As filed with the Securities and Exchange Commission on September 14, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ARIZONA PUBLIC SERVICE COMPANY
(EXACT NAME OF REGISTRANT AS
SPECIFIED IN ITS CHARTER) 86-0011170
ARIZONA (I.R.S. EMPLOYER
(STATE OF INCORPORATION) IDENTIFICATION NO.)
400 NORTH FIFTH STREET
PHOENIX, ARIZONA 85004
(602) 250-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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MATTHEW P. FEENEY
SNELL & WILMER
ONE ARIZONA CENTER
PHOENIX, ARIZONA 85073
(602) 382-6239
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement, as determined
by market conditions and other factors.
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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]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO TO BE OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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First Mortgage
Bonds (1)(3) (2) (1)(2)(3) N/A
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Debt Securities (1)(4) (2) (1)(2)(4) N/A
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Total $100,000,000 (2) $100,000,000 $34,483(5)
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(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this registration statement exceed
$100,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $100,000,000, notwithstanding that the stated principal amount
of such securities may exceed such amount.
(2) The proposed maximum initial offering price per unit will be determined,
from time to time, by the registrant in connection with the issuance by
the registrant of the securities registered hereunder.
(3) Subject to Footnote (1), there are being registered hereunder an
indeterminate principal amount of First Mortgage Bonds as may be sold,
from time to time, by the registrant.
(4) Subject to Footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from
time to time, by the registrant.
(5) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933.
Pursuant to Rule 429 of the rules and regulations under the Securities Act
of 1933, this registration statement contains a combined prospectus relating
to the $100,000,000 principal amount of securities registered hereby and
$100,000,000 principal amount of First Mortgage Bonds registered on April 26,
1993 pursuant to Registration No. 33-61228.
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 this 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 BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 14, 1994
$200,000,000
ARIZONA PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS
DEBT SECURITIES
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Arizona Public Service Company (the "Company") intends from time to time
to issue up to $200,000,000 aggregate principal amount of its securities, at
least $100,000,000 of which will consist of First Mortgage Bonds of the
Company (the "New Bonds"), and the remaining $100,000,000 of which will
consist of either New Bonds or other debt securities of the Company (the "Debt
Securities"), or any combination thereof, in one or more series at prices and
on terms to be determined at the time of sale. The New Bonds and the Debt
Securities may be collectively referred to in this Prospectus as the
"Securities".
For each issue of Securities for which this Prospectus is being delivered
(the "Offered Bonds" or the "Offered Debt Securities" and, collectively, the
"Offered Securities"), there will be an accompanying Prospectus Supplement
(the "Prospectus Supplement") that sets forth, without limitation and to the
extent applicable, the specific designation, aggregate principal amount,
denomination, maturity, premium, if any, rate of interest (which may be fixed
or variable) or method of calculation thereof, time of payment of interest,
any terms for redemption, any sinking fund provisions, any subordination
provisions (in the case of the Debt Securities only), the initial public
offering price, the names of any underwriters or agents, the principal
amounts, if any, to be purchased by the underwriters, the compensation of such
underwriters or agents, and any other special terms of the Offered Securities.
The Prospectus Supplement relating to any series of Offered Securities will
also contain information concerning certain United States federal income tax
considerations, if applicable to the Offered Securities.
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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.
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The date of this Prospectus is , 1994.
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<PAGE>
AVAILABLE INFORMATION
Arizona Public Service Company (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and in accordance therewith files reports, proxy statements,
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements, and other information can be
obtained at prescribed rates from the Public Reference Section of the
Commission or may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at certain of its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, 13th
Floor, New York, New York 10048. Certain securities of the Company are listed
on the New York Stock Exchange. Reports, proxy materials, and other
information concerning the Company can be inspected at the office of this
exchange at 20 Broad Street, 7th Floor, New York, New York 10005.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Company (File No. 1-4473) are incorporated by reference in this Prospectus:
1. The Company's Form 10-K Report for the fiscal year ended December 31,
1993 (the "1993 10-K Report");
2. The Company's Form 10-Q Reports for the fiscal quarters ended March 31
and June 30, 1994 (the "June 10-Q Report"); and
3. The Company's Form 8-K Reports, dated December 15, 1993, February 23,
April 30, and May 19, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the 1934 Act after the filing date of the June 10-Q Report and
prior to the termination of the offering of the securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which is also incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
oral or written request of such person, a copy of any or all of the documents
referred to above which have been or may be incorporated in this Prospectus by
reference, other than exhibits to such documents. Request for such copies
should be directed to Arizona Public Service Company, Office of the Secretary,
Station 9068, P.O. Box 53999, Phoenix, Arizona 85072-3999, (602) 250-3252.
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SELECTED INFORMATION
The following material is qualified in its entirety by reference to
the detailed information and financial statements incorporated by
reference in this Prospectus.
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Securities Offered.......................... Up to $200,000,000 of First Mortgage Bonds or up to
$100,000,000 of First Mortgage Bonds and $100,000,000 of
any combination of First Mortgage Bonds and Debt
Securities.
Application of Proceeds..................... Except as otherwise described in the Prospectus Supplement,
the net proceeds of the Offered Securities will be applied
primarily to the redemption, repurchase, repayment, or
retirement of outstanding indebtedness, and temporary
investment pending such application.
<CAPTION>
THE COMPANY
<S> <C>
Business.................................... Electric utility servicing approximately 654,000 customers
in an area that includes all or part of 11 of Arizona's 15
counties.
Generating Fuel Mix (estimated for the
twelve months ended June 30, 1994)........
Coal -- 65.3%; Nuclear -- 28.4%; Gas -- 6.1%; Other --
0.2%.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL DATA (THOUSANDS OF DOLLARS):
Twelve Months Ended
----------------------------------------------------------------------
December 31,
-----------------------------------------------
June 30, 1994 <F1> 1993 1992 1991
--------------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Electric Operating Revenues........... $ 1,690,376 $ 1,686,290 $ 1,669,679 $ 1,515,289
Refund Obligation <F2>................ -- -- -- (53,436)
------------------ -------------- -------------- ---------------
Net Operating Revenue............... $ 1,690,376 $ 1,686,290 $ 1,669,679 $ 1,461,853
------------------ -------------- -------------- ---------------
------------------ -------------- -------------- ---------------
Net Income (Loss)..................... $ 246,175 $ 250,386 $ 246,805 $ (222,649)
------------------ -------------- -------------- ---------------
------------------ -------------- -------------- ---------------
Ratio of Earnings to Fixed Charges.... 2.97 2.99 2.73 <F3>
<CAPTION>
CAPITALIZATION DATA (THOUSANDS OF DOLLARS):
As Adjusted <F4>
As of ------------------------------
June 30, 1994 Amount Percentage
----------------- -------------- --------------
<S> <C> <C> <C>
Long-Term Debt (excluding current maturities)........ $ 2,163,173 $ 2,245,673 55.9%
Redeemable Preferred Stock........................... 145,000 95,000 2.4
Non-Redeemable Preferred Stock....................... 193,561 193,561 4.8
Common Stock Equity.................................. 1,485,244 1,485,244 36.9
---------------- -------------- ------------
Total Capitalization............................. $ 3,986,978 $ 4,019,478 100.0%
---------------- -------------- ------------
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<FN>
<F1> Financial data as of and for the twelve months ended June 30, 1994 is
unaudited but, in the judgment of the Company's management, contains all
necessary adjustments for a fair presentation of the financial position
of the Company on such date and the results of operations for such
period.
<F2> The Company recorded a refund obligation to customers relating to and
included in the write-off described in "Regulatory Matters -- Rate
Case Settlement" in Note 2 of Notes to Financial Statements in
Part II, Item 8 of the 1993 10-K Report and in Note 5 of Notes to
Financial Statements in Part I, Item 1 of the June 10-Q Report.
<F3> The write-off resulting from the December 1991 Arizona Corporation
Commission ("ACC") order settling the Company's then-pending rate case
(see "Regulatory Matters -- Rate Case Settlement" in Note 2 of Notes
to Financial Statements in Part II, Item 8 of the 1993 10-K Report)
resulted in a negative coverage ratio and an earnings coverage
deficiency of approximately $317 million for the twelve months ended
December 31, 1991. Excluding the effects of the write-off, the
coverage ratio would have been 2.11 for the same period.
<F4> For the Company's (i) assumed issuance of $200 million of Securities,
(ii) August 1994 purchases of approximately $24 million of its First
Mortgage Bonds, 10 1/4% Series due 2000, (iii) redemption on September
1, 1994 of $50 million of its $8.50 Cumulative Preferred Stock,
Series T, and (iv) incurrence on September 14, 1994 of $31.5 million of
long-term debt in connection with a tax-exempt financing. It is assumed
that the net proceeds from the issuance of approximately $125 million of
the Securities will be used for the redemption, repurchase, repayment,
or retirement of a similar amount of outstanding long-term debt.
</FN>
</TABLE>
<PAGE>
THE COMPANY
The Company was incorporated in 1920 under the laws of Arizona and is
principally engaged in providing electricity in the State of Arizona. The
principal executive offices of the Company are located at 400 North Fifth
Street, Phoenix, Arizona 85004 and its telephone number is (602) 250-1000.
APPLICATION OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net
proceeds of the Offered Securities will be applied primarily to the
redemption, repurchase, repayment, or retirement of outstanding indebtedness.
Any proceeds not immediately so applied when received may be invested
temporarily, pending such application, in United States government or agency
obligations, commercial paper, bank certificates of deposit, or repurchase
agreements collateralized by United States government or agency obligations,
or will be deposited with banks.
EARNINGS RATIOS
The following table sets forth the Company's historical ratio of earnings
to fixed charges for each of the indicated periods:
Twelve months ended
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December 31,
June 30, ------------------------------------------------
1994 1993 1992 1991 1990 1989
- ---------------- ---- ---- ---- ---- ----
2.97 2.99 2.73 (1) 2.05 2.29
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(1) The write-off resulting from the December 1991 ACC order settling the
Company's then-pending rate case (see "Regulatory Matters -- Rate Case
Settlement" in Note 2 of Notes to Financial Statements in Part II, Item 8
of the 1993 10-K Report) resulted in a negative coverage ratio and an
earnings coverage deficiency of approximately $317 million for the twelve
months ended December 31, 1991. Excluding the effects of the write-off,
the coverage ratio would have been 2.11 for the same period.
For the purposes of these computations, "earnings" are defined as the sum
of pre-tax income plus fixed charges of the Company and its subsidiaries;
"fixed charges" consist of interest on debt, amortization of debt discount,
premium, and expense and an estimated interest factor in rentals.
DESCRIPTION OF NEW BONDS
GENERAL
The New Bonds may be issued in one or more new series under the Mortgage
and Deed of Trust dated as of July 1, 1946 between the Company and Bank of
America National Trust and Savings Association, as successor by merger to
Security Pacific National Bank, as Trustee ("Bond Trustee"), which as
heretofore amended and supplemented is herein referred to as the "Mortgage,"
and which is to be further amended and supplemented by appropriate
Supplemental Indentures ("Bond Supplemental Indentures"). The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Mortgage,
the New Bonds, and the Bond Supplemental Indentures, the forms of which are
filed as exhibits to the registration statement of which this Prospectus forms
a part. Whenever particular provisions or defined terms in such documents are
referred to herein, such provisions or defined terms are incorporated by
reference herein.
Reference is made to the Prospectus Supplement relating to any particular
issue of Offered Bonds for the following terms: (1) the aggregate principal
amount of the Offered Bonds; (2) the date on which such Offered Bonds mature;
(3) the rate per annum at which such Offered Bonds will bear interest;
(4) the times at which such interest will be payable; (5) the date, if any,
after which such Offered Bonds may be redeemed at the option of the Company
and the redemption price; and (6) any other special terms. Interest will be
paid to the person in whose name the Offered Bonds are registered at the close
of business on the record date, as established in the Bond Supplemental
Indenture relating thereto, preceding the interest payment date in respect
thereof. The New Bonds will be issued as fully registered bonds, without
coupons, in denominations of $1,000 and multiples thereof. The New Bonds will
be transferable at any time without any service or other charge, except
transfer taxes and other governmental charges, if any.
Except as otherwise described under the heading "Description of New Bonds
- -- Issuance of Additional Bonds" or in the Prospectus Supplement, the
covenants contained in the Mortgage and the New Bonds would not afford holders
of the New Bonds protection in the event of a highly-leveraged transaction
involving the Company.
REDEMPTION
The Offered Bonds are redeemable as set forth in the Prospectus Supplement
relating thereto and, subject to any qualifications or variations set forth in
any such Prospectus Supplement, are also subject to redemption, in each case
at the principal amount of the Offered Bonds to be redeemed together with
accrued interest to the date fixed for redemption, (i) in whole or in part
with the proceeds from mortgaged property of the Company taken under eminent
domain by, or otherwise sold to, a governmental body or agency; (ii) in whole
or in part with the Proceeds of Released Property, including proceeds from the
sale or other disposition (including a sale and leaseback) of property
released from the lien of the Mortgage as specified in section (b) of the
second to the last paragraph under the heading "Description of New Bonds --
Security" below; and (iii) in whole, together with all other first mortgage
bonds of the Company then outstanding, within twelve months of certain mergers
or other transactions involving the transfer of substantially all of the
property subject to the lien of the Mortgage, as then amended. In addition,
after the date and at the price set forth in the Prospectus Supplement,
Offered Bonds may be redeemed in whole or in part with cash deposited in the
replacement fund discussed below.
