount of bonds then outstanding under the ISU 1923
Indenture;
(vii) to permit the withdrawal by the Company, without
compliance with other provisions of the ISU 1923
Indenture, of cash in an amount, together with other
amounts paid over to the Company pursuant to this
provision in the then current calendar year, up to the
greater of $5,000,000 and 3% of the aggregate principal
amount of the bonds then outstanding
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under the ISU 1923 Indenture; provided that such cash
must be expended for Property Additions;
(viii) to increase the amount of cash withdrawable by the
Company on the basis of retired property from 100% of the
cost or fair value of such property to 133-1/3% of such
cost or fair value;
(ix) to raise the minimum dollar amount of any one fire loss
which must be payable to the ISU Indenture Trustees from
$10,000 to an amount equal to the greater of $5,000,000
and 3% of the aggregate principal amount of bonds then
outstanding under the ISU 1923 Indenture;
(x) to modify the definition of "defaults" under the ISU 1923
Indenture to be substantially the same as "Events of
Default" under the Mortgage;
(xi) to modify the provisions of the ISU 1923 Indenture for
the acceleration of the maturity of bonds to provide that
(1) action by the holders of a majority (rather than the
current 25%) in principal amount of the then outstanding
bonds is required to accelerate the maturity of all
outstanding bonds upon default and (2) any such
acceleration and its consequences are automatically
rescinded (rather than at the option of the holders as is
currently provided) upon the curing of all defaults;
(xii) to reduce the quorum requirements for bondholder meetings
from 80% to a majority; and
(xiii) to modify the remedies provisions to increase to a
majority from 25% the percentage of the principal amount
of bonds, the holders of which must have requested the
ISU Corporate Trustee to take action before individual
holders may institute suits against the Company.
(b) with respect to any other amendments or modifications to the ISU
1923 Indenture, as follows:
the Trustee will vote all Class "A" Bonds issued under the ISU 1923
Indenture then held by it, or consent with respect thereto,
proportionately with what is reasonably believed to be the vote or
consent of the holders of all other bonds outstanding under the ISU
1923 Indenture, the holders of which are eligible to vote or consent;
provided, however, that (i) at any time such Class "A" Bonds under the
ISU 1923 Indenture held by the Trustee constitute a majority of the
principal amount of the Outstanding bonds under the ISU 1923 Indenture
or (ii) at any time such Class "A" Bonds held by the Trustee constitute
less than such a majority but there is a proposed amendment or
modification of the ISU 1923 Indenture which, if it were an amendment
or modification of the Mortgage (See "DESCRIPTION OF THE COLLATERAL
TRUST BONDS - Modification of the Mortgage"), would require the consent
of Holders, then, in either case, the Trustee may only vote such Class
"A" Bonds in accordance with the vote of the Holders of at least a
majority of the principal amount of the securities casting a vote and
shall seek that vote in accordance with the provisions of the Mortgage
applicable to required votes of Holders in respect of amendments or
modifications to the Mortgage.
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DESCRIPTION OF THE SENIOR UNSECURED INDENTURE
GENERAL
The Securities may be issued in one or more series under the Indenture
(For Senior Unsecured Debt Securities) (the "Senior Unsecured Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Senior Unsecured Indenture Trustee"). The summaries of the Senior Unsecured
Indenture set forth below do not purport to be complete and are subject to the
detailed provisions of the Senior Unsecured Indenture, a copy of which is filed
with the Commission as an exhibit to the Registration Statement of which this
Prospectus is a part and is incorporated in this section by reference.
Capitalized terms used in this section which are not otherwise defined in this
Prospectus shall have the meanings ascribed to them in the Senior Unsecured
Indenture. Wherever particular provisions or terms defined in the Senior
Unsecured Indenture are referred to in this section, such provisions or
definitions are incorporated by reference as part of the statements made in this
section, and such statements are qualified in their entirety by such reference.
References to article and section numbers herein, unless otherwise indicated,
are references to article and section numbers of the Senior Unsecured Indenture.
The Securities issued under the Senior Unsecured Indenture (the "Senior
Debentures") will be unsecured obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated debt of the Company. Senior
Debentures shall not be afforded any protection under the Mortgage, pursuant to
which various series of Collateral Trust Bonds may be issued. Reference is made
to the Prospectus Supplement, or a supplement thereto, for a description of the
following terms of the series of Senior Debentures in respect of which this
Prospectus is being delivered: (1) the title of such series of Senior
Debentures; (2) any limit on the aggregate principal amount of such Senior
Debentures or the series of which they are a part; (3) the Person or Persons to
whom interest on the Senior Debentures of such series shall be payable if other
than the Persons in whose names such Senior Debentures are registered; (4) the
date or dates on which the principal of any of such Senior Debentures will be
payable; (5) the rate or rates (which may be fixed or variable) and/or the
method of determination of such rate or rates at which any of such Senior
Debentures will bear interest, if any, the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest will
be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date; (6) the place or places where (i) the principal of,
premium, if any, and interest on any of such Senior Debentures will be payable,
(ii) registration of transfer of such Senior Debentures may be effected, (iii)
exchanges of such Senior Debentures may be effected and (iv) notices and demands
to or upon the Company in respect of such Senior Debentures may be served; the
Security Registrar for such Senior Debentures and, if such is the case, that the
principal of such Senior Debentures shall be payable without presentment or
surrender thereof; (7) the period or periods within which, or the date or dates
on which, the price or prices at which and the terms and conditions upon which
any of such Senior Debentures may be redeemed, in whole or in part, at the
option of the Company; (8) the obligation or obligations, if any, of the Company
to redeem or purchase any of such Senior Debentures pursuant to any sinking fund
or other mandatory redemption provisions or at the option of the Holder thereof,
and the period or periods within which, or the date or dates on which, the price
or prices at which and the terms and conditions upon which any of such Senior
Debentures shall be redeemed or purchased, in whole or in part, pursuant to such
obligation, and applicable exceptions to the requirements of a notice of
redemption in the case of mandatory redemption or redemption at the option of
the Holder; (9) the denominations in which any of such Senior Debentures will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof; (10) if other than the currency of the United States, the currency or
currencies, including composite currencies, in which payment of the principal of
and any premium and interest on any of such Senior Debentures will be payable;
(11) if the principal of or any premium or interest on any of such Senior
Debentures is to be payable, at the election of the Company or the Holder
thereof, in a coin or currency other than in which such Senior Debentures are
stated to be payable, the period or periods within which and the terms and
conditions upon which, such election is to be made; (12) if the principal of or
premium, if any, or interest on such Senior Debentures are to be payable, or are
to be payable at the election of the Company or a Holder thereof, in securities
or other property, the type and amount of such securities or other property, or
the formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and conditions
upon which, any such election may be made; (13) if the amount payable in respect
of principal of or any premium or interest on any of such Senior Debentures may
be determined with reference to an index or other fact or event ascertainable
outside the Senior Unsecured Indenture, the manner in which such amounts will be
determined; (14) if other than the principal amount thereof, the portion of the
principal amount of any of such Senior Debentures which shall be payable upon
declaration of acceleration of the Maturity thereof; (15) any addition to the
Events of Default applicable to any of such Senior Debentures and any addition
to the covenants of the Company for the benefit of the Holders of such
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Senior Debentures; (16) the terms, if any, pursuant to which such Senior
Debentures may be converted into or exchanged for shares of capital stock or
other securities of the Company or any other Person; (17) the obligations or
instruments, if any, which shall be considered to be Eligible Obligations in
respect of such Senior Debentures denominated in a currency other than Dollars
or in a composite currency, and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such Senior Debentures
after the satisfaction and discharge thereof; (18) if such Senior Debentures are
to be issued in global form, (i) any limitations on the rights of the Holder or
Holders of such Senior Debentures to transfer or exchange the same or to obtain
the registration of transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in definitive form in
lieu of temporary form and (iii) any and all other matters incidental to such
Senior Debentures; (19) if such Senior Debentures are to be issuable as bearer
securities; (20) any limitations on the rights of the Holders of such Senior
Debentures to transfer or exchange such Senior Debentures or to obtain the
registration of transfer thereof, and if a service charge will be made for the
registration of transfer or exchange of such Senior Debentures, the amount or
terms thereof; (21) any exceptions to the provisions governing payments due on
legal holidays or any variations in the definition of Business Day with respect
to such Senior Debentures; and (22) any other terms of such Senior Debentures of
such series, or any Tranche thereof, not inconsistent with the provisions of the
Senior Unsecured Indenture. (Section 301)
Senior Debentures may be sold at a substantial discount below their
principal amount. Certain special United States federal income tax
considerations applicable to Senior Debentures sold at an original issue
discount may be described in the applicable Prospectus Supplement. In addition,
certain special United States federal income tax or other considerations
applicable to any Senior Debentures which are denominated in a currency or
currency unit other than Dollars may be described in the applicable Prospectus
Supplement.
Except as may otherwise be described in the Prospectus Supplement, the
covenants contained in the Senior Unsecured Indenture would not afford Holders
of Senior Debentures protection in the event of a highly-leveraged transaction
or change of control involving the Company.
FORM, EXCHANGE, AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement,
Senior Debentures of each series will be issuable only in fully registered form
without coupons and in denominations of $1,000 and any integral multiple
thereof. (Sections 201 and 302)
At the option of the Holder, subject to the terms of the Senior
Unsecured Indenture and the limitations applicable to global securities, Senior
Debentures of any series will be exchangeable for other Senior Debentures of the
same series, of any authorized denomination and of like tenor and aggregate
principal amount. (Section 305)
Subject to the terms of the Senior Unsecured Indenture and the
limitations applicable to global securities, Senior Debentures may be presented
for exchange as provided above for registration of transfer (duly endorsed or
accompanied by a duly executed instrument of transfer) at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose. Unless otherwise indicated, no service charge will be
made for any registration of transfer or exchange of Senior Debentures, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Every Senior Debenture
presented or surrendered for registration of transfer or exchange shall (if so
required by the Company, the Senior Unsecured Indenture Trustee or the Security
Registrar) be duly endorsed or accompanied by an executed written instrument of
transfer in form satisfactory to the Company, the Senior Unsecured Indenture
Trustee or the Security Registrar. (Section 305) Any transfer agent (in addition
to the Security Registrar) initially designated by the Company for any Senior
Debenture will be named in the applicable Prospectus Supplement. The Company may
at any time designate additional transfer agents or rescind the designation of
any transfer agent or approve a change in the office through which any transfer
agent acts, except that the Company will be required to maintain a transfer
agent in each Place of Payment for the Senior Debentures of each series. The
Company may perform all functions of any office or agency. (Section 602)
The Company shall not be required to execute or register the transfer
of or the exchange of any Senior Debenture, or any Tranche thereof, during a
period of 15 days preceding the notice to be given identifying the Senior
Debenture called for redemption, or any Senior Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Senior Debenture being redeemed in part. (Section 305)
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PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Senior Debenture on any Interest Payment Date will be
made to the person in whose name such Senior Debenture (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any interest on the Senior Debentures of a particular series
will be payable at the office of such Paying Agent or Paying Agents as the
Company may designate for such purpose from time to time. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office of
the Senior Unsecured Indenture Trustee in New York, New York will be designated
as the Company's sole Paying Agent for payment with respect to Senior Debentures
of each series. Any other Paying Agents initially designated by the Company for
the Senior Debentures of a particular series will be named in the applicable
Prospectus Supplement. The Company may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent or approve a change in the
office through which any Paying Agent acts, except that the Company will be
required to maintain a Paying Agent in each Place of Payment for the Senior
Debentures of a particular series. (Section 602)
Any moneys deposited by the Company with the Trustee or any Paying
Agent for the payment of the principal of or any premium or interest on any
Senior Debenture which remains unclaimed at the end of two years after such
principal, premium or interest has become due and payable will be paid to the
Company, and the Holder of such Senior Debenture, as an unsecured general
creditor and not as a Holder, thereafter may look only to the Company for
payment thereof. (Section 603)
REDEMPTION
Any terms for the optional or mandatory redemption of Senior Debentures
will be set forth in the applicable Prospectus Supplement or a supplement
thereto. Except as shall otherwise be provided in the applicable Prospectus
Supplement with respect to Senior Debentures that are redeemable at the option
of the Holder, Senior Debentures will be redeemable only upon notice by mail not
less than 30 days nor more than 60 days prior to the date fixed for redemption,
and, if less than all the Senior Debentures of a series, or any Tranche thereof,
are to be redeemed, the particular Senior Debentures to be redeemed will be
selected by the Securities Registrar by such method as shall be provided for any
particular series, or in the absence of any such provision, by such method of
random selection as the Security Registrar deems fair and appropriate. (Sections
403 and 404)
Any notice of redemption at the option of the Company may state that
such redemption will be conditional upon receipt by the Paying Agent or Agents,
on or prior to the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on such Senior
Debentures and that if such money has not been so received, such notice will be
of no force and effect and the Company will not be required to redeem such
Senior Debentures. (Section 404)
CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER
Under the terms of the Senior Unsecured Indenture, the Company may not
consolidate with or merge into any other corporation or convey, transfer or
lease its properties and assets substantially as an entirety to any Person,
unless (i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Person organized and existing under the laws of any domestic
jurisdiction and shall expressly assume the Company's obligations on the Senior
Debentures and under the Senior Unsecured Indenture, (ii) immediately after
giving effect to the transaction, no Event of Default shall have occurred and be
continuing, and (iii) the Company will have delivered to the Senior Unsecured
Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided
in the Senior Unsecured Indenture. (Section 1101)
LIMITATIONS ON LIENS
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So long as there remains outstanding any Senior Debentures of any
series to which Section 6.08 of the Senior Unsecured Indenture applies under the
terms of such series, the Company may not, and may not permit any subsidiary to,
create or suffer to be created or to exist any mortgage, pledge, security
interest, encumbrance, easement, lease, reservation, restriction, servitude,
charge or similar right or lien of any kind (for purposes of this paragraph,
"Liens") on any of its properties or assets now owned or hereinafter acquired to
secure any indebtedness, without making effective provision whereby the Senior
Debentures (together with, if the Company shall so determine, any other debt of
the Company or any subsidiary then existing or thereafter created that is not
subordinate to such Senior Debentures) of such series shall be equally and
ratably secured with (or prior to) any and all such indebtedness and with any
other indebtedness similarly entitled to be equally and ratably secured. The
foregoing restriction shall not apply to or prevent the creation or existence of
the following: (a) the Liens of the 1940 Indenture, the 1923 Indenture and the
Mortgage or any indenture supplemental to any thereof subjecting any property to
the Lien thereof or confirming the Lien thereof upon any property, whether now
owned or hereafter acquired; (b) Liens on property existing at the time of
acquisition or construction of such property (or created within one year after
completion of such acquisition or construction), whether by purchase, merger,
construction or otherwise (or on the property of a subsidiary at the date it
became a subsidiary), or to secure the payment of all or any part of the
purchase price or construction cost thereof, including the extension of any such
Liens to repairs, renewals, replacements, substitutions, betterments, additions,
extensions and improvements then or thereafter made on the property subject
thereto; (c) any extensions, renewals or replacements (or successive extensions,
renewals or replacements), in whole or in part of Liens permitted by the
foregoing clauses (a) and (b); (d) the pledge of any bonds or other securities
at any time issued under any of the Liens permitted by clauses (a), (b), or (c);
or (e) Permitted Liens. Further, this restriction shall not apply to or prevent
the creation or existence of leases made, or existing on property acquired, in
the ordinary course of business. "Permitted Liens" means any of the following:
(a) Liens for taxes, assessments and other governmental charges or requirements
not delinquent or which can thereafter be paid without penalty or which are
currently being contested in good faith by appropriate proceedings; (b)
mechanics', workmen's, repairmen's, materialmen's, warehousemen's and carriers'
Liens, Liens or privileges of any employees of the Company for salary or wages
earned, but not yet payable, and other Liens, including without limitation Liens
for worker's compensation awards, arising in the ordinary course of business for
charges or requirements which are not delinquent or which are being contested in
good faith and by appropriate proceedings; (c) Liens in respect of judgments or
awards with respect to which the Company shall (i) in good faith be prosecuting
an appeal or other proceeding for review and with respect to which the Company
shall have secured a stay of execution pending such appeal or other proceeding
or (ii) have the right to prosecute an appeal or other proceeding for review;
(d) easements, leases, reservations or other rights of others in, on and/or
over, and laws, regulations and restrictions affecting, and defects and
irregularities in record title to, the property of the Company or any part
thereof; provided, however, that such easements, leases, reservations, rights,
laws, regulations, restrictions, defects and irregularities do not, in the
reasonable judgment of the Company, in the aggregate materially impair the use
by the Company of its property considered as a whole for the purposes for which
it is held by the Company; (e) any defects or irregularities in title to any
rights-of-way and/or to any real estate used or to be used primarily for
right-of-way purposes or held under lease, easement, license or similar right;
provided, however, that (i) the Company shall have obtained from the apparent
owner of the lands or estates therein covered by any such right-of-way a
sufficient right, by the terms of the instrument granting such right-of-way,
lease, easement, license or similar right, to the use thereof for the purpose
for which the Company acquired the same, (ii) the Company has power under
eminent domain, or similar statutes, to remove such defects or irregularities or
(iii) such defects or irregularities may be otherwise remedied without undue
effort or expense; (f) Liens securing indebtedness neither created, assumed nor
guaranteed by the Company nor on account of which it customarily pays interest,
existing at the date of the execution and delivery of this Indenture, or, as to
property hereafter acquired, at the time of the acquisition thereof by the
Company, upon real estate or rights in or relating to real estate acquired by
the Company for rights of way for distribution and transmission lines and for
pipes, substations, structures and appurtenances thereto; (g) leases existing at
the date of the execution and delivery of this Indenture affecting property
owned by the Company at said date and renewals and extensions thereof and leases
for a term of not more than ten (10) years (including extensions or renewals at
the option of the tenant) affecting property acquired by the Company after said
date; (h) any controls, restrictions, obligations, duties and/or other burdens
imposed by any federal, state, municipal or other law, or by any rule,
regulation or order of any Governmental Authority, upon any property of the
Company or the operation or use thereof or upon the Company with respect to any
of its property or the operation or use thereof or with respect to any
franchise, grant, license, permit or public purpose requirement, or any rights
reserved to or otherwise vested in any Governmental Authority to impose any such
controls, restrictions, obligations, duties and/or other burdens; (i) Liens
granted on air or water pollution control or sewage or solid waste disposal
facilities of the Company in connection with the issuance of industrial
development revenue bonds; (j) any right which any Governmental Authority may
have by virtue of any
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franchise, license, contract or statute to purchase, or designate a purchaser of
or order the sale of, any property of the Company upon payment of cash or
reasonable compensation therefor or to terminate any franchise, license or other
rights or to regulate the property and business of the Company; (k) any Liens
which have been bonded for the full amount in dispute or for the payment of
which other adequate security arrangements have been made or which, in the
opinion of counsel, are not material; (l) Prepaid Liens; (m) Liens resulting
from good faith deposits made in connection with bids, tenders, contracts or
leases to which the Company is a party and Liens resulting from deposits made to
secure public or statutory obligations of the Company or for the purpose of
obtaining a stay or discharge in the course of any legal proceedings; (n) the
pledge or assignment in the ordinary course of business of electricity, gas
(either natural or artificial) or steam, accounts receivable or customers'
installment paper; (o) rights reserved to or vested in others to take or receive
any part of the electricity, gas (either natural or artificial), steam or any
by-products thereof generated or produced by or from any properties of the
Company or with respect to any other rights concerning electricity, gas (either
natural or artificial) or steam supply, transportation, or storage which are in
use in the ordinary course of the electricity, gas (either natural or
artificial) or steam business; (p) any landlord's Lien; (q) Liens incurred
pursuant to Section 907; and (r) Liens or encumbrances not otherwise permitted
if, at the time of incurrence and after giving effect thereto, the aggregate of
all obligations of the Company and its subsidiaries secured thereby does not
exceed 10% of Tangible Net Worth. "Prepaid Lien" means any Lien securing
indebtedness for the payment of which money in the necessary amount shall have
been irrevocably deposited in trust with the trustee or other holder of such
Lien; provided, however, that if such indebtedness is to be redeemed or
otherwise prepaid prior to the stated maturity thereof, any notice requisite to
such redemption or prepayment shall have been given in accordance with the
mortgage or other instrument creating such Lien or irrevocable instructions to
give such notice shall have been given to such trustee or other holder.
"Tangible Net Worth" means (i) common stockholders' equity appearing on the most
recent balance sheet of the Company (or consolidated balance sheet of the
Company and its subsidiaries if the Company then has one or more subsidiaries
the accounts of which are consolidated with the accounts of the Company)
prepared in accordance with generally accepted accounting principles less (ii)
intangible assets (excluding intangible assets recoverable through rates as
prescribed by applicable regulatory authorities).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Senior Unsecured Indenture with respect to Senior Debentures of any series: (a)
failure to pay any interest on any Senior Debentures of such series within 60
days after the same becomes due and payable; provided, that an extension of an
interest payment period by the Company permitted by the terms of the series
shall not constitute a failure to pay interest for this purpose; (b) failure to
pay principal of or premium, if any, on any Senior Debenture of such series
within three business days after the same becomes due and payable; (c) failure
to perform or breach of any other covenant or warranty of the Company in the
Senior Unsecured Indenture (other than a covenant or warranty of the Company in
the Senior Unsecured Indenture solely for the benefit of one or more series of
Senior Debentures other than such series) for 60 days after written notice to
the Company by the Senior Unsecured Indenture Trustee, or to the Company and the
Senior Unsecured Indenture Trustee by the Holders of at least 33% in principal
amount of the Senior Debentures of such series Outstanding under the Senior
Unsecured Indenture as provided in the Senior Unsecured Indenture; (d) certain
events of bankruptcy, insolvency or reorganization; and (e) any other Event of
Default specified in the applicable Prospectus Supplement with respect to Senior
Debentures of a particular series. (Section 801)
An Event of Default with respect to the Senior Debentures may not
necessarily constitute an Event of Default with respect to the Senior Debentures
of any other series issued under the Senior Unsecured Indenture.
If an Event of Default with respect to any series of Senior Debentures
occurs and is continuing, then either the Senior Unsecured Indenture Trustee or
the Holders of not less than 33% in principal amount of the Outstanding Senior
Debentures of such series may declare the principal amount (or if the Senior
Debentures of such series are Discount Securities, such portion of the principal
amount hereof as may be specified in the applicable Prospectus Supplement) of
all of the Senior Debentures of such series to be due and payable immediately;
provided, however, that if an Event of Default occurs and is continuing with
respect to more than one series of Senior Debentures, the Senior Unsecured
Indenture Trustee or the Holders of not less than 33% in aggregate principal
amount of the Outstanding Securities of all such series, considered as one
class, may make such declaration of acceleration and not the Holders of the
Senior Debentures of any one of such series.
Subject to the provisions of the Senior Unsecured Indenture relating to
the duties of the Senior Unsecured Indenture Trustee in case an Event of Default
shall occur and be continuing, the Senior Unsecured Indenture Trustee
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will be under no obligation to exercise any of its rights or powers under the
Senior Unsecured Indenture at the request or direction of any Holder, unless
such Holder shall have offered to the Senior Unsecured Indenture Trustee
reasonable security or indemnity. (Section 903) Subject to such provisions of
the indemnification of the Senior Unsecured Indenture Trustee, the Holders of a
majority in principal amount of the Outstanding Senior Debentures of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Unsecured Indenture Trustee,
or exercising any trust or power conferred on the Senior Unsecured Indenture
Trustee, with respect to the Senior Debentures of that series. (Section 812)
No Holder of a Senior Debenture of any series will have any right to
institute any proceeding with respect to the Senior Unsecured Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Senior Debentures of such
series, (ii) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Senior Debentures of such series have made written
request to the Senior Unsecured Indenture Trustee, and such Holder or Holders
have offered reasonable indemnity to the Senior Unsecured Indenture Trustee, to
institute such proceeding as trustee and (iii) the Senior Unsecured Indenture
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding Senior
Debentures of that series a direction inconsistent with such request, within 60
days after such notice, request and offer. (Section 807) However, such
limitations do not apply to a suit instituted by a Holder of a Senior Debenture
for the enforcement of payment of the principal of or any premium or interest on
such Senior Debenture on or after the applicable due date specified in such
Senior Debenture. (Section 808)
The Company will be required to furnish to the Senior Unsecured
Indenture Trustee annually, not later than October 1 in each year, a statement
by an appropriate officer as to such officer's knowledge of the Company's
compliance with all conditions and covenants under the Senior Unsecured
Indenture, such compliance to be determined without regard to any period of
grace or requirement of notice under the Senior Unsecured Indenture. (Section
606)
RIGHT TO CURE
At any time after the declaration of acceleration with respect to the
Senior Debentures of any series has been made and before a judgment or decree
for payment of the money due has been obtained, the Event or Events of Default
giving rise to such declaration of acceleration will, without further act, be
deemed to have been waived, and such declaration and its consequences will,
without further act, be deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Senior Unsecured
Indenture Trustee a sum sufficient to pay
(1) all overdue interest on all Senior Debentures of such
series;
(2) the principal of and premium, if any, on any Senior
Debentures of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Senior Debentures;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Senior Debentures, to the extent that
payment of such interest is lawful; and
(4) all amounts due to the Senior Unsecured Indenture
Trustee under the Senior Unsecured Indenture; and
(b) any other Event or Events of Default with respect to the Senior
Debentures of such series, other than the non-payment of the principal of the
Senior Debentures of such series which has become due solely by such declaration
of acceleration, have been cured or waived as provided in the Senior Unsecured
Indenture. (Section 802)
MODIFICATION AND WAIVER
Without the consent of any Holder of Senior Debentures, the Company and
the Senior Unsecured Indenture Trustee may enter into one or more supplemental
indentures to the Senior Unsecured Indenture for any of the
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following purposes: (a) to evidence the assumption by any permitted successor to
the Company of the covenants of the Company in the Senior Unsecured Indenture
and the Senior Debentures; or (b) to add one or more covenants of the Company or
other provisions for the benefit of the Holders of all or any series of
Outstanding Senior Debentures or to surrender any right or power conferred upon
the Company by the Senior Unsecured Indenture; or (c) to add any additional
Events of Default with respect to all or any series of Outstanding Senior
Debentures; or (d) to change or eliminate any provision of the Senior Unsecured
Indenture or to add any new provision to the Senior Unsecured Indenture,
provided that if such change, elimination or addition will adversely affect the
interests of the Holders of Senior Debentures of any series in any material
respect, such change, elimination or addition will become effective with respect
to such series only when the consent of the Holders of such series so affected
has been obtained or when there is no Senior Debenture of such series remaining
Outstanding under the Senior Unsecured Indenture; or (e) to provide collateral
security for the Senior Debentures; or (f) to establish the form or terms of
Senior Debentures of any series as permitted by the Senior Unsecured Indenture;
or (g) to provide for the authentication and delivery of bearer securities and
coupons appertaining thereto representing interest, if any, thereon and for the
procedures for the registration, exchange and replacement thereof and for giving
of notice to, and the solicitation of the vote or consent of, the Holders
thereof, and for any and all other matters incidental thereto; or (h) to
evidence and provide for the acceptance of appointment of a separate or
successor Senior Unsecured Indenture Trustee under the Senior Unsecured
Indenture with respect to the Senior Debentures of one or more series and to add
or to change any of the provisions of the Senior Unsecured Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the Senior Unsecured Indenture by more than one trustee; or (i) to provide for
the procedures required to permit the utilization of a noncertificated system of
registration for any series of Senior Debentures; or (j) to change any place
where (1) the principal of and premium, if any, and interest, if any, on any
Senior Debentures shall be payable, (2) any Senior Debentures may be surrendered
for registration of transfer or exchange and (3) notices and demands to or upon
the Company in respect of Senior Debentures and the Senior Unsecured Indenture
may be served; or (k) to cure any ambiguity, to correct or supplement any
defective or inconsistent provision or to make or change any other provisions
with respect to matters and questions arising under the Senior Unsecured
Indenture, provided such changes or additions shall not adversely affect the
interests of the Holders of Senior Debentures of any series in any material
respect. (Section 1201)
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Senior Debentures of any series may waive compliance by the
Company with certain restrictive provisions of the Senior Unsecured Indenture.