SECURITY
The New Bonds will rank pari passu, except as to any sinking fund or
similar fund provided for a particular series, with all bonds at any time
outstanding under the Mortgage. The Mortgage constitutes a first mortgage lien
on substantially all the fixed property owned by the Company (which does not
include a combined cycle plant or certain interests in Unit 2 of the Palo
Verde Nuclear Generating Station being leased), other than property
specifically excepted by the Mortgage. Such lien and the Company's title to
certain of its properties are subject to Excepted Encumbrances, to minor
leases, defects, irregularities, and deficiencies, and to the considerations
discussed below with respect to the Four Corners and Navajo Plant locations.
The lien of the Mortgage will also extend to all after-acquired property
(other than the excepted classes) located in the jurisdictions in which the
necessary recordations or filings have been accomplished, subject to Excepted
Encumbrances and to liens existing or placed on such property at the time of
its acquisition by the Company.
Both the Four Corners and the Navajo Plants are located on property held
by the plant participants under leases from the Navajo Tribe and easements
from the Secretary of the Interior. The leases extend from their respective
effective dates in 1966 and 1969 for terms of 50 years with rights of renewal
for up to 25 additional years. The easements are for 50-year terms from the
same effective dates. While the Company owns the rights conferred upon it by
the leases from the Navajo Tribe, the Company does not make any representation
with respect to the Tribe's title to the lands leased (but is not aware of any
assertion of a contesting claim to such lands) or with respect to the
enforceability of the leases against the Tribe.
The Mortgage requires the Company to keep the property encumbered thereby
as an operating system or systems in good repair and working order, but
permits the permanent discontinuance or reduction in capacity of any such
properties which, in the judgment of the Board of Directors of the Company, is
desirable in the conduct of its business or which is ordered by a regulatory
authority or which properties are to be sold or disposed of by the Company.
When not in default under the Mortgage, the Company may obtain the release
from the lien thereof of (a) property that has become unserviceable, obsolete,
or unnecessary for use in the Company's operations, provided that it replaces
such property with, or substitutes for the same, an equal value of other
property, and (b) other property that has been sold or otherwise disposed of,
provided that the Company deposits with the Bond Trustee cash in an amount,
waives the right to issue additional bonds on the basis of retired bonds
previously issued in an amount, or utilizes as a credit net Property Additions
acquired by the Company within the preceding five years and having a fair
value (not more than Cost), equal to the fair value of the property to be
released.
The Bond Trustee may, and upon request of the Company shall, cancel and
discharge the lien of the Mortgage and all indentures supplemental thereto
whenever all indebtedness secured by the Mortgage has been paid.
ISSUANCE OF ADDITIONAL BONDS
Additional bonds may be issued under the Mortgage in a principal amount
equal to (a) 60% of net Property Additions, (b) the principal amount of
certain redeemed or retired bonds previously issued, and/or (c) deposited
cash, provided that the Company's Adjusted Net Earnings over a twelve-month
period are at least two times the annual interest on all bonds to be
outstanding under the Mortgage after the issuance and on indebtedness secured
by prior liens. Exceptions to this earnings coverage requirement apply to
bonds issued on the basis of redeemed or retired bonds where the redeemed or
retired bonds bore a higher rate of interest and where certain other
conditions are satisfied. In addition, the Company's articles of incorporation
allow the Company to issue additional preferred stock when certain earnings
coverage requirements are met. Exceptions to this earnings coverage
requirement apply to preferred stock issued for the purpose of redeeming or
retiring other preferred stock.
Assuming 8.25% as the rate of interest on bonds that might have been
issued on June 30, 1994, and the issuance on that date of $200 million in
aggregate principal amount of the New Bonds, and adjusting for the Company's
August 1994 purchases of approximately $24 million of First Mortgage Bonds,
10 1/4% Series due 2000, the coverage afforded by earnings for the twelve
months ended June 30, 1994, would have allowed the issuance of approximately
$2.13 billion in aggregate principal amount of additional bonds, as compared
to approximately $321 million of first mortgage bonds on the basis of property
additions and approximately $744 million of first mortgage bonds on the basis
of redeemed or retired bonds.
In addition to the Mortgage restrictions on the Company's issuance of
additional bonds, the Company must obtain ACC approval before issuing equity
securities or incurring long-term debt. Existing ACC orders allow the Company
to have approximately $501 million in aggregate par value of preferred stock
and approximately $2.6 billion in principal amount of long-term debt
outstanding at any one time. The Company does not expect these provisions or
authorizations to limit the Company's ability to meet its capital
requirements.
Property Additions, and in many instances redeemed or retired bonds, as
well as deposited cash, may be used for certain alternative purposes under the
Mortgage, including the release of property from the lien thereof or the
satisfaction of sinking or replacement fund requirements. The Mortgage
contains restrictions on the issuance of bonds, withdrawal of cash, or release
of property on the basis of property subject to prior liens. Property located
on leaseholds or easements (as, for example, the Four Corners and Navajo
Plants) will constitute fundable Property Additions if the leasehold or
easement has an unexpired term of, or the term is extendable at the Company's
option for, at least 30 years after the time of funding, or if the property
may be removed by the Company without compensation.
REPLACEMENT FUND
So long as any of the New Bonds are outstanding, the Company is required
for each calendar year to deposit with the Bond Trustee cash in a formularized
amount related to net additions to the Company's mortgaged utility plant;
however, the Company may satisfy all or any part of the requirement by
utilizing redeemed or retired bonds, net Property Additions, or property
retirements. For the years 1992 and 1993, such requirement amounted to
approximately $117,000,000 and $122,000,000, respectively. Any cash that may
be deposited by the Company pursuant to the requirement may, upon request by
the Company, be applied to the redemption or purchase of bonds and, if not
withdrawn against Property Additions or retired bonds within five years, must
be so applied, subject in each case to any restrictions on any such redemption
or purchase as set forth in the Prospectus Supplement relating to the issue of
bonds to be redeemed or purchased. For example, the cash deposited with the
Bond Trustee by the Company in partial satisfaction of its 1992 replacement
fund requirements was used to redeem $47,430,000 in aggregate principal amount
of the Company's First Mortgage Bonds, 9% Series due 2017, at their principal
amount plus accrued interest, on April 30, 1993 and the cash deposited with
the Bond Trustee by the Company in partial satisfaction of its 1993
replacement fund requirements was used to redeem $60,264,000 in aggregate
principal amount of the Company's First Mortgage Bonds, 10 3/4% Series due
2019, at their principal amount plus accrued interest, on April 4, 1994.
EVENTS OF DEFAULT
The following are defaults under the Mortgage: (a) failure to pay the
principal of any bond outstanding under the Mortgage when due and payable;
(b) failure to pay interest on any bond outstanding under the Mortgage within
60 days after the same is due and payable; (c) failure to pay any installment
of any fund required to be applied to the purchase or redemption of bonds
outstanding under the Mortgage within 60 days after the same is due and
payable; (d) certain events in bankruptcy, insolvency, or reorganization; and
(e) failure to perform any other covenant of the Mortgage continuing for 90
days after notice by the Bond Trustee or holders of 15% in principal amount of
Eligible bonds. The Mortgage allows the Bond Trustee to withhold notice of
certain defaults, not including any default in the payment of principal of, or
interest on, any bond outstanding, or in the payment of any sinking,
improvement, replacement, or purchase fund installment, if it in good faith
determines that the withholding of such notice is in the interests of the
bondholders.
The holders of not less than a majority in principal amount of Eligible
bonds may direct the time, method, and place of conducting any proceeding for
any remedy available to the Bond Trustee under the Mortgage; provided,
however, that the Trustee may decline to follow any such direction under
certain circumstances, including a determination made in good faith by the
Bond Trustee that it will not be sufficiently indemnified for any
expenditures, including its own charges, in any action or proceeding so
directed. The Company is required to file with the Bond Trustee, on or before
July 1 of each year, a certificate to the effect that, except as otherwise
stated therein, the Company has complied with all of the provisions of the
Mortgage and is not then in default thereunder.
MODIFICATION OF THE MORTGAGE
The Mortgage and the rights of bondholders may be modified with the
consent of the Company, and of the Bond Trustee if deemed affected, and the
vote or assent of the holders of not less than 70% in principal amount of the
Eligible bonds, and of not less than 70% in principal amount of the Eligible
bonds of any one or more series (less than all) affected by any such
modification; except that the bondholders, without the consent of the holder
of each bond affected, have no power to (a) reduce the principal thereof, or
the premium, if any, or rate of interest thereon or otherwise modify the terms
of payment of principal, premium, or interest, or extend the maturity of any
bonds, (b) permit the creation of any lien ranking prior to or on a parity
with the lien of the Mortgage with respect to any of the mortgaged property,
(c) deprive any nonassenting bondholder of a lien upon the mortgaged property
for the security of his bonds, or (d) reduce the percentage of bondholders
authorized to effect any such modification.
OTHER
The Mortgage restricts the payment of dividends on common stock of the
Company under certain conditions which have not existed in the past and do not
currently exist.
The Bond Trustee under the Mortgage is Bank of America National Trust and
Savings Association ("Bank of America"), Los Angeles, California. The Transfer
Agent and Paying Agents are Bank of America and BankAmerica National Trust
Company, New York, New York. The Company maintains normal banking arrangements
with Bank of America, which include (i) a commitment by Bank of America
to lend the Company up to $40 million under two separate revolving credit
agreements, none of which was outstanding at June 30, 1994, and (ii) two
commitments in the aggregate principal amount of approximately $56.6 million
by Bank of America pursuant to reimbursement agreements related to letters
of credit issued on behalf of the Company in connection with issuances of tax
exempt bonds, the proceeds of which were made available to the Company, none
of which was outstanding at June 30, 1994. In addition, Pinnacle West Capital
Corporation, the Company's parent, maintains normal banking arrangements with
Bank of America.
DESCRIPTION OF DEBT SECURITIES
General
The Debt Securities may be issued in one or more new series under an
Indenture or Indentures between the Company and The Bank of New York, or other
trustee to be named, as Trustee (each, a "Trustee"). The following summary
does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Indenture
and the Debt Securities, the forms of which are filed, or will be filed, as
exhibits to the registration statement of which this Prospectus forms a part,
or as an exhibit to a Report on Form 8-K to be incorporated by reference in
such Prospectus. Whenever particular provisions or defined terms in such
documents are referred to herein or in a Prospectus Supplement, such
provisions or terms are incorporated by reference herein or therein, as the
case may be.
The Debt Securities will be unsecured obligations of the Company and,
unless otherwise provided in a Prospectus Supplement relating to a particular
series of Debt Securities, will be subordinated obligations of the Company. It
is expected that separate Indentures would be used for Senior Debt Securities
and subordinated Debt Securities, respectively.
Reference is made to the Prospectus Supplement relating to any particular
issue of Offered Debt Securities for the following terms: (1) the title of
such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities or the series of which they are a part; (3) the date or dates
on which the principal of any of such Debt Securities will be payable; (4) the
rate or rates at which any of such Debt Securities 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; (5)
the place or places where the principal of and any premium and interest on any
of such Debt Securities will be payable; (6) the period or periods within
which, the price or prices at which and the terms and conditions on which any
of such Debt Securities may be redeemed, in whole or in part, at the option of
the Company; (7) the obligation, if any, of the Company to redeem or purchase
any of such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of the Holder thereof, and the period or periods
within which, the price or prices at which and the terms and conditions on
which any of such Debt Securities will be redeemed or purchased, in whole or
in part, pursuant to any such obligation; (8) the denominations in which any
of such Debt Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (9) if the amount of principal of or
any premium or interest on any of such Debt Securities may be determined with
reference to an index or pursuant to a formula, the manner in which such
amounts will be determined; (10) if other than the currency of the United
States of America, the currency, currencies, or currency units in which the
principal of or any premium or interest on any of such Debt Securities will be
payable and the manner of determining the equivalent principal amount thereof
in the currency of the United States of America for any purpose, including for
purposes of determining the principal amount deemed to be Outstanding at any
time); (11) if the principal of or any premium or interest on any of such Debt
Securities is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies, or currency units other than those in
which such Debt Securities are stated to be payable, the currency, currencies
or currency units in which payment of any such amount as to which such
election is made will be payable, the periods within which and the terms and
conditions upon which such election is to be made and the amount so payable
(or the manner in which such amount is to be determined); (12) if other than
the entire principal amount thereof, the portion of the principal amount of
any of such Debt Securities which will be payable upon declaration of
acceleration of the Maturity thereof; (13) if the principal amount payable at
the Stated Maturity of any of such Debt Securities will not be determinable as
of any one or more dates prior to the Stated Maturity, the amount which will
be deemed to be such principal amount as of any such date for any purpose,
including the principal amount thereof which will be due and payable upon any
Maturity other than the Stated Maturity or which will be deemed to be
Outstanding as of any such date (or, in any such case, the manner in which
such deemed principal amount is to be determined); (14) if applicable, that
such Debt Securities, in whole or any specified part, are defeasible pursuant
to the provisions of the Indenture described under "Defeasance and Covenant
Defeasance -- Defeasance and Discharge" or "Defeasance and Covenant Defeasance
- -- Covenant Defeasance," or under both such captions; (15) whether any of such
Debt Securities will be issuable in whole or in part in the form of one or
more Global Securities and, if so, the respective Depositaries for such Global
Securities, the form of any legend or legends to be borne by any such Global
Security in addition to or in lieu of the legend referred to under "Form,
Exchange and Transfer -- Global Securities" and, if different from those
described under such caption, any circumstances under which any such Global
Security may be exchanged in whole or in part for Debt Securities registered,
and any transfer of such Global Security in whole or in part may be
registered, in the names of Persons other than the Depositary for such Global
Security or its nominee; (16) any addition to or change in the Events of
Default applicable to any of such Debt Securities and any change in the right
of the Trustee or the Holders to declare the principal amount of any of such
Debt Securities due and payable; (17) any addition to or change in the
covenants in the Indenture; and (18) any other terms of such Debt Securities
not inconsistent with the provisions of the Indenture. (Section 301).
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Debt
Securities 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 (if any) applicable to any Debt
Securities which are denominated in a currency or currency unit other than
United States dollars may be described in the applicable Prospectus
Supplement.
Except as otherwise described in the Prospectus Supplement, the covenants
contained in the Indenture would not afford holders of Debt Securities
protection in the event of a highly-leveraged transaction involving the
Company.
SUBORDINATION
The Indenture provides that, unless otherwise provided in a supplemental
indenture or a Board Resolution, the Debt Securities will be subordinate and
subject in right of payment to the prior payment in full of all Senior Debt of
the Company, whether outstanding as of the date of the Indenture or thereafter
incurred. (Section 1401). The balance of the information under this section
assumes that the relevant supplemental indenture or Board Resolution results
in the corresponding series of Debt Securities being subordinated obligations
of the Company.
No payment of principal of (including redemption and sinking fund
payments), premium, if any, or interest on, the Debt Securities may be made if
any Senior Debt is not paid when due, any applicable grace period with respect
to such default has ended and such default has not been cured or waived, or if
the maturity of any Senior Debt has been accelerated because of a default.
(Section 1402). 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, and premium, if any, and interest due or to
become due on, all Senior Debt must be paid in full before the holders of the
Debt Securities are entitled to receive or retain any payment. (Section 1403).
The rights of the holders of the Debt Securities will be subrogated to the
rights of the holders of Senior Debt to receive payments or distributions
applicable to Senior Debt until all amounts owing on the Debt Securities are
paid in full. (Section 1404).
The term "Senior Debt" shall mean the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of the Company evidenced by notes, debentures,
bonds, or other securities sold by the Company for money, including all
first mortgage bonds of the Company outstanding from time to time;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by the Company; and
(c) all renewals, extensions, or refundings of indebtedness of the
kinds described in any of the preceding clauses (a) and (b);
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari passu
with the Debt Securities. (Section 101).
The Indenture does not limit the aggregate amount of Senior Debt that the
Company may issue. As of June 30, 1994, outstanding Senior Debt of the Company
aggregated approximately $2.29 billion.
FORM, EXCHANGE, AND TRANSFER
The Debt Securities of each series will be issuable only in fully
registered form without coupons and, unless otherwise specified in the
applicable Prospectus Supplement, in denominations of $1,000 and any integral
multiple thereof. (Section 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities, Debt Securities of any series,
will be exchangeable for other Debt Securities of the same series, of any
authorized denomination and of like tenor and aggregate principal amount.
(Section 305).
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or with the form of
transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer
or exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in
addition to the Security Registrar) initially designated by the Company for
any Debt Securities will be named in the applicable Prospectus Supplement.
(Section 305). 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 Debt
Securities of each series. (Section 1002).
If the Debt Securities of any series (or of any tenor and specified
terms) are to be redeemed in part, the Company will not be required to (i)
issue, register the transfer of, or exchange any Debt Security of that series
(or of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Debt Security that may be selected for
redemption and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Debt Security so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Debt Security being redeemed in part. (Section 305).
GLOBAL SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Securities which will have an
aggregate principal amount equal to that of the Debt Securities represented
thereby. Each Global Security will be registered in the name of a 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 Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Security may be exchanged in whole or in part for
Debt Securities registered, and no transfer of a Global Security in whole or
in part may be registered, in the name of any Person other than the Depositary
for such Global Security or any nominee of such Depositary unless (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or has ceased to be qualified to act as
such as required by the Indenture, (ii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities represented
by such Global Security or (iii) there shall exist such circumstances, if any,
in addition to or in lieu of those described above as may be described in the
applicable Prospectus Supplement. All securities issued in exchange for a
Global Security or any portion thereof will be registered in such names as the
Depositary may direct. (Sections 204 and 305).
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 Debt
Securities represented thereby for all purposes under the Debt Securities and
the Indenture. Except in the limited circumstances referred to above, owners
of beneficial interests in a Global Security will not be entitled to have such
Global Security or any Debt Securities represented thereby registered in their
names, will not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange therefor and will not be considered
to be the owners or Holders of such Global Security or any Debt Securities
represented thereby for any purpose under the Debt Securities or the
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 Debt 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 others 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 Trustee or any agent of the Company or the Trustee 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.
Secondary trading in notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, beneficial
interests in a Global Security, in some cases, may trade in the Depositary's
same-day funds settlement system, in which secondary market trading activity
in those beneficial interests would be required by the Depositary to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity
in such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Security upon the original issuance thereof may be
required to be made in immediately available funds.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Debt Security on any Interest Payment Date will be
made to the Person in whose name such Debt Security (or one or more
Predecessor Debt 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 premium and interest on the Debt Securities 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, except
that at the option of the Company payment of any interest may be made by check
mailed to the address of the Person entitled thereto as such address appears
in the Security Register. Unless otherwise indicated in the applicable
Prospectus Supplement, the corporate trust office of the Trustee in The City
of New York will be designated as the Company's sole Paying Agent for payments
with respect to Debt Securities of each series. Any other Paying Agents
initially designated by the Company for the Debt Securities 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 Debt Securities of a particular series.
(Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
has become due and payable will be repaid to the Company, and the Holder of
such Debt Security thereafter may look only to the Company for payment
thereof. (Section 1003).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and may not permit any Person to consolidate with or
merge into the Company or convey, transfer, or lease its properties and assets
substantially as an entirety to the Company, unless (i) the successor Person
(if any) is a corporation, partnership, trust or other entity organized and
validly existing under the laws of any domestic jurisdiction and assumes the
Company's obligations on the Debt Securities and under the Indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing and (iii) certain other
conditions are met. (Section 801).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due; (b)
failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform
any other covenant of the Company in the Indenture (other than a covenant
included in the Indenture solely for the benefit of a series other than that
series), continued for 90 days after written notice has been given by the
Trustee, or the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of that series, as provided in the Indenture; and (e) certain
events in bankruptcy, insolvency or reorganization. (Section 501).
If an Event of Default (other than an Event of Default described in
clause (e) above) with respect to the Debt Securities of any series at the
time Outstanding shall occur and be continuing, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indenture may declare
the principal amount of the Debt Securities of that series (or, in the case of
any Debt Security that is an Original Issue Discount Security or the principal
amount of which is not then determinable, such portion of the principal amount
of such Debt Security, or such other amount in lieu of such principal amount,
as may be specified in the terms of such Debt Security) to be due and payable
immediately. If an Event of Default described in clause (e) above with respect
to the Debt Securities of any series at the time Outstanding shall occur, the
principal amount of all the Debt Securities of that series (or, in the case of
any such Original Issue Discount Debt Security or other Debt Security, such
specified amount) will automatically, and without any action by the Trustee or
any Holder, become immediately due and payable. After any such acceleration,
but before a judgment or decree based on acceleration, the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of
accelerated principal (or other specified amount), have been cured or waived
as provided in the Indenture. (Section 502). For information as to waiver of
defaults, see "Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section 603).
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred on the Trustee, with respect to the Debt Securities
of that series. (Section 512).
No Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless
(i) such Holder has previously given to the Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that
series, (ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series have made written request, and such
Holder or Holders have offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee and (iii) the Trustee has failed to
institute such proceeding, and has not received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that
series a direction inconsistent with such request, within 60 days after such
notice, request and offer. (Section 507). However, such limitations do not
apply to a suit instituted by a Holder of a Debt Security for the enforcement
of payment of the principal of or any premium or interest on such Debt
Security on or after the applicable due date specified in such Debt Security.
(Section 508).
The Company will be required to furnish to the Trustee annually a
statement by certain of its officers as to whether or not the Company, to
their knowledge, is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults. (Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than 66 - 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any instalment of principal of or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on,
any Debt Security, (c) reduce the amount of principal of an Original Issue
Discount Security or any other Debt Security payable upon acceleration of the
Maturity thereof, (d) change the place or currency of payment of principal of,
or any premium or interest on, any Debt Security, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Debt Security, (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture, reduce the percentage in principal
amount of Outstanding Debt Securities of any series necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults or modify such provisions with respect to modification and waiver.
(Section 902).
The Holders of not less than 66 - 2/3% in aggregate principal amount of
the Outstanding Debt Securities of any series may waive compliance by the
Company with certain restrictive provisions of the Indenture. (Section 1008).
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive any past default under the Indenture,
except a default in the payment of principal, premium, or interest and certain
covenants and provisions of the Indenture which cannot be amended without the
consent of the Holder of each Outstanding Debt Security of such series
affected. (Section 513).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver, or other action under the
Indenture as of any date, (i) the principal amount of an Original Issue
Discount Security that will be deemed to be Outstanding will be the amount of
the principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date, (ii) if, as of such date,
the principal amount payable at the Stated Maturity of a Debt Security is not
determinable (for example, because it is based on an index), the principal
amount of such Debt Security deemed to be Outstanding as of such date will be
an amount determined in the manner prescribed for such Debt Security and (iii)
the principal amount of a Debt Security denominated in one or more foreign
currencies or currency units that will be deemed to be Outstanding will be the
U.S. dollar equivalent, determined as of such date in the manner prescribed
for such Debt Security, of the principal amount of such Debt Security (or, in
the case of a Debt Security described in clause (i) or (ii) above, of the
amount described in such clause). Certain Debt Securities, including those for
whose payment or redemption money has been deposited or set aside in trust for
the Holders and those that have been fully defeased pursuant to Section 1302,
will not be deemed to be Outstanding. (Section 101).
Except in certain limited circumstances, the Company will be entitled to
set any day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities of any series entitled to give or take any
direction, notice, consent, waiver, or other action under the Indenture, in
the manner and subject to the limitations provided in the Indenture. In
certain limited circumstances, the Trustee will be entitled to set a record
date for action by Holders. If a record date is set for any action to be taken
by Holders of a particular series, such action may be taken only by persons
who are Holders of Outstanding Debt Securities of that series on the record
date. To be effective, such action must be taken by Holders of the requisite
principal amount of such Debt Securities within a specified period following
the record date. For any particular record date, this period will be 180 days
or such other shorter period as may be specified by the Company (or the
Trustee, if it set the record date), and may be shortened or lengthened (but
not beyond 180 days) from time to time. (Section 104).
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement,
the Company may elect, at its option at any time, to have the provisions of
Section 1302, relating to defeasance and discharge of indebtedness, or Section
1303, relating to defeasance of certain restrictive covenants in the
Indenture, applied to the Debt Securities of any series, or to any specified
part of a series. (Section 1301).
Defeasance and Discharge. The Indenture will provide that, upon the
Company's exercise of its option (if any) to have Section 1302 applied to any
Debt Securities, the Company will be discharged from all its obligations with
respect to such Debt Securities (except for certain obligations to exchange or
register the transfer of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold moneys for payment in
trust) upon the deposit in trust for the benefit of the Holders of such Debt
Securities of money or U.S. Government Obligations, or both, which, through
the payment of principal and interest in respect thereof in accordance with
their terms, will provide money in an amount sufficient to pay the principal
of and any premium and interest on such Debt Securities on the respective
Stated Maturities in accordance with the terms of the Indenture and such Debt
Securities. Such defeasance or discharge may occur only if, among other
things, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Company has received from, or there has been published by, the
United States Internal Revenue Service a ruling, or there has been a change in
tax law, in either case to the effect that Holders of such Debt Securities
will not recognize gain or loss for federal income tax purposes as a result of
such deposit, defeasance, and discharge and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge were not to occur.
(Sections 1302 and 1304).
Defeasance of Certain Covenants. The Indenture provides that, upon the
Company's exercise of its option (if any) to have Section 1303 applied to any
Debt Securities, the Company may omit to comply with certain restrictive
covenants that may be described in the applicable Prospectus Supplement, and
the occurrence of certain Events of Default, which are described above in
clause (d) (with respect to such restrictive covenants) under "Events of
Default" and any that may be described in the applicable Prospectus
Supplement, will be deemed not to be or result in an Event of Default and the
provisions of Article Fourteen relating to subordination will cease to be
effective, in each case with respect to such Debt Securities. The Company, in
order to exercise such option, will be required to deposit, in trust for the
benefit of the Holders of such Debt Securities, money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an
amount sufficient to pay the principal of and any premium and interest on such
Debt Securities on the respective Stated Maturities in accordance with the
terms of the Indenture and such Debt Securities. The Company will also be
required, among other things, to deliver to the Trustee an Opinion of Counsel
to the effect that Holders of such Debt Securities will not recognize gain or
loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been
the case if such deposit and defeasance were not to occur. In the event the
Company exercised this option with respect to any Debt Securities and such
Debt Securities were declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government Obligations so
deposited in trust would be sufficient to pay amounts due on such Debt
Securities at the time of their respective Stated Maturities but may not be
sufficient to pay amounts due on such Debt Securities upon any acceleration
resulting from such Event of Default. In such case, the Company would remain
liable for such payments. (Sections 1303 and 1304).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register.
(Sections 101 and 106).
TITLE
The Company, the Trustee, and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the
purpose of making payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed
in accordance with, the law of the State of New York. (Section 112).