(Section 607) The Holders of not less than a majority in principal amount of the
Outstanding Senior Debentures of any series may waive any past default under the
Senior Unsecured Indenture, except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Senior Unsecured
Indenture that cannot be modified or be amended without the consent of the
Holder of each Outstanding Senior Debenture of such series affected. (Section
813)
Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after
the date of the Senior Unsecured Indenture in such a way as to require changes
to the Senior Unsecured Indenture or the incorporation therein of additional
provisions or so as to permit changes to, or the elimination of, provisions
which, at the date of the Senior Unsecured Indenture or at any time thereafter,
were required by the Trust Indenture Act to be contained in the Senior Unsecured
Indenture, the Senior Unsecured Indenture will be deemed to have been amended so
as to conform to such amendment or to effect such changes or elimination, and
the Company and the Senior Unsecured Indenture Trustee may, without the consent
of any Holders, enter into one or more supplemental indentures to evidence or
effect such amendment. (Section 1201)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Senior Debentures of all series
then Outstanding, considered as one class, is required for the purpose of adding
any provisions to, or changing in any manner, or eliminating any of the
provisions of, the Senior Unsecured Indenture pursuant to one or more
supplemental indentures; provided, however, that if less than all of the series
of Senior Debentures Outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the Holders of a majority in
aggregate principal amount of Outstanding Senior Debentures of all series so
directly affected, considered as one class, will be required; and provided,
further, that if the Senior Debentures of any series have been issued in more
than one Tranche and if the proposed supplemental indenture directly affects the
rights of the Holders of one or more, but less than all, such Tranches, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Senior Debentures of all Tranches so directly affected, considered
as one class, will be required; and provided further, that no such supplemental
indenture may (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Senior Debenture, or
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reduce the principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the redemption thereof,
or reduce the amount of the principal of any Discount Security that would be due
and payable upon a declaration of acceleration of Maturity or change the coin or
currency (or other property) in which any Senior Debenture or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any Senior
Debenture (or, in the case of redemption, on or after the redemption date)
without, in any such case, the consent of the Holder of such Senior Debenture,
(b) reduce the percentage in principal amount of the Outstanding Senior
Debentures of any series, or any Tranche thereof, the consent of the Holders of
which is required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with any provision of
the Senior Unsecured Indenture or any default thereunder and its consequences,
or reduce the requirements for quorum or voting, without, in any such case, the
consent of the Holder of each Outstanding Senior Debenture of such series or
Tranche, or (c) modify certain of the provisions of the Senior Unsecured
Indenture relating to supplemental indentures, waivers of certain covenants and
waivers of past defaults with respect to the Senior Debentures of any series, or
any Tranche thereof, without the consent of the Holder of each Outstanding
Senior Debenture affected thereby. A supplemental indenture which changes or
eliminates any covenant or other provision of the Senior Unsecured Indenture
which has expressly been included solely for the benefit of one or more
particular series of Senior Debentures or one or more Tranches thereof, or
modifies the rights of the Holders of Senior Debentures of such series or
Tranches with respect to such covenant or other provision, will be deemed not to
affect the rights under the Indenture of the Holders of the Senior Debentures of
any other series or Tranche. (Section 1202)
The Senior Unsecured Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding Senior Debentures
have given any request, demand, authorization, direction, notice, consent, or
waiver under the Senior Unsecured Indenture as of any date, or whether or not a
quorum is present at a meeting of Holders, (i) Senior Debentures owned by the
Company or any other obligor upon the Senior Debentures or any Affiliate of the
Company or of such other obligor (unless the Company, such Affiliate or such
obligor owns all Securities Outstanding under this Senior Unsecured Indenture,
or all Outstanding Senior Debentures of each such series and each such Tranche,
as the case may be, determined without regard to this clause (i)) shall be
disregarded and deemed not to be Outstanding; (ii) the principal amount of a
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof as provided in the Senior Unsecured Indenture; and (iii) the principal
amount of a Senior Debenture denominated in one or more foreign currencies or a
composite currency that will be deemed to be Outstanding will be the Dollar
equivalent, determined as of such date in the manner prescribed for such Senior
Debenture, of the principal amount of such Senior Debenture (or, in the case of
a Senior Debenture described in clause (ii) above, of the amount described in
such clause). (Section 101)
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act, 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, election, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, election,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on the record date shall be deemed to
be Holders for the purposes of determining whether Holders of the requisite
proportion of the Outstanding Senior Debentures have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
direction, waiver or other Act, and for that purpose the Outstanding Senior
Debentures shall be computed as of the record date. Any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of a
Holder shall bind every future Holder of the same Senior Debenture and the
Holder of every Senior Debenture 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 Senior
Debenture. (Section 104)
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, any
Senior Debenture, or any portion of the principal amount thereof, will be deemed
to have been paid for purposes of the Senior Unsecured Indenture, and, at the
Company's election, the entire indebtedness of the Company in respect thereof
will be deemed to have
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been satisfied and discharged, if there has been irrevocably deposited with the
Senior Unsecured Indenture Trustee or any Paying Agent (other than the Company),
in trust: (a) money in an amount which will be sufficient, or (b) Eligible
Obligations (as described below), which do not contain provisions permitting the
redemption or other prepaying thereof at the option of the issuer thereof, the
principal of and the interest on which when due, without any regard to
reinvestment thereof, will provide monies which, together with money, if any,
deposited with or held by the Senior Unsecured Indenture Trustee or such Paying
Agent, will be sufficient, or (c) a combination of (a) and (b) which will be
sufficient, to pay when due the principal of and premium, if any, and interest,
if any, due and to become due on such Senior Debentures or portions thereof.
(Section 701) For this purpose, unless otherwise indicated in the applicable
Prospectus Supplement, Eligible Obligations include direct obligations of, or
obligations unconditionally guaranteed by, the United States, entitled to the
benefit of the full faith and credit thereof, and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due in respect
thereof. (Section 101)
While the Company knows of no legal precedent on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related securities for
an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such securities would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their securities. In addition, such Holders thereafter would be required to
recognize for federal income tax purposes a share of the income, gain or loss of
the trust. The amount so required to be recognized could be different from the
amount that would be recognized in the absence of such deposit. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences to them of any such deposit.
RESIGNATION OF SENIOR UNSECURED INDENTURE TRUSTEE
The Senior Unsecured Indenture Trustee may resign at any time by giving
written notice thereof to the Company or may be removed at any time by Act of
the Holders of a majority in principal amount of Senior Debentures then
Outstanding delivered to the Senior Unsecured Indenture Trustee and the Company.
No resignation or removal of the Senior Unsecured Indenture Trustee and no
appointment of a successor trustee will become effective until the acceptance of
appointment by a successor trustee in accordance with the requirements of the
Senior Unsecured Indenture. So long as no Event of Default or event which, after
notice or lapse of time, or both, would become an Event of Default has occurred
and is continuing and except with respect to a Senior Unsecured Indenture
Trustee appointed by Act of the Holders of a majority in principal amount of the
Outstanding Senior Debentures, if the Company has delivered to the Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the
Senior Unsecured Indenture, the Senior Unsecured Indenture Trustee will be
deemed to have resigned and the successor will be deemed to have been appointed
as trustee in accordance with the Senior Unsecured Indenture. (Section 910)
NOTICES
Notices to Holders of Senior Debentures will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Section
106)
TITLE
The Company, the Senior Unsecured Indenture Trustee, and any agent of
the Company or the Senior Unsecured Indenture Trustee may treat the Person in
whose name a Senior Debenture is registered as the absolute owner thereof
(whether or not such Senior Debenture may be overdue) for the purpose of making
payment and for all other purposes. (Section 308)
GOVERNING LAW
The Senior Unsecured Indenture and the Senior Debentures will be
governed by, construed in accordance with, the laws of the State of New York,
except to the extent the law of any other jurisdiction shall be mandatorily
applicable. (Section 112)
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LIMITATION ON SUITS
The Senior Unsecured Indenture limits a Holder's right to institute any
proceeding with respect to the Senior Unsecured Indenture, the appointment of a
receiver or trustee, or for any other remedy under the Senior Unsecured
Indenture. (Section 807)
MAINTENANCE OF PROPERTIES
The Senior Unsecured Indenture provides that the Company shall cause
(or, with respect to property owned in common with others, make reasonable
effort to cause) all its properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working order
and shall cause (or, with respect to property owned in common with others, make
reasonable effort to cause) to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as, in the judgment of
the Company, may be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that nothing shall
prevent the Company from discontinuing, or causing the discontinuance of, the
operation and maintenance of any of its properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business. (Section
605)
RELATIONSHIP WITH THE SENIOR UNSECURED INDENTURE TRUSTEE
See "DESCRIPTION OF THE COLLATERAL TRUST BONDS -- Relationship with the
Trustee" for a description of certain relationships between the Senior Unsecured
Indenture Trustee and the Company.
DESCRIPTION OF THE SUBORDINATED INDENTURE
GENERAL
The Securities may be issued in one or more series under the Indenture
(For Unsecured Subordinated Debt Securities) (the "Subordinated Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Subordinated Indenture Trustee"). The summaries of the Subordinated Indenture
set forth below do not purport to be complete and are subject to the detailed
provisions of the Subordinated Indenture, a copy of which was previously filed
with the Commission, is listed as an exhibit to the Registration Statement of
which this Prospectus is a part, and is incorporated herein by reference.
Capitalized terms used in this section which are not otherwise defined in this
Prospectus shall have the meanings ascribed to them in the Subordinated
Indenture. Wherever particular provisions or terms defined in the Subordinated
Indenture are referred to in this section, such provisions or definitions are
incorporated by reference as part of the statements made in this section, and
such statements are qualified in their entirety by such reference. References to
article and section numbers herein, unless otherwise indicated, are references
to article and section numbers of the Subordinated Indenture.
The Securities issued under the Subordinated Indenture (the
"Subordinated Debentures") will be unsecured, subordinated obligations of the
Company and shall not be afforded any protection under the Mortgage, pursuant to
which various series of Collateral Trust Bonds may be issued. Reference is made
to the Prospectus Supplement, or a supplement thereto, for a description of the
following terms of the series of Subordinated Debentures in respect of which
this Prospectus is being delivered: (1) the title of such series of Subordinated
Debentures; (2) any limit on the aggregate principal amount of such Subordinated
Debentures or the series of which they are a part; (3) the Person or Persons to
whom interest on the Subordinated Debentures of such series shall be payable if
other than the Persons in whose names such Subordinated Debentures are
registered; (4) the date or dates on which the principal of any of such
Subordinated Debentures will be payable; (5) the rate or rates (which may be
fixed or variable) and/or the method of determination of such rate or rates at
which any of such Subordinated Debentures will bear interest, if any, the date
or dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date; (6) the place or places where (i)
the principal of, premium, if any, and interest on any of such Subordinated
Debentures will be payable, (ii) registration of transfer of such Subordinated
Debentures may be effected, (iii) exchanges of such Subordinated Debentures may
be effected and (iv) notices and demands to or upon the Company in respect of
such Subordinated Debentures may be served; the Security Registrar for such
Subordinated Debentures and, if such is the
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case, that the principal of such Subordinated Debentures shall be payable
without presentment or surrender thereof; (7) the period or periods within
which, or the date or dates on which, the price or prices at which and the terms
and conditions upon which any of such Subordinated Debentures may be redeemed,
in whole or in part, at the option of the Company; (8) the obligation or
obligations, if any, of the Company to redeem or purchase any of such
Subordinated Debentures pursuant to any sinking fund or other mandatory
redemption provisions or at the option of the Holder thereof, and the period or
periods within which, or the date or dates on which, the price or prices at
which and the terms and conditions upon which any of such Subordinated
Debentures shall be redeemed or purchased, in whole or in part, pursuant to such
obligation, and applicable exceptions to the requirements of a notice of
redemption in the case of mandatory redemption or redemption at the option of
the Holder; (9) the denominations in which any of such Subordinated Debentures
will be issuable, if other than denominations of $1,000 and any integral
multiple thereof; (10) if other than the currency of the United States, the
currency or currencies, including composite currencies, in which payment of the
principal of and any premium and interest on any of such Subordinated Debentures
will be payable; (11) if the principal of or any premium or interest on any of
such Subordinated Debentures is to be payable, at the election of the Company or
the Holder thereof, in a coin or currency other than in which such Subordinated
Debentures are stated to be payable, the period or periods within which and the
terms and conditions upon which, such election is to be made; (12) if the
principal of or premium, if any, or interest on such Subordinated Debentures are
to be payable, or are to be payable at the election of the Company or a Holder
thereof, in securities or other property, the type and amount of such securities
or other property, or the formulary or other method or other means by which such
amount shall be determined, and the period or periods within which, and the
terms and conditions upon which, any such election may be made; (13) if the
amount payable in respect of principal of or any premium or interest on any of
such Subordinated Debentures may be determined with reference to an index or
other fact or event ascertainable outside the Subordinated Indenture, the manner
in which such amounts will be determined; (14) if other than the principal
amount thereof, the portion of the principal amount of any of such Subordinated
Debentures which shall be payable upon declaration of acceleration of the
Maturity thereof; (15) any addition to the Events of Default applicable to any
of such Subordinated Debentures and any addition to the covenants of the Company
for the benefit of the Holders of such Subordinated Debentures; (16) the terms,
if any, pursuant to which such Subordinated Debentures may be converted into or
exchanged for shares of capital stock or other securities of the Company or any
other Person; (17) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of such Subordinated Debentures
denominated in a currency other than Dollars or in a composite currency, and any
additional or alternative provisions for the reinstatement of the Company's
indebtedness in respect of such Subordinated Debentures after the satisfaction
and discharge thereof; (18) if such Subordinated Debentures are to be issued in
global form, (i) any limitations on the rights of the Holder or Holders of such
Subordinated Debentures to transfer or exchange the same or to obtain the
registration of transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in definitive form in
lieu of temporary form and (iii) any and all other matters incidental to such
Subordinated Debentures; (19) if such Subordinated Debentures are to be issuable
as bearer securities; (20) any limitations on the rights of the Holders of such
Subordinated Debentures to transfer or exchange such Subordinated Debentures or
to obtain the registration of transfer thereof, and if a service charge will be
made for the registration of transfer or exchange of such Subordinated
Debentures, the amount or terms thereof; (21) any exceptions to the provisions
governing payments due on legal holidays or any variations in the definition of
Business Day with respect to such Subordinated Debentures; and (22) any other
terms of such Subordinated Debentures of such series, or any Tranche thereof,
not inconsistent with the provisions of the Subordinated Indenture. (Section
301)
Subordinated Debentures may be sold at a substantial discount below
their principal amount. Certain special United States federal income tax
considerations applicable to Subordinated Debentures sold at an original issue
discount may be described in the applicable Prospectus Supplement. In addition,
certain special United States federal income tax or other considerations
applicable to any Subordinated Debentures which are denominated in a currency or
currency unit other than Dollars may be described in the applicable Prospectus
Supplement.
Except as may otherwise be described in the Prospectus Supplement, the
covenants contained in the Subordinated Indenture would not afford Holders of
Subordinated Debentures protection in the event of a highly-leveraged
transaction or change of control involving the Company.
SUBORDINATION
The Subordinated Indenture provides that payment of the principal of,
premium, if any, and interest on Subordinated Debentures is subordinated and
subject in right of payment to the prior payment in full of all Senior
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Indebtedness (as defined below) of the Company, all as provided in the
Subordinated Indenture. No payment of principal of (including redemption of and
sinking fund payments), premium, if any, or interest on, Subordinated Debentures
may be made if payment of principal, premium, interest or any other payment on
any Senior Indebtedness is not made when due, any applicable grace period with
respect to such default has ended and such default has not been cured or waived
or ceased to exist, or if the maturity on any Senior Indebtedness has been
accelerated because of default. Upon any distribution of assets of the Company
to creditors upon any dissolution, winding up, liquidation or reorganization,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of, premium, if any, and interest due or to
become due on, all Senior Indebtedness must be paid in full before any payment
on the Subordinated Debentures. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions applicable to Senior Indebtedness until all amounts
owing on Subordinated Debentures are paid in full.
(Sections 1501 - 1504)
The term "Senior Indebtedness" means all obligations (other than
non-recourse obligations and the indebtedness issued under the Subordinated
Indenture) of, or guaranteed or assumed by, the Company for borrowed money,
including both senior and subordinated indebtedness for borrowed money (other
than the Subordinated Debentures), or for the payment of money relating to any
lease which is capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting principles, or
evidenced by bonds, debentures, notes or other similar instruments, and in each
case, amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Subordinated
Indenture or subsequently incurred by the Company. (Section 101) Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of such Senior Indebtedness. (Section 1509)
The Subordinated Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued. As of March 31, 1997, Senior
Indebtedness of the Company aggregated approximately $708 million.
FORM, EXCHANGE, AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement,
Subordinated Debentures of each series will be issuable only in fully registered
form without coupons and in denominations of $1,000 and any integral multiple
thereof. (Sections 201 and 302)
At the option of the Holder, subject to the terms of the Subordinated
Indenture and the limitations applicable to global securities, Subordinated
Debentures of any series will be exchangeable for other Subordinated Debentures
of the same series, of any authorized denomination and of like tenor and
aggregate principal amount. (Section 305)
Subject to the terms of the Subordinated Indenture and the limitations
applicable to global securities, Subordinated Debentures may be presented for
exchange as provided above for registration of transfer (duly endorsed or
accompanied by a duly executed instrument of transfer) at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose. Unless otherwise indicated, no service charge will be
made for any registration of transfer or exchange of Subordinated Debentures,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. Every Subordinated
Debenture presented or surrendered for registration of transfer or exchange
shall (if so required by the Company, the Subordinated Indenture Trustee or the
Security Registrar) be duly endorsed or accompanied by an executed written
instrument of transfer in form satisfactory to the Company, the Subordinated
Indenture Trustee or the Security Registrar. (Section 305) Any transfer agent
(in addition to the Security Registrar) initially designated by the Company for
any Subordinated Debenture will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that the Company will be required
to maintain a transfer agent in each Place of Payment for the Subordinated
Debentures of each series. The Company may perform all functions of any office
or agency. (Section 602)
The Company shall not be required to execute or register the transfer
of or the exchange of any Subordinated Debenture, or any Tranche thereof, during
a period of 15 days preceding the notice to be given identifying the
Subordinated Debenture called for redemption, or any Subordinated Debentures so
selected for
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redemption, in whole or in part, except the unredeemed portion of any such
Subordinated Debenture being redeemed in part. (Section 305)
PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Subordinated Debenture on any Interest Payment Date
will be made to the person in whose name such Subordinated Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any interest on the Subordinated Debentures of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office of
the Subordinated Indenture Trustee in New York, New York will be designated as
the Company's sole Paying Agent for payment with respect to Subordinated
Debentures of each series. Any other Paying Agents initially designated by the
Company for the Subordinated Debentures of a particular series will be named in
the applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Company will be required to maintain a Paying Agent in each Place of Payment
for the Subordinated Debentures of a particular series. (Section 602)
Any moneys deposited by the Company with the Trustee or any Paying
Agent for the payment of the principal of or any premium or interest on any
Subordinated Debenture which remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be paid to
the Company, and the Holder of such Subordinated Debenture, as an unsecured
general creditor and not as a Holder, thereafter may look only to the Company
for payment thereof. (Section 603)
REDEMPTION
Any terms for the optional or mandatory redemption of Subordinated
Debentures will be set forth in the applicable Prospectus Supplement or a
supplement thereto. Except as shall otherwise be provided in the applicable
Prospectus Supplement with respect to Subordinated Debentures that are
redeemable at the option of the Holder, Subordinated Debentures will be
redeemable only upon notice by mail not less than 30 days nor more than 60 days
prior to the date fixed for redemption, and, if less than all the Subordinated
Debentures of a series, or any Tranche thereof, are to be redeemed, the
particular Subordinated Debentures to be redeemed will be selected by the
Securities Registrar by such method as shall be provided for any particular
series, or in the absence of any such provision, by such method of random
selection as the Security Registrar deems fair and appropriate. (Sections 403
and 404)
Any notice of redemption at the option of the Company may state that
such redemption will be conditional upon receipt by the Paying Agent or Agents,
on or prior to the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on such Subordinated
Debentures and that if such money has not been so received, such notice will be
of no force and effect and the Company will not be required to redeem such
Subordinated Debentures. (Section 404)
CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER
Under the terms of the Subordinated Indenture, the Company may not
consolidate with or merge into any other corporation or convey, transfer or
lease its properties and assets substantially as an entirety to any Person,
unless (i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Person organized and existing under the laws of any domestic
jurisdiction and shall expressly assume the Company's obligations on the
Subordinated Debentures and under the Subordinated Indenture, (ii) immediately
after giving effect to the transaction, no Event of Default shall have occurred
and be continuing, and (iii) the Company will have delivered to the Subordinated
Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided
in the Subordinated Indenture. (Section 1101)
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EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Subordinated Indenture with respect to Subordinated Debentures of any series:
(a) failure to pay any interest on any Subordinated Debentures of such series
within 60 days after the same becomes due and payable; provided, that an
extension of an interest payment period by the Company permitted by the terms of
the series shall not constitute a failure to pay interest for this purpose; (b)
failure to pay principal of or premium, if any, on any Subordinated Debenture of
such series within three business days after the same becomes due and payable;
(c) failure to perform or breach of any other covenant or warranty of the
Company in the Subordinated Indenture (other than a covenant or warranty of the
Company in the Subordinated Indenture solely for the benefit of one or more
series of Subordinated Debentures other than such series) for 60 days after
written notice to the Company by the Subordinated Indenture Trustee, or to the
Company and the Subordinated Indenture Trustee by the Holders of at least 33% in
principal amount of the Subordinated Debentures of such series Outstanding under
the Subordinated Indenture as provided in the Subordinated Indenture; (d)
certain events of bankruptcy, insolvency or reorganization; and (e) any other
Event of Default specified in the applicable Prospectus Supplement with respect
to Subordinated Debentures of a particular series. (Section 801)
An Event of Default with respect to the Subordinated Debentures may not
necessarily constitute an Event of Default with respect to the Subordinated
Debentures of any other series issued under the Subordinated Indenture.
If an Event of Default with respect to any series of Subordinated
Debentures occurs and is continuing, then either the Subordinated Indenture
Trustee or the Holders of not less than 33% in principal amount of the
Outstanding Subordinated Debentures of such series may declare the principal
amount (or if the Subordinated Debentures of such series are Discount
Securities, such portion of the principal amount hereof as may be specified in
the applicable Prospectus Supplement) of all of the Subordinated Debentures of
such series to be due and payable immediately; provided, however, that if an
Event of Default occurs and is continuing with respect to more than one series
of Subordinated Debentures, the Subordinated Indenture Trustee or the Holders of
not less than 33% in aggregate principal amount of the Outstanding Securities of
all such series, considered as one class, may make such declaration of
acceleration and not the Holders of the Subordinated Debentures of any one of
such series.