REGARDING THE TRUSTEE
The Trustee under the Indenture is The Bank of New York. The Company
maintains normal banking arrangements with The Bank of New York, which include
two commitments in the aggregate principal amount of approximately $35.7
million by The Bank of New York pursuant to reimbursement agreements related
to letters of credit issued on behalf of the Company in connection with
issuances of pollution control bonds, the proceeds of which were made
available to the Company, none of which was outstanding at June 30, 1994. The
Bank of New York also serves as trustee for the holders of several issues of
pollution control bonds issued on behalf of the Company.
PLAN OF DISTRIBUTION
The Company intends to sell up to $200 million in aggregate principal
amount of the Offered Securities to or through underwriters or dealers, and
may also sell the Offered Securities directly to other purchasers or through
agents, as described in the Prospectus Supplement relating to an issue of
Offered Securities.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices.
In connection with the sale of the Offered Securities, underwriters may
receive compensation from the Company or from purchasers of Offered Securities
for whom they may act as agents in the form of discounts, concessions, or
commissions. Underwriters may sell Offered Securities to or through dealers,
and such dealers may receive compensation in the form of discounts,
concessions, or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers, and agents
that participate in the distribution of Offered Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Offered Securities by them may be
deemed to be underwriting discounts and commissions under the Securities Act
of 1933 (the "1933 Act"). Any such person who may be deemed to be an
underwriter will be identified, and any such compensation received from the
Company will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers, and agents who participate in the distribution of the Offered
Securities may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the 1933 Act.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference to the Company's 1993 Annual
Report on Form 10-K have been audited by DELOITTE & TOUCHE LLP, independent
auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended March 31 and June 30, 1994 and 1993, which is incorporated
herein by reference, DELOITTE & TOUCHE LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31 and June 30, 1994, and
incorporated by reference herein, they did not audit and they do not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. DELOITTE & TOUCHE LLP are
not subject to the liability provisions of Section 11 of the Securities Act of
1933 for their reports on the unaudited interim financial information because
those reports are not "reports" or a "part" of the registration statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Act.
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for the
Company by Snell & Wilmer, One Arizona Center, Phoenix, Arizona 85004, and, it
is currently anticipated, for any underwriters of Securities by Sullivan &
Cromwell, 444 South Flower Street, Los Angeles, California 90071. In giving
their opinions, Sullivan & Cromwell and Snell & Wilmer may rely as to matters
of New Mexico law upon the opinion of Keleher & McLeod, P.A., 1200 Public
Service Building, Albuquerque, New Mexico 87102, Sullivan & Cromwell may rely
as to all matters of Arizona law upon the opinion of Snell & Wilmer, and Snell
& Wilmer may rely as to all matters of New York law upon the opinion of
Sullivan & Cromwell.
<PAGE>
NO DEALER, SALESMAN OR OTHER $200,000,000
PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT
CONTAINED IN THIS PROSPECTUS ARIZONA PUBLIC SERVICE
AND, IF GIVEN OR MADE, SUCH COMPANY
INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. FIRST MORTGAGE BONDS
THIS PROSPECTUS DOES NOT DEBT SECURITIES
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 [APS LOGO]
SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS ------------
NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THAT THERE
HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE
SUCH DATE.
-------------
TABLE OF CONTENTS
PAGE
--------
PROSPECTUS
Available Information............. 2
Incorporation of Certain Documents
by Reference.................... 2
Selected Information.............. 3
The Company....................... 5
Application of Proceeds........... 5
Earnings Ratios................... 5
Description of New Bonds.......... 5
Description of Debt Securities.... 9
Plan of Distribution.............. 17
Experts........................... 17
Legal Opinions.................... 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission registration fee............. $ 34,483
Printing, engraving, and postage expenses....................... 40,000*
Legal fees...................................................... 25,000*
Accounting fees................................................. 15,000*
Rating Agency fees.............................................. 55,000*
Trustee's fees and expenses..................................... 15,000*
Blue Sky fees and expenses...................................... 5,000*
Miscellaneous................................................... 5,517*
------------
Total....................................................... $ 195,000
------------
------------
- --------------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The law of Arizona permits extensive indemnification of present and former
directors, officers, employees or agents of an Arizona corporation, whether or
not authority for such indemnification is contained in the indemnifying
corporation's articles of incorporation or bylaws. Specific authority for
indemnification of present and former directors and officers, under certain
circumstances, is contained in Article Fifth of the Company's Articles of
Incorporation. In addition, Section 7.01 of the Company's bylaws provides that
the Company will indemnify present and former directors and officers to the
fullest extent permitted by Arizona law. Under Arizona law, in order for a
corporation to provide indemnification, a disinterested majority of the
corporation's board of directors, independent legal counsel, a court or the
shareholders must find that the director, officer, employee or agent acted, or
failed to act, in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reason to believe his conduct was
unlawful. Statutory indemnification is permissive, except in the event of a
successful defense, when a director, officer, employee or agent must be
indemnified against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection therewith. Indemnification is
permitted with respect to expenses, judgments, fines, and amounts paid in
settlement by such persons.
In connection with the offering made by the prospectus which is a part of
this registration statement, as it may be amended or supplemented, the
underwriters of the Offered Securities, pursuant to the relevant underwriting
agreement, will severally agree to indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed this registration
statement, and each person, if any, who controls the Company within the
meaning of the Securities Act of 1933, as amended (the "Act"), against certain
losses, claims, damages or liabilities, including liabilities under the Act,
that arise out of or are based upon written information furnished by such
underwriters to the Company for use in this registration statement or in such
prospectus.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising
on the part of the Company out of its foregoing indemnification provisions,
subject to certain exclusions and to the policy limits.
ITEM 16. LIST OF EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
1.1 Form of Underwriting Agreement for First Mortgage Bonds
(Proof).
1.2 Form of Underwriting Agreement for Debt Securities (Proof).
4.1 Form(s) of Supplemental Indenture relating to New Bonds (to be
filed as Exhibit(s) by means of Form 8-K).
4.2 Specimen(s) of New Bonds (to be filed as Exhibit(s) by means of
Form 8-K).
4.3 Form of Indenture Relating to Debt Securities (Proof).
4.4 Form(s) of Supplemental Indenture relating to Offered Debt
Securities (to be filed as Exhibit(s) by means of Form 8-K).
4.5 Specimen(s) of Offered Debt Securities (to be filed as Exhibit
(s) by means of Form 8-K).
5.1 Opinion of Snell & Wilmer.
12.1 Computation of Ratio of Earnings to Fixed Charges.
15.1 Letter In Lieu of Consent of DELOITTE & TOUCHE LLP Regarding
Unaudited Interim Financial Information
23.1 Consent of DELOITTE & TOUCHE LLP.
23.2 Consent of Snell & Wilmer (included in Opinion filed as Exhibit
No. 5.1).
24.1 Power of Attorney (see II-4).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of Bank of America National Trust and Savings
Association, as Bond Trustee under the Mortgage.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The Bank of New York, as Trustee under the Indenture
Relating to the Debt Securities.
In addition to those Exhibits shown above, the Company hereby incorporates
the following Exhibits pursuant to Rule 411 of Regulation C promulgated under
the Securities Act of 1933 by reference to the filings set forth below:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PREVIOUSLY FILED AS EXHIBIT: FILE NO. DATE EFFECTIVE
----------- ----------- ---------------------------- -------- --------------
<S> <C> <C> <C> <C>
4.6 Mortgage and Deed of 4.1 to September 1992 Form 10-Q 1-4473 11-9-92
Trust relating to Report
Company's First
Mortgage Bonds,
together with forty-
eight indentures
supplemental thereto.
Forty-ninth 4.1 to 1992 Form 10-K Report 1-4473 3-30-93
Supplemental
Indenture.
Fiftieth Supplemental 4.2 to 1993 Form 10-K Report 1-4473 3-30-94
Indenture.
Fifty-First 4.1 to August 1, 1993 Form 8-K 1-4473 9-27-93
Supplemental Report
Indenture.
Fifty-Second 4.1 to September 30, 1993 Form 1-4473 11-15-93
Supplemental 10-Q Report
Indenture.
Fifty-Third 4.5 to Registration Statement 1-4473 3-1-94
Supplemental No. 33-61228 by means of
Indenture. February 23, 1994 Form 8-K
Report
</TABLE>
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; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided however, that paragraphs (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 by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the 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 being registered which remain unsold at the termination
of the offering.
(4) If the registrant is a foreign private issuer, to file a post-
effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any
delayed offering or throughout a continuous offering.
(5) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification by the Company for liabilities arising under the
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has
been advised that, in the opinion of the 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 Company of expenses incurred or
paid by a director, officer, or controlling person of the Company 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 Company 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 of 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on the 14th day of
September, 1994.
ARIZONA PUBLIC SERVICE COMPANY
By O. MARK DE MICHELE
----------------------------------------
(O. Mark De Michele, President and
Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes O. Mark De Michele, Jaron B. Norberg and William J.
Hemelt, and Nancy E. Newquist and each of them, as attorneys-in-fact, to sign
in his or her name and behalf, individually and in each capacity designated
below, and to file any amendments, including post-effective amendments, to
this registration statement.
SIGNATURE TITLE DATE
--------- ----- ----
O. MARK DE MICHELE Principal Executive Officer September 14,
- -------------------------------- and Director 1994
(O. Mark De Michele, President
and Chief Executive Officer)
JARON B. NORBERG Principal Financial Officer September 14,
- -------------------------------- and Director 1994
(Jaron B. Norberg, Executive
Vice President and Chief
Financial Officer)
WILLIAM J. POST Principal Accounting Officer September 14,
- -------------------------------- 1994
(William J. Post, Senior Vice
President)
KENNETH M. CARR Director September 14,
- -------------------------------- 1994
(Kenneth M. Carr)
MARTHA O. HESSE Director September 14,
- -------------------------------- 1994
(Martha O. Hesse)
MARIANNE M. JENNINGS Director September 14,
- -------------------------------- 1994
(Marianne M. Jennings)
ROBERT G. MATLOCK Director September 14,
- -------------------------------- 1994
(Robert G. Matlock)
JOHN R. NORTON III Director September 14,
- -------------------------------- 1994
(John R. Norton III)
DONALD M. RILEY Director September 14,
- -------------------------------- 1994
(Donald M. Riley)
HENRY B. SARGENT Director September 14,
- -------------------------------- 1994
(Henry B. Sargent)
WILMA W. SCHWADA Director September 14,
- -------------------------------- 1994
(Wilma W. Schwada)
VERNE D. SEIDEL Director September 14,
- -------------------------------- 1994
(Verne D. Seidel)
RICHARD SNELL Director September 14,
- -------------------------------- 1994
(Richard Snell)
DIANNE C. WALKER Director September 14,
- -------------------------------- 1994
(Dianne C. Walker)
BEN F. WILLIAMS, JR. Director September 14,
- -------------------------------- 1994
(Ben F. Williams, Jr.)
THOMAS G. WOODS, JR. Director September 14,
- -------------------------------- 1994
(Thomas G. Woods, Jr.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
EXHIBIT 1.1
ARIZONA PUBLIC SERVICE COMPANY
First Mortgage Bonds
UNDERWRITING AGREEMENT
_________________________
Dear Sir or Madam:
1. Introduction. Arizona Public Service Company, an Arizona
corporation (the "Company"), proposes to issue and sell from time to time up to
$200,000,000 in aggregate principal amount of its First Mortgage Bonds (the
"Bonds") registered under the registration statements referred to in Section
2(a). The Bonds will be issued under its Mortgage and Deed of Trust dated as of
July 1, 1946, to Bank of America National Trust and Savings Association, as
successor by merger to Security Pacific National Bank (formerly Security-First
National Bank of Los Angeles), Trustee, as amended and supplemented by
fifty-three indentures supplemental thereto (the "Mortgage"), and as further
amended and supplemented by one or more additional Supplemental Indentures
relating to the Bonds (the "Supplemental Indentures") (the Mortgage as amended
and supplemented by such Supplemental Indentures being sometimes hereinafter
referred to as the "Indenture"). The Bonds will be issued in one or more series,
which series may vary as to interest rates, maturities, redemption provisions,
selling prices, and other terms, with all such terms for any particular issue of
the Bonds being determined at the time of sale. Particular issues of the Bonds
may be sold from time to time to one or more of the firms to whom this Agreement
is addressed, and to such other purchasers as the Company shall designate and as
shall agree in writing to comply with the terms and conditions of this
Agreement, for resale in accordance with the terms of offering determined at the
time of sale. The Bonds involved in any such offering are hereinafter referred
to as the "Purchased Bonds," the parties that agree to purchase the same are
hereinafter referred to as the "Underwriters" of such Purchased Bonds, and the
representative or representatives of the Underwriters, if any, specified in a
Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives."
2. Representations and Warranties of the Company. In connection with
each offering of the Purchased Bonds, the Company represents and warrants to,
and agrees with, the several Underwriters that:
(a) A registration statement (No. 33-61228) relating to
$100,000,000 of the Bonds and a registration statement (No. __________)
relating to $100,000,000 of the Bonds or unsecured debentures, notes,
or other evidences of indebtedness (the "Securities") (including a
combined prospectus relating to all of the Bonds and Securities) were
filed with the Securities and Exchange Commission (the "Commission")
and have become effective. Such registration statements, as each is
amended at the time of the Terms Agreement referred to in Section 3
relating to the Purchased Bonds, are hereinafter referred to as the
"First Registration Statement" and the "Second Registration Statement,"
respectively, and are hereinafter referred to collectively as the
"Registration Statements," and such prospectus, as supplemented as
contemplated by Section 3 to reflect the terms of the Purchased Bonds
and terms of offering thereof, including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus."