Subject to the provisions of the Subordinated Indenture relating to the
duties of the Subordinated Indenture Trustee in case an Event of Default shall
occur and be continuing, the Subordinated Indenture Trustee will be under no
obligation to exercise any of its rights or powers under the Subordinated
Indenture at the request or direction of any Holder, unless such Holder shall
have offered to the Subordinated Indenture Trustee reasonable security or
indemnity. (Section 903) Subject to such provisions of the indemnification of
the Subordinated Indenture Trustee, the Holders of a majority in principal
amount of the Outstanding Subordinated Debentures of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Subordinated Indenture Trustee, or exercising any trust
or power conferred on the Subordinated Indenture Trustee, with respect to the
Subordinated Debentures of that series. (Section 812)
No Holder of a Subordinated Debenture of any series will have any right
to institute any proceeding with respect to the Subordinated Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy thereunder,
unless (i) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Subordinated Debentures of such
series, (ii) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Subordinated Debentures of such series have made
written request to the Subordinated Indenture Trustee, and such Holder or
Holders have offered reasonable indemnity to the Subordinated Indenture Trustee,
to institute such proceeding as trustee and (iii) the Subordinated Indenture
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding
Subordinated Debentures of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 807)
However, such limitations do not apply to a suit instituted by a Holder of a
Subordinated Debenture for the enforcement of payment of the principal of or any
premium or interest on such Subordinated Debenture on or after the applicable
due date specified in such Subordinated Debenture. (Section 808)
The Company will be required to furnish to the Subordinated Indenture
Trustee annually, not later than October 1 in each year, a statement by an
appropriate officer as to such officer's knowledge of the Company's compliance
with all conditions and covenants under the Subordinated Indenture, such
compliance to be determined without regard to any period of grace or requirement
of notice under the Subordinated Indenture. (Section 606)
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RIGHT TO CURE
At any time after the declaration of acceleration with respect to the
Subordinated Debentures of any series has been made and before a judgment or
decree for payment of the money due has been obtained, the Event or Events of
Default giving rise to such declaration of acceleration will, without further
act, be deemed to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Subordinated Indenture
Trustee a sum sufficient to pay
(1) all overdue interest on all Subordinated Debentures of
such series;
(2) the principal of and premium, if any, on any Subordinated
Debentures of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Subordinated Debentures;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Subordinated Debentures, to the extent that
payment of such interest is lawful; and
(4) all amounts due to the Subordinated Indenture Trustee
under the Subordinated Indenture; and
(b) any other Event or Events of Default with respect to the
Subordinated Debentures of such series, other than the non-payment of the
principal of the Subordinated Debentures of such series which has become due
solely by such declaration of acceleration, have been cured or waived as
provided in the Subordinated Indenture. (Section 802)
<PAGE> 45
MODIFICATION AND WAIVER
Without the consent of any Holder of Subordinated Debentures, the
Company and the Subordinated Indenture Trustee may enter into one or more
supplemental indentures to the Subordinated Indenture for any of the following
purposes: (a) to evidence the assumption by any permitted successor to the
Company of the covenants of the Company in the Subordinated Indenture and the
Subordinated Debentures; or (b) to add one or more covenants of the Company or
other provisions for the benefit of the Holders of all or any series of
Outstanding Subordinated Debentures or to surrender any right or power conferred
upon the Company by the Subordinated Indenture; or (c) to add any additional
Events of Default with respect to all or any series of Outstanding Subordinated
Debentures; or (d) to change or eliminate any provision of the Subordinated
Indenture or to add any new provision to the Subordinated Indenture, provided
that if such change, elimination or addition will adversely affect the interests
of the Holders of Subordinated Debentures of any series in any material respect,
such change, elimination or addition will become effective with respect to such
series only when the consent of the Holders of such series so affected has been
obtained or when there is no Subordinated Debenture of such series remaining
Outstanding under the Subordinated Indenture; or (e) to provide collateral
security for the Subordinated Debentures; or (f) to establish the form or terms
of Subordinated Debentures of any series as permitted by the Subordinated
Indenture; or (g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and replacement
thereof and for giving of notice to, and the solicitation of the vote or consent
of, the Holders thereof, and for any and all other matters incidental thereto;
or (h) to evidence and provide for the acceptance of appointment of a separate
or successor Subordinated Indenture Trustee under the Subordinated Indenture
with respect to the Subordinated Debentures of one or more series and to add or
to change any of the provisions of the Subordinated Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the Subordinated Indenture by more than one trustee; or (i) to provide for the
procedures required to permit the utilization of a noncertificated system of
registration for any series of Subordinated Debentures; or (j) to change any
place where (1) the principal of and premium, if any, and interest, if any, on
any Subordinated Debentures shall be payable, (2) any Subordinated Debentures
may be surrendered for registration of transfer or exchange and (3) notices and
demands to or upon the Company in respect of Subordinated Debentures and the
Subordinated Indenture may be served; or (k) to cure any ambiguity, to correct
or supplement any defective or inconsistent provision or to make or change any
other provisions with respect to matters and questions arising under the
Subordinated Indenture, provided such changes or additions shall not adversely
affect the interests of the Holders of Subordinated Debentures of any series in
any material respect. (Section 1201)
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Subordinated Debentures of any series may waive compliance by
the Company with certain restrictive provisions of the Subordinated Indenture.
(Section 607) The Holders of not less than a majority in principal amount of the
Outstanding Subordinated Debentures of any series may waive any past default
under the Subordinated Indenture, except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Subordinated
Indenture that cannot be modified or be amended without the consent of the
Holder of each Outstanding Subordinated Debenture of such series affected.
(Section 813)
Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after
the date of the Subordinated Indenture in such a way as to require changes to
the Subordinated Indenture or the incorporation therein of additional provisions
or so as to permit changes to, or the elimination of, provisions which, at the
date of the Subordinated Indenture or at any time thereafter, were required by
the Trust Indenture Act to be contained in the Subordinated Indenture, the
Subordinated Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and the Company and the
Subordinated Indenture Trustee may, without the consent of any Holders, enter
into one or more supplemental indentures to evidence or effect such amendment.
(Section 1201)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Subordinated Debentures of all
series then Outstanding, considered as one class, is required for the purpose of
adding any provisions to, or changing in any manner, or eliminating any of the
provisions of, the Subordinated Indenture pursuant to one or more supplemental
indentures; provided, however, that if less than all of the series of
Subordinated Debentures Outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the Holders of a majority in
aggregate principal amount of Outstanding Subordinated Debentures of all series
so directly affected, considered as one class, will be required; and provided,
further, that if the Subordinated Debentures of any series have been issued in
more than one Tranche and if the proposed supplemental
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indenture directly affects the rights of the Holders of one or more, but less
than all, such Tranches, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Subordinated Debentures of all
Tranches so directly affected, considered as one class, will be required; and
provided further, that no such supplemental indenture may (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Subordinated Debenture, or reduce the principal amount thereof or the rate
of interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or reduce the amount of the principal of any Discount
Security that would be due and payable upon a declaration of acceleration of
Maturity or change the coin or currency (or other property) in which any
Subordinated Debenture or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity of any Subordinated Debenture (or, in the case of
redemption, on or after the redemption date) without, in any such case, the
consent of the Holder of such Subordinated Debenture, (b) reduce the percentage
in principal amount of the Outstanding Subordinated Debentures of any series, or
any Tranche thereof, the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with any provision of the Subordinated Indenture or
any default thereunder and its consequences, or reduce the requirements for
quorum or voting, without, in any such case, the consent of the Holder of each
Outstanding Subordinated Debenture of such series or Tranche, or (c) modify
certain of the provisions of the Subordinated Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults with
respect to the Subordinated Debentures of any series, or any Tranche thereof,
without the consent of the Holder of each Outstanding Subordinated Debenture
affected thereby. A supplemental indenture which changes or eliminates any
covenant or other provision of the Subordinated Indenture which has expressly
been included solely for the benefit of one or more particular series of
Subordinated Debentures or one or more Tranches thereof, or modifies the rights
of the Holders of Subordinated Debentures of such series or Tranches with
respect to such covenant or other provision, will be deemed not to affect the
rights under the Indenture of the Holders of the Subordinated Debentures of any
other series or Tranche. (Section 1202)
The Subordinated Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding Subordinated
Debentures have given any request, demand, authorization, direction, notice,
consent, or waiver under the Subordinated Indenture as of any date, or whether
or not a quorum is present at a meeting of Holders, (i) Subordinated Debentures
owned by the Company or any other obligor upon the Subordinated Debentures or
any Affiliate of the Company or of such other obligor (unless the Company, such
Affiliate or such obligor owns all Securities Outstanding under this
Subordinated Indenture, or all Outstanding Subordinated Debentures of each such
series and each such Tranche, as the case may be, determined without regard to
this clause (i)) shall be disregarded and deemed not to be Outstanding; (ii) the
principal amount of a Discount Security that shall be deemed to be Outstanding
for such purposes shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon a declaration of
acceleration of the Maturity thereof as provided in the Subordinated Indenture;
and (iii) the principal amount of a Subordinated Debenture denominated in one or
more foreign currencies or a composite currency that will be deemed to be
Outstanding will be the Dollar equivalent, determined as of such date in the
manner prescribed for such Subordinated Debenture, of the principal amount of
such Subordinated Debenture (or, in the case of a Subordinated Debenture
described in clause (ii) above, of the amount described in such clause).
(Section 101)
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act, 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, election, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, election,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on the record date shall be deemed to
be Holders for the purposes of determining whether Holders of the requisite
proportion of the Outstanding Subordinated Debentures have authorized or agreed
or consented to such request, demand, authorization, direction, notice, consent,
direction, waiver or other Act, and for that purpose the Outstanding
Subordinated Debentures shall be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election, waiver or other Act
of a Holder shall bind every future Holder of the same Subordinated Debenture
and the Holder of every Subordinated Debenture 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
Subordinated Debenture. (Section 104)
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DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, any
Subordinated Debenture, or any portion of the principal amount thereof, will be
deemed to have been paid for purposes of the Subordinated Indenture, and, at the
Company's election, the entire indebtedness of the Company in respect thereof
will be deemed to have been satisfied and discharged, if there has been
irrevocably deposited with the Subordinated Indenture Trustee or any Paying
Agent (other than the Company), in trust: (a) money in an amount which will be
sufficient, or (b) Eligible Obligations (as described below), which do not
contain provisions permitting the redemption or other prepaying thereof at the
option of the issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide monies which,
together with money, if any, deposited with or held by the Subordinated
Indenture Trustee or such Paying Agent, will be sufficient, or (c) a combination
of (a) and (b) which will be sufficient, to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on such
Subordinated Debentures or portions thereof. (Section 701) For this purpose,
unless otherwise indicated in the applicable Prospectus Supplement, Eligible
Obligations include direct obligations of, or obligations unconditionally
guaranteed by, the United States, entitled to the benefit of the full faith and
credit thereof, and certificates, depositary receipts or other instruments which
evidence a direct ownership interest in such obligations or in any specific
interest or principal payments due in respect thereof. (Section 101)
While the Company knows of no legal precedent on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related securities for
an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such securities would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their securities. In addition, such Holders thereafter would be required to
recognize for federal income tax purposes a share of the income, gain or loss of
the trust. The amount so required to be recognized could be different from the
amount that would be recognized in the absence of such deposit. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences to them of any such deposit.
RESIGNATION OF SUBORDINATED INDENTURE TRUSTEE
The Subordinated Indenture Trustee may resign at any time by giving
written notice thereof to the Company or may be removed at any time by Act of
the Holders of a majority in principal amount of Subordinated Debentures then
Outstanding delivered to the Subordinated Indenture Trustee and the Company. No
resignation or removal of the Subordinated Indenture Trustee and no appointment
of a successor trustee will become effective until the acceptance of appointment
by a successor trustee in accordance with the requirements of the Subordinated
Indenture. So long as no Event of Default or event which, after notice or lapse
of time, or both, would become an Event of Default has occurred and is
continuing and except with respect to a Subordinated Indenture Trustee appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Subordinated Debentures, if the Company has delivered to the Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the
Subordinated Indenture, the Subordinated Indenture Trustee will be deemed to
have resigned and the successor will be deemed to have been appointed as trustee
in accordance with the Subordinated Indenture. (Section 910)
NOTICES
Notices to Holders of Subordinated Debentures will be given by mail to
the addresses of such Holders as they may appear in the Security Register.
(Section 106)
TITLE
The Company, the Subordinated Indenture Trustee, and any agent of the
Company or the Subordinated Indenture Trustee may treat the Person in whose name
a Subordinated Debenture is registered as the absolute owner thereof (whether or
not such Subordinated Debenture may be overdue) for the purpose of making
payment and for all other purposes. (Section 308)
GOVERNING LAW
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The Subordinated Indenture and the Subordinated Debentures will be
governed by, construed in accordance with, the laws of the State of New York,
except to the extent the law of any other jurisdiction shall be mandatorily
applicable. (Section 112)
LIMITATION ON SUITS
The Subordinated Indenture limits a Holder's right to institute any
proceeding with respect to the Subordinated Indenture, the appointment of a
receiver or trustee, or for any other remedy under the Subordinated Indenture.
(Section 807)
MAINTENANCE OF PROPERTIES
The Subordinated Indenture provides that the Company shall cause (or,
with respect to property owned in common with others, make reasonable effort to
cause) all its properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and shall cause
(or, with respect to property owned in common with others, make reasonable
effort to cause) to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as, in the judgment of the Company,
may be necessary so that the business carried on in connection therewith may be
properly conducted; provided, however, that nothing shall prevent the Company
from discontinuing, or causing the discontinuance of, the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business. (Section 605)
MODIFICATION OF SENIOR INDEBTEDNESS
In general, the holders of Senior Indebtedness may, without in any
manner affecting the subordination of the payment of principal of and premium,
if any, and interest, if any, on the Subordinated Debentures in their absolute
discretion agree with the Company to change the manner, place or terms of
payment, change or extend the time of payment of, or renew or alter, any Senior
Indebtedness, or amend or supplement any instrument pursuant to which any Senior
Indebtedness is issued, or exercise or refrain from exercising any other of
their rights under the Senior Indebtedness including, without limitation, the
waiver of default thereunder, all without notice to or assent from the Holders
or the Trustee. (Section 1509)
RELATIONSHIP WITH THE SUBORDINATED INDENTURE TRUSTEE
See "DESCRIPTION OF THE COLLATERAL TRUST BONDS -- Relationship with the
Trustee" for a description of certain relationships between the Subordinated
Indenture Trustee and the Company.
GLOBAL SECURITIES
Some or all of the Securities of any series may be represented, in
whole or in part, by one or more global securities (each, a "Global Security")
which will have an aggregate principal amount equal to that of the Securities
represented thereby. Each Global Security will be registered in the name of a
depositary (the "Depositary") or a nominee thereof identified in the applicable
Prospectus Supplement, will be deposited with such Depositary or nominee or a
custodian therefor and will bear a legend regarding the restrictions on
exchanges and registration of transfer thereof referred to below and any such
other matters as may be provided for pursuant to the Mortgage or Subordinated
Indenture, as the case may be.
As long as the Depositary, or its nominee, is the registered holder of
a Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Securities
represented thereby for all purposes under the Mortgage or the Subordinated
Indenture, as the case may be. Except in limited circumstances, owners of
beneficial interests in a Global Security will not be entitled to have such
Global Security or any Securities represented thereby registered in their names,
will not receive or be entitled to receive physical delivery of certificated
Securities in exchange therefor and will not be considered to be the owners or
holders of such Global Security or any Securities represented thereby for any
purpose under the Securities or, as
45
<PAGE> 49
the case may be, the Mortgage or the Subordinated Indenture. All payments of
principal of and any premium and interest on a Global Security will be made to
the Depositary or its nominee, as the case may be, as the Holder thereof. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited
to institutions that have accounts with the Depositary or its nominee
('participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security to
the accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the Mortgage Trustee or the
Subordinated Indenture Trustee, or any agents of each of the foregoing, will
have any responsibility or liability for any aspect of the Depositary's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising, or
reviewing any records relating to such beneficial interests.
EXPERTS
The financial statements and schedule included in the latest Annual
Report on Form 10-K of the Company have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto and are incorporated by reference herein in reliance upon the authority
of said firm as experts in auditing and accounting in giving said report.
LEGAL MATTERS
The legality of the Securities will be passed upon for the Company by
Stephen W. Southwick, Vice President, General Counsel & Secretary of the
Company, 200 First Street S.E., Cedar Rapids, Iowa 52401, and by Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York 10004, and
for any underwriters, dealers, agents or purchasers by Dorsey & Whitney LLP, 220
South Sixth Street, Minneapolis, Minnesota 50402. However, all matters
pertaining to the Lien of the Mortgage, organization of the Company, titles to
property and franchises will be passed upon by Stephen W. Southwick, Vice
President, General Counsel & Secretary.
46
<PAGE> 50
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and
distribution of the Securities, other than underwriting discounts and
commissions are as follows:
<TABLE>
<S> <C>
Registration Fee--Securities and Exchange Commission (actual).. $ 15,152
Printing and Engraving Cost ................................... $ 10,000
Trustee's Charges including Authentication .................... $ 7,000
Attorney's Fees and Expenses .................................. $ 75,000
Accountant's Fees and Expenses ................................ $ 35,000
Blue Sky Expenses ............................................. $ 1,000
Rating Agency Fees ............................................ $ 15,000
Recording and Listing Fees .................................... $ 30,000
Miscellaneous ................................................. $ 5,000
--------
Total ....................................... $193,152
========
</TABLE>
ITEM 15. INDEMNIFICATION.
Section 490.851 of the Iowa Business Corporations Act ("IBCA") grants
each corporation organized thereunder, such as the Registrant, the power to
indemnify its directors and officers against liabilities for certain of their
acts. Section 6.1 of the Registrant's Bylaws, as amended, provides for
indemnification of directors and officers of the Registrant to the full extent
permitted by Section 490.851 of the IBCA. Section 6.1 further requires the
Registrant to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted and incurred against such person in
any such capacity or arising out of such person's status as such, whether or not
the Registrant would have the power to indemnify such person against such
liability under the provisions of Section 6.1. Section 2 of Article Ninth of the
Registrant's Amended Articles of Incorporation, however, requires that the
Registrant may, but is not required to, maintain such insurance.
Section 490.832 of the IBCA grants corporations organized thereunder,
such as the Registrant, the authority to adopt a provision in their respective
articles of incorporation eliminating or limiting, with certain exceptions, the
personal liability of a director to the corporation or to its shareholders for
monetary damages for certain breaches of fiduciary duty as a director. Section 1
of Article Ninth of the Amended Articles of Incorporation of the Registrant
eliminates the personal liability of each director except for liability (i) for
any breach of the director's duty of loyalty to the Registrant or its
shareholders, (ii) for acts or omissions not in good faith or which involve any
intentional misconduct or knowing violation of the law, (iii) any transaction
from which the director derived an improper personal benefit, or (iv) under
Section 490.833 of the IBCA relating to liability for unlawful distribution.
The foregoing statements are subject to the detailed provisions of
Sections 490.832, 490.833 and 490.851 of the IBCA, Article Ninth of the Amended
Articles of Incorporation of the Registrant and Section 6.1 of the Bylaws, as
amended of the Registrant, as applicable and should be read in conjunction
therewith for a more full understanding of their affect on the Registrant.
The Registrant's directors' and officers' insurance policies are
designed to reimburse the Registrant for any payments made by it pursuant to the
foregoing indemnification provisions.
II - 1
<PAGE> 51
The proposed form of underwriting agreement for each of the Securities
contains provisions under which the underwriters agree to indemnify the
directors and officers of the Registrant against certain liabilities under the
Securities Act of 1933, as amended (the "Act").
ITEM 16. EXHIBITS.
See Exhibit Index on Page II - 6.
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 Act;
(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 a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(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 (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, or Form S-8, and the information required
to be included in a Post-Effective Amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining liability under the Act, 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 which remain unsold at the termination of the offering.
(4) That for purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
II - 2
<PAGE> 52
Insofar as indemnification for liabilities arising under the Act, as
amended, 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II - 3
<PAGE> 53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cedar Rapids, State of
Iowa, on the 17th day of July, 1997.
IES UTILITIES INC.
By: /s/ Larry D. Root
-----------------------------------
Larry D. Root
President & Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
such Amendment No. 1 to the Registration Statement has been signed below on the
17th day of July, 1997, by the following persons in the capacities indicated:
SIGNATURE TITLE
--------- -----
/s/ Lee Liu* Chairman of the Board &
- ---------------------------------------- Chief Executive Officer and Director
Lee Liu (Principal Executive Officer)
/s/ Thomas M. Walker* Executive Vice President &
- ---------------------------------------- Chief Financial Officer
Thomas M. Walker (Principal Financial Officer)
/s/ John E. Ebright* Controller & Chief Accounting Officer
- ---------------------------------------- (Principal Accounting Officer)
John E. Ebright
/s/ C.R.S. Anderson* Director
- ----------------------------------------
C.R.S. Anderson
/s/ J. Wayne Bevis* Director
- ----------------------------------------
J. Wayne Bevis
II - 4
<PAGE> 54
SIGNATURE TITLE
--------- -----
/s/ Jack R. Newman* Director
- ----------------------------------------
Jack R. Newman
/s/ Robert D. Ray* Director
- ----------------------------------------
Robert D. Ray
/s/ David Q. Reed* Director
- ----------------------------------------
David Q. Reed
/s/ Henry Royer* Director
- ----------------------------------------
Henry Royer
/s/ Robert W. Schlutz* Director
- ----------------------------------------
Robert W. Schlutz
/s/ Anthony R. Weiler* Director
- ----------------------------------------
Anthony R. Weiler
* By: /s/ Larry D. Root
- ----------------------------------------
(Attorney-in-fact)
II - 5
<PAGE> 55
EXHIBIT INDEX
EXHIBIT NUMBER LIST OF EXHIBITS
- -------------- ----------------
1(a) Proposed form of Underwriting Agreement relating to Collateral
Trust Bonds ("Bonds") (Previously filed).
1(b) Proposed form of Underwriting Agreement relating to
Subordinated Debentures to be issued under the Subordinated
Indenture (Previously filed).
1(c) Proposed form of Underwriting Agreement relating to Senior
Debentures to be issued under the Senior Unsecured Indenture.
*4(a) Indenture of Mortgage and Deed of Trust, dated as of September
1, 1993, between the Company (formerly Iowa Electric Light and
Power Company ("IE")) and The First National Bank of Chicago,
as Trustee ("Mortgage") (Filed as Exhibit 4(c) to IE's Form
10-Q for the quarter ended September 30, 1993).
*4(b) Supplemental Indentures to the Mortgage:
<TABLE>
<CAPTION>
Number Dated as of File Reference Exhibit
------ ----------- -------------- -------
<S> <C> <C> <C>
First October 1, 1993 Form 10-Q, 11/12/93 4(d)
Second November 1, 1993 Form 10-Q, 11/12/93 4(e)
Third March 1, 1995 Form 10-Q, 5/12/95 4(b)
Fourth September 1, 1996 Form 8-K, 9/19/96 4(c)(i)
Fifth April 1, 1997 Form 10-Q, 5/14/97 4(a)
</TABLE>
4(c) Proposed form of __________ Supplemental Indenture
establishing the series of Bonds (including form of Bonds)
(Previously filed).
*4(d) Indenture of Mortgage and Deed of Trust, dated as of August 1,
1940, between the Company (formerly IE) and The First National
Bank of Chicago, Trustee (1940 Indenture) (Filed as Exhibit
2(a) to IE's Registration Statement, File No. 2-25347).
*4(e) Supplemental Indentures to the 1940 Indenture:
<TABLE>
<CAPTION>
Number Dated as of IE File Reference Exhibit
------ ----------- ----------------- -------
<S> <C> <C> <C>
First March 1, 1941 2-25347 2(a)
Second July 15, 1942 2-25347 2(a)
Third August 2, 1943 2-25347 2(a)
Fourth August 10, 1944 2-25347 2(a)
Fifth November 10, 1944 2-25347 2(a)
Sixth August 8, 1945 2-25347 2(a)
Seventh July 1, 1946 2-25347 2(a)
Eighth July 1, 1947 2-25347 2(a)
Ninth December 15, 1948 2-25347 2(a)
Tenth November 1, 1949 2-25347 2(a)
Eleventh November 10, 1950 2-25347 2(a)
Twelfth October 1, 1951 2-25347 2(a)
Thirteenth March 1, 1952 2-25347 2(a)
Fourteenth November 5, 1952 2-25347 2(a)
Fifteenth February 1, 1953 2-25347 2(a)
</TABLE>
II - 6
<PAGE> 56
<TABLE>
<CAPTION>
Number Dated as of IE File Reference Exhibit
------ ----------- ----------------- -------
<S> <C> <C> <C>
Sixteenth May 1, 1953 2-25347 2(a)
Seventeenth November 3, 1953 2-25347 2(a)
Eighteenth November 8, 1954 2-25347 2(a)
Nineteenth January 1, 1955 2-25347 2(a)
Twentieth November 1, 1955 2-25347 2(a)
Twenty-first November 9, 1956 2-25347 2(a)
Twenty-second November 6, 1957 2-25347 2(a)
Twenty-third November 4, 1959 2-25347 2(a)
Twenty-fourth November 3, 1959 2-25347 2(a)
Twenty-fifth November 1, 1960 2-25347 2(a)
Twenty-sixth January 1, 1961 2-25347 2(a)
Twenty-seventh November 7, 1961 2-25347 2(a)
Twenty-eighth November 6, 1962 2-25347 2(a)
Twenty-ninth November 5, 1963 2-25347 2(a)
Thirtieth November 4, 1964 2-25347 2(a)
Thirty-first November 2, 1965 2-25347 2(a)
Thirty-second September 1, 1966 Form 10-K, 1966 4.10
Thirty-third November 30, 1966 Form 10-K, 1966 4.10
Thirty-fourth November 7, 1967 Form 10-K, 1967 4.10
Thirty-fifth November 5, 1968 Form 10-K, 1968 4.10
Thirty-sixth November 1, 1969 Form 10-K, 1969 4.10
Thirty-seventh December 1, 1970 Form 8-K, 12/70 1
Thirty-eighth November 2, 1971 2-43131 2(g)
Thirty-ninth May 1, 1972 Form 8-K, 5/72 1
Fortieth November 7, 1972 2-56078 2(i)
Forty-first November 7, 1973 2-56078 2(j)
Forty-second September 10, 1974 2-56078 2(k)
Forty-third November 5, 1975 2-56078 2(l)
Forty-fourth July 1, 1976 Form 8-K, 7/76 1
Forty-fifth November 1, 1976 Form 8-K, 12/76 1
Forty-sixth December 1, 1977 2-60040 2(o)
Forty-seventh November 1, 1978 Form 10-Q, 6/30/79 1
Forty-eighth December 1, 1979 Form S-16, 2-65996 2(q)
Forty-ninth November 1, 1981 Form 10-Q, 3/31/82 2
Fiftieth December 1, 1980 Form 10-K, 1981 4(s)
Fifty-first December 1, 1982 Form 10-K, 1982 4(t)
Fifty-second December 1, 1983 Form 10-K, 1983 4(u)
Fifty-third December 1, 1984 Form 10-K, 1984 4(v)
Fifty-fourth March 1, 1985 Form 10-K, 1984 4(w)
Fifty-fifth March 1, 1988 Form 10-Q, 5/12/88 4(b)
Fifty-sixth October 1, 1988 Form 10-Q, 11/10/88 4(c)
Fifty-seventh May 1, 1991 Form 10-Q, 8/13/91 4(d)
Fifty-eighth March 1, 1992 Form 10-K, 1991 4(c)
Fifty-ninth October 1, 1993 Form 10-Q, 11/12/93 4(a)
Sixtieth November 1, 1993 Form 10-Q, 11/12/93 4(b)
Sixty-first March 1, 1995 Form 10-Q, 5/12/95 4(a)
Sixty-second September 1, 1996 Form 8-K, 9/19/96 4(c)(i)
Sixty-third April 1, 1997 Form 10-Q, 5/14/97 4(b)
</TABLE>
4(f) Proposed form of __________ Supplemental Indenture providing
for the issuance of Class "A" Bonds under the 1940 Indenture
(including form of Class "A" Bonds) (Previously filed).
II - 7
<PAGE> 57
*4(g) Indenture or Deed of Trust dated as of February 1, 1923,
between the Company (successor to Iowa Southern Utilities
Company (IS) as a result of merger of IS and IE) and The
Northern Trust Company (The First National Bank of Chicago,
successor) and Harold H. Rockwell (Richard D. Manella,
successor), as Trustees (ISU 1923 Indenture) (Filed as Exhibit
B-1 to File No. 2-1719).
*4(h) Supplemental Indentures to the ISU 1923 Indenture:
<TABLE>
<CAPTION>
Dated as of IS File Reference Exhibit
----------- ----------------- -------
<S> <C> <C>
May 1, 1940 2-4921 B-1-k
May 2, 1940 2-4921 B-1-l
October 1, 1945 2-8053 7(m)
October 2, 1945 2-8053 7(n)
January 1, 1948 2-8053 7(o)
September 1, 1950 33-3995 4(e)
February 1, 1953 2-10543 4(b)
October 2, 1953 2-10543 4(q)
August 1, 1957 2-13496 2(b)
September 1, 1962 2-20667 2(b)
June 1, 1967 2-26478 2(b)
February 1, 1973 2-46530 2(b)
February 1, 1975 2-53860 2(aa)
July 1, 1975 2-54285 2(bb)
September 2, 1975 2-57510 2(bb)
March 10, 1976 2-57510 2(cc)
February 1, 1977 2-60276 2(ee)
January 1, 1978 0-849 2
March 1, 1979 0-849 2
March 1, 1980 0-849 2
May 31, 1986 33-3995 4(g)
July 1, 1991 0-849 4(h)
September 1, 1992 0-849 4(m)
December 1, 1994 Form 10-K,1994 4(f)
</TABLE>
*4(i) Indenture (For Unsecured Subordinated Debt Securities), dated
as of December 1, 1995, between the Company and The First
National Bank of Chicago, Trustee (Subordinated Indenture)
(Filed as Exhibit 4(i) to the Company's Registration
Statement, File No. 33-62259).
4(j) Indenture (For Senior Unsecured Debt Securities), dated as of
_________, 1997, between the Company and The First National
Bank of Chicago, Trustee (Senior Unsecured Indenture).
5 Opinion of Stephen W. Southwick, Vice President, General
Counsel & Secretary as to the legality of the Securities
(including consent of counsel) (Previously filed).
*12 Ratio of Earnings to Fixed Charges (Filed as Exhibit 12 to the
Company's Form 10-Q for the quarter ended March 31, 1997).
23(a) Consent of Arthur Andersen LLP (Previously filed).
23(b) Consent of Stephen W. Southwick, Vice President, General
Counsel & Secretary (contained in Exhibit 5) (Previously
filed).
II - 8
<PAGE> 58
24 Powers of Attorney (included on p. II - 4 of the Registration
Statement) (Previously filed).
25(a) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The First National Bank of
Chicago, as Trustee under the Mortgage (Previously filed).
25(b) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The First National Bank of
Chicago, as Trustee under the Subordinated Indenture
(Previously filed).
25(c) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The First National Bank of
Chicago, as Trustee under the Senior Unsecured Indenture.
26 Form of Letter to Prospective Purchasers regarding the
Securities (Previously filed).
- ----------
* The exhibits listed above and marked with an asterisk were filed as exhibits
to registration statements or reports previously filed with the Commission under
the exhibit number and file reference number shown after each such exhibit, and
they are hereby incorporated herein by reference.
II - 9
<PAGE> 1
EXHIBIT 1(c)
UNDERWRITING AGREEMENT
For the Purchase of Senior Debentures
of IES Utilities Inc.
IES UTILITIES INC.
c/o Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
SECTION 1. Purchase and Sale. On the basis of the
representations and warranties, and subject to the terms and conditions, set
forth in this agreement ("Underwriting Agreement"), each Underwriter (defined
below) shall purchase from IES Utilities Inc. ("Company"), severally and not
jointly, and the Company shall sell to each of the Underwriters (defined below),
the principal amount of the Company's senior unsecured debentures ("Senior
Debentures") set forth opposite the name of such Underwriter in Schedule II
hereto at the price specified in Schedule I hereto, plus accrued interest, if
any, at the rate specified in Schedule I hereto. The aggregate principal amount
of such Senior Debentures being sold hereunder is hereinafter referred to as the
"Debentures."
SECTION 2. Underwriters and Representative. The term
"Underwriters," as used herein, shall be deemed to mean the several persons,
firms, or corporations named in Schedule II hereto (including any substituted
Underwriters under the provisions of Section 6), and the term "Representative,"
as used herein, shall be deemed to mean the representative or representatives of
such Underwriters by whom or on whose behalf this Underwriting Agreement is
signed. If there shall be one person, firm, or corporation named in said
Schedule II, the term "Underwriters" and the term "Representative," as used
herein, shall mean that person, firm, or corporation. All obligations of the
Underwriters are several and not joint. The use of the term "Underwriter" herein
shall not be deemed to establish or admit that a purchaser of the Debentures is
an "Underwriter" of the Debentures as such term is defined in and used under the
Securities Act of 1933, as amended ("Securities Act").
SECTION 3. Description of the Debentures. The Debentures shall
be in the aggregate principal amount and shall mature on the date specified in
Schedule I hereto, and shall be issued under and secured by the Indenture (For
Senior Unsecured Debt Securities) dated as of _______, 1997 ("Indenture"), of
the Company to The First National Bank of Chicago as Trustee ("Trustee"). The
Debentures shall bear interest at the rate per annum specified in Schedule I
hereto. The Debentures and the Indenture are more fully described in the
Prospectus hereinafter referred to.
SECTION 4. Representations and Warranties of the Company. The
Company represents and warrants that:
(a) It has filed with the Securities and Exchange
Commission ("Commission") two registration statements (File
Nos. 33-62259 and 333-29391) (collectively, the "Registration
Statement") for the registration of up to an aggregate of
$135,000,000 principal amount of the Company's debt securities
under the Securities Act. Registration statements (File Nos.
33-62259 and 333-29391) have become effective. No stop order
suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been
initiated or threatened by the Commission. The prospectus
(including the supplement thereto) forming a part of the
Registration Statement, at that time pursuant to Item 12 of
Form S-3, is hereinafter referred to as the "Basic
Prospectus." In the event that the Basic Prospectus shall have
been amended, revised, or supplemented (but excluding any
amendments, revisions, or supplements to the Basic
<PAGE> 2
Prospectus relating solely to the offering of debt securities
other than the Debentures) prior to the time of effectiveness
of this Underwriting Agreement, and with respect to any
documents filed by the Company pursuant to Section 13, 14, or
15(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), after the time the Registration Statement
initially became effective and up to the time of effectiveness
of this Underwriting Agreement (but excluding documents
incorporated therein by reference relating solely to the
offering of debt securities other than the Debentures), which
documents are deemed to be incorporated by reference in the
Basic Prospectus, the term "Basic Prospectus" as used herein
shall also mean such prospectus as so amended, revised, or
supplemented. The Registration Statement as it initially
became effective and as it may have been amended by any
amendment thereto incorporated in the Basic Prospectus
(including for these purposes as an amendment any document
incorporated by reference in the Basic Prospectus) and the
Basic Prospectus as it shall be supplemented to reflect the
terms of offering and sale of the Debentures by a prospectus
supplement ("Prospectus Supplement") to be filed with the
Commission pursuant to Rule 424 under the Securities Act
("Rule 424"), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively;
(b) After the time of effectiveness of this
Underwriting Agreement, the Company will not file (i) any
amendment to the Registration Statement (except any amendment
relating solely to the offering of debt securities other than
the Debentures) or supplement to the Prospectus or (ii) prior
to the time that the Prospectus is filed with the Commission
pursuant to Rule 424, any document which is to be incorporated
by reference in, or any supplement (including the Prospectus
Supplement) to, the Basic Prospectus, in either case without
prior notice to each of the Representative and Dorsey &
Whitney LLP ("Counsel for the Underwriters"), or any such
amendment, supplement, or document to which said Counsel shall
reasonably object on legal grounds in writing. For purposes of
this Underwriting Agreement, any document filed with the
Commission after the effectiveness of this Underwriting
Agreement and incorporated by reference in the Prospectus
(except documents incorporated by reference relating solely to
the offering of debt securities other than the Debentures)
pursuant to Item 12 of Form S-3 shall be deemed a supplement
to the Prospectus;
(c) The Registration Statement, at the time of its
effectiveness, fully complied, the Indenture, at the time of
its execution, will fully comply, and the Prospectus, when
filed with the Commission pursuant to Rule 424 and at the
Closing Date (hereinafter defined), as it may then be
supplemented or amended, will fully comply, in all material
respects with the applicable provisions of the Securities Act,
the Trust Indenture Act of 1939, as amended ("Trust Indenture
Act"), and the rules and regulations of the Commission
thereunder or pursuant to said rules and regulations will be
deemed to comply therewith; the documents incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3,
on the date first filed with the Commission pursuant to the
Exchange Act, fully complied and on the date the Prospectus is
filed with the Commission pursuant to Rule 424 and at the
Closing Date (hereinafter defined) will comply in all material
respects with the applicable provisions of the Exchange Act
and the rules and regulations of the Commission thereunder or
pursuant to said rules and regulations were or will be deemed
to comply therewith; on the date of effectiveness of the
Registration Statement and any post-effective amendment
thereto (but excluding in each case any post-effective
amendment relating solely to the offering of debt securities
other than the Debentures) or, if later than such dates, on
the date that the Company's most recent annual report on Form
10-K was filed with the Commission under the Exchange Act, the
Registration Statement, as amended by any such post-effective
amendment, did not or will not, as the case may be, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus, at
the date it is filed with the Commission pursuant to Rule 424
and at the Closing Date (hereinafter defined), as it may be
amended or supplemented, will not include an untrue statement
of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and
on said dates and at such times, the documents then
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<PAGE> 3
incorporated by reference in the Prospectus pursuant to Item
12 of Form S-3, when read together with the Prospectus, or the
Prospectus as it may then be amended or supplemented, will not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the foregoing representations and
warranties in this subsection (c) shall not apply to
statements or omissions made in reliance upon and in
conformity with written information furnished to the Company
by or through the Representative on behalf of any Underwriter
for use in connection with the preparation of the Registration
Statement or the Prospectus, as they may be amended or
supplemented, or to any statements in or omissions from the
statement of eligibility, as it may be amended, under the
Trust Indenture Act of the Trustee under the Indenture;
(d) The Federal Energy Regulatory Commission has
authorized the issuance and sale of the Debentures; such
authorization is in full force and effect; the issuance and
sale of the Debentures pursuant to this Underwriting Agreement
will not violate the terms of such authorization; and no other
authorization, approval or consent of any other governmental
body or regulatory authority is legally required for the
issuance and sale of the Debentures pursuant to this
Underwriting Agreement, except such as have been obtained
under the Securities Act and the Trust Indenture Act and such
as may be required under the state securities or "blue sky"
laws in connection with the purchase and distribution of the
Debentures by the Underwriters;
(e) The Company is a corporation duly incorporated,
and validly existing, and in good standing under the laws of
the State of Iowa and has full power and authority (corporate
and other) under such laws to own its properties and to
conduct its business as described in the Registration
Statement and the Prospectus; and the Company does not own or
lease substantial properties or conduct its business in any
state other than the State of Iowa;
(f) The Debentures have been duly authorized, and,
when issued and delivered pursuant to this Agreement, will
have been duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by and secured
by the Indenture; the Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, and
constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, except in each case
as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity
or at law) and by an implied covenant of good faith and fair
dealing; and the Debentures and the Indenture will conform in
all material respects to the descriptions thereof in the
Prospectus; and
(g) The consummation by the Company of the
transactions herein contemplated and the fulfillment of the
terms hereof will not result in a breach of any of the terms
or provisions of, or constitute a default under, the Company's
Articles of Incorporation or Bylaws, as amended, or of any
indenture or other agreement or instrument to which the
Company is now a party.
SECTION 5. Offering. Forthwith upon the execution of this
Underwriting Agreement, the Representative, acting on behalf of the
Underwriters, shall advise the Company whether a public offering of the
Debentures is to be made, and, if so, shall furnish to the Company (which
information shall be confirmed in writing as soon as practicable thereafter) (a)
the information with respect to such offering of the Debentures and related
matters that is required to complete the Prospectus Supplement or any
post-effective amendment to the Registration Statement which may be required and
a copy of any "agreement among underwriters"; (b) if a post-effective amendment
to the Registration Statement is required, a consent, if necessary, to the
filing of the post-effective amendment or an acceptable power-of-attorney
authorizing an available individual to sign the consent on its behalf; and (c)
such further information, if any, as may be required to be furnished by the
Company under the Federal Power Act. Such information and the power-of-attorney
may be provided by telecopier (in the case of the power-
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<PAGE> 4
of-attorney, followed promptly by an executed copy). Nothing in this
Underwriting Agreement shall be construed to require that the Underwriters make
any such public offering on a "fixed price" basis. The Representative agrees to
notify the Company in writing of any change in the plan of distribution of the
Debentures that would require a supplement to the Prospectus or an amendment to
the Registration Statement.
SECTION 6. Time and Place of Closing. Delivery of the
Debentures and payment therefor by check or checks, payable to the Company or
its order, in New York, New York, or by wire transfer, in immediately available
funds, shall be made at the offices of Winthrop, Stimson, Putnam & Roberts, One
Battery Park Plaza, New York, New York, at 10:00 A.M., New York time, on _____,
or at such other place, time, and/or date as the Representative and the Company
may agree upon in writing or as may be established in accordance with the
following paragraph. The hour and date of such delivery and payment are herein
called the "Closing Date."
The Debentures shall be delivered to the Representative for
the respective accounts of the Underwriters in registered form in such
authorized denominations and registered in such names as the Representative may
reasonably request in writing at least two business days prior to the Closing
Date, or, to the extent not so requested, in the names of the respective
Underwriters in such denominations as the Company shall determine.
For the purpose of expediting the checking of the Debentures
by the Representative, the Company agrees to make the Debentures available to
the Representative for checking not later than 2:30 P.M., New York time, on the
last business day preceding the Closing Date, at the New York office of The
First National Bank of Chicago, or at such other place, time, and/or date as may
be agreed upon between the Company and the Representative.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the principal amount of Debentures that it has agreed to purchase and pay
for hereunder, the Company shall immediately give notice to the Representative
of the default of such Underwriter, and the other Underwriters shall have the
right within twenty-four (24) hours after the receipt of such notice by the
Representative to determine to purchase, or to procure one or more others, who
are members of the National Association of Securities Dealers, Inc. ("NASD")
(or, if not members of the NASD, who are foreign banks, dealers, or institutions
not registered under the Exchange Act and who agree in making sales to comply
with the NASD's Rules of Fair Practice), and satisfactory to the Company, to
purchase, upon the terms herein set forth, the principal amount of Debentures
that the defaulting Underwriter had agreed to purchase. If any non-defaulting
Underwriter or Underwriters shall determine to exercise such right, the
Representative shall give written notice to the Company of such determination
within twenty-four (24) hours after it shall have received notice of any such
default, and thereupon the Closing Date shall be postponed for such period, not
exceeding three business days, as the Company shall determine. If in the event
of such a default the Representative shall fail to give such notice, or shall
within such twenty-four (24) hour period give written notice to the Company that
no other Underwriter or Underwriters, or others, will exercise such right, then
this Underwriting Agreement may be terminated by the Company, upon like notice
given to the Representative, within a further period of twenty-four (24) hours.
If in such case the Company shall not elect to terminate this Underwriting
Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to
purchase and pay for the respective principal amounts of
Debentures that they had severally agreed to purchase
hereunder, as hereinabove provided, and, in addition, the
principal amount of Debentures that the defaulting Underwriter
shall have so failed to purchase up to a principal amount
thereof equal to one-ninth (1/9th) of the respective principal
amounts of Debentures that such non-defaulting Underwriters
have otherwise agreed to purchase hereunder, and/or
(b) to procure one or more others, who are members of
the NASD (or, if not members of the NASD, who are foreign
banks, dealers, or institutions not registered under the
Exchange Act and who agree in making sales to comply with the
NASD's Rules of Fair Practice), to purchase, upon the terms
herein set forth, the principal amount of Debentures that such
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<PAGE> 5
defaulting Underwriter had agreed to purchase, or that portion
thereof that the remaining Underwriters shall not be obligated
to purchase pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under clause (a) and/or (b)
above, the Company shall give written notice thereof to the Representative
within such further period of twenty-four (24) hours, and, thereupon, the
Closing Date shall be postponed for such period, not exceeding three business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Underwriting
Agreement.
Any action taken by the Company under this Section 6 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Underwriting Agreement. Termination by the Company
under this Section 6 shall be without any liability on the part of the Company
or any non-defaulting Underwriter, except as otherwise provided in subsection
(g) of Section 7.
In the computation of any period of twenty-four (24) hours
referred to in this Section 6, there shall be excluded a period of twenty-four
(24) hours in respect of each Saturday, Sunday, or legal holiday which would
otherwise be included in such period of time.
SECTION 7. Covenants of the Company. The Company agrees with
each of the Underwriters:
(a) To deliver to the Representative a signed copy of
the Registration Statement as originally filed and of all
amendments thereto relating to the Debentures or a conformed
copy thereof certified by an officer of the Company to be in
the form filed.
(b) To deliver to the Underwriters, through the
Representative, prior to 10:00 A.M. New York time on the
business day after the date on which this Underwriting
Agreement becomes effective as many copies of the Prospectus
as the Representative may reasonably request.
(c) To cause the Prospectus to be filed with the
Commission pursuant to and in compliance with Rule 424, and to
advise the Representative promptly of the issuance of any stop
order under the Securities Act with respect to the
Registration Statement or the institution of any proceedings
therefor of which the Company shall have received notice. The
Company will use its best efforts to prevent the issuance of
any such stop order and to secure the prompt removal thereof
if issued.
(d) During such period of time (not exceeding nine
months) after the Prospectus has been filed with the
Commission pursuant to Rule 424 as the Underwriters are
required by law to deliver a prospectus, if any event relating
to or affecting the Company or of which the Company shall be
advised in writing by the Representative shall occur which in
the Company's opinion should be set forth in a supplement or
amendment to the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser of the Debentures, not misleading,
to notify the Representative of such event and to amend or
supplement the Prospectus by either (i) preparing and filing
with the Commission and furnishing to the Representative at
the Company's expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the
Prospectus or (ii) making an appropriate filing pursuant to
Section 13, 14, or 15(d) of the Exchange Act, which will
supplement or amend the Prospectus so that, as supplemented or
amended, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in the light of the circumstances when the Prospectus is
delivered to a purchaser of the Debentures, not misleading;
provided that should such event relate solely to the
activities of any of the Underwriters, then the Underwriters
shall assume the expense of preparing any such amendment or
supplement. In case any Underwriter is required to deliver a
prospectus after the expiration of nine months from the date
the Prospectus is filed with the Commission pursuant to Rule
424, the Company, upon the request of the
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<PAGE> 6
Representative, will furnish to the Representative, at the
expense of such Underwriter, a reasonable quantity of a
supplemented or amended prospectus or supplements or
amendments to the Prospectus complying with Section 10(a) of
the Securities Act.
(e) During such period of time after the date the
Prospectus is filed with the Commission pursuant to Rule 424
as a prospectus relating to the Debentures is required to be
delivered under the Securities Act, to file promptly all
documents required to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act.
(f) To make generally available to the Company's
security holders as soon as practicable an earning statement
(which need not be audited) in reasonable detail covering a
period of at least twelve months beginning after the
"effective date of the registration statement" within the
meaning of Rule 158 under the Securities Act, which earning
statement shall be in such form, and be made generally
available to security holders in such a manner, as to comply
with the requirements of Section 11(a) of the Securities Act
and Rule 158 promulgated under the Securities Act.
(g) Except as herein otherwise provided, to pay all
expenses and taxes (except transfer taxes) in connection with
(i) the preparation and filing of the Registration Statement
and any amendments thereto, (ii) the issuance, printing, and
delivery of the Debentures, (iii) any fees charged by
securities rating services for rating the Debentures and (iv)
the typing, printing, and delivery to the Underwriters,
through the Representative, of reasonable quantities of copies
of the Registration Statement and the Prospectus, and any
amendment or supplement thereto, except as otherwise provided
in paragraph (d) of this Section. The Company shall not,
however, be required to pay any amount for any expenses of the
Representative or any of the Underwriters, except that, if
this Underwriting Agreement shall be terminated in accordance
with the provisions of Section 8, 9, or 11, the Company will
reimburse the Representative for (i) the reasonable fees and
disbursements of counsel for the Underwriters, whose fees and
disbursements the Underwriters agree to pay in any other
event, and (ii) their reasonable out-of-pocket expenses, in an
amount not exceeding a total of ten thousand dollars
($10,000), incurred in contemplation of the performance of
this Underwriting Agreement. The Company shall not in any
event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
(h) Not to sell any additional Senior Debentures
until the earlier to occur of (i) the Closing Date or (ii) in
the case of an initial public offering at a fixed price by the
Underwriters, the date of the termination of the fixed price
offering restrictions applicable to the Underwriters. The
Representative agrees to notify the Company of such
termination if it occurs prior to the Closing Date.
SECTION 8. Conditions of Underwriters' Obligations. The
obligation of the Underwriters to purchase and pay for the Debentures shall be
subject to the accuracy of the representations and warranties made herein on the
part of the Company and to the following conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the
Closing Date; and at the Closing Date the Representative shall
have received a certificate, dated the Closing Date and signed
by an officer of the Company, to the effect that no such stop
order has been or is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
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<PAGE> 7
(c) The authorization by the Federal Energy
Regulatory Commission of the issuance and sale of the
Debentures shall be in full force and effect;
(d) At the Closing Date, the Representative shall
have received from ___________, counsel for IES Industries
Inc., Winthrop, Stimson, Putnam & Roberts, counsel to the
Company, and Dorsey & Whitney LLP, counsel for the
Underwriters, opinions in substantially the form and substance
set forth in Exhibits A, B, and C hereto, respectively, (i)
with such changes therein as may be agreed upon by the Company
and the Representative, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the
Debentures shall be supplemented after the Prospectus shall
have been filed with the Commission pursuant to Rule 424, with
changes therein to reflect such supplementation.
(e) On the Closing Date, the Representative shall
have received from Arthur Andersen LLP a letter dated the
Closing Date, in substantially the form and substance set
forth in Exhibit D hereto.
(f) At the Closing Date, the Representative shall
have received a certificate of the Company dated the Closing
Date and signed by a Vice President of the Company, to the
effect that (i) the Federal Energy Regulatory Commission has
authorized the issuance and sale of the Debentures and such
authorization is in full force and effect, to the best
knowledge of the signer; (ii) since the most recent date as of
which information is given in the Prospectus, as it may have
been amended or supplemented, there has not been any material
adverse change in the business, property, or financial
condition of the Company and there has not been any material
transaction entered into by the Company, other than
transactions in the ordinary course of business, in each case
other than as referred to in, or contemplated by, the
Prospectus, as it may have been amended or supplemented; and
(iii) to the best knowledge of the signer, the representations
and warranties of the Company in this Underwriting Agreement
are true and correct in all material respects at and as of the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(g) All legal proceedings to be taken in connection
with the issuance and sale of the Debentures shall have been
satisfactory in form and substance to Counsel for the
Underwriters.
If any of the conditions specified in this Section 8 shall not
have been fulfilled, this Underwriting Agreement may be terminated by the
Representative with the consent of the Underwriters, who may include the
Representative, which have agreed to purchase in the aggregate fifty percent
(50%) or more of the principal amount of the Debentures, upon notice thereof to
the Company. Any such termination shall be without liability of any party to any
other party, except as otherwise provided in subsection (g) of Section 7.
SECTION 9. Conditions of Company's Obligations. The
obligations of the Company hereunder shall be subject to the following
conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect at or prior to the
Closing Date, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the
Closing Date.
(c) The authorization by the Federal Energy
Regulatory Commission of the issuance and sale of the
Debentures shall be in full force and effect.
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<PAGE> 8
In case any of the conditions specified in this Section 9
shall not have been fulfilled, this Underwriting Agreement may
be terminated by the Company upon notice thereof to the
Representative. Any such termination shall be without
liability of any party to any other party, except as otherwise
provided in subsection (g) of Section 7.
SECTION 10. Indemnification.
(a) The Company shall indemnify, defend, and hold
harmless each Underwriter and each person who controls any
Underwriter within the meaning of Section 15 of the Securities
Act from and against any and all losses, claims, damages, or
liabilities, joint or several, to which they or any of them
may become subject under the Securities Act or any other
statute or common law. The Company shall reimburse each such
Underwriter and controlling person for any legal or other
expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them, such reimbursement
to be made as such expenses are incurred by them, in
connection with investigating any such losses, claims,
damages, or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages, liabilities,
expenses, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in a preliminary prospectus (if used prior to the
initial effective date of the Registration Statement), or in
the Basic Prospectus (if used prior to the date that the
Prospectus is filed with the Commission pursuant to Rule 424)
or in the Registration Statement or the Prospectus, as amended
or supplemented (if any amendments or supplements thereto
shall have been made), or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made not misleading;
provided, however, that the indemnity agreement contained in
this paragraph shall not apply to any such losses, claims,
damages, liabilities, expenses, or actions arising out of, or
based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in
conformity with written information furnished to the Company
by or through the Representative on behalf of any Underwriter
expressly for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the
Registration Statement which shall constitute the statement of
eligibility under the Trust Indenture Act of the Trustee under
the Indenture; and provided further, that the indemnity
agreement contained in this paragraph shall not inure to the
benefit of any Underwriter or of any person controlling any
Underwriter on account of any such losses, claims, damages,
liabilities, expenses, or actions arising from the sale of the
Debentures to any person if there shall not have been given or
sent to such person on behalf of such Underwriter (i) with or
prior to the written confirmation of the sale to such person a
copy of the Prospectus, as then amended or supplemented
(exclusive for this purpose of any amendment or supplement
relating solely to any offering of debt securities other than
the Debentures and of any document which becomes incorporated
by reference pursuant to Item 12 of Form S-3 more than 3
business days prior to the date hereof), and (ii) as soon as
available after such written confirmation a copy of any
amendment or supplement to the Prospectus (exclusive for this
purpose of any document incorporated by reference pursuant to
Item 12 of Form S-3) which the Company shall thereafter
furnish, pursuant to subsection (d) of Section 7 hereof,
relating to an event occurring prior to the payment for and
delivery to such person of the Debentures involved in such
sale. The indemnity agreement of the Company contained in this
Section and the representations and warranties of the Company
contained in Section 4 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any Underwriter or any such controlling person, and
shall survive the delivery of the Debentures.