(b) Each part of the Registration Statements relating to the
Bonds, when such part became effective, conformed in all respects to
the requirements of the Securities Act of 1933 (the "Act"), the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the rules and
regulations (the "Rules and Regulations") of the Commission and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Prospectus
Supplement referred to in Section 3, the Registration Statements and
the Prospectus will conform in all respects to the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations, and at such
date none of such documents will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing does not apply to statements in
or omissions from any such documents based upon written information
furnished to the Company by any Underwriter specifically for use
therein.
(c) An order of the Arizona Corporation Commission shall have been
granted authorizing the execution and delivery of the Supplemental
Indenture relating to the Purchased Bonds and the issuance and sale of
the Purchased Bonds on the terms and conditions herein and in the
Prospectus and the Terms Agreement referred to in Section 3 relating to
the Purchased Bonds, and the approval or consent of no other public
body or authority is necessary to the execution and delivery of such
Supplemental Indenture or the validity of the issuance and sale of the
Purchased Bonds, except as may be required under state securities or
blue sky laws.
(d) Except for property specifically excepted from the lien of the
Indenture or released therefrom in accordance with the terms thereof,
the Company has good and marketable title in fee simple, except for
items described in (A), (B), and (C) below, to all of the real property
purported in the Indenture to be so held, good and valid leasehold
interests in all properties purported in the Indenture to be held under
lease, and good and valid title to all other properties described in
the Indenture as subject to the lien thereof (which property excludes
(i) the combined cycle plant referred to in Note 4 of Notes to
Financial Statements in the Company's Form 10-K Report for the fiscal
year ended December 31, 1993 (the "1993 Form 10-K Report") incorporated
by reference in the Registration Statements but includes the Company's
leasehold and related interests in that plant and (ii) certain leased
interests in Unit 2 of the Palo Verde Nuclear Generating Station
referred to in Note 7 of Notes to Financial Statements in the 1993 Form
10-K Report), except that the transmission and distribution lines of
the Company, other than those located on land owned in fee by the
Company, and the property described in Section 15 of Article IV of the
Forty-first Supplemental Indenture, have been installed in public
streets or alleys and in highways under ordinances and permits granted
by the various governmental bodies having jurisdiction, or have been
constructed on leaseholds, easements or rights-of-way granted, with
minor exceptions, by the apparent owners of record of the land and such
leases, easements, or rights-of-way are subject to any defects in or
encumbrances on the title of the respective lessors of such leases or
grantors of such easements or rights-of-way; title to the aforesaid
properties is subject only to: (A) the lien of the Mortgage, (B)
Excepted Encumbrances as defined in the Mortgage, and (C) other liens,
encumbrances or defects, none of which, individually or in the
aggregate, materially interfere with the business or operations of the
Company (with respect to leasehold interests on the Navajo Reservation,
this representation is intended and shall be understood to mean only
that the Company is the owner of the rights conferred upon it by the
leases from the Navajo Tribe relating to the sites on which the Navajo
Plant and the Four Corners Plant are located, and that while the
Company is not aware of the assertion of any claim contesting the title
of the Navajo Tribe to the lands leased, the Company does not give any
representation with respect to the title of the Navajo Tribe to the
lands leased or with respect to the enforceability of such leases
against the Navajo Tribe); the Mortgage, subject only as above set
forth in this clause, now constitutes, and the Mortgage and the
Supplemental Indentures theretofore executed, subject only as above set
forth in this clause, when the latter shall have been duly recorded and
filed, will constitute, together and as a single instrument, a direct
and valid first mortgage lien upon said properties, which include all
of the properties of the Company (other than the classes or items of
property expressly excepted in the Mortgage); and all properties (other
than the classes or items of property expressly excepted in the
Mortgage or expressly released from the lien thereof) acquired by the
Company after the date of the Supplemental Indenture relating to the
Purchased Bonds in each county in the States of Arizona and New Mexico
in which the Mortgage and the Supplemental Indenture shall have been
duly recorded and filed (and, as to which properties, with respect to
priority only, any necessary recordation and/or filing has been
accomplished, including therein any necessary descriptions of
after-acquired real property and real property upon which
after-acquired fixtures are affixed) will, upon such acquisition,
become subject to the first mortgage lien thereof, subject, however, to
Excepted Encumbrances and to liens, if any, existing or placed thereon
at the time of the acquisition thereof by the Company and, with respect
to priority only, to liens, if any, existing prior to the time of any
necessary recordation and/or filing by the Company.
(e) The Company holds such valid franchises, certificates of
convenience and necessity, licenses, and permits as are necessary with
respect to the maintenance and operation of its property and business
as now conducted, except that (A) the Company from time to time makes
minor extensions of its system prior to the time a related franchise,
certificate, license, or permit is procured, (B) from time to time
communities already being served by the Company become incorporated and
considerable time may elapse before a franchise is procured, (C)
certain franchises may have expired prior to the renegotiation thereof,
(D) the Company may not have obtained certain permits or variances
relating to the environmental requirements described in any of its Form
10-K Report, its Form 10-Q Reports, and/or its Form 8-K Reports
incorporated by reference in the Registration Statements, (E) certain
minor defects and exceptions may exist which, individually and in the
aggregate, are not deemed material, and (F) the Company does not make
any representation regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope.
3. Purchase and Offering. The obligation of the Underwriters to
purchase, and the obligation of the Company to sell, the Purchased Bonds will be
evidenced by an exchange of facsimile transmission or other written
communications (the "Terms Agreement") at the time the Company determines to
sell the Purchased Bonds. The Terms Agreement shall specify (by incorporation by
reference or otherwise) the parties that will be Underwriters, the principal
amount to be purchased by each, the purchase price to be paid by the
Underwriters, any compensation or commissions to be paid to Underwriters, the
offering price, and the terms of the Purchased Bonds not already specified in
the Indenture, including, but not limited to, interest rates, maturity,
redemption provisions, and sinking fund requirements, if any. The Terms
Agreement shall also specify (by incorporation by reference or otherwise) the
time and date of delivery and payment (the "Closing Date"), the place of
delivery and payment, and any details of the terms of offering that should be
reflected in the prospectus supplement relating to the offering of the Purchased
Bonds (the "Prospectus Supplement"). It is understood that the Underwriters will
offer the Purchased Bonds for sale as set forth in the Prospectus. The
obligations of the Underwriters to purchase the Purchased Bonds shall be several
and not joint. Except as may otherwise be set forth in the Terms Agreement, the
Purchased Bonds will be in definitive form and in such denominations and
registered in such names as the Underwriters may request.
4. Covenants of the Company. In connection with each offering of
Purchased Bonds, the Company covenants and agrees with the several
Underwriters that:
(a) The Company will advise the Underwriters or the
Representatives promptly of any proposed amendment or supplementation
of the First Registration Statement, the Second Registration Statement,
or the Prospectus and will not effect such amendment or supplementation
without the consent of the Underwriters or the Representatives. The
Company will also advise the Underwriters or the Representatives of the
institution by the Commission of any stop order proceedings in respect
of the First Registration Statement, the Second Registration Statement,
or of any part thereof, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If, at any time when a prospectus relating to the Purchased
Bonds is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend or supplement the First Registration
Statement, the Second Registration Statement, or the Prospectus to
comply with the Act, the Company promptly will prepare and file with
the Commission an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance.
(c) As soon as practicable, but not later than 18 months, after
the date of the Terms Agreement relating to the Purchased Bonds, the
Company will make generally available to its securityholders an earning
statement or statements (which need not be audited) covering a period
of at least 12 months beginning after the effective date of the Second
Registration Statement (as defined in Rule 158(c) under the Act), which
will satisfy the provisions of Section ll(a) of the Act and the rules
and regulations thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statements (including
one copy of the Second Registration Statement for each Representative,
or for each Underwriter if there are no Representatives, and for the
counsel for the Underwriters, which is signed and includes all
exhibits), any related preliminary prospectus supplements and the
Prospectus, including all amendments or supplements to such documents,
as may be reasonably requested.
(e) The Company will arrange or cooperate in arrangements for
the qualification of the Purchased Bonds for sale and the determination
of their eligibility for investment under the laws of such
jurisdictions as the Underwriters or the Representatives designate and
will continue such qualifications in effect so long as required for the
distribution of the Purchased Bonds, provided that the Company shall
not be required to qualify as a foreign corporation in any State, to
consent to service of process in any State other than with respect to
claims arising out of the offering or sale of the Purchased Bonds, or
to meet other requirements deemed by it to be unduly burdensome.
(f) During the period of five years after the date of the Terms
Agreement relating to the Purchased Bonds, the Company will furnish to
the Underwriters or the Representatives thereunder, and, upon request,
each of the other Underwriters, (i) as soon as practicable after the
end of each fiscal year, a balance sheet and statements of income and
retained earnings of the Company as at the end of and for such year,
all in reasonable detail and certified by independent public
accountants, and (ii) (A) as soon as practicable after the end of each
quarterly fiscal period (except for the last quarterly fiscal period of
each fiscal year), a balance sheet and statement of income of the
Company as at the end of and for such period, all in reasonable detail
and certified by a principal financial or accounting officer of the
Company, (B) as soon as available, a copy of each report of the Company
mailed by the Company to stockholders or filed with the Commission, and
(C) from time to time, such other information concerning the Company as
may reasonably be requested. So long as the Company has active
subsidiaries, such financial statements will be on a consolidated basis
to the extent the accounts of the Company and its subsidiaries are
consolidated.
(g) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, and will reimburse
the Underwriters for any reasonable expenses (including reasonable fees
and disbursements of counsel) incurred by them in connection with the
qualification of the Purchased Bonds with respect to which the Terms
Agreement relating to the Purchased Bonds has been entered for sale,
and the determination of their eligibility for investment, under the
laws of such jurisdictions as the Representatives or, if there are no
Representatives, the Underwriters designate, and the printing of
memoranda relating thereto, and for any fees charged by investment
rating agencies for the rating of the Purchased Bonds.
(h) The Company will not offer or sell any of its First
Mortgage Bonds for a period beginning at the time of execution of the
Terms Agreement relating to the Purchased Bonds and ending on the
Closing Date relating thereto without prior consent of the Underwriters
or the Representatives.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Purchased Bonds will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following additional conditions precedent:
(a) The Underwriters or the Representatives shall have received
a letter from DELOITTE & TOUCHE LLP, dated the date of the Terms
Agreement, confirming that they are independent certified public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder, and stating in effect that (i) in
their opinion the financial statements and schedules of the Company
examined by them and incorporated by reference in the Registration
Statements comply as to form in all material respects with the
applicable accounting requirements of the Securities Exchange Act of
1934 (the "1934 Act") and the published Rules and Regulations
thereunder and (ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials of
the Company responsible for financial and accounting matters, and other
specified procedures, nothing came to their attention that caused them
to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the published Rules and Regulations
thereunder or are not stated on a basis substantially consistent with
that of the audited financial statements incorporated by reference in
the Registration Statements, (B) at the date of the most recent
available unaudited financial statements and at a specified date not
more than five days prior to the date of this Agreement, there was any
increase in the amounts of common stock, redeemable preferred stock, or
non-redeemable preferred stock of the Company or any increase,
exceeding $10,000,000, in long-term debt of the Company or, at the date
of the most recent available unaudited financial statements there was
any decrease in net assets as compared with amounts shown in the most
recent financial statements incorporated by reference in the
Registration Statements, or (C) for the twelve-month period ended at
the date of the most recent available unaudited financial statements
there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in
the amounts of total revenues or net income, except in all cases for
increases or decreases which result from the declaration or payment of
dividends, or which the Registration Statements (including any material
incorporated by reference therein) disclose have occurred or may occur,
or which are described in such letter.
(b) No stop order suspending the effectiveness of the First
Registration Statement, the Second Registration Statement, or any part
thereof shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement relating
to the Purchased Bonds, (i) there shall not have occurred any change,
or any development involving a prospective change, in or affecting
particularly the business or properties of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters under such Terms Agreement, including any Representatives,
materially impairs the investment quality of the Purchased Bonds, (ii)
there shall not have occurred a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, (iii)
there shall not have occurred a general moratorium on commercial
banking activities in New York declared by either Federal or New York
State authorities, (iv) no rating of any of the Company's debt
securities shall have been lowered and there shall have been no public
announcement that any such debt securities have been placed on
CreditWatch, Watchlist, or under any similar surveillance or review, in
each case with negative implications, by any recognized rating agency,
and (v) there shall not have occurred any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters under such Terms Agreement, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the Purchased
Bonds.