(b) Each Underwriter shall indemnify, defend, and
hold harmless the Company, its directors and officers, and
each person who controls any of the foregoing within the
meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages, or liabilities, joint or
several, to which they or any of them may become subject under
the Securities
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<PAGE> 9
Act or any other statute or common law and shall reimburse
each of them for any legal or other expenses (including, to
the extent hereinafter provided, reasonable counsel fees)
incurred by them, such reimbursement to be made as such
expenses are incurred by them, in connection with
investigating any such losses, claims, damages, or liabilities
or in connection with defending any action, insofar as such
losses, claims, damages, liabilities, expenses, or actions
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement or the Prospectus, as amended or
supplemented (if any amendments or supplements thereto shall
have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company
by or through the Representative on behalf of such Underwriter
expressly for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement to either thereof. The indemnity agreement of the
respective Underwriters contained in this paragraph shall
remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Company, its
directors or officers, or any such controlling person, and
shall survive the delivery of the Debentures.
(c) The Company and the several Underwriters each
shall, upon the receipt of notice of the commencement of any
action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of any
indemnity agreement contained herein, promptly give written
notice of the commencement thereof to the party or parties
against whom indemnity shall be sought hereunder, but the
omission so to notify the indemnifying party or parties of any
such action shall not relieve the indemnifying party or
parties from any liability which it or they may have to the
indemnified party otherwise than on account of such indemnity
agreement. In case such notice of any such action shall be so
given, the indemnifying party shall be entitled to participate
at its own expense in the defense or, if it so elects, to
assume (in conjunction with any other indemnifying parties)
the defense of the action, in which event the defense shall be
conducted by counsel chosen by such indemnifying party or
parties and satisfactory to the indemnified party or parties
who shall be a defendant or defendants in the action, and the
indemnified defendant or defendants shall bear the fees and
expenses of any additional counsel retained by them; but if
the indemnifying party shall elect not to assume the defense
of the action, the indemnifying party will reimburse the
indemnified party or parties for the reasonable fees and
expenses of any counsel retained by the indemnified party or
parties. If the indemnifying party does not employ counsel to
take charge of the defense or if counsel for the indemnified
party reasonably concludes that there may be defenses
available to the indemnified party which are different from or
in addition to those available to the indemnifying party (in
which case the indemnifying party will not have the right to
assume the defense on behalf of the indemnified party), legal
expenses (limited to those of one counsel for all indemnified
parties) and other expenses reasonably incurred by the
indemnified party will be paid by the indemnifying party. No
party will be liable with respect to any settlement made
without its prior written consent.
(d) If the indemnification provided for in this
Section 10 is unavailable to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable
considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statements of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct
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<PAGE> 10
or prevent such statements or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined
by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of
allocation which does not take account of equitable
considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Debentures underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The respective obligations of the Company and the
Underwriters under this Section 10 shall be in addition to any
liability which each of them may otherwise have.
SECTION 11. Termination. This Underwriting Agreement may be
terminated at any time prior to the Closing Date by the Representative with the
consent of the Underwriters, who may include the Representative, which have
agreed to purchase in the aggregate fifty percent (50%) or more of the aggregate
principal amount of the Debentures, if, prior to such time, (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the New York Stock Exchange, the Commission,
or other governmental authority, (iii) a general banking moratorium shall have
been declared by federal or New York State authorities, (iv) an outbreak or
escalation of hostilities or other national or international calamity or crisis
occurs, the effect of which on the financial markets of the United States is
such as, in the reasonable judgment of the Representative, to make it
impracticable to market the Debentures or enforce contracts for the sale of the
Debentures or (v) in the reasonable judgment of the Representative, the subject
matter of any amendment or supplement (prepared by the Company) to the Basic
Prospectus, the Registration Statement or the Prospectus (except for information
relating to the public offering of the Debentures or to the activity of any
Underwriter or Underwriters) filed or issued after the effectiveness of this
Underwriting Agreement by the Company shall have materially impaired the
marketability of the Debentures. Any termination hereof pursuant to this Section
11 shall be without liability of any party to any other party, except as
otherwise provided in subsection (g) of Section 7.
SECTION 12. Applicable Law. This Underwriting Agreement and
the Debentures to be sold hereunder shall be New York contracts, and their
validity and interpretation shall be governed by the laws of the State of New
York.
SECTION 13. Successors. This Underwriting Agreement shall
inure to the benefit of the Company, the Underwriters and, with respect to the
provisions of Section 10, each director, officer, and controlling person
referred to in Section 10, and their respective successors. Nothing herein is
intended or shall be construed to give to any other person, firm, or corporation
any legal or equitable right, remedy, or claim under or in respect of any
provision in this Underwriting Agreement. The term "successor" as used in this
Underwriting Agreement shall not include any purchaser, as such purchaser, of
any of the Debentures from any of the Underwriters.
SECTION 14. Notices. All communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered to the
Representative at the address set forth below, or, if to the Company, shall be
mailed or delivered to it c/o IES Utilities Inc., 200 First Street, S.E., Cedar
Rapids, Iowa 52401 Attention: Treasurer.
- 10 -
<PAGE> 11
SECTION 15. Counterparts. This Underwriting Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of such counterparts, when so executed and
delivered, shall be deemed to be an original, and all of such counterparts
shall, taken together, constitute one and the same agreement.
-----------
The stated interest rate to be borne by the Debentures and the
price to be paid to the Company therefor (stated as a percentage of the
principal amount of the Debentures), in each case are set forth in Schedule I
hereto. If said interest rate and price and this Underwriting Agreement are in
accordance with your understanding of our agreement, please indicate your
acceptance thereof in the space provided below for that purpose; whereupon, this
letter and your acceptance shall constitute a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
As Representative(s) of the Underwriters
By:
------------------------------------
Name:
Title:
Address of Representative(s):
----------------------------
----------------------------
The foregoing Underwriting Agreement is hereby
accepted as of the date set forth below:
IES UTILITIES INC.
By:
----------------------------
Name:
Title:
Date:
- 11 -
<PAGE> 12
SCHEDULE I
Underwriting Agreement dated ____________
Registration Statements (Nos. 33-62259 and 333-____________)
Securities:
Designation:
Principal Amount:
Date of Maturity:
Interest Rate: ___%
Commencement of Interest Accrual:
Purchase Price: ______%
Public Offering Price: ______%
Closing Date:
<PAGE> 13
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
Name of Underwriter of Debentures
- ------------------- ----------------
<S> <C>
Total
=========
</TABLE>
<PAGE> 14
EXHIBIT A
[Letterhead of IES Industries Inc.]
[Date]
RE: __% SENIOR DEBENTURES, SERIES ___
$_______________
DUE_____________
Ladies and Gentlemen:
I am counsel for IES Industries Inc., the parent company of
IES Utilities Inc. (the "Company") and have participated in the issuance and
sale by the Company to you of $________ aggregate principal amount of __% Senior
Debentures, Series ___ due _____________ (the "Debentures"), issued under the
Company's Indenture (For Senior Unsecured Debt Securities), dated as of ______,
1997, to The First National Bank of Chicago, as Trustee (the "Trustee") (the
"Indenture") pursuant to an Underwriting Agreement dated as of ________ between
you and the Company (the "Underwriting Agreement").
In this connection, I have examined, among other things, the
following:
(a) the Registration Statement and the Prospectus (such terms
having the same meanings herein as in the Underwriting Agreement);
(b) the Articles of Incorporation of the Company and all
amendments thereto, as certified by the Secretary of State of the State
of Iowa;
(c) a Certificate of the Secretary of State or other
appropriate state official certifying as to the good standing and
qualification of the Company to transact business in the State of Iowa;
(d) the By-laws of the Company, certified by the Secretary of
the Company;
(e) the Indenture;
(f) resolution of the Board of Directors of the Company
[pertaining to the authorization and sale of the Debentures and related
matters];
(g) the Application filed by the Company with the Federal
Energy Regulatory Commission seeking, among other things, authority for
and approval of the issuance and sale of Debentures and a copy of the
Letter of Authority issued by the Chief Accountant of such Commission,
dated __________, authorizing and approving the issuance and sale of
the Debentures;
(h) certified copies of the Officer's Certificate of the
Company dated __________, setting forth the terms and conditions of the
Debentures approved by the __________ of the Company.
(i) counterparts of the Underwriting Agreement executed by you
and the Company; and
(j) other information, documents, and material which I deem
sufficient along with the foregoing to support this opinion.
In addition, in connection with this opinion, I have reviewed
various orders and certificates of, and members of the legal staff of IES
Industries Inc. had telephone conversations with, public officials. I have not
examined the Debentures, except a specimen thereof.
A - 1
<PAGE> 15
Subject to the foregoing and to the further exceptions and
qualifications set forth below and having regard to all legal and factual
considerations which I deem relevant and based upon all such other information
and documents furnished to or obtained by me as I believe necessary to enable me
to render this opinion, including certificates of public officials, I am of the
opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Iowa, with full power and authority (corporate and other) to own its property
and to conduct its business as presently being conducted all within the State of
Iowa.
2. The Debentures and the Indenture conform in all material
respects to the descriptions thereof in the Prospectus.
3. The Underwriting Agreement has been duly authorized,
executed and delivered on behalf of the Company.
4. The Debentures have been duly authorized and, when duly
executed, authenticated, issued and delivered to and paid for by you in
accordance with the terms of the Underwriting Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits and
security provided by the Indenture, enforceable against the Company in
accordance with their terms except as the same may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditors' rights generally, by
general principles of equity (regardless of whether or not enforceability is
considered in a proceeding in equity or at law) and by an implied covenant of
good faith and fair dealing.
5. The Indenture has been duly and validly authorized by all
necessary corporate action of the Company, has been duly executed, acknowledged
and delivered by the Company and is a valid and legally binding instrument
enforceable against the Company in accordance with its terms except as the same
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, by general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and by
an implied covenant of good faith and fair dealing.
6. The execution and delivery of the Underwriting Agreement,
the consummation of the transactions therein contemplated and the fulfillment of
the terms thereof do not and will not conflict with, or result in a breach by,
the Company of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation or By-laws of the Company or the Indenture, or to
the best of my knowledge after reasonable investigation, any other indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it or any of its properties are bound, including the
Agreement and Plan of Merger, by and among, WPL Holdings, Inc., IES Industries
Inc., Interstate Power Company (a Delaware corporation), WPLH Acquisition Co.,
and Interstate Power Company (a Wisconsin corporation), dated as of November 10,
1995, as amended.
7. The Chief Accountant of the Federal Energy Regulatory
Commission ("FERC") has authorized the issuance and sale of the Debentures,
which authorization is, to the best of my knowledge, still in full force and
effect; the issuance and sale of the Debentures to you pursuant to the
Underwriting Agreement is in conformity with the terms of such authorization;
and no other authorization, approval or consent of any other governmental body
is legally required for the issuance and sale of the Debentures pursuant to the
Underwriting Agreement, except such as have been obtained under the Securities
Act of 1933, as amended ("Securities Act"), and such as may be required under
state securities or blue sky laws in connection with the purchase and
distribution of the Debentures by you.
8. The Company has the legal right to function and operate as
an electric and gas utility in the state of Iowa, holds valid and subsisting
franchises authorizing it to carry on the utility business in which it is
A - 2
<PAGE> 16
engaged in all incorporated communities having a population of 1,000 or more
(except in ____, which operations have not been impaired by the lack of such
franchises), and has adequate licenses and permits where required by law to
maintain electric and gas transmission and distribution lines through
unincorporated areas and over public lands not located in incorporated
communities and over private rights-of-way in the territory which it serves.
9. Except as referred to in the Registration Statement and
Prospectus, to the best of my knowledge, there are no material or contemplated
legal proceedings to which the Company is or may be a party or of which property
of the Company is or may be subject which depart from the ordinary routine
litigation incident to the kinds of business conducted by the Company.
10. The documents incorporated by reference in the Prospectus
(other than the financial statements and financial and statistical data, as to
which I express no opinion), when they were filed with the Securities and
Exchange Commission (the "Commission"), complied as to form in all material
respects with the requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder of the Commission; and I have no reason to
believe that any of such documents, when they were so filed, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
11. To the best of my knowledge, there are no contracts or
other instruments or documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
I am a member of the bar of the State of Iowa and do not hold
myself out as an expert on the laws of any other State. The opinion set forth
above is solely for the benefit of the addressees of this letter and may not be
relied upon in any manner by any other person without my prior written consent,
except that Winthrop, Stimson, Putnam & Roberts may rely on this opinion as to
all matters of Iowa law in rendering their opinions required to be delivered
under the Underwriting Agreement.
Very truly yours,
A - 3
<PAGE> 17
EXHIBIT B
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
RE: IES UTILITIES INC.
$________% SENIOR DEBENTURES,
SERIES ______ DUE _______
Ladies and Gentlemen:
We have acted as Counsel for IES Utilities Inc. ("Company") in
connection with the issuance and sale by the Company to you pursuant to the
Underwriting Agreement dated _________, ("Underwriting Agreement") between the
Company and you, of $_________ in principal amount of __% Senior Debentures,
Series __ (the "Debentures"), issued under the Company's Indenture dated as of
_________, 1997, to The First National Bank of Chicago, as Trustee (the
"Trustee") (the "Indenture").
We are members of the New York Bar and, for purposes of this
opinion, do not hold ourselves out as experts on the laws of any jurisdiction
other than the State of New York and the United States of America. We have, with
your consent, relied upon the opinion of even date herewith addressed to you by
__________, Counsel for IES Industries Inc., as to the matters covered in such
opinion relating to Iowa law. We have reviewed said opinion and believe that it
is satisfactory and that you and we are justified in relying thereon.
We also examined such other documents and questions of law and
satisfied ourselves as to such other matters as we have deemed necessary in
order to enable us to express this opinion. We have not examined and are
expressing no opinion or belief as to matters relating to the incorporation of
the Company. We also have not examined the Debentures, except a specimen
thereof. As to various questions of fact material to this opinion, we have
relied upon representations and certificates of officers and representatives of
the Company and statements in the Registration Statement (the terms
"Registration Statement" and "Prospectus," as used herein, have the same
meanings as those words in the Underwriting Agreement). We have also examined
originals, or copies of originals certified to our satisfaction, of such
agreements, documents, certificates and other instruments, as we have considered
relevant and necessary as a basis for such opinion. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to the originals of the
documents submitted to us as certified or photostatic copies.
Subject to the foregoing and to the further exceptions and
qualifications set forth below, we are of the opinion that:
1. The Indenture has been duly and validly authorized by all
necessary corporate action of the Company, has been duly executed, acknowledged
and delivered by the Company and is a valid and legally binding instrument
enforceable against the Company in accordance with its terms except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting enforcement of creditors' rights
generally, by general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law) and by an implied covenant of
good faith and fair dealing; and the Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
B - 1
<PAGE> 18
2. The Debentures have been duly authorized and, when duly
executed, authenticated, issued and delivered to and paid for by you in
accordance with the terms of the Underwriting Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits and
security provided by the Indenture enforceable against the Company in accordance
with their terms except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing.
3. The summaries of the terms of the Indenture and the
Debentures contained in the Registration Statement and the Prospectus fairly
describe in all material respects the provisions thereof required to be
described by the registration statement form.
4. The Underwriting Agreement has been duly authorized,
executed and delivered on behalf of the Company.
5. The execution and delivery of the Underwriting Agreement,
the consummation of the transactions therein contemplated and the fulfillment of
the terms thereof do not and will not conflict with, or result in a breach by,
the Company of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation or By-laws of the Company or to the best of our
knowledge, any other indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or any of its
properties are bound. As used in this paragraph 5, the phrase "to the best of
our knowledge after reasonable investigation" is intended to mean the actual
knowledge or information known by the lawyers in our firm who have been
principally involved in the transactions contemplated by the Underwriting
Agreement.
6. The Chief Accountant of the Federal Energy Regulatory
Commission has authorized the issuance and sale of the Debentures, which
authorization is, to the best of our knowledge, still in full force and effect;
the issuance and sale of the Debentures to you pursuant to the Underwriting
Agreement is in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other federal commission or regulatory
authority is legally required for the issuance and sale of the Debentures
pursuant to the Underwriting Agreement, except such as have been obtained under
the Securities Act of 1933, as amended ("Securities Act") or the Trust Indenture
Act.
7. To the best of our knowledge, the Registration Statement
is, at the date hereof, effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for a stop order with respect thereto have been instituted or are
pending or threatened under the Securities Act; the Registration Statement, at
the time of its effectiveness, and the Prospectus, at the time first filed with
the Securities and Exchange Commission ("Commission") pursuant to Rule 424 under
the Securities Act, complied as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act, and the
applicable rules and regulations of the Commission thereunder (except that we
express no opinion as to the financial statements or other financial or
statistical data included or incorporated by reference therein or as to the Form
T-1 filed as an exhibit to the Registration Statement).
8. The Company and IES Industries Inc. are exempt from
regulation under the Public Utility Holding Company Act of 1935, as amended,
except under Section 9(a)(2) thereof.
9. To the best of our knowledge, there are no contracts or
other instruments or documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
In passing upon the forms of the Registration Statement and
the Prospectus, we necessarily assume the correctness and completeness of the
statements made by the Company and the information included or incorporated by
reference in the Registration Statement and the Prospectus and take no
responsibility therefor,
B - 2
<PAGE> 19
except insofar as such statements relate to us and as set forth in paragraph 3
above. In connection with the preparation of the Registration Statement and the
Prospectus, we have had discussions with certain of the Company's officers and
representatives, with other counsel for the Company, with your counsel and with
Arthur Andersen LLP, the independent certified public accountants who examined
certain of the financial statements included or incorporated by reference in the
Registration Statement. Our examination of the Registration Statement and the
Prospectus and our discussions did not disclose to us any information that gives
us reason to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, at the time first
filed with the Commission pursuant to Rule 424 under the Securities Act and at
the date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. We do not express any opinion or belief as to the
financial statements or other financial or statistical data included or
incorporated by reference in the Registration Statement or the Prospectus. We do
not express any opinion as to the statements contained in the Form T-1 filed as
an exhibit to the Registration Statement.
The opinion set forth above is solely for the benefit of the
addressees hereof in connection with the Underwriting Agreement and the
transactions contemplated thereunder and may not be quoted or furnished to, or
relied upon in any manner by, any other person or utilized for any other purpose
without our prior written consent.
Very truly yours,
WINTHROP, STIMSON, PUTNAM & ROBERTS
B - 3
<PAGE> 20
EXHIBIT C
[Letterhead of Dorsey & Whitney LLP]
[Date]
RE: IES UTILITIES INC.
$_____________% SENIOR DEBENTURES,
SERIES _______________________
Ladies and Gentlemen:
We have acted as your counsel in connection with the issuance
and sale by IES Utilities, Inc. (the "Company") to you pursuant to the
Underwriting Agreement dated _______________, ("Underwriting Agreement") between
the Company and you, of $___________ in principal amount of __% Senior
Debentures, Series ___ (the "Debentures"), issued under the Company's Indenture,
dated as of ________, 1997, to The First National Bank of Chicago, as Trustee
(the "Trustee") (the "Indenture"). This opinion is being delivered pursuant to
subsection (d) of Section 8 of the Underwriting Agreement.
We have examined such documents and reviewed such questions of
law as we have considered necessary and appropriate for the purposes of this
opinion.
In rendering our opinions below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies or specimens. We have also assumed the legal capacity
for all purposes relevant hereto of all natural persons and, with respect to all
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or other) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or other), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
on certificates of officers of the Company and of public officials.
Certain of our opinions expressed below as to factual matters
are qualified as being limited "to the best of our knowledge" or by other words
to the same or similar effect. Such words, as used herein, mean the information
known to ___________, ___________ and __________, the attorneys who have
represented you in connection with the transactions contemplated by the
Underwriting Agreement. In rendering such opinions, we have not conducted any
independent investigation or consulted with other attorneys in our firm with
respect to the matters covered thereby.
On the basis of such examination, we advise you that, in our
opinion:
1. the Company is a validly organized and existing corporation
in good standing under the laws of the State of Iowa;
2. the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
C - 1
<PAGE> 21
3. the Indenture has been duly and validly authorized by all
requisite corporate action of the Company, and has been duly executed and
delivered by the Company and (assuming the Indenture has been duly authorized,
executed and delivered by the Trustee) constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, by general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and fair dealing;
4. the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act");
5. the Debentures have been duly authorized and executed by
the Company and, when authenticated by the Trustee in accordance with the terms
of the Indenture, and delivered to and paid for by you in accordance with the
terms of the Underwriting Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits and security provided by the
Indenture, except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing;
6. the Chief Accountant of the FERC has authorized the
issuance and sale of the Debentures, which authorization is, to the best of our
knowledge, still in full force and effect; the issuance and sale of the
Debentures to you pursuant to the Underwriting Agreement is in conformity with
the terms of such authorization; and no other authorization, approval or consent
of any other federal commission or regulatory authority is legally required for
the issuance and sale of the Debentures pursuant to the Underwriting Agreement,
except such as have been obtained under the Securities Act of 1933, as amended
("Securities Act"), or the Trust Indenture Act;
7. the Company's registration statements on Form S-3 (File
Nos. 33-62259 and 333-_____) relating to the Debentures (collectively, the
"Registration Statement") have become effective under the Securities Act, and,
to the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for a stop order with
respect thereto have been instituted or are pending or threatened under the
Securities Act; and
8. the Company is a subsidiary of IES Industries Inc., an Iowa
corporation, and both are exempt from regulation under the Public Utility
Holding Company Act of 1935, as amended, except under Section 9(a)(2) thereof.
Our opinions expressed above are limited to the laws of the
States of Iowa and New York and the federal laws of the United States of
America.
The opinion set forth above is solely for the benefit of the
addressees of this letter and may not be relied upon in any manner by, nor may
copies be delivered to, any other person without our prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
C - 2
<PAGE> 22
[Letterhead of Dorsey & Whitney LLP]
[Date]
RE: IES UTILITIES INC.
$_____________% SENIOR DEBENTURES,
SERIES _______________________
Ladies and Gentlemen:
This letter relates to the registration under the Securities
Act of 1933, as amended (the "Act"), and offering of $__________ in aggregate
principal amount of ___% Senior Debentures, Series ____ (the "Debentures") of
IES Utilities Inc., an Iowa corporation (the "Company"). The registration
statements of the Company on Form S-3 (File Nos. 33-62259 and 333-29391)
(collectively, the "Registration Statement") was filed in accordance with
procedures of the Securities and Exchange Commission (the "Commission")
permitting a delayed or continuous offering of securities pursuant thereto and,
if appropriate, a post-effective amendment or prospectus supplement that
provides information relating to the terms of the securities and the manner of
their distribution. The Debentures have been offered by the Prospectus dated
__________ (the "Prospectus"), as supplemented by the Prospectus Supplement
dated __________ (the "Prospectus Supplement"), which updates or supplements
certain information contained in the Prospectus. The Prospectus, as so
supplemented, does not necessarily contain a current description of the
Company's business and affairs since, pursuant to form S-3, it incorporates by
reference certain documents filed with the Commission which contain information
as of various dates.
In accordance with our understanding with you as to the scope
of our services under the circumstances applicable to the offering of the
Debentures, we reviewed the Registration Statement, the Prospectus and the
Prospectus Supplement, participated in the discussions with your representatives
and those of the Company, its counsel and its independent public accountants and
advised you as to the requirements of the Act and the applicable rules and
regulations thereunder. Between the date of the Prospectus Supplement and the
date of delivery of this letter, we participated in further discussions with
your representatives and those of the Company, its counsel and its independent
public accountants regarding the contents of certain portions of the Prospectus
and the Prospectus Supplement and certain related matters, and reviewed
certificates of certain officers of the Company, opinions addressed to you from
counsel to the Company and letters addressed to you from independent public
accountants of the Company.
On the basis of the information that was reviewed by us in the
course of the performance of the services referred to above, in our opinion (i)
the Registration Statement, as of its effective date, and the Prospectus, as
supplemented by the Prospectus Supplement as of the date of the Prospectus
Supplement, complied as to form in all material respects with the requirements
of the Act and the Trust Indenture Act of 1939, as amended, and the respective,
applicable rules and regulations thereunder (except that we express no opinion
as to financial statements and financial or statistical data contained therein
or as to the Form T-1 filed as an Exhibit to the Registration Statement) (ii)
the summaries of the terms of the Indenture (as such term is defined in the
Prospectus) and the Debentures contained in the Registration Statement, the
Prospectus and the Prospectus Supplement fairly describe in all material
respects the provisions thereof required to be described in the Registration
Statement. Further, nothing that came to our attention in the course of such
review has caused us to believe that the Registration Statement, on such
effective date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as supplemented by
the Prospectus Supplement, as of the date of the Prospectus Supplement and as of
the date and time of delivery
C - 3
<PAGE> 23
of this letter, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such, however, that we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement. Also, we do
not express any opinion or belief as to the financial statements or other
financial data contained in the Registration Statement, the Prospectus or the
Prospectus Supplement, or as to the statement of the eligibility and
qualification of the Trustee under the Indenture under which the Debentures are
being issued.
This letter is furnished by us as counsel to you solely for
your benefit and may not be relied upon by, nor may copies be delivered to, any
other person without our prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
C - 4
<PAGE> 24
EXHIBIT D
Pursuant to subsection (e) of Section 8 of the Underwriting
Agreement, Arthur Andersen LLP shall furnish a letter to the Representative to
the effect that:
(1) They are independent certified public accountants with respect to
the Company within the meaning of the Securities Act and the applicable
published rules and regulations thereunder;
(2) In their opinion, the financial statements and schedules audited by
them and included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published rules and
regulations thereunder;
(3) On the basis of performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information, on the
latest available unaudited financial statements included or incorporated by
reference in the Registration Statement, a reading of the latest available
interim unaudited financial statements of the Company, the minutes of the
meetings of the Board of Directors, the Executive Committee thereof and the
stockholders of the Company, respectively, since the close of the most recent
audited fiscal year to a specified date not more than five business days prior
to the Closing Date, and inquiries of officials of the Company who have
responsibility for the respective company's financial and accounting matters (it
being understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and that they would not
necessarily reveal matters of significance with respect to the comments made in
such letter, and, accordingly, that Arthur Andersen LLP makes no representation
as to the sufficiency of such procedures for the several Underwriters'
purposes), nothing has come to their attention which caused them to believe that
(a) the unaudited financial statements included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and regulations
thereunder;
(b) the audited and unaudited selected financial information
and supplemental financial information and ratios of earnings to fixed charges
included or incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable disclosure requirements of
Regulation S-K promulgated under the Securities Act;
(c) any material modifications should be made to said
unaudited financial statements for them to be in conformity with generally
accepted accounting principles;
(d) for the period from ___________ to the date of the latest
available unaudited financial statements of the Company, there was any decrease
in operating revenues, operating income or net income as compared with the
corresponding period in the preceding year, except in all instances for
decreases which the Prospectus discloses have occurred or may occur or except as
set forth in such letter; and
(e) at a specified date not more than _____ days prior to the
Closing Date there was any change in the capital stock or long-term debt of the
Company, in each case as compared with amounts shown in the most recent balance
sheet incorporated by reference in the Prospectus, except in all instances for
changes or decreases which the Prospectus discloses have occurred or may occur,
for declarations of dividends, for the repayment or redemption of long-term
debt, for the amortization of premium or discount on long-term debt, for the
redemption or purchase of preferred stock for sinking fund purposes, for any
increases in long-term debt in respect of previously issued pollution control
revenue bonds, or for changes or decreases as set forth in such letter,
identifying the same and specifying the amount thereof.
(4) In addition to the audit referred to in their reports included or
incorporated by reference in the Prospectus and the inspection of minute books,
inquiries and other limited procedures referred to in paragraph 3 above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally
D - 1
<PAGE> 25
accepted auditing standards, with respect to certain amounts, percentages and
financial information including certain pro forma information specified by the
Representative which are derived from the general accounting records of the
Company which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representative or in documents incorporated by
reference in the Prospectus specified by the Representative and agreed to by the
Company, and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and have found them to be
in agreement.
D - 2
<PAGE> 1
EXHIBIT 4(j)
------------------------------------------
IES UTILITIES INC.
TO
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
---------
Indenture
(For Senior Unsecured Debt Securities)
Dated as of , 1997
----------
------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
RECITAL OF THE COMPANY...................................................... 1
ARTICLE ONE................................................................. 1
Definitions and Other Provisions of General Application..................... 1
SECTION 101. Definitions.......................................... 1
Act....................................................... 2
Affiliate................................................. 2
Authenticating Agent...................................... 2
Authorized Officer........................................ 2
Board of Directors........................................ 2
Board Resolution.......................................... 2
Business Day.............................................. 2
Commission................................................ 2
Company................................................... 2
Company Request or company order........................ 2
Corporate Trust Office.................................... 3
Defaulted Interest........................................ 3
Discount Security......................................... 3
Dollar or $............................................. 3
Eligible Obligations...................................... 3
Event of Default.......................................... 3
Governmental Authority.................................... 3
Government Obligations.................................... 3
Holder.................................................... 3
Indenture................................................. 4
Interest Payment Date..................................... 4
Lien...................................................... 4
Maturity ................................................. 4
Mortgages................................................. 4
Officer's Certificate..................................... 4
Opinion of Counsel........................................ 4
Outstanding............................................... 4
Paying Agent.............................................. 5
Periodic Offering......................................... 6
Permitted liens........................................... 6
Person.................................................... 7
Place of Payment.......................................... 8
Predecessor Security...................................... 8
Prepaid Lien.............................................. 8
Redemption Date........................................... 8
Redemption Price.......................................... 8
Regular Record Date....................................... 8
Required Currency......................................... 8
Responsible Officer....................................... 8
Securities................................................ 8
Security Register and security registrar................ 8
Special Record Date....................................... 8
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Stated Interest Rate.......................................................................... 8
Stated Maturity............................................................................... 8
Tangible Net Worth............................................................................ 8
Tranche....................................................................................... 9
Trust Indenture Act........................................................................... 9
Trustee....................................................................................... 9
United States................................................................................. 9
SECTION 102. Compliance Certificates and Opinions..................................................... 9
SECTION 103. Form of Documents Delivered to Trustee................................................... 10
SECTION 104. Acts of Holders.......................................................................... 10
SECTION 105. Notices, Etc. to Trustee and Company..................................................... 12
SECTION 106. Notice to Holders of Securities; Waiver.................................................. 13
SECTION 107. Conflict with Trust Indenture Act........................................................ 13
SECTION 108. Effect of Headings and Table of Contents................................................. 13
SECTION 109. Successors and Assigns................................................................... 13
SECTION 110. Separability Clause...................................................................... 13
SECTION 111. Benefits of Indenture.................................................................... 13
SECTION 112. Governing Law............................................................................ 14
SECTION 113. Legal Holidays........................................................................... 14
ARTICLE TWO..................................................................................................... 14
Security Forms.................................................................................................. 14
SECTION 201. Forms Generally.......................................................................... 14
SECTION 202. Form of Trustee's Certificate of Authentication.......................................... 15
ARTICLE THREE................................................................................................... 15
The Securities.................................................................................................. 15
SECTION 301. Amount Unlimited; Issuable in Series..................................................... 15
SECTION 302. Denominations............................................................................ 18
SECTION 303. Execution, Authentication, Delivery and Dating........................................... 18
SECTION 304. Temporary Securities..................................................................... 20
SECTION 305. Registration, Registration of Transfer and Exchange...................................... 21
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................................... 22
SECTION 307. Payment of Interest; Interest Rights Preserved........................................... 23
SECTION 308. Persons Deemed Owners.................................................................... 24
SECTION 309. Cancellation by Security Registrar....................................................... 24
SECTION 310. Computation of Interest........................................................................... 24
SECTION 311. Payment to Be in Proper Currency......................................................... 25
SECTION 312. Extension of Interest Payment............................................................ 25
ARTICLE FOUR.................................................................................................... 25
Redemption of Securities........................................................................................ 25
SECTION 401. Applicability of Article................................................................. 25
SECTION 402. Election to Redeem; Notice to Trustee.................................................... 25
SECTION 403. Selection of Securities to Be Redeemed................................................... 26
SECTION 404. Notice of Redemption..................................................................... 26
SECTION 405. Securities Payable on Redemption Date.................................................... 27
SECTION 406. Securities Redeemed in Part.............................................................. 27
ARTICLE FIVE.................................................................................................... 28
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Sinking Funds................................................................................................... 28
SECTION 501. Applicability of Article................................................................. 28
SECTION 502. Satisfaction of Sinking Fund Payments with Securities.................................... 28
SECTION 503. Redemption of Securities for Sinking Fund................................................ 29
ARTICLE SIX..................................................................................................... 29
Covenants....................................................................................................... 29
SECTION 601. Payment of Principal, Premium and Interest............................................... 29
SECTION 602. Maintenance of Office or Agency.......................................................... 29
SECTION 603. Money for Securities Payments to Be Held in Trust........................................ 30
SECTION 604. Corporate Existence...................................................................... 31
SECTION 605. Maintenance of Properties................................................................ 31
SECTION 606. Annual Officer's Certificate as to Compliance............................................ 32
SECTION 607. Waiver of Certain Covenants.............................................................. 32
SECTION 608. Limitations on Liens..................................................................... 32
ARTICLE SEVEN................................................................................................... 33
Satisfaction and Discharge...................................................................................... 33
SECTION 701. Satisfaction and Discharge of Securities................................................. 33
SECTION 702. Satisfaction and Discharge of Indenture.................................................. 35
SECTION 703. Application of Trust Money............................................................... 36
ARTICLE EIGHT................................................................................................... 37
Events of Default; Remedies..................................................................................... 37
SECTION 801. Events of Default........................................................................ 37
SECTION 802. Acceleration of Maturity; Rescission and Annulment....................................... 38
SECTION 803. Collection of Indebtedness and Suits for Enforcement by TRUSTEE.......................... 39
SECTION 804. Trustee May File Proofs of Claim......................................................... 39
SECTION 805. Trustee May Enforce Claims Without Possession of Securities.............................. 40
SECTION 806. Application of Money Collected........................................................... 40
SECTION 807. Limitation on Suits...................................................................... 40
SECTION 808. Unconditional Right of Holders to Receive Principal, Premium and Interest................ 41
SECTION 809. Restoration of Rights and Remedies....................................................... 41
SECTION 810. Rights and Remedies Cumulative........................................................... 41
SECTION 811. Delay or Omission Not Waiver............................................................. 42
SECTION 812. Control by Holders of Securities......................................................... 42
SECTION 813. Waiver of Past Defaults.................................................................. 42
SECTION 814. Undertaking for Costs.................................................................... 43
SECTION 815. Waiver of Stay or Extension Laws......................................................... 43
ARTICLE NINE.................................................................................................... 43
The Trustee..................................................................................................... 43
SECTION 901. Certain Duties and Responsibilities...................................................... 43
SECTION 902. Notice of Defaults....................................................................... 44
SECTION 903. Certain Rights of Trustee................................................................ 45
SECTION 904. Not Responsible for Recitals or Issuance of Securities................................... 46
SECTION 905. May Hold Securities...................................................................... 46
SECTION 906. Money Held in Trust...................................................................... 46
SECTION 907. Compensation and Reimbursement........................................................... 46
SECTION 908. Disqualification; Conflicting Interests.................................................. 47
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
SECTION 909. Corporate Trustee Required; Eligibility.................................................. 47
SECTION 910. Resignation and Removal; Appointment of Successor........................................ 48
SECTION 911. Acceptance of Appointment by Successor................................................... 49
SECTION 912. Merger, Conversion, Consolidation or Succession to Business.............................. 50
SECTION 913. Preferential Collection of Claims Against Company........................................ 50
SECTION 914. Co-trustees and Separate Trustees........................................................ 51
SECTION 915. Appointment of Authenticating Agent...................................................... 52
ARTICLE TEN..................................................................................................... 54
Holders' Lists and Reports by Trustee and Company............................................................... 54
SECTION 1001. Lists of Holders........................................................................ 54
SECTION 1002. Reports by Trustee and Company.......................................................... 54
ARTICLE ELEVEN.................................................................................................. 54
Consolidation, Merger, Conveyance or Other Transfer............................................................. 54
SECTION 1101. Company May Consolidate, Etc., Only on Certain Terms.................................... 54
SECTION 1102. Successor Corporation Substituted....................................................... 55
ARTICLE TWELVE.................................................................................................. 55
Supplemental Indentures......................................................................................... 55
SECTION 1201. Supplemental Indentures Without Consent of Holders...................................... 55
SECTION 1202. Supplemental Indentures With Consent of Holders......................................... 57
SECTION 1203. Execution of Supplemental Indentures.................................................... 58
SECTION 1204. Effect of Supplemental Indentures....................................................... 58
SECTION 1205. Conformity With Trust Indenture Act..................................................... 58
SECTION 1206. Reference in Securities to Supplemental Indentures...................................... 59
SECTION 1207. Modification Without Supplemental Indenture............................................. 59
ARTICLE THIRTEEN................................................................................................ 59
Meetings of Holders; Action Without Meeting..................................................................... 59
SECTION 1301. Purposes for Which Meetings May Be Called............................................... 59
SECTION 1302. Call, Notice and Place of Meetings...................................................... 59
SECTION 1303. Persons Entitled to Vote at Meetings.................................................... 60
SECTION 1304. Quorum; Action.......................................................................... 60
SECTION 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and
Adjournment of Meetings.............................................................. 61
SECTION 1306. Counting Votes and Recording Action of Meetings......................................... 62
SECTION 1307. Action Without Meeting.................................................................. 62
ARTICLE FOURTEEN................................................................................................ 62
Immunity of Incorporators, Stockholders, Officers and Directors................................................. 62
SECTION 1401. Liability Solely Corporate.............................................................. 62
</TABLE>
<PAGE> 6
INDENTURE, dated as of _____________, 1997 between IES
UTILITIES INC., a corporation duly organized and existing under the laws of the
State of Iowa (herein called the "Company"), having its principal office at
200 First Street S.E., Cedar Rapids, Iowa 52401, and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association organized and existing under the laws
of the United States of America, having its principal corporate trust office at
One First National Plaza, Suite 0126, Chicago, Illinois, 60670-0126, as Trustee
(herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its senior
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as contemplated herein;
and all acts necessary to make this Indenture a valid agreement of the Company
have been performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires, capitalized terms
used herein shall have the meanings assigned to them in Article One of this
Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in
the Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at
the date of such computation or, at the election of the Company from time
to time, at the date of the execution and delivery of this Indenture;
provided, however, that in determining generally accepted accounting
principles applicable to the Company, the Company shall, to the extent
required, conform to any order, rule
1
<PAGE> 7
or regulation of any administrative agency, regulatory authority or
other governmental body having jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Nine, are defined in
that Article.
"ACT", when used with respect to any Holder of a Security, has
the meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AUTHENTICATING AGENT" means any Person (other than the Company
or an Affiliate of the Company) authorized by the Trustee to act on behalf of
the Trustee to authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer or any
other duly authorized officer of the Company.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof duly authorized to act in respect of matters
relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or
any other particular location specified in the Securities or this Indenture,
means any day, other than a Saturday or Sunday, which is not a day on which
banking institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation or executive
order to remain closed, except as may be otherwise specified as contemplated by
Section 301.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the date of execution and delivery of
this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body, if any, performing
such duties at such time.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by an Authorized Officer and delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office at the date of execution and delivery of this
Indenture is located at One First National Plaza, Suite 0126, Chicago, Illinois,
60670-0126.
2
<PAGE> 8
"CORPORATION" means a corporation, association, company, joint
stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 802.
"INTEREST" with respect to a Discount Security means interest, if any, borne by
such Security at a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars, Government
Obligations; or
(b) with respect to Securities denominated in a currency other
than Dollars or in a composite currency, such other obligations or
instruments as shall be specified with respect to such Securities, as
contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section 801.
"GOVERNMENTAL AUTHORITY" means the government of the United
States or of any State or Territory thereof or of the District of Columbia or of
any county, municipality or other political subdivision of any thereof, or any
department, agency, authority or other instrumentality of any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments
which evidence a direct ownership interest in obligations described in
clause (a) above or in any specific interest or principal payments due
in respect thereof; provided, however, that the custodian of such
obligations or specific interest or principal payments shall be a bank
or trust company (which may include the Trustee or any Paying Agent)
subject to Federal or state supervision or examination with a combined
capital and surplus of at least $50,000,000; and provided, further,
that except as may be otherwise required by law, such custodian shall
be obligated to pay to the holders of such certificates, depositary
receipts or other instruments the full amount received by such
custodian in respect of such obligations or specific payments and shall
not be permitted to make any deduction therefrom.
"HOLDER" means a Person in whose name a Security is registered in
the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 301.
3
<PAGE> 9
"INTEREST PAYMENT DATE", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
easement, lease, reservation, restriction, servitude, charge, or similar right
or lien of any kind, including, without limitation, any conditional sale of
other title retention agreement, any lease in the nature thereof, any filing of,
or agreement to give, any financing statement under the Uniform Commercial Code
of any jurisdiction, and any defect or irregularity in record title.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as provided in such Security or in this Indenture, whether at the
Stated Maturity, by declaration of acceleration, upon call for redemption or
otherwise.
"MORTGAGES" means (a) the Company's Indenture of Mortgage or Deed of
Trust, dated as of August 1, 1940, to The First National Bank of Chicago, as
Trustee, (b) the Iowa Southern Utilities Company (Company, as surviving obligor)
Indenture or Deed of Trust, dated as of February 1, 1923, with The First
National Bank of Chicago and Richard D. Manella, as successor Trustees and (c)
the Company's Indenture of Mortgage and Deed of Trust, dated as of September 1,
1993, between the Company and The First National Bank of Chicago, as Trustee, in
each case as heretofore or hereafter amended, modified and supplemented.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, or other counsel acceptable to the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance with
Section 701; and
(c) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it and the Company that such
Securities are held by a bona fide purchaser or purchasers in whose
hands such Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture,
or the Outstanding Securities of any series or Tranche, have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or whether
or not a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor
(unless the Company, such Affiliate or such obligor owns all Securities
Outstanding under this Indenture, or all Outstanding Securities of
4
<PAGE> 10
each such series and each such Tranche, as the case may be, determined
without regard to this clause (x)) shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the
Trustee knows to be so owned shall be so disregarded; provided,
however, that Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such
other obligor;
(y) the principal amount of a Discount Security that shall be
deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802; and
(z) the principal amount of any Security which is denominated
in a currency other than Dollars or in a composite currency that shall
be deemed to be Outstanding for such purposes shall be the amount of
Dollars which could have been purchased by the principal amount (or, in
the case of a Discount Security, the Dollar equivalent on the date
determined as set forth below of the amount determined as provided in
(y) above) of such currency or composite currency evidenced by such
Security, in each such case certified to the Trustee in an Officer's
Certificate, based (1) on the average of the mean of the buying and
selling spot rates quoted by three banks which are members of the New
York Clearing House Association selected by the Company in effect at
11:00 A.M. (New York time) in The City of New York on the fifth
Business Day preceding any such determination or (2) if on such fifth
Business Day it shall not be possible or practicable to obtain such
quotations from such three banks, on such other quotations or
alternative methods of determination which shall be as consistent as
practicable with the method set forth in (1) above;
provided, further, that, in the case of any Security the principal of which is
payable from time to time without presentment or surrender, the principal amount
of such Security that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount thereof less
the aggregate amount of principal thereof theretofore paid.
"PAYING AGENT" means any Person, including the Company, authorized by
the Company to pay the principal of and premium, if any, or interest, if any, on
any Securities on behalf of the Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time any or all of the specific terms of which Securities, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents upon the
issuance of such Securities.
"PERMITTED LIENS" means, at any time, any of the following:
(a) Liens for taxes, assessments and other governmental
charges or requirements not delinquent or which can thereafter be paid
without penalty or which are currently being contested in good faith by
appropriate proceedings;
5
<PAGE> 11
(b) mechanics', workmen's, repairmen's, materialmen's,
warehousemen's and carriers' Liens, Liens or privileges of any
employees of the Company for salary or wages earned, but not yet
payable, and other Liens, including without limitation Liens for
worker's compensation awards, arising in the ordinary course of
business for charges or requirements which are not delinquent or which
are being contested in good faith and by appropriate proceedings;
(c) Liens in respect of judgments or awards with respect to
which the Company shall (i) in good faith be prosecuting an appeal or
other proceeding for review and with respect to which the Company shall
have secured a stay of execution pending such appeal or other
proceeding or (ii) have the right to prosecute an appeal or other
proceeding for review;
(d) easements, leases, reservations or other rights of others
in, on and/or over, and laws, regulations and restrictions affecting,
and defects and irregularities in record title to, the property of the
Company or any part thereof; provided, however, that such easements,
leases, reservations, rights, laws, regulations, restrictions, defects
and irregularities do not, in the reasonable judgment of the Company,
in the aggregate materially impair the use by the Company of its
property considered as a whole for the purposes for which it is held by
the Company;
(e) any defects or irregularities in title to any
rights-of-way and/or to any real estate used or to be used primarily
for right-of-way purposes or held under lease, easement, license or
similar right; provided, however, that (i) the Company shall have
obtained from the apparent owner of the lands or estates therein
covered by any such right-of-way a sufficient right, by the terms of
the instrument granting such right-of-way, lease, easement, license or
similar right, to the use thereof for the purpose for which the Company
acquired the same, (ii) the Company has power under eminent domain, or
similar statutes, to remove such defects or irregularities or (iii)
such defects or irregularities may be otherwise remedied without undue
effort or expense;
(f) Liens securing indebtedness neither created, assumed nor
guaranteed by the Company nor on account of which it customarily pays
interest, existing at the date of the execution and delivery of this
Indenture, or, as to property hereafter acquired, at the time of the
acquisition thereof by the Company, upon real estate or rights in or
relating to real estate acquired by the Company for rights of way for
distribution and transmission lines and for pipes, substations,
structures and appurtenances thereto;
(g) leases existing at the date of the execution and delivery
of this Indenture affecting property owned by the Company at said date
and renewals and extensions thereof and leases for a term of not more
than ten (10) years (including extensions or renewals at the option of
the tenant) affecting property acquired by the Company after said date;
(h) any controls, restrictions, obligations, duties and/or
other burdens imposed by any federal, state, municipal or other law, or
by any rule, regulation or order of any Governmental Authority, upon
any property of the Company or the operation or use thereof or upon the
Company with respect to any of its property or the operation or use
thereof or with respect to any franchise, grant, license, permit or
public purpose requirement, or any rights reserved to or otherwise
vested in any Governmental Authority to impose any such controls,
restrictions, obligations, duties and/or other burdens;
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(i) Liens granted on air or water pollution control or sewage
or solid waste disposal facilities of the Company in connection with
the issuance of industrial development revenue bonds;
(j) any right which any Governmental Authority may have by
virtue of any franchise, license, contract or statute to purchase, or
designate a purchaser of or order the sale of, any property of the
Company upon payment of cash or reasonable compensation therefor or to
terminate any franchise, license or other rights or to regulate the
property and business of the Company;
(k) any Liens which have been bonded for the full amount in
dispute or for the payment of which other adequate security
arrangements have been made or which, in the opinion of counsel, are
not material;
(l) Prepaid Liens;
(m) Liens resulting from good faith deposits made in
connection with bids, tenders, contracts or leases to which the Company
is a party and Liens resulting from deposits made to secure public or
statutory obligations of the Company or for the purpose of obtaining a
stay or discharge in the course of any legal proceedings;
(n) the pledge or assignment in the ordinary course of
business of electricity, gas (either natural or artificial) or steam,
accounts receivable or customers' installment paper;
(o) rights reserved to or vested in others to take or receive
any part of the electricity, gas (either natural or artificial), steam
or any by-products thereof generated or produced by or from any
properties of the Company or with respect to any other rights
concerning electricity, gas (either natural or artificial) or steam
supply, transportation, or storage which are in use in the ordinary
course of the electricity, gas (either natural or artificial) or steam
business;
(p) any landlord's Lien;
(q) Liens incurred pursuant to Section 907; and
(r) Liens or encumbrances not otherwise permitted if, at the
time of incurrence and after giving effect thereto, the aggregate of
all obligations of the Company and its subsidiaries secured thereby
does not exceed 10% of Tangible Net Worth.
"PERSON" means any individual, corporation, partnership, joint venture,
trust or unincorporated organization or any Governmental Authority thereof.
"PLACE OF PAYMENT", when used with respect to the Securities of any
series, or Tranche thereof, means the place or places, specified as contemplated
by Section 301, at which, subject to Section 602, principal of and premium, if
any, and interest, if any, on the Securities of such series or Tranche are
payable.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu
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of a mutilated, destroyed, lost or stolen Security shall be deemed (to the
extent lawful) to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"PREPAID LIEN" means any Lien securing indebtedness for the payment of
which money in the necessary amount shall have been irrevocably deposited in
trust with the trustee or other holder of such Lien; provided, however, that if
such indebtedness is to be redeemed or otherwise prepaid prior to the stated
maturity thereof, any notice requisite to such redemption or prepayment shall
have been given in accordance with the mortgage or other instrument creating
such Lien or irrevocable instructions to give such notice shall have been given
to such trustee or other holder.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any securities authenticated and delivered
under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Trustee pursuant to Section
307.
"STATED INTEREST RATE" means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear simple interest. Any
calculation or other determination to be made under this Indenture by reference
to the Stated Interest Rate on a Security shall be made without regard to the
effective interest cost to the Company of such Security and without regard to
the Stated Interest Rate on, or the effective cost to the Company of, any other
indebtedness the Company's obligations in respect of which are evidenced or
secured in whole or in part by such Security.
"STATED MATURITY", when used with respect to any obligation or any
installment of principal thereof or interest thereon, means the date on which
the principal of such obligation or such installment of principal or interest is
stated to be due and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"TANGIBLE NET WORTH" means (i) common stockholders' equity appearing on
the most recent balance sheet of the Company (or consolidated balance sheet of
the Company and its subsidiaries if the Company then has one or more
subsidiaries the accounts of which are consolidated with the accounts of the
Company) prepared in accordance with generally accepted accounting principles
less (ii) intangible assets (excluding intangible assets recoverable through
rates as prescribed by applicable regulatory authorities).
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"TRANCHE" means a group of Securities which (a) are of the same series
and (b) have identical terms except as to principal amount and/or date of
issuance.
"TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act of
1939, or any successor statute, as in effect at such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
with respect to one or more series of Securities pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"UNITED STATES" means the United States of America, its Territories,
its possessions and other areas subject to its political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall, if requested by the
Trustee, furnish to the Trustee an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such Officer's Certificate or opinion are
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, election, waiver or other action provided by this Indenture to
be made, given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing or,
alternatively, may be embodied in and evidenced by the record of
Holders voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called and held in
accordance with the provisions of Article Thirteen, or a combination of
such instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding
by any Person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 901) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall be proved in the
manner provided in Section 1306.
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(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof or may be proved in any other manner which
the Trustee and the Company deem sufficient. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount (except as otherwise contemplated in
clause (y) of the proviso to the definition of Outstanding) and serial
numbers of Securities held by any Person, and the date of holding the
same, shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind every
future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
(e) Until such time as written instruments shall have been
delivered to the Trustee with respect to the requisite percentage of
principal amount of Securities for the action contemplated by such
instruments, any such instrument executed and delivered by or on behalf
of a Holder may be revoked with respect to any or all of such
Securities by written notice by such Holder or any subsequent Holder,
proven in the manner in which such instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any action taken by such Act of Holders. If the Company
shall so determine, new Securities of any series, or any Tranche
thereof, so modified as to conform, in the opinion of the Trustee and
the Company, to such action may be prepared and executed by the Company
and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.
(g) If the Company shall solicit from Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by Company Order, fix in advance a
record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on
the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Securities shall be
computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with, the Trustee by any Holder or by the Company, or the Company by the Trustee
or by any Holder, shall be sufficient for every purpose hereunder (unless
otherwise herein
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expressly provided) if in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by facsimile
transmission, telex or other direct written electronic means to such telephone
number or other electronic communications address as the parties hereto shall
from time to time designate, or transmitted by registered mail, charges prepaid,
to the applicable address set opposite such party's name below or to such other
address as either party hereto may from time to time designate:
If to the Trustee, to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telephone: (312) 407-1895
Telecopy: (312) 407-1078
If to the Company, to:
IES Utilities Inc.