(d) The Underwriters or the Representatives shall have received
an opinion of Snell & Wilmer, counsel for the Company, dated the
relevant Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Arizona and has full corporate power and authority to carry on its
business as presently conducted; and the Company is duly qualified
as a foreign corporation to do business and is in good standing in
the State of New Mexico, the only other jurisdiction in which it
owns or leases substantial properties or in which the conduct of
its business requires such qualification;
(ii) The Purchased Bonds have been duly authorized,
executed, authenticated, issued, and delivered, constitute valid
and legally binding obligations of the Company entitled to the
benefits and security provided by the Indenture (except as the same
may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement, moratorium, or
other laws or equitable principles relating to or affecting the
enforcement of creditors' rights generally or the enforcement of
the security provided by the Indenture, (b) the necessity for
compliance with the statutory procedural requirements governing the
exercise of remedies by a secured creditor, and (c) the
qualification that certain waivers, procedures, remedies, and other
provisions of the Purchased Bonds and the Indenture may be
unenforceable under or limited by the law of the State of Arizona;
however, such law does not in such counsel's opinion substantially
prevent the practical realization of the benefits intended by such
documents) and conform to the description thereof in the
Prospectus;
(iii) The Indenture has been duly authorized,
executed, and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a valid and binding instrument
enforceable in accordance with its terms except as the same may be
limited by (a) general principles of equity or by bankruptcy,
insolvency, reorganization, arrangement, moratorium, or other laws
or equitable principles relating to or affecting the enforcement of
creditors' rights generally or the enforcement of the security
provided by the Indenture, (b) the necessity for compliance with
the statutory procedural requirements governing the exercise of
remedies by a secured creditor, and (c) the qualification that
certain waivers, procedures, remedies, and other provisions of the
Purchased Bonds and the Indenture may be unenforceable under or
limited by the law of the State of Arizona; however, such law does
not in such counsel's opinion substantially prevent the practical
realization of the benefits intended by such documents;
(iv) Except for property specifically excepted from
the lien of the Indenture or released therefrom in accordance with
the terms thereof, the Company has good and marketable title in fee
simple, except for items described in (A), (B), and (C) below, to
all of the real property and fixtures thereon purported in the
Indenture to be so held and that are both located in the State of
Arizona and described in those title reports covering at least the
Saguaro, Yucca, Cholla, Ocotillo, West Phoenix, and Palo Verde
plant sites that are listed on an exhibit to such opinion (the
"Title Documents") (in giving such opinion, such counsel may rely
solely upon the Title Documents and may assume the accuracy thereof
and of the real property descriptions contained therein and may
state that no other investigation or inquiry has been made with
respect thereto), and in giving the opinions described below with
respect to any liens, defects, and encumbrances on such title to
such personal property, such counsel may assume that the Company
has good and valid title to all of the personal property located in
the State of Arizona and described in the Indenture as subject to
the lien thereof (which property shall not include fixtures), and
such counsel may rely solely upon, and assume the accuracy of, a
search of the Uniform Commercial Code Financing Statements filed in
the records of the Arizona Secretary of State and may assume that
there are no liens or other encumbrances on personal property (as
used in the Arizona Uniform Commercial Code) of the Company located
in the State of Arizona other than liens or other encumbrances that
have been perfected by filing with the Arizona Secretary of State
under Arizona Revised Statutes ("A.R.S.") Section 47-9401.A; such
title is subject only to: (A) the lien of the Mortgage, (B)
Excepted Encumbrances as defined in the Mortgage, and (C) other
liens, encumbrances, or defects, none of which, individually or in
the aggregate, in the opinion of such counsel, materially interfere
with the business or operations of the Company (in determining
whether any such other liens, encumbrances, or defects materially
interfere with the business or operations of the Company, such
counsel may rely solely upon a certificate of an officer or
engineer of the Company which shall be attached to such opinion and
such opinion may state that no other investigation or inquiry with
respect thereto has been made); the Mortgage, subject only as above
set forth in this clause, now constitutes, and the Mortgage and the
Supplemental Indentures theretofore executed, subject only as above
set forth in this clause, when the latter shall have been duly
recorded and filed, will constitute, together and as a single
instrument, a direct and valid first mortgage lien upon said
property; and all properties (other than the classes or items of
property expressly excepted in the Mortgage or expressly released
from the lien thereof) acquired by the Company after the date of
the Supplemental Indenture relating to the Purchased Bonds in each
county in the State of Arizona in which the Mortgage and the
Supplemental Indenture shall have been duly recorded and filed and,
with respect to priority only, any necessary recordation and/or
filing has been accomplished (including therein any necessary
descriptions of after-acquired real property and real property upon
which after-acquired fixtures are affixed) will, upon such
acquisition, become subject to the first mortgage lien thereof,
subject, however, to Excepted Encumbrances and to liens, if any,
existing or placed thereon at the time of the acquisition thereof
by the Company and, with respect to priority only, to liens, if
any, existing prior to the time of any necessary recordation and/or
filing by the Company;
(v) The Company is the owner of the rights conferred
upon it by the leases from the Navajo Tribe relating to the site on
which the Navajo Plant is located and while such counsel is not
aware of the assertion of any claim contesting the title of the
Navajo Tribe to the lands leased, such counsel shall not be
required to express any opinion with respect to the title of the
Navajo Tribe to the lands leased or with respect to the
enforceability of such leases against the Navajo Tribe;
(vi) With certain exceptions, a public service
corporation is required to obtain certificates of convenience and
necessity from the Arizona Corporation Commission under A.R.S.
Section 40-281.A for construction of its lines, plant, services, or
systems, or any extensions thereof, within the State of Arizona,
and to obtain franchises or similar consents or permits from
counties and incorporated municipalities under A.R.S. Section
40-283.A for the construction, operation, and maintenance of
transmission lines within the State of Arizona; to the best of such
counsel's knowledge after due inquiry, the Company holds such valid
franchises, certificates of convenience and necessity, consents,
and permits pursuant to such statutory provisions as are necessary
with respect to the maintenance and operation of its property and
business as now conducted, except that (A) the Company from time to
time makes minor extensions of its system prior to the time a
related franchise, certificate, license, or permit is procured, (B)
from time to time communities already being served by the Company
become incorporated and considerable time may elapse before a
franchise is procured, (C) certain franchises may have expired
prior to the renegotiation thereof, (D) certain minor defects and
exceptions may exist which, individually and in the aggregate, are
not deemed material, and (E) such counsel need not be required to
express any opinion regarding the geographical scope of any
franchise, certificate, license, or permit that is not specific as
to its geographical scope;
(vii) The issuance and sale of the Purchased Bonds on
the terms and conditions herein and in the Prospectus and the Terms
Agreement relating to the Purchased Bonds set forth or contemplated
and the execution and delivery of the Supplemental Indenture
relating to the Purchased Bonds have been duly authorized by the
Arizona Corporation Commission, said Commission had jurisdiction in
the premises, and no further approval, authorization, or consent of
any other public board or body is necessary to the validity of such
issuance and sale of such Purchased Bonds or the execution and
delivery of such Supplemental Indenture, except as may be required
under state securities or blue sky laws, as to which laws such
counsel shall not be required to express an opinion;
(viii) The First Registration Statement and the
Second Registration Statement have become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the First Registration Statement or
the Second Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each part of the Registration
Statements relating to the Bonds, when such part became effective,
and the First Registration Statement, the Second Registration
Statement, and the Prospectus, as of the date of the Prospectus
Supplement, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act, and the published Rules and Regulations; such
counsel has no reason to believe that any part of the Registration
Statements, when such part became effective, or the First
Registration Statement, the Second Registration Statement, or the
Prospectus, as of the date of the Prospectus Supplement, or as of
the Closing Date, or any amendment or supplement thereto, as of
their respective effective or issue dates, or as of the Closing
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; the
descriptions in the Registration Statements and Prospectus of
statutes, legal and governmental proceedings and contracts, and
other documents are accurate and fairly present the information
required to be shown; and to the actual knowledge of those persons
in the lawyer group described in such opinion, there are no legal
or governmental proceedings required to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be described in the
Registration Statements or Prospectus or to be filed as exhibits to
the Registration Statements that are not described and filed as
required (it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statements or the Prospectus); and
(ix) This Agreement and the Terms Agreement have been
duly authorized, executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer may rely solely upon
certificates of the Company as to any factual matters upon which any such
opinions are based and may rely upon the opinion of Keleher & McLeod, P.A.,
referred to below, as to all matters governed by the laws of the State of New
Mexico, but the opinion of Snell & Wilmer shall state that, though they are
members of the Arizona Bar and do not hold themselves out as experts on the laws
of the State of New Mexico, they have made a study of the laws of such State
insofar as such laws are involved in the conclusions stated in their opinion,
other than such laws as relate to matters of title, and from such study it is
their opinion that such laws support such conclusions and that, in their
opinion, the Underwriters and they are justified to such extent in relying upon
the opinion of Keleher & McLeod, P.A.; and (b) the lawyer group referred to in
such opinion will mean those lawyers in the offices of Snell & Wilmer who (i)
have billed any time on the particular transaction to which such opinion relates
or (ii) have billed more than ten hours to any Company matter in the
twelve-month period preceding the date on which the list of such lawyers was
compiled for purposes of inquiry pursuant to such opinion.
(e) The Underwriters or the Representatives shall have received
an opinion of Keleher & McLeod, P.A., New Mexico counsel for the
Company, dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign
corporation to do business and is in good standing in the State of
New Mexico and has full corporate power and authority to engage in
the State of New Mexico in the business now conducted by it
therein;
(ii) The activities of the Company in the State of
New Mexico to date do not constitute it a "public utility" as that
term is defined in the relevant laws of the State of New Mexico,
and accordingly, no public utility franchises or certificates of
convenience and necessity are necessary under New Mexico law with
respect to the maintenance and operation of the Company's property
and business as now conducted in the State of New Mexico and no
approval, authorization, or consent of the New Mexico Public
Utility Commission or any other public board or body of the State
of New Mexico is required for the issuance and sale of the
Purchased Bonds on the terms and conditions herein and in the
Prospectus set forth or contemplated or for the execution of the
Supplemental Indenture relating to the Purchased Bonds, except as
may be required under New Mexico state securities or blue sky laws,
as to which laws such counsel shall not be required to express an
opinion;
(iii) Assuming that the Company has good and valid
title to all of the personal property located in the State of New
Mexico and described in the Indenture as subject to the lien
thereof (which property shall not include fixtures) ("Personal
Property"), in giving the opinions described below with respect to
any liens, defects and encumbrances on such title to such Personal
Property, such counsel may rely solely upon, and assume the
accuracy of, a search of the Uniform Commercial Code Financing
Statements filed in the records of the New Mexico Secretary of
State and may assume that there are no liens or other encumbrances
on personal property (as used in the New Mexico Uniform Commercial
Code) of the Company located in the State of New Mexico other than
liens or other encumbrances that have been perfected by filing with
the New Mexico Secretary of State under Section 55-9-401, New
Mexico Statutes Annotated 1978; such title to such Personal
Property is subject only to: (A) the lien of the Mortgage, (B)
Excepted Encumbrances as defined in the Mortgage, and (C) other
liens, encumbrances, or defects, none of which, individually or in
the aggregate, in the opinion of such counsel, materially interfere
with the business or operations of the Company (in determining
whether any such other liens, encumbrances, or defects materially
interfere with the business or operations of the Company, such
counsel may rely solely upon a certificate of an officer or
engineer of the Company which shall be attached to such opinion and
such opinion may state that no other investigation or inquiry with
respect thereto has been made); the Mortgage, subject only as above
set forth in this clause, now constitutes, and the Mortgage and the
Supplemental Indentures theretofore executed, subject only as above
set forth in this clause, when the latter shall have been duly
recorded and filed, will constitute, together and as a single
instrument, a direct and valid first mortgage lien upon such
Personal Property; and all properties (other than the classes or
items of property expressly excepted in the Mortgage or expressly
released from the lien thereof) acquired by the Company after the
date of the Supplemental Indenture relating to the Purchased Bonds
in each county in the State of New Mexico in which the Mortgage and
the Supplemental Indenture shall have been duly recorded and filed
and, with respect to priority only, any necessary recordation
and/or filing has been accomplished (including therein any
necessary descriptions of after-acquired real property and real
property upon which after-acquired fixtures are affixed) will, upon
such acquisition, become subject to the first mortgage lien
thereof, subject, however, to Excepted Encumbrances and to liens,
if any, existing or placed thereon at the time of the acquisition
thereof by the Company and, with respect to priority only, to
liens, if any, existing prior to the time of any necessary
recordation and/or filing by the Company;
(iv) The Company is the owner of the rights conferred
upon it by the leases from the Navajo Tribe relating to the site on
which the Four Corners plant is located and while such counsel is
not aware of the assertion of any claim contesting the title of the
Navajo Tribe to the lands leased, such counsel shall not be
required to express any opinion with respect to the title of the
Navajo Tribe to the lands leased or with respect to the
enforceability of such leases against the Navajo Tribe.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon certificates
of the Company as to any factual matters upon which any such opinions are based.
(f) The Underwriters or the Representatives shall have received
from counsel for the Underwriters such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Purchased Bonds, the Registration Statements, the
Prospectus, and other related matters as may reasonably be required,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to the
incorporation of the Company and all other matters governed by the laws
of the States of Arizona and New Mexico upon the opinions of Snell &
Wilmer and Keleher & McLeod, P.A., referred to above.
(g) The Underwriters or the Representatives shall have received
a certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date,
in which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Date, that
no stop order suspending the effectiveness of the First Registration
Statement or the Second Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission, and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operations of
the Company and its subsidiaries except as set forth or contemplated in
the Prospectus or as described in such certificate.
(h) The Underwriters or the Representatives shall have received
a letter of DELOITTE & TOUCHE LLP, dated the Closing Date, which meets
the requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than five days prior to the Closing Date for the purposes of this
subsection.
The Company will furnish the Underwriters or the Representatives with
such conformed copies of such opinions, certificates, letters, and documents as
may be reasonably requested.
6. Indemnification. (a) The Company will indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of the Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any part of the Registration Statements relating to the Bonds, when such part
became effective, the First Registration Statement, the Second Registration
Statement, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon 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; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statements, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which the Company or any such director, officer, or controlling
person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statements relating to the Bonds,
when such part became effective, the First Registration Statement, the Second
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter specifically for use
therein; and will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, or controlling person in connection
with investigating or defending any such loss, claim, damage, liability, or
action. This indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, without the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party for any loss, claim,
damage, liability, or action described in subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above on the following basis: (l) if such
loss, claim, damage, liability, or action arises under subsection (a) above,
then (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Bonds or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
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 as well as any other relevant equitable
considerations; and (2) if such loss, claim, damage, liability, or action arises
under subsection (b) above, then 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 as well as any other relevant equitable
considerations. For the purposes of clause (1) above, the relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. For the
purposes of clauses (1) and (2) above, the relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of 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 action or claim which is
the subject of this subsection (d). No person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the 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.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Purchased Bonds pursuant to this Agreement and
the Terms Agreement and the principal amount of Purchased Bonds that such
defaulting Underwriter or Underwriters agreed but failed to purchase is ten
percent (10%) or less of the principal amount of Purchased Bonds to which such
Terms Agreement relates, the Underwriters or the Representatives may make
arrangements satisfactory to the Company for the purchase of such Purchased
Bonds by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date the nondefaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder
and under such Terms Agreement, to purchase the Purchased Bonds that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of
Purchased Bonds with respect to which such default or defaults occur is more
than the above-described amount and arrangements satisfactory to the remaining
Underwriters and the Company for the purchase of such Purchased Bonds by other
persons are not made within thirty-six hours after such default, the Terms
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company, except as provided in Section 8. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Bonds. If any Terms Agreement is terminated pursuant to Section 7, or if for any
reason a purchase pursuant to any Terms Agreement is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect.
9. Notices. All communications hereunder relating to any offering of
Purchased Bonds will be in writing, and, if sent to the Underwriters, may be
mailed, delivered, or telecopied and confirmed to the Representative first named
in the Terms Agreement relating to such Purchased Bonds or the Underwriters at
their addresses furnished to the Company in writing for the purpose of
communications; provided, however, that any notice to an Underwriter pursuant to
Section 6 will be mailed, delivered, or telecopied and confirmed to each such
Underwriter at its own address. All communications hereunder to the Company
shall be mailed to the Company, Attention: Treasurer, at P.O. Box 53999,
Phoenix, Arizona 85072-3999, or delivered, or telecopied and confirmed to the
Company at 400 North Fifth Street, Phoenix, Arizona 85004.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and such Underwriters as are named in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. Representation of Underwriters. The Representatives, if any, may
act for the several Underwriters in connection with any offering to which a
Terms Agreement may relate, and any action under this Agreement or such Terms
Agreement taken by the Representatives jointly or the Representative first named
in such Terms Agreement in such capacity will be binding upon all the
Underwriters of Purchased Bonds to which such Terms Agreement relates.
12. Execution in Counterpart. This Agreement and any Terms Agreement
may be executed in one or more counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
a single instrument.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By____________________________
Treasurer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written
ARIZONA PUBLIC SERVICE COMPANY
Securities
UNDERWRITING AGREEMENT
Dear Sir or Madam:
1. Introduction. Arizona Public Service Company, an Arizona corporation
(the "Company"), proposes to issue and sell from time to time up to
$100,000,000 in aggregate principal amount of its unsecured debentures,
notes or other evidences of indebtedness (the "Securities") registered under
the registration statement referred to in Section 2(a). The Securities will
be issued under the Indenture, dated as of September 1, 1994 between the
Company and Bank of America Arizona, as Trustee, (the "Indenture"), as amended
and supplemented by one or more Supplemental Indentures between the Company
and the trustee (each, a "Supplemental Indenture") (the Indenture as amended
and supplemented by such Supplemental Indentures being sometimes hereinafter
referred to as the "Indenture"). The Securities will be issued in one or more
series, which series may vary as to interest rates, maturities, redemption
provisions, selling prices, and other terms, with all such terms for any
particular issue of the Securities being determined at the time of sale.
Particular issues of the Securities may be sold from time to time to one or
more of the firms to whom this Agreement is addressed, and to such other
purchasers as the Company shall designate and as shall agree in writing to
comply with the terms and conditions of this Agreement, for resale in
accordance with the terms of offering determined at the time of sale. The
Securities involved in any such offering are hereinafter referred to as the
"Purchased Securities," the party or parties that agree to purchase the same
are hereinafter referred to as the "Underwriters" of such Purchased
Securities, and the representative or representatives of the Underwriters, if
any, specified in a Terms Agreement referred to in Section 3 are hereinafter
referred to as the "Representatives."
2. Representations and Warranties of the Company. In connection
with each offering of the Purchased Securities, the Company represents and
warrants to, and agrees with, the Underwriters that:
(a) A registration statement (No. 33- ) relating to the
Securities (including a prospectus relating to up to $200,000,000 of
the Company's first mortgage bonds) was filed with the Securities and
Exchange Commission (the "Commission") and has become effective. Such
registration statement, as amended at the time of the Terms Agreement
referred to in Section 3 relating to the Purchased Securities, is
hereinafter referred to as the "Registration Statement" and such
prospectus, as supplemented as contemplated by Section 3 to reflect the
terms of the Purchased Securities and terms of offering thereof,
including all material incorporated by reference therein, is
hereinafter referred to as the "Prospectus."
(b) Each part of the Registration Statement relating to the
Securities, when such part became effective, conformed in all respects
to the requirements of the Securities Act of 1933 (the "Act"), the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules
and regulations (the "Rules and Regulations") of the Commission and did
not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and on the date of each
Prospectus Supplement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and at such date none of such documents will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing does not
apply to statements in or omissions from any such documents based upon
written information furnished to the Company by any Underwriter
specifically for use therein.
(c) An order of the Arizona Corporation Commission shall have
been granted authorizing the execution and delivery of the Supplemental
Indenture relating to the Purchased Securities and the issuance and
sale of the Purchased Securities on the terms and conditions herein and
in the Prospectus and the Terms Agreement referred to in Section 3
relating to the Purchased Securities, and the approval or consent of no
other public body or authority is necessary to the execution and
delivery of such Supplemental Indenture or the validity of the issuance
and sale of the Purchased Securities, except as may be required under
state securities or blue sky laws.
(d) The Company holds such valid franchises, certificates of
convenience and necessity, licenses, and permits as are necessary with
respect to the maintenance and operation of its property and business
as now conducted, except that (A) the Company from time to time makes
minor extensions of its system prior to the time a related franchise,
certificate, license, or permit is procured, (B) from time to time
communities already being served by the Company become incorporated and
considerable time may elapse before a franchise is procured, (C)
certain franchises may have expired prior to the renegotiation thereof,
(D) the Company may not have obtained certain permits or variances
relating to the environmental requirements described in any of its
Form 10-K Report, its Form 10-Q Reports, and/or its Form 8-K Reports
incorporated by reference in the Registration Statement, (E) certain
minor defects and exceptions may exist which, individually and in the
aggregate, are not deemed material, and (F) the Company does not make
any representation regarding the geographical scope of any franchise,
certificate, license, or permit that is not specific as to its
geographical scope.
3. Purchase and Offering. The obligation of the Underwriters to
purchase, and the obligation of the Company to sell, the Purchased
Securities will be evidenced by an exchange of facsimile transmission or
other written communications (the "Terms Agreement") at the time the Company
determines to sell the Purchased Securities. The Terms Agreement shall
specify (by Incorporation by reference or otherwise) the party or parties
that will be Underwriters, the principal amount to be purchased by each, the
purchase price to be paid by the Underwriters, any compensation or
commissions to be paid to Underwriters, the offering price, and the terms of
the Purchased Securities not already specified in the Indenture, including,
but not limited to, interest rates, maturity, redemption provisions, and
sinking fund requirements, if any. The Terms Agreement shall also specify
(by incorporation by reference or otherwise) the time and date of delivery
and payment (the "Closing Date"), the place of delivery and payment, and any
details of the terms of offering that should be reflected in the prospectus
supplement relating to the offering of the Purchased Securities (the
"Prospectus Supplement"). It is understood that the Underwriters will offer
the Purchased Securities for sale as set forth in the Prospectus. The
obligations of the Underwriters to purchase the Purchased Securities shall
be several and not joint. Except as may otherwise be set forth in the Terms
Agreement, the Purchased Securities will be in definitive form and in such
denominations and registered in such names as the Underwriters may request.
4. Covenants of the Company. In connection with each offering of
Purchased Securities, the Company covenants and agrees with the several
Underwriters that:
(a) The Company will advise the Underwriters or the
Representatives promptly of any proposed amendment or supplementation
of the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without the consent of the
Underwriters or the Representatives. The Company will also advise the
Underwriters or the Representatives of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement or of any part thereof, and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Purchased
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact, or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act, the
Company promptly will prepare and file with the Commission an amendment
or supplement that will correct such statement or omission or an
amendment that will effect such compliance.
(c) As soon as practicable, but not later than 18 months, after
the date of the Terms Agreement relating to the Purchased Securities,
the Company will make generally available to its security holders an
earning statement or statements (which need not be audited) covering a
period of at least 12 months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act), which
will satisfy the provisions of Section 11(a) of the Act and the rules
and regulations thereunder.
(d) The Company will furnish to the Underwriters or the
Representatives such copies of the Registration Statement (including
one copy of the Registration Statement for each Representative, or for
each Underwriter if there are no Representatives, and for the counsel
for the Underwriters, which is signed and includes all exhibits), any
related preliminary prospectus supplements and the Prospectus,
including all amendments or supplements to such documents, as may be
reasonably requested.
(e) The Company will arrange or cooperate in arrangements for the
qualification of the Purchased Securities for sale and the
determination of their eligibility for investment under the laws of
such jurisdictions as the Underwriters or the Representatives designate
and will continue such qualifications in effect so long as required for
the distribution of the Purchased Securities, provided that the Company
shall not be required to qualify as a foreign corporation in any State,
to consent to service of process in any State other than with respect
to claims arising out of the offering or sale of the Purchased
Securities, or to meet other requirements deemed by it to be unduly
burdensome.
(f) During the period of five years after the date of the Terms
Agreement relating to the Purchased Securities, the Company will
furnish to the Underwriters or the Representatives thereunder, and,
upon request, each of the other Underwriters, (i) as soon as
practicable after the end of each fiscal year, a balance sheet and
statements of income and retained earnings of the Company as at the end
of and for such year, all in reasonable detail and certified by
independent public accountants, and (ii) (A) as soon as practicable
after the end of each quarterly fiscal period (except for the last
quarterly fiscal period of each fiscal year), a balance sheet and
statement of income of the Company as at the end of and for such
period, all in reasonable detail and certified by a principal financial
or accounting officer of the Company, (B) as soon as available, a copy
of each report of the Company mailed by the Company to stockholders or
filed with the Commission, and (C) from time to time, such other
information concerning the Company as may reasonably be requested. So
long as the Company has active subsidiaries, such financial statements
will be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse the
Underwriters for any reasonable expenses (including reasonable fees and
disbursements of counsel) incurred by them in connection with the
qualification of the Purchased Securities with respect to which the
Terms Agreement relating to the Purchased Securities has been entered
for sale, and the determination of their eligibility for investment,
under the laws of such jurisdictions as the Representatives or, if
there are no Representatives, the Underwriters designate, and the
printing of memoranda relating thereto, and for any fees charged by
investment rating agencies for the rating of the Purchased Securities.
(h) The Company will not offer or sell any other of its
Securities for a period beginning at the time of execution of the Terms
Agreement relating to the Purchased Securities and ending on the
Closing Date relating thereto without prior consent of the Underwriter
or the Representatives.
5. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Purchased
Securities will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of Company officers made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions precedent:
(a) The Underwriters or the Representatives shall have received a
letter from DELOITTE & TOUCHE LLP, dated the date of the Terms
Agreement, confirming that they are independent certified public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder, and stating in effect that (i) in
their opinion the financial statements and schedules of the Company
examined by them and incorporated by reference in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Exchange Act of
1934 (the "1934 Act") and the published Rules and Regulations
thereunder and (ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials of
the Company responsible for financial and accounting matters, and other
specified procedures, nothing came to their attention that caused them
to believe that (A) the unaudited financial statements incorporated by
reference, if any, in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the published Rules and Regulations
thereunder or are not stated on a basis substantially consistent with
that of the audited financial statements incorporated by reference in
the Registration Statements, (B) at the date of the most recent
available unaudited financial statements and at a specified date not
more than five days prior to the date of this Agreement, there was any
increase in the amounts of common stock, redeemable preferred stock, or
non-redeemable preferred stock of the Company or any increase,
exceeding $10,000,000, in long-term debt of the Company or, at the date
of the most recent available unaudited financial statements there was
any decrease in net assets as compared with amounts shown in the most
recent financial statements incorporated by reference in the
Registration Statements, or (C) for the twelve-month period ended at
the date of the most recent available unaudited financial statements
there were any decreases, exceeding 3%, as compared with the
twelve-month period ended at the date of the most recent financial
statements incorporated by reference in the Registration Statements, in
the amounts of total revenues or net income, except in all cases for
increases or decreases which result from the declaration or payment of
dividends, or which the Registration Statement (including any material
incorporated by reference therein) discloses have occurred or may
occur, or which are described in such letter.
(b) No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Underwriters, shall be contemplated by
the Commission.
(c) Subsequent to the execution of the Terms Agreement relating
to the Purchased Securities, (i) there shall not have occurred any
change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters under such Terms Agreement, including any Representatives,
materially impairs the investment quality of the Purchased Securities,
(ii) there shall not have occurred a suspension or material limitation
in trading in securities generally on the New York Stock Exchange,
(iii) there shall not have occurred a general moratorium on commercial
banking activities in New York declared by either Federal or New York
State authorities, (iv) no rating of any of the Company's debt
securities shall have been lowered and there shall have been no public
announcement that any such debt securities have been placed on
CreditWatch, Watchlist, or under any similar surveillance or review, in
each case with negative implications, by any recognized rating agency,
and (v) there shall not have occurred any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Underwriters under such Terms Agreement, including
any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the Purchased
Securities.