IES Tower
200 First Street S.E.
Cedar Rapids, Iowa 52401
Attention: General Counsel
Telephone: (319) 398-8147
Telecopy: (319) 398-4533
Any communication contemplated herein shall be deemed to have
been made, given, furnished and filed if personally delivered, on the date of
delivery, if transmitted by facsimile transmission, telex or other direct
written electronic means, on the date of transmission, and if transmitted by
certified or registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given, and shall be deemed given, to Holders if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event, at
the address of such Holder as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders.
Any notice required by this Indenture may be waived in writing
by the Person entitled to receive such notice, either before or after the event
otherwise to be specified therein, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the
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Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or deemed to be
included in this Indenture by, or is otherwise governed by, any of the
provisions of the Trust Indenture Act, such other provision shall control; and
if any provision hereof otherwise conflicts with the Trust Indenture Act, the
Trust Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
and Trustee shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, except to the
extent that the law of any other jurisdiction shall be mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities other than a provision in Securities of any series, or any Tranche
thereof, or in the Board Resolution or Officer's Certificate which establishes
the terms of the Securities of such series or Tranche, which specifically states
that such provision shall apply in lieu of this Section) payment of interest or
principal and premium, if any, need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment, except that if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day in
each case with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and, if such payment is made or
duly provided for on such Business Day, no interest shall accrue on the amount
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so payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms thereof established in the indenture
supplemental hereto establishing such series or in a Board Resolution
establishing such series, or in an Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form or forms of
Securities of any series are established in a Board Resolution or in an
Officer's Certificate pursuant to a Board Resolution, such Board Resolution and
Officer's Certificate, if any, shall be delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Sections 301 or
1201 (g), the Securities of each series shall be issuable in registered form
without coupons. The definitive Securities shall be produced in such manner as
shall be determined by the officers executing such Securities, as evidenced by
their execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
___________________________________
___________, Trustee
By: _______________________________
Authorized Officer
ARTICLE THREE
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THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Prior to
the authentication and delivery of Securities of any series there shall be
established by specification in a supplemental indenture or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental indenture
or a Board Resolution:
(a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all other
series);
(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of such series pursuant to Section 304, 305, 306, 406
or 1206 and, except for any Securities which, pursuant to Section 303,
are deemed never to have been authenticated and delivered hereunder);
(c) the Person or Persons (without specific identification) to
whom interest on Securities of such series, or any Tranche thereof,
shall be payable on any Interest Payment Date, if other than the
Persons in whose names such Securities (or one or more Predecessor
Securities) are registered at the close of business on the Regular
Record Date for such interest;
(d) the date or dates on which the principal of the Securities
of such series, or any Tranche thereof, is payable or any formula or
other method or other means by which such date or dates shall be
determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise (without regard to
any provisions for redemption, prepayment, acceleration, purchase or
extension);
(e) the rate or rates at which the Securities of such series,
or any Tranche thereof, shall bear interest, if any (including the rate
or rates at which overdue principal shall bear interest, if different
from the rate or rates at which such Securities shall bear interest
prior to Maturity, and, if applicable, the rate or rates at which
overdue premium or interest shall bear interest, if any), or any
formula or other method or other means by which such rate or rates
shall be determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date or dates
from which such interest shall accrue; the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date, if
any, for the interest payable on such Securities on any Interest
Payment Date; the right of the Company, if any, to extend the interest
payment periods and the duration of any such extension as contemplated
by Section 312; and the basis of computation of interest, if other than
as provided in Section 310;
(f) the place or places at which or methods by which (1) the
principal of and premium, if any, and interest, if any, on Securities
of such series, or any Tranche thereof, shall be payable, (2)
registration of transfer of Securities of such series, or any Tranche
thereof, may be effected, (3) exchanges of Securities of such series,
or any Tranche thereof, may be effected and (4) notices and demands to
or upon the Company in respect of the
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Securities of such series, or any Tranche thereof, and this Indenture
may be served; the Security Registrar and any Paying Agent or Agents
for such series or Tranche; and if such is the case, that the principal
of such Securities shall be payable without presentment or surrender
thereof;
(g) the period or periods within which, or the date or dates
on which, the price or prices at which and the terms and conditions
upon which the Securities of such series, or any Tranche thereof, may
be redeemed, in whole or in part, at the option of the Company and any
restrictions on such redemptions, including but not limited to a
restriction on a partial redemption by the Company of the Securities of
any series, or any Tranche thereof, resulting in delisting of such
Securities from any national exchange;
(h) the obligation or obligations, if any, of the Company to
redeem or purchase the Securities of such series, or any Tranche
thereof, pursuant to any sinking fund or other mandatory redemption
provisions or at the option of a Holder thereof and the period or
periods within which or the date or dates on which, the price or prices
at which and the terms and conditions upon which such Securities shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation, and applicable exceptions to the requirements of Section
404 in the case of mandatory redemption or redemption at the option of
the Holder;
(i) the denominations in which Securities of such series, or
any Tranche thereof, shall be issuable if other than denominations of
$1,000 and any integral multiple thereof;
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium, if any,
and interest, if any, on the Securities of such series, or any Tranche
thereof, shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof, are to
be payable, at the election of the Company or a Holder thereof, in a
coin or currency other than that in which the Securities are stated to
be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(l) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof, are to
be payable, or are to be payable at the election of the Company or a
Holder thereof, in securities or other property, the type and amount of
such securities or other property, or the formulary or other method or
other means by which such amount shall be determined, and the period or
periods within which, and the terms and conditions upon which, any such
election may be made;
(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of such series,
or any Tranche thereof, may be determined with reference to an index or
other fact or event ascertainable outside of this Indenture, the manner
in which such amounts shall be determined to the extent not established
pursuant to clause (e) of this paragraph;
(n) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series, or any Tranche
thereof, which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 802;
(o) any Events of Default, in addition to those specified in
Section 801, with respect to the Securities of such series, and any
covenants of the Company for the benefit of the
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Holders of the Securities of such series, or any Tranche thereof, in
addition to those set forth in Article Six;
(p) the terms, if any, pursuant to which the Securities of
such series, or any Tranche thereof, may be converted into or exchanged
for shares of capital stock or other securities of the Company or any
other Person;
(q) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the Securities of
such series, or any Tranche thereof, denominated in a currency other
than Dollars or in a composite currency, and any additional or
alternative provisions for the reinstatement of the Company's
indebtedness in respect of such Securities after the satisfaction and
discharge thereof as provided in Section 701;
(r) if the Securities of such series, or any Tranche thereof,
are to be issued in global form, (1) any limitations on the rights of
the Holder or Holders of such Securities to transfer or exchange the
same or to obtain the registration of transfer thereof, (2) any
limitations on the rights of the Holder or Holders thereof to obtain
certificates therefor in definitive form in lieu of temporary form and
(3) any and all other matters incidental to such Securities;
(s) if the Securities of such series, or any Tranche thereof,
are to be issuable as bearer securities, any and all matters incidental
thereto which are not specifically addressed in a supplemental
indenture as contemplated by clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r) of
this paragraph, any limitations on the rights of the Holders of the
Securities of such Series, or any Tranche thereof, to transfer or
exchange such Securities or to obtain the registration of transfer
thereof; and if a service charge will be made for the registration of
transfer or exchange of Securities of such series, or any Tranche
thereof, the amount or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of such
series, or any Tranche thereof; and
(v) any other terms of the Securities of such series, or any
Tranche thereof, not inconsistent with the provisions of this
Indenture.
With respect to Securities of a series subject to a Periodic
Offering, the indenture supplemental hereto or the Board Resolution which
establishes such series, or the Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, as the case may be, may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of Securities of such series, or any Tranche thereof,
shall be specified in a Company Order or that such terms shall be determined by
the Company or its agents in accordance with procedures specified in a Company
Order as contemplated by clause (b) of Section 303.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities of
each series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
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Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities
shall be executed on behalf of the Company by an Authorized Officer and may have
the corporate seal of the Company affixed thereto or reproduced thereon and
attested by any other Authorized Officer. The signature of any or all of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such Securities.
The Trustee shall authenticate and deliver Securities of a
series, for original issue, at one time or from time to time in accordance with
the Company Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or
forms and terms of such series, as provided in Sections 201 and 301;
(b) a Company Order requesting the authentication and delivery
of such Securities and, to the extent that the terms of such Securities
shall not have been established in an indenture supplemental hereto or
in a Board Resolution, or in an Officer's Certificate pursuant to a
supplemental indenture or Board Resolution, all as contemplated by
Sections 201 and 301, either (1) establishing such terms or (2) in the
case of Securities of a series subject to a Periodic Offering,
specifying procedures, acceptable to the Trustee, by which such terms
are to be established (which procedures may provide, to the extent
acceptable to the Trustee, for authentication and delivery pursuant to
oral or electronic instructions from the Company or any agent or agents
thereof, which oral instructions are to be promptly confirmed
electronically or in writing), in either case in accordance with the
instrument or instruments delivered pursuant to clause (a) above;
(c) the Securities of such series, executed on behalf of the
Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(1) the form or forms of such Securities have been
duly authorized by the Company and have been established in
conformity with the provisions of this Indenture;
(2) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(3) such Securities, when authenticated and delivered
by the Trustee and issued and delivered by the Company in the
manner and subject to any conditions specified in such Opinion
of Counsel, will have been duly issued under this Indenture
and will constitute valid and legally binding obligations of
the Company, entitled to the benefits provided by this
Indenture, and enforceable in accordance with their terms,
subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
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provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of such
Securities (provided that such Opinion of Counsel addresses the authentication
and delivery of all Securities of such series) and that in lieu of the opinions
described in clauses (2) and (3) above Counsel may opine that:
(x) when the terms of such Securities shall have been
established pursuant to a Company Order or Orders or pursuant to such
procedures (acceptable to the Trustee) as may be specified from time to
time by a Company Order or Orders, all as contemplated by and in
accordance with the instrument or instruments delivered pursuant to
clause (a) above, such terms will have been duly authorized by the
Company and will have been established in conformity with the
provisions of this Indenture; and
(y) such Securities, when authenticated and delivered by the
Trustee in accordance with this Indenture and the Company Order or
Orders or specified procedures referred to in paragraph (x) above and
issued and delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided
by the Indenture, and enforceable in accordance with their terms,
subject, as to enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency laws, and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of Counsel
and other documents delivered pursuant to Sections 201 and 301 and this Section,
as applicable, at or prior to the time of the first authentication of Securities
of such series unless and until such opinion or other documents have been
superseded or revoked or expire by their terms. In connection with the
authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any Governmental Authority having jurisdiction
over the Company.
If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such Securities pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, each Security shall
be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, no Security shall
be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the
Trustee or its agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder to the Company, or any Person acting on
its behalf, but shall never have been
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issued and sold by the Company, and the Company shall deliver such Security to
the Security Registrar for cancellation as provided in Section 309 together with
a written statement (which need not comply with Section 102 and need not be
accompanied by an Officer's Certificate and an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any
series, or any Tranche thereof, the Company may execute, and upon Company Order
the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities; provided,
however, that temporary Securities need not recite specific redemption, sinking
fund, conversion or exchange provisions.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, after the
preparation of definitive Securities of such series or Tranche, the temporary
Securities of such series or Tranche shall be exchangeable, without charge to
the Holder thereof, for definitive Securities of such series or Tranche upon
surrender of such temporary Securities at the office or agency of the Company
maintained pursuant to Section 602 in a Place of Payment for such Securities.
Upon such surrender of temporary Securities, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and deliver in exchange
therefor definitive Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and Tranche and of like
tenor authenticated and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated
pursuant to Section 602, with respect to the Securities of each series or any
Tranche thereof, a register (all registers kept in accordance with this Section
being collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series or Tranche and the registration of
transfer thereof. The Company shall designate one Person to maintain the
Security Register for the Securities of each series on a consolidated basis, and
such Person is referred to herein, with respect to such series, as the "Security
Registrar." Anything herein to the contrary notwithstanding, the Company may
designate one or more of its offices as an office in which a register with
respect to the Securities of one or more series, or any Tranche or Tranches
thereof, shall be maintained, and the Company may designate itself the Security
Registrar with respect to one or more of such series. The Security Register
shall be open for inspection by the Trustee and the Company at all reasonable
times.
Except as otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche thereof, upon
surrender for registration of transfer of any Security of such series or Tranche
at the office or agency of the Company maintained pursuant to Section 602 in a
Place of Payment for such series or Tranche, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or
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<PAGE> 26
more new Securities of the same series and Tranche, of authorized denominations
and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301
with respect to the Securities of any series, or any Tranche thereof, any
Security of such series or Tranche may be exchanged at the option of the Holder,
for one or more new Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or
exchange of Securities shall be valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee or
the Security Registrar) be duly endorsed or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, duly executed by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with
respect to Securities of any series, or any Tranche thereof, no service charge
shall be made for any registration of transfer or exchange of Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.
The Company shall not be required to execute or to provide for
the registration of transfer of or the exchange of (a) Securities of any series,
or any Tranche thereof, during a period of 15 days immediately preceding the
date notice is to be given identifying the serial numbers of the Securities of
such series or Tranche called for redemption or (b) any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and Tranche, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction, loss or
theft of any Security and (b) such security or indemnity as may be reasonably
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such Security, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series and
Tranche, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
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Notwithstanding the foregoing, in case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone
other than the Holder of such new Security, and any such new Security shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.
Subject to Section 312, any interest on any Security of any
series which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the related Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a date (herein called a "Special Record Date") for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security
of such series and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall promptly cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series at the
address of such Holder as it appears in the Security
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Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date.
(b) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 308. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and premium, if any, and (subject to Sections 305 and 307)
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Security Registrar, be delivered to the Security Registrar and, if not
theretofore canceled, shall be promptly canceled by the Security Registrar. The
Company may at any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever or which the Company shall not have
issued and sold, and all Securities so delivered shall be promptly canceled by
the Security Registrar. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Security Registrar shall be disposed of in accordance with a Company Order
delivered to the Security Registrar and the Trustee, and the Security Registrar
shall promptly deliver a certificate of disposition to the Trustee and the
Company unless, by a Company Order, similarly delivered, the Company shall
direct that canceled Securities be returned to it. The Security Registrar shall
promptly deliver evidence of any cancellation of a Security in accordance with
this Section 309 to the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, or any Tranche thereof, interest on the Securities
of each series shall be computed on the basis of a 360-day year consisting of
twelve 30-day months and on the basis of the actual number of days elapsed
within any month in relation to the deemed 30 days of such month.
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SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any Tranche
thereof, denominated in any currency other than Dollars or in a composite
currency (the "Required Currency"), except as otherwise specified with respect
to such Securities as contemplated by Section 301, the obligation of the Company
to make any payment of the principal thereof, or the premium, if any, or
interest, if any, thereon, shall not be discharged or satisfied by any tender by
the Company, or recovery by the Trustee, in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
Trustee timely holding the full amount of the Required Currency then due and
payable. If any such tender or recovery is in a currency other than the Required
Currency, the Trustee may take such actions as it considers appropriate to
exchange such currency for the Required Currency. The costs and risks of any
such exchange, including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall remain fully
liable for any shortfall or delinquency in the full amount of Required Currency
then due and payable, and in no circumstances shall the Trustee be liable
therefor except in the case of its negligence or willful misconduct.
SECTION 312. EXTENSION OF INTEREST PAYMENT.
The Company shall have the right at any time, so long as the
Company is not in default in the payment of interest on the Securities of any
series hereunder, to extend interest payment periods on all Securities of one
or more series, or Tranches thereof, if so specified as contemplated by Section
301 with respect to such Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 301
for Securities of such series or Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company shall,
at least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of such Securities
to be redeemed. In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
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If less than all the Securities of any series, or any Tranche
thereof, are to be redeemed, the particular Securities to be redeemed shall be
selected by the Security Registrar from the Outstanding Securities of such
series or Tranche not previously called for redemption, by such method as shall
be provided for any particular series or Tranche, or, in the absence of any such
provision, by such method of random selection as the Security Registrar shall
deem fair and appropriate and which may, in any case, provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of such series or Tranche or any integral multiple thereof) of the
principal amount of Securities of such series or Tranche of a denomination
larger than the minimum authorized denomination for Securities of such series or
Tranche; provided, however, that if, as indicated in an Officer's Certificate,
the Company shall have offered to purchase all or any principal amount of the
Securities then Outstanding of any series, or any Tranche thereof, and less than
all of such Securities as to which such offer was made shall have been tendered
to the Company for such purchase, the Security Registrar, if so directed by
Company Order, shall select for redemption all or any principal amount of such
Securities which have not been so tendered.
The Security Registrar shall promptly notify the Company and the
Trustee in writing of the Securities selected for redemption and, in the case of
any Securities selected to be redeemed in part, the principal amount thereof to
be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 106 to the Holders of the Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series or Tranche are
to be redeemed, the identification of the particular Securities to be
redeemed and the portion of the principal amount of any Security to be
redeemed in part,
(d) that on the Redemption Date the Redemption Price, together
with accrued interest, if any, to the Redemption Date, will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any, unless it shall have been specified as contemplated by Section 301
with respect to such Securities that such surrender shall not be
required,
(f) that the redemption is for a sinking or other fund, if such
is the case, and
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(g) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any notice of redemption of
Securities at the election of the Company, unless, upon the giving of such
notice, such Securities shall be deemed to have been paid in accordance with
Section 701, such notice may state that such redemption shall be conditional
upon the receipt by the Paying Agent or Agents for such Securities, on or prior
to the date fixed for such redemption, of money sufficient to pay the principal
of and premium, if any, and interest, if any, on such Securities and that if
such money shall not have been so received such notice shall be of no force or
effect and the Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition and such money is
not so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the Holders thereof any
of such Securities which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election
of the Company, and any notice of non-satisfaction of a condition for redemption
as aforesaid, shall be given by the Company or, at the Company's request, by the
Security Registrar in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security Registrar in
the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with such notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such Security, any
installment of interest on any Security the Stated Maturity of which installment
is on or prior to the Redemption Date shall be payable to the Holder of such
Security, or one or more Predecessor Securities, registered as such at the close
of business on the related Regular Record Date according to the terms of such
Security and subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be redeemed only in
part at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities of the same series and Tranche, of
any authorized denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
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ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of any series, or any Tranche thereof,
except as otherwise specified as contemplated by Section 301 for Securities of
such series or Tranche.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series, or any Tranche thereof, is herein referred to
as a "mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Securities of any series, or any Tranche
thereof, is herein referred to as an "optional sinking fund payment". If
provided for by the terms of Securities of any series, or any Tranche thereof,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 502. Each sinking fund payment shall be applied to the
redemption of Securities of the series or Tranche in respect of which it was
made as provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (a) may deliver to the Trustee Outstanding Securities
(other than any previously called for redemption) of a series or Tranche in
respect of which a mandatory sinking fund payment is to be made and (b) may
apply as a credit Securities of such series or Tranche which have been (1)
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 or (2) repurchased by the
Company in the open market, by tender offer or otherwise, in each case in
satisfaction of all or any part of such mandatory sinking fund payment;
provided, however, that no Securities shall be applied in satisfaction of a
mandatory sinking fund payment if such Securities shall have been previously so
applied. Securities so applied shall be received and credited for such purpose
by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for
the Securities of any series, or any Tranche thereof, the Company shall deliver
to the Trustee an Officer's Certificate specifying:
(a) the amount of the next succeeding mandatory sinking fund
payment for such series or Tranche;
(b) the amount, if any, of the optional sinking fund payment to
be made together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
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(d) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by the payment of cash;
(e) the portion, if any, of such aggregate sinking fund payment
which is to be satisfied by delivering and crediting Securities of such
series or Tranche pursuant to Section 502 and stating the basis for such
credit and that such Securities have not previously been so credited,
and the Company shall also deliver to the Trustee any Securities to be
so delivered. If the Company shall not deliver such Officer's
Certificate, the next succeeding sinking fund payment for such series or
Tranche shall be made entirely in cash in the amount of the mandatory
sinking fund payment. Not less than 40 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section
403 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section
404. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in
Sections 405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if any, and
interest, if any, on the Securities of each series in accordance with the terms
of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the
Securities of each series, or any Tranche thereof, an office or agency where
payment of such Securities shall be made, where the registration of transfer or
exchange of such Securities may be effected and where notices and demands to or
upon the Company in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency and prompt notice to
the Holders of any such change in the manner specified in Section 106. If at any
time the Company shall fail to maintain any such required office or agency in
respect of Securities of any series, or any Tranche thereof, or shall fail to
furnish the Trustee with the address thereof, payment of such Securities shall
be made, registration of transfer or exchange thereof may be effected and
notices and demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
for all such purposes in any such event.
The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series, or any
Tranche thereof, for any or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that, unless otherwise
specified as contemplated by Section 301 with respect to the Securities of such
series or Tranche, no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency for such purposes
in each Place of Payment for such Securities in accordance with the requirements
set forth above. The Company shall give prompt written notice to the Trustee,
and prompt notice to the Holders in the manner specified in Section 106, of any
such designation or rescission and of any change in the location of any such
other office or agency.
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Anything herein to the contrary notwithstanding, any office or
agency required by this Section may be maintained at an office of the Company,
in which event the Company shall perform all functions to be performed at such
office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it shall, on or
before each due date of the principal of and premium, if any, and interest, if
any, on any of such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and premium
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company shall promptly notify the
Trustee of any failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or interest, if any, on
such Securities.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, or any Tranche thereof, it shall, on or before each
due date of the principal of and premium, if any, and interest, if any, on such
Securities, deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so becoming due, such
sums to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of
any series, or any Tranche thereof, other than the Company or the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of
and premium, if any, or interest, if any, on such Securities in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or any
other obligor upon such Securities) to make any payment of principal of
or premium, if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such failure, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent and furnish to the Trustee
such information as it possesses regarding the names and addresses of
the Persons entitled to such sums.
The Company may at any time pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent and, if
so stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and premium,
if any, or interest, if any, on any Security and remaining unclaimed for two
years after such principal and premium, if any, or interest,
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if any, has become due and payable shall be paid to the Company on Company
Request, or, if then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security shall, as an
unsecured general creditor and not as a Holder of an Outstanding Security, look
only to the Company for payment of the amount so due and payable and remaining
unpaid, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such payment to the Company, may at the
expense of the Company cause to be mailed, on one occasion only, notice to such
Holder that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such mailing, any
unclaimed balance of such money then remaining will be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Eleven, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all its properties used or
useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and shall cause (or, with respect to
property owned in common with others, make reasonable effort to cause) to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the Company, may be necessary so that the
business carried on in connection therewith may be properly conducted; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation and maintenance
of any of its properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than October 1 in each year, commencing October 1, 1997,
the Company shall deliver to the Trustee an Officer's Certificate which need not
comply with Section 102, executed by the principal executive officer, the
principal financial officer or the principal accounting officer of the Company,
as to such officer's knowledge of the Company's compliance with all conditions
and covenants under this Indenture, such compliance to be determined without
regard to any period of grace or requirement of notice under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in (a) Section 602 or any additional
covenant or restriction specified with respect to the Securities of any series,
or any Tranche thereof, as contemplated by Section 301 if before the time for
such compliance the Holders of at least a majority in aggregate principal amount
of the Outstanding Securities of all series and Tranches with respect to which
compliance with Section 602 or such additional covenant or restriction is to be
omitted, considered as one class, shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition and (b) Section 604, 605 or Article Eleven if before the
time for such compliance the Holders of at least a majority in principal amount
of Securities Outstanding under this Indenture shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or (b), no such
waiver
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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 608. LIMITATIONS ON LIENS.
So long as there remain outstanding any Securities of any series
to which this Section 608 applies under the terms of the series, the Company
shall not, and will not permit any subsidiary to, create or suffer to be created
or to exist any Lien on any of its properties or assets now owned or hereinafter
acquired to secure any indebtedness, without making effective provision whereby
the Securities (together with, if the Company shall so determine, any other debt
of the Company or any subsidiary then existing or thereafter created that is not
subordinate to such Securities) of such series shall be equally and ratably
secured with (or prior to) any and all such indebtedness and with any other
indebtedness similarly entitled to be equally and ratably secured. However, this
restriction shall not apply to or prevent the creation or existence of:
(a) the Liens of the Mortgages or any indenture supplemental to
any thereof subjecting any property to the Lien thereof or confirming
the Lien thereof upon any property, whether now owned or hereafter
acquired;
(b) Liens on property existing at the time of acquisition or
construction of such property (or created within one year after
completion of such acquisition or construction), whether by purchase,
merger,construction or otherwise (or on the property of a subsidiary at
the date it became a subsidiary), or to secure the payment of all or any
part of the purchase price or construction cost thereof, including the
extension of any such Liens to repairs, renewals, replacements,
substitutions, betterments, additions, extensions and improvements then
or thereafter made on the property subject thereto;
(c) any extensions, renewals or replacements (or successive
extensions, renewals or replacements), in whole or in part of Liens
permitted by the foregoing clauses (a) and (b);
(d) the pledge of any bonds or other securities at any time issued
under any of the Liens permitted by clauses (a), (b), or (c); or
(e) Permitted Liens.
Further, this restriction shall not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be deemed to
have been satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in
trust:
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(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of such
Securities or portions thereof, Eligible Obligations, which shall not
contain provisions permitting the redemption or other prepayment thereof
at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will
provide moneys which, together with the money, if any, deposited with or
held by the Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof on or prior to
Maturity; provided, however, that in the case of the provision for payment or
redemption of less than all the Securities of any series or Tranche, such
Securities or portions thereof shall have been selected by the Security
Registrar as provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been given or
irrevocable authority shall have been given by the Company to the Trustee to
give such notice, under arrangements satisfactory to the Trustee; and provided,
further, that the Company shall have delivered to the Trustee and such Paying
Agent:
(x) if such deposit shall have been made prior to the Maturity of
such Securities, a Company Order stating that the money and Eligible
Obligations deposited in accordance with this Section shall be held in
trust, as provided in Section 703;
(y) if Eligible Obligations shall have been deposited, an Opinion
of Counsel that the obligations so deposited constitute Eligible
Obligations and do not contain provisions permitting the redemption or
other prepayment at the option of the issuer thereof, and an opinion of
an independent public accountant of nationally recognized standing,
selected by the Company, to the effect that the requirements set forth
in clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity of
such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
indebtedness in respect of such Securities or portions thereof will have
been satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(x), (y) and (z) above, the Trustee shall, upon receipt of a Company Request,
acknowledge in writing that the Security or Securities or portions thereof with
respect to which such deposit was made are deemed to have been paid for all
purposes of this Indenture and that the entire indebtedness of the Company in
respect thereof has been satisfied and discharged as contemplated in this
Section. In the event that all of the conditions set forth in the preceding
paragraph shall have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate specified in
clause (z) shall not have been delivered, such Securities or portions thereof
shall nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the covenants
contained in Sections 602, 603 and 604) or any other covenants made in respect
of such Securities or portions thereof as contemplated by Section 301, but the
indebtedness of the Company in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged prior to Maturity for
any other purpose, and the Holders of such Securities or portions thereof shall
continue to be entitled to look to the Company for payment of the indebtedness
represented
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thereby; and, upon Company Request, the Trustee shall acknowledge in writing
that such Securities or portions thereof are deemed to have been paid for all
purposes of this Indenture.
If payment at Stated Maturity of less than all of the Securities
of any series, or any Tranche thereof, is to be provided for in the manner and
with the effect provided in this Section, the Security Registrar shall select
such Securities, or portions of principal amount thereof, in the manner
specified by Section 403 for selection for redemption of less than all the
Securities of a series or Tranche.
In the event that Securities which shall be deemed to have been
paid for purposes of this Indenture, and, if such is the case, in respect of
which the Company's indebtedness shall have been satisfied and discharged, all
as provided in this Section do not mature and are not to be redeemed within the
sixty (60) day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as promptly as
practicable, give a notice, in the same manner as a notice of redemption with
respect to such Securities, to the Holders of such Securities to the effect that
such deposit has been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to have been
paid for purposes of this Indenture, as aforesaid, the obligations of the
Company and the Trustee in respect of such Securities under Sections 304, 305,
306, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907, 909, 910
and 915 and this Article Seven shall survive.
The Company shall pay, and shall indemnify the Trustee or any
Paying Agent with which Eligible Obligations shall have been deposited as
provided in this Section against, any tax, fee or other charge imposed on or
assessed against such Eligible Obligations or the principal or interest received
in respect of such Eligible Obligations, including, but not limited to, any such
tax payable by any entity deemed, for tax purposes, to have been created as a
result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any
time after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied or discharged, pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the money or
Eligible Obligations, or combination thereof, deposited with it as aforesaid to
the Company or its representative under any applicable Federal or State
bankruptcy, insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of
the Company's indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to remain Outstanding
and (b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
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provided, however, that if, in accordance with the last paragraph of Section
701, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture
as aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907, 909,
910 and 915 and this Article Seven shall survive.
Upon satisfaction and discharge of this Indenture as provided in
this Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 907, any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities other than money and Eligible Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited pursuant
to Section 701, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and such
Eligible Obligations and money deposited and the principal and interest payments
on any such Eligible Obligations shall be held in trust for, the payment of the
principal of and premium, if any, and interest, if any, on the Securities or
portions of principal amount thereof in respect of which such deposit was made,
all subject, however, to the provisions of Section 603; provided, however, that,
so long as there shall not have occurred and be continuing an Event of Default,
any cash received from such principal or interest payments on such Eligible
Obligations, if not then needed for such purpose, shall, to the extent
practicable, be invested in Eligible Obligations of the type described in clause
(b) in the first paragraph of Section 701 maturing at such times and in such
amounts as shall be sufficient, together with any other moneys and the principal
of and interest on any other Eligible Obligations then held by the Trustee, to
pay when due the principal of and premium, if any, and interest, if any, due and
to become due on such Securities or portions thereof on and prior to the
Maturity thereof, and interest earned from such reinvestment shall be paid over
to the Company as received, free and clear of any trust, lien or pledge under
this Indenture except the lien provided by Section 907; and provided, further,
that, so long as there shall not have occurred and be continuing an Event of
Default, any moneys held in accordance with this Section on the Maturity of all
such Securities in excess of the amount required to pay the principal of and
premium, if any, and interest, if any, then due on such Securities shall be paid
over to the Company free and clear of any trust, lien or pledge under this
Indenture except the lien provided by Section 907; and provided, further, that
if an Event of Default shall have occurred and be continuing, moneys to be paid
over to the Company pursuant to this Section shall be held until such Event of
Default shall have been waived or cured.
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ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of such
series within sixty (60) days after the same becomes due and payable;
provided, however, that a valid extension of the interest payment period
by the Company as contemplated in Section 312 of this Indenture shall
not constitute a failure to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if any, on any
Security of such series within ten (10) days after its Maturity; or
(c) failure to perform, or breach of, any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a
default in the performance of which or breach of which is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more series
of Securities other than such series) for a period of 60 days after
there has been given, by registered or certified mail, to the Company by
the Trustee, or to the Company and the Trustee by the Holders of at
least 33% in principal amount of the Outstanding Securities of such
series, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not less than the
principal amount of Securities the Holders of which gave such notice, as
the case may be, shall agree in writing to an extension of such period
prior to its expiration; provided, however, that the Trustee, or the
Trustee and the Holders of such principal amount of Securities of such
series, as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by the
Company within such period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of
(1) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (2) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for relief or
any such other decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in a
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
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against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due, or the authorization of such action by the Board of Directors; or
(f) any other Event of Default specified with respect to
Securities of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default shall have occurred and be continuing with
respect to Securities of any series at the time Outstanding, then in every such
case the Trustee or the Holders of not less than 33% in principal amount of the
Outstanding Securities of such series may declare the principal amount (or, if
any of the Securities of such series are Discount Securities, such portion of
the principal amount of such Securities as may be specified in the terms thereof
as contemplated by Section 301) of all of the Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon receipt by the Company of notice of such
declaration such principal amount (or specified amount) shall become immediately
due and payable; provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one series of Securities,
the Trustee or the Holders of not less than 33% in aggregate principal amount of
the Outstanding Securities of all such series, considered as one class (and not
the Holders of the Securities of any one of such series), may make such
declaration of acceleration.
At any time after such a declaration of acceleration with respect
to Securities of any series shall have been made and before a judgment or decree
for payment of the money due shall have been obtained by the Trustee as
hereinafter in this Article provided, the Event or Events of Default giving rise
to such declaration of acceleration shall, without further act, be deemed to
have been waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with the Trustee a
sum sufficient to pay
(1) all overdue interest on all Securities of such series;
(2) the principal of and premium, if any, on any Securities
of such series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Securities;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities;
(4) all amounts due to the Trustee under Section 907;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the non-payment of the principal
of Securities of such series which shall have become due solely by such
declaration of acceleration, shall have been cured or waived as provided
in Section 813.
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No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section
801 shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities of the
series with respect to which such Event of Default shall have occurred, the
whole amount then due and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent permitted by law, interest on
premium, if any, and on any overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover any amounts due to the Trustee under
Section 907.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series
shall have occurred and be continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for amounts due to the Trustee under Section 907)
and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 907.
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Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
premium, if any, or interest, if any, upon presentation of the Securities in
respect of which or for the benefit of which such money shall have been
collected and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
907;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal of and premium, if any, and interest, if any,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal, premium, if any, and interest, if any, respectively; and
THIRD: To the Company.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of such series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing, considered as
one class, shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
all series in respect of which an Event of Default shall have occurred
and be continuing, considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and (subject to Section
307 and 312) interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
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If an Event of Default shall have occurred and be continuing in
respect of a series of Securities, the Holders of a majority in principal amount
of the Outstanding Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series; provided, however, that if an Event of
Default shall have occurred and be continuing with respect to more than one
series of Securities, the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all such series, considered as one class, shall
have the right to make such direction, and not the Holders of the Securities of
any one of such series; and provided, further, that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not, in the Trustee's
sole discretion, be adequate, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(a) in the payment of the principal of or premium, if any, or
interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under
Section 1202 cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
and all Events of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities of all series in respect of which
such suit may be brought, considered as one class, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
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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 NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with
respect to Securities of any series,
(1) the Trustee undertakes to perform, with respect to
Securities of such series, such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may, 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.
(b) In case an Event of Default with respect to Securities of
any series shall have occurred and be continuing, the Trustee shall
exercise, with respect to 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 wilful misconduct, except that
(1) this clause (c) shall not be construed to limit the
effect of clause (a) of this Section;
(2) 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;
(3) 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
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majority in principal amount of the Outstanding Securities of any
one or more series, as provided herein, 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; and
(4) 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.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder with
respect to the Securities of any series to the Holders of Securities of such
series in the manner and to the extent required to do so by the Trust Indenture
Act, unless such default shall have been cured or waived; provided, however,
that in the case of any default of the character specified in clause (c) of
Section 801, no such notice to Holders shall be given until at least 75 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time, or both,
would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the applicable
provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order,
or as otherwise expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the 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;
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(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall (subject to applicable legal requirements) be
entitled to examine, during normal business hours, the books, records
and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder; and
(h) except as otherwise provided in Section 801, the Trustee shall
not be charged with knowledge of any Event of Default with respect to
the Securities of any series for which it is acting as Trustee unless
either (1) a Responsible Officer of the Trustee shall have actual
knowledge of the Event of Default or (2) written notice of such Event of
Default shall have been given to the Trustee by the Company, any other
obligor on such Securities or by any Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 908 and 913, may otherwise deal with the Company with
the same rights it would have if it were not the Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by law. The Trustee
shall be under no liability for interest on or investment of any money received
by it hereunder except as expressly provided herein or otherwise agreed with,
and for the sole benefit of, the Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
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The Company shall
(a) pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except to
the extent that any such expense, disbursement or advance may be
attributable to its negligence, wilful misconduct or bad faith; and
(c) indemnify the Trustee and hold it harmless from and against,
any loss, liability or expense reasonably incurred by it arising out of
or in connection with the acceptance or administration of the trust or
trusts hereunder or the performance of its duties hereunder, including
the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence, wilful
misconduct or bad faith.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such other than
property and funds held in trust under Section 703 (except as otherwise provided
in Section 703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence, wilful misconduct
or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest
within the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and subject to the conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee, in its capacity as trustee in respect
of the Securities of any series, shall not be deemed to have a conflicting
interest arising from its capacity as trustee in respect of the Securities of
any other series.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of
the United States, any State or Territory thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision
or examination by authority of such
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foreign government or a political subdivision thereof substantially
equivalent to supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article and the Trust
Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required
by Section 911 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 908 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder for at least six months, or
(2) the Trustee shall cease to be eligible under Section
909 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove
the Trustee with respect to all Securities or (B) subject to Section
814, any Holder who has been a bona fide Holder for at least six months
may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause (other than as contemplated in clause (B) in clause (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with
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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 911. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 911, become the successor Trustee with respect
to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by
the Company or the Holders and accepted appointment in the manner
required by Section 911, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of itself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to
the Securities of such series.
(f) So long as no event which is, or after notice or lapse of
time, or both, would become, an Event of Default shall have occurred and
be continuing, and except with respect to a Trustee appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Securities pursuant to subsection (e) of this Section, if the Company
shall have delivered to the Trustee (1) a Board Resolution appointing a
successor Trustee, effective as of a date specified therein, and (2) an
instrument of acceptance of such appointment, effective as of such date,
by such successor Trustee in accordance with Section 911, the Trustee
shall be deemed to have resigned as contemplated in subsection (b) of
this Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to subsection (e) of this Section and
such appointment shall be deemed to have been accepted as contemplated
in Section 911, all as of such date, and all other provisions of this
Section and Section 911 shall be applicable to such resignation,
appointment and acceptance except to the extent inconsistent with this
clause (f).
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities
of any series by mailing written notice of such event by first-class
mail, postage prepaid, to all Holders of Securities of such series as
their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of all series, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of all
sums owed to it, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
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(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to
the Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested
in the retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust
and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee,
upon payment of all sums owed to it, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such
successor Trustee all such rights, powers and trusts referred to in
clause (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Securities (other than by reason of a relationship
described in Section 311(b) of the Trust Indenture Act), the Trustee shall be
subject to any and all applicable provisions of the Trust Indenture Act
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regarding the collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company or such obligor 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 or such obligor arising from the
making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of any applicable jurisdiction, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or of the
Holders of at least thirty-three per centum (33%) in principal amount of the
Securities then Outstanding, the Company shall for such purpose join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee
either to act as co-trustee, jointly with the Trustee, or to act as separate
trustee, in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons, in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Company does not join in such
appointment within 15 days after the receipt by it of a request so to do, or if
an Event of Default shall have occurred and be continuing, the Trustee alone
shall have power to make such appointment.
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
conditions:
(a) the Securities shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or
performed either by the Trustee or by the Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to
be performed, the Trustee shall be incompetent or unqualified to perform
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such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate
trustee;
(c) the Trustee at any time, by an instrument in writing executed
by it, with the concurrence of the Company, may accept the resignation
of or remove any co-trustee or separate trustee appointed under this
Section, and, if an Event of Default shall have occurred and be
continuing, the Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the
concurrence of the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and delivery of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or
any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities of one or more series, or any Tranche thereof, which
shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series or Tranche issued upon original issuance, exchange, registration
of transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States, any State or Territory thereof or the
District of Columbia or the Commonwealth of Puerto Rico, authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
not less than $50,000,000 and subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Trustee 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 such payments, in accordance
with, and subject to the provisions of Section 907.
The provisions of Sections 308, 904 and 905 shall be applicable to
each Authenticating Agent.
If an appointment with respect to the Securities of one or more
series, or any Tranche thereof, shall be made pursuant to this Section, the
Securities of such series or Tranche may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: The First National Bank of Chicago,
As Trustee
By:_________________________________
As Authenticating Agent
By:_________________________________
Authorized Signatory
If all of the Securities of a series may not be originally issued
at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel), shall appoint, in accordance with this Section and in
accordance with such procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment designated by the
Company with respect to such series of Securities.
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ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than January 1 and July 1 in each year,
commencing January 1, 1998, and at such other times as the Trustee may request
in writing, the Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the Trust
Indenture Act; provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than July 1 in each year, commencing July 1, 1998, the
Trustee shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, a report, dated as of the next
preceding May 15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to the extent
required by the Trust Indenture Act. The Trustee shall transmit to the Holders,
the Commission and each securities exchange upon which any Securities are
listed,, and the Company shall file with the Trustee (within thirty (30) days
after filing with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and furnished to the
Trustee) and transmit to the Holders, such other information, reports and other
documents, if any, at such times and in such manner, as shall be required by the
Trust Indenture Act.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer or lease its properties and assets
substantially as an entirety to any Person, unless
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a Person organized and existing
under the laws of the United States, any State thereof or the District
of Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all Outstanding Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction and
treating any indebtedness for borrowed money which becomes an obligation
of the Company as a result of such transaction as having been incurred
by the Company at the time of such transaction, no Event
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of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by the
Company into any other corporation or any conveyance, or other transfer or lease
of the properties and assets of the Company substantially as an entirety in
accordance with Section 1101, the successor corporation formed by such
consolidation or into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities, all as provided in Article Eleven; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit of the
Holders of, or to remain in effect only so long as there shall be
Outstanding, Securities of one or more specified series, or one or more
specified Tranches thereof, or to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default with respect to all or
any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Indenture or to
add any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of
the Holders of Securities of any series or Tranche Outstanding on the
date of such indenture supplemental hereto in any material respect, such
change, elimination or addition shall become effective (1) with respect
to such series or Tranche only pursuant to the provisions of Section
1202 hereof or (2) when no Security of such series or Tranche remains
Outstanding; or
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(e) to provide collateral security for all but not part of the
Securities; or
(f) to establish the form or terms of Securities of any series or
Tranche as contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and for any
and all other matters incidental thereto; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee or co-Trustee with respect
to the Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of clause (b) of Section 911; or
(i) to provide for the procedures required to permit the Company
to utilize, at its option, a non-certificated system of registration for
all, or any series or Tranche of, the Securities; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of
Securities, or any Tranche thereof, shall be payable, (2) all or any
series of Securities, or any Tranche thereof, may be surrendered for
registration of transfer, (3) all or any series of Securities, or any
Tranche thereof, may be surrendered for exchange and (4) notices and
demands to or upon the Company in respect of all or any series of
Securities, or any Tranche thereof, and this Indenture may be served; or
(k) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other changes to the provisions hereof or to add
other provisions with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall not
adversely affect the interests of the Holders of Securities of any
series or Tranche in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to any
provisions hereof or the inclusion herein of any additional provisions,
or shall by operation of law be deemed to effect such changes or
incorporate such provisions by reference or otherwise, this Indenture
shall be deemed to have been amended so as to conform to such amendment
to the Trust Indenture Act, and the Company and the Trustee may, without
the consent of any Holders, enter into an indenture supplemental hereto
to effect or evidence such changes or additional provisions; or
(y) if any such amendment shall permit one or more changes to, or
the elimination of, any provisions hereof which, at the date of the
execution and delivery hereof or at any time thereafter, are required by
the Trust Indenture Act to be contained herein, this Indenture shall be
deemed to have been amended to effect such changes or elimination, and
the Company and the Trustee may, without the consent of any Holders,
enter into an indenture supplemental hereto to evidence such amendment
hereof.
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SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under this Indenture, considered as one class, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture; provided,
however, that if there shall be Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on (except as provided in
Section 312 hereof), any Security, or reduce the principal amount
thereof or the rate of interest thereon (or the amount of any
installment of interest thereon) or change the method of calculating
such rate or reduce any premium payable upon the redemption thereof, or
reduce the amount of the principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 802, or change the coin or currency (or
other property), in which any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any
Security (or, in the case of redemption, on or after the Redemption
Date), without, in any such case, the consent of the Holder of such
Security, or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series or any Tranche thereof, the consent of the
Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance
with any provision of this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1304 for quorum or
voting, without, in any such case, the consent of the Holders of each
Outstanding Security of such series or Tranche, or
(c) modify any of the provisions of this Section, Section 607 or
Section 813 with respect to the Securities of any series, or any Tranche
thereof, or except to increase the percentages in principal amount
referred to in this Section or such other Sections or to provide that
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of
this proviso, in accordance with the requirements of clause (b) of
Section 911 and clause (h) of Section 1201.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or of one or
more Tranches thereof, or which modifies the rights of the Holders of Securities
of such series or Tranches with respect to such covenant or other provision,
shall be
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deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof. A
waiver by a Holder of such Holder's right to consent under this Section shall be
deemed to be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 901) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. Any supplemental indenture permitted by this
Article may restate this Indenture in its entirety, and, upon the execution and
delivery thereof, any such restatement shall supersede this Indenture as
theretofore in effect for all purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series, or any Tranche thereof, authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any series, or
any Tranche thereof, so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall have
been established in a Board Resolution or an Officer's Certificate pursuant to a
Board Resolution as contemplated by Section 301, and not in an indenture
supplemental hereto, additions to, changes in or the elimination of any of such
terms may be effected by means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or Officer's
Certificate shall not be accepted by the Trustee or otherwise be effective
unless all conditions set forth in this Indenture which would be required to be
satisfied if such additions, changes or elimination were contained in a
supplemental indenture shall have been
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appropriately satisfied. Upon the acceptance thereof by the Trustee, any such
supplemental Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or all, series,
or any Tranche or Tranches thereof, may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series or Tranches.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 1301, to be held at such
time and at such place in the Borough of Manhattan, The City of New
York, as the Trustee shall determine, or, with the approval of the
Company, at any other place. Notice of every such meeting, setting forth
the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior
to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of
the Holders of Securities of one or more, or all, series, or any Tranche
or Tranches thereof, by the Company or by the Holders of 33% in
aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section 1301, by
written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities of such series and
Tranches in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City
of New York, or in such other place as shall be determined or approved
by the Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in clause (a) of this
Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, shall be valid without
notice if the Holders of all Outstanding Securities of such series or
Tranches are present in person or by proxy and if representatives of the
Company and the Trustee are present, or if notice is waived in writing
before or after the meeting by the Holders of all Outstanding Securities
of such series, or any Tranche or Tranches thereof, or by such of them
as are not present at the meeting in person or by proxy, and by the
Company and the Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
57
<PAGE> 63
To be entitled to vote at any meeting of Holders of Securities of
one or more, or all, series, or any Tranche or Tranches thereof, a Person shall
be (a) a Holder of one or more Outstanding Securities of such series or
Tranches, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series or
Tranches by such Holder or Holders. The only Persons who shall be entitled to
attend any meeting of Holders of Securities of any series or Tranche shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of the series and Tranches with respect to
which a meeting shall have been called as hereinbefore provided, considered as
one class, shall constitute a quorum for a meeting of Holders of Securities of
such series and Tranches; provided, however, that if any action is to be taken
at such meeting which this Indenture expressly provides may be taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Securities of such series and Tranches, considered as
one class, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series and Tranches, considered as
one class, shall constitute a quorum. In the absence of a quorum within one hour
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series and Tranches, be dissolved.
In any other case the meeting may be adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for such period as may be determined
by the chairman of the meeting prior to the adjournment of such adjourned
meeting. Except as provided by clause (e) of Section 1305, notice of the
reconvening of any meeting adjourned for more than 30 days shall be given as
provided in clause (a) of Section 1302 not less than ten days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series and Tranches
which shall constitute a quorum.
Except as limited by Section 1202, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of the
series and Tranches with respect to which such meeting shall have been called,
considered as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture expressly provides
may be taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of such series and Tranches, considered as one
class.
Any resolution passed or decision taken at any meeting of Holders
of Securities duly held in accordance with this Section shall be binding on all
the Holders of Securities of the series and Tranches with respect to which such
meeting shall have been held, whether or not present or represented at the
meeting.
58
<PAGE> 64
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS; CONDUCT
AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in
person or by proxy; and, to the extent permitted by law, any such proxy
shall remain in effect and be binding upon any future Holder of the
Securities with respect to which it was given unless and until
specifically revoked by the Holder or future Holder of such Securities
before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities in regard to proof of the
holding of such Securities and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence
of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted
or required by any such regulations, the holding of Securities shall be
proved in the manner specified in Section 104 and the appointment of any
proxy shall be proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the
proof specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in clause (b) of Section
1302, in which case the Company or the Holders of Securities of the
series and Tranches calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities of all series and Tranches represented at the
meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one
vote for each $1 principal amount of Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote, except as a Holder of a
Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at which a
quorum is present may be adjourned from time to time by Persons entitled
to vote a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches represented at the meeting,
considered as one class; and the meeting may be held as so adjourned
without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities, of the series and Tranches with
respect to which the meeting shall have been called, held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits
59
<PAGE> 65
by one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 1302 and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by Holders
by written instruments as provided in Section 104.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Securities, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
under this Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or to be implied herefrom or therefrom, and that any such
personal liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Indenture and the
issuance of the Securities.
-------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
IES UTILITIES INC.
60
<PAGE> 66
By: ________________________________
ATTEST:
___________________________________
THE FIRST NATIONAL BANK OF
CHICAGO, TRUSTEE
By: ________________________________
ATTEST:
___________________________________
61
<PAGE> 67
STATE OF IOWA )
) ss.:
COUNTY OF LINN )
On the ____ day of _________, 1997, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________ of IES Utilities Inc., the corporation described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority,
acknowledging the instrument to be the free act and deed of said corporation.
________________________________
Notary Public
[Notarial Seal]
STATE OF ILLINOIS )
) ss.:
COUNTY OF ______ )
On the ____ day of _________, 1997, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is a _______________ of The First National Bank of Chicago, the national
banking association described in and which executed the foregoing instrument;
that he knows the seal of said national banking association; that the seal
affixed to said instrument is the seal of said national banking association;
that it was so affixed by authority of the Board of Directors of said national
banking association, and that he signed his name thereto by like authority,
acknowledging the instrument to be the free act and deed of said national
banking association.
________________________________
Notary Public
[Notarial Seal]
-i-
<PAGE> 1
EXHIBIT 25(c)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
IES UTILITIES, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
IOWA 42-0331370
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
IES TOWER
200 FIRST STREET S.E.
P.O. BOX 351
CEDAR RAPIDS, IOWA 52406
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
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 Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
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.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
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.
<PAGE> 3
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, 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 Chicago
and the State of Illinois, on this 14th day of July, 1997.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
25, 1996 (REGISTRATION NO. 333-14201).
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 14, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between IES
Utilities, Inc. and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the 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.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE> 5
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 3,871,170 1.a.
b. Interest-bearing balances(2) 0071 6,498,314 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ... 1773 3,901,208 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,612,975 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 23,345,201 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 420,963 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 22,924,238 4.d.
5. Trading assets (from Schedule RD-D) 3545 8,792,158 5.
6. Premises and fixed assets (including capitalized leases) 2145 706,928 6.
7. Other real estate owned (from Schedule RC-M) 2150 6,563 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 61,551 8.
9. Customers' liability to this bank on acceptances outstanding 2155 488,866 9.
10. Intangible assets (from Schedule RC-M) 2143 291,569 10.
11. Other assets (from Schedule RC-F) 2160 1,775,283 11.
12. Total assets (sum of items 1 through 11) 2170 53,930,823 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 6
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
Thousands BIL MIL THOU
----------------- ------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,550,056 13.a.
(1) Noninterest-bearing(1) RCON 6631 8,895,137 13.a.1
(2) Interest-bearing RCON 6636 12,654,919 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 12,364,650 13.b.
(1) Noninterest bearing RCFN 6631 287,496 13.b.1
(2) Interest-bearing RCFN 6636 12,077,154 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,817,421 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 63,621 15.a.
b. Trading Liabilities (from Schedule RC-D) ..................... RCFD 3548 5,872,831 15b.
16. Other borrowed money:
a. With original maturity of one year or less RCFD 2332 2,607,549 16.a.
b. With original maturity of more than one year RCFD 2333 322,414 16b.
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 488,866 18.
19. Subordinated notes and debentures RCFD 3200 1,550,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,196,229 20.
21. Total liabilities (sum of items 13 through 20) RCFD 2948 49,833,637 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,944,244 25.
26. a. Undivided profits and capital reserves RCFD 3632 954,885 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 (1,089) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,712) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,097,186 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) RCFD 3300 53,930,823 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1996 .............................................. RCFD 6724 2 M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