(d) The Underwriters or the Representatives shall have received
an opinion of Snell & Wilmer, counsel for the Company, dated the
relevant Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Arizona and has full corporate power and authority to carry
on its business as presently conducted; and the Company is
duly qualified as a foreign corporation to do business and is
in good standing in the State of New Mexico, the only other
jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification;
(ii) The Purchased Securities have been duly authorized,
executed, authenticated, issued, and delivered, constitute
valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture (except as the same
may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other laws or equitable principles relating to
or affecting the enforcement of creditors' rights generally
and (b) the qualification that certain waivers, procedures,
remedies, and other provisions of the Purchased
Securities and the Indenture may be unenforceable under
or limited by the law of the State of Arizona; however,
such law does not in such counsel's opinion
substantially prevent the practical realization of the
benefits intended by such documents) and conform to the
description thereof in the Prospectus;
(iii) The Indenture has been duly authorized, executed,
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a valid and binding instrument
enforceable in accordance with its terms except as the same
may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other laws or equitable principles relating to
or affecting the enforcement of creditors' rights generally
and (b) the qualification that certain waivers, procedures,
remedies, and other provisions of the Purchased Securities
and the Indenture may be unenforceable under or limited by
the law of the State of Arizona; however, such law does not
in such counsel's opinion substantially prevent the practical
realization of the benefits intended by such documents;
(iv) With certain exceptions, a public service
corporation is required to obtain certificates of convenience
and necessity from the Arizona Corporation Commission under
A.R.S. Section 40-281.A for construction of its lines, plant,
services, or systems, or any extensions thereof, within the
State of Arizona, and to obtain franchises or similar
consents or permits from counties and incorporated
municipalities under A.R.S. Section 40-283.A for the
construction, operation, and maintenance of transmission
lines within the State of Arizona; to the best of such
counsel's knowledge after due inquiry, the Company holds such
valid franchises, certificates of convenience and necessity,
consents, and permits pursuant to such statutory provisions
as are necessary with respect to the maintenance and
operation of its property and business as now conducted,
except that (A) the Company from time to time makes minor
extensions of its system prior to the time a related
franchise, certificate, license, or permit is procured,
(B) from time to time communities already being served by the
Company become incorporated and considerable time may elapse
before a franchise is procured, (C) certain franchises may
have expired prior to the renegotiation thereof, (D) certain
minor defects and exceptions may exist which, individually
and in the aggregate, are not deemed material, and (E) such
counsel need not be required to express any opinion regarding
the geographical scope of any franchise, certificate,
license, or permit that is not specific as to its
geographical scope;
(v) The issuance and sale of the Purchased Securities on
the terms and conditions herein and in the Prospectus and the
Terms Agreement relating to the Purchased Securities set
forth or contemplated and the execution and delivery of the
Supplemental Indenture relating to the Purchased Securities
have been duly authorized by the Arizona Corporation
Commission, said Commission had jurisdiction in the premises,
and no further approval, authorization, or consent of any
other public board or body is necessary to the validity of
such issuance and sale of such Purchased Securities or the
execution and delivery of such Supplemental Indenture, except
as may be required under state securities or blue sky laws,
as to which laws such counsel shall not be required to
express an opinion;
(vi) The Registration Statement has become effective
under the Act, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated under the Act, and each part of the Registration
Statement relating to the Securities, when such part became
effective, and the Prospectus, as of the date of the
Prospectus Supplement, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act, and the
published Rules and Regulations; such counsel has no reason
to believe that any part of the Registration Statement, when
such part became effective, or the Prospectus, as of the date
of the Prospectus Supplement, or as of the Closing Date, or
any amendment or supplement thereto, as of their respective
effective or issue dates, or as of the Closing 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; the
descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts,
and other documents are accurate and fairly present the
information required to be shown; and to the actual knowledge
of those persons in the lawyer group described in such
opinion, there are no legal or governmental proceedings
required to be described in the Prospectus that are not
described as required, nor any contracts or documents of a
character required to be described in the Registration
Statements or Prospectus or to be filed as exhibits to the
Registration Statements that are not described and filed as
required (it being understood that such counsel need express
no opinion as to the financial statements or other financial
data contained in the Registration Statements or the
Prospectus); and
(vii) This Agreement and the Terms Agreement have been
duly authorized, executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer may rely solely upon
certificates of the Company as to any factual matters upon which any
such opinions are based and may rely upon the opinion of Keleher &
McLeod, P.A., referred to below, as to all matters governed by the laws
of the State of New Mexico, but the opinion of Snell & Wilmer shall
state that, though they are members of the Arizona Bar and do not hold
themselves out as experts on the laws of the State of New Mexico, they
have made a study of the laws of such State insofar as such laws are
involved in the conclusions stated in their opinion, and from such
study it is their opinion that such laws support such conclusions and
that, in their opinion, the Underwriters and they are justified to such
extent in relying upon the opinion of Keleher & McLeod, P.A.; and (b)
the lawyer group referred to in such opinion will mean those lawyers in
the offices of Snell & Wilmer who (i) have billed any time on the
particular transaction to which such opinion relates or (ii) have
billed more than ten hours to any Company matter in the twelve-month
period preceding the date on which the list of such lawyers was
compiled for purposes of inquiry pursuant to such opinion.
(e) The Underwriters or the Representatives shall have received
an opinion of Keleher & McLeod, P.A., New Mexico counsel for the
Company, dated the Closing Date, to the effect that:
(i) The Company is duly qualified as a foreign
corporation to do business and is in good standing in the
State of New Mexico and has full corporate power and
authority to engage in the State of New Mexico in the
business now conducted by it therein; and
(ii) The activities of the Company in the State of New
Mexico to date do not constitute it a "public utility" as
that term is defined in the relevant laws of the State of New
Mexico, and accordingly, no public utility franchises or
certificates of convenience and necessity are necessary under
New Mexico law with respect to the maintenance and operation
of the Company's property and business as now conducted in
the State of New Mexico and no approval, authorization, or
consent of the New Mexico Public Utility Commission or any
other public board or body of the State of New Mexico is
required for the issuance and sale of the Purchased
Securities on the terms and conditions herein and in the
Prospectus set forth or contemplated or for the execution of
the Supplemental Indenture relating to the Purchased
Securities, except as may be required under New Mexico state
securities or blue sky laws, as to which laws such counsel
shall not be required to express an opinion.
In giving such opinion, Keleher & McLeod, P.A. may rely solely upon
certificates of the Company as to any factual matters upon which any
such opinions are based.
(f) The Underwriters or the Representatives shall have received
from counsel for the Underwriters such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Purchased Securities, the Registration Statements, the
Prospectus, and other related matters as may reasonably be required,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters. In rendering such opinion, such counsel may rely as to the
incorporation of the Company and all other matters governed by the laws
of the States of Arizona and New Mexico upon the opinions of Snell &
Wilmer and Keleher & McLeod, P.A., referred to above.
(g) The Underwriters or the Representatives shall have received a
certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date,
in which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Date, that
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission, and that, subsequent
to the date of the most recent financial statements in the Prospectus,
there has been no material adverse change in the financial position or
results of operations of the Company and its subsidiaries except as set
forth or contemplated in the Prospectus or as described in such
certificate.
(h) The Underwriters or the Representatives shall have received a
letter of DELOITTE & TOUCHE LLP, dated the Closing Date, which meets
the requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than five days prior to the Closing Date for the purposes of this
subsection.
The Company will furnish the Underwriters or the Representatives
with such conformed copies of such opinions, certificates, letters, and
documents as may be reasonably requested.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the
meaning of the Act against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any part of the
Registration Statement relating to the Securities, when such part
became effective, any preliminary prospectus or preliminary prospectus
supplement, the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon 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; and will
reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of the Act, against any losses,
claims, damages, or liabilities to which the Company or any such
director, officer, or controlling person may become subject, under the
Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any part of the Registration Statement relating to
the Securities, when such part became effective, any preliminary
prospectus or preliminary prospectus supplement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter specifically for use therein; and will reimburse any legal
or other expenses reasonably incurred by the Company or any such
director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or
action. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under this Section. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, without the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party for
any loss, claim, damage, liability, or action described in
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above on the following basis: (1) if such loss,
claim, damage, liability, or action arises under subsection (a) above,
then (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also 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 as well as any other relevant
equitable considerations; and (2) if such loss, claim, damage,
liability, or action arises under subsection (b) above, then in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Underwriter on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. For the purposes of clause (1) above, the relative
benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters. For the purposes of clauses (1) and (2)
above, the relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
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 action or claim which is the
subject of this subsection (d). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Purchased Securities pursuant to
this Agreement and the Terms Agreement and the principal amount of Purchased
Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase is ten percent (10%) or less of the principal amount of
Purchased Securities to which such Terms Agreement relates, the Underwriters
or the Representatives may make arrangements satisfactory to the Company for
the purchase of such Purchased Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by the Closing Date
the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder and under such Terms Agreement, to
purchase the Purchased Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so default and the aggregate principal amount of Purchased
Securities with respect to which such default or defaults occur is more than
the above-described amount and arrangements satisfactory to the remaining
Underwriters and the Company for the purchase of such Purchased Securities
by other persons are not made within thirty-six hours after such default,
the Terms Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 8.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company or its officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect
regardless of any investigation, or statement as to the results thereof,
made by or on behalf of the Underwriters or the Company or any of its
officers or directors or any controlling person, and will survive delivery
of and payment for the Purchased Securities. If any Terms Agreement is
terminated pursuant to Section 7, or if for any reason a purchase pursuant
to any Terms Agreement is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect.
9. Notices. All communications hereunder relating to any
offering of Purchased Securities will be in writing, and, if sent to the
Underwriters, may be mailed, delivered, or telecopied and confirmed to the
Representative first named in the Terms Agreement relating to such Purchased
Securities or the Underwriters at their addresses furnished to the Company
in writing for the purpose of communications; provided, however, that any
notice to an Underwriter pursuant to Section 6 will be mailed, delivered, or
telecopied and confirmed to each such Underwriter at its own address. All
communications hereunder to the Company shall be mailed to the Company,
Attention: Treasurer, at P.O. Box 53999, Phoenix, Arizona 85O72-3999, or
delivered, or telecopied and confirmed to the Company at 400 North Fifth
Street, Phoenix, Arizona 85004.
10. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and the Underwriter or Underwriters as
are named in any Terms Agreement and their respective successors and the
officers and directors and controlling persons referred to in Section 6, and
no other person will have any right or obligation hereunder.
11. Representation of Underwriters. The Representatives, if any,
may act for the Underwriters in connection with any offering to which a
Terms Agreement may relate, and any action under this Agreement or such
Terms Agreement taken by the Representatives jointly or the Representative
first named in such Terms Agreement in such capacity will be binding upon
the Underwriters of Purchased Securities to which such Terms Agreement
relates.
12. Execution in Counterpart. This Agreement and any Terms
Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall
together constitute a single instrument.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By___________________________
Treasurer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written
____________________________
============================================================================
ARIZONA PUBLIC SERVICE COMPANY
TO
THE BANK OF NEW YORK
Trustee
______________
Indenture
Dated as of September 1, 1994
______________
(For Subordinated Securities or, if Article Fourteen is made non-applicable
(as permitted by Section 301), for Senior Securities)
============================================================================
..............................................................
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
<PAGE>
TABLE OF CONTENTS
__________
Page
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions:
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . 2
Company Request; Company Order . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Covenant Defeasance . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . 3
Defeasance . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . 3
Exchange Act . . . . . . . . . . . . . . . . . . . . 3
Expiration Date . . . . . . . . . . . . . . . . . . 3
Global Security . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . 3
interest . . . . . . . . . . . . . . . . . . . . . . 3
Interest Payment Date . . . . . . . . . . . . . . . 3
Investment Company Act . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . 4
Notice of Default . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . . . 5
Redemption Date . . . . . . . . . . . . . . . . . . 5
Redemption Price . . . . . . . . . . . . . . . . . . 5
Regular Record Date . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . 6
Securities Act . . . . . . . . . . . . . . . . . . . 6
Security Register; Security Registrar . . . . . . . 6
Senior Debt . . . . . . . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . . . 6
Stated Maturity . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
U.S. Government Obligation . . . . . . . . . . . . . 7
Vice President . . . . . . . . . . . . . . . . . . . 7
Section 102. Compliance Certificates and Opinions . . . . . . . . 7
Section 103. Form of Documents Delivered to Trustee . . . . . . . 8
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . 8
Section 105. Notices, Etc., to Trustee and Company . . . . . . . 10
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . 11
Section 107. Conflict with Trust Indenture Act . . . . . . . . . 11
Section 108. Effect of Headings and Table of Contents . . . . . . 12
Section 109. Successors and Assigns . . . . . . . . . . . . . . . 12
Section 110. Separability Clause . . . . . . . . . . . . . . . . 12
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . 12
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . 12
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . 12
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . 13
Section 202. Form of Face of Security . . . . . . . . . . . . . . 13
Section 203. Form of Reverse of Security . . . . . . . . . . . . 15
Section 204. Form of Legend for Global Securities . . . . . . . . 19
Section 205. Form of Trustee's Certificate of Authentication . . 20
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . 20
Section 302. Denominations . . . . . . . . . . . . . . . . . . . 23
Section 303. Execution, Authentication, Delivery and Dating . . . 23
Section 304. Temporary Securities . . . . . . . . . . . . . . . . 24
Section 305. Registration, Registration of Transfer and Exchange 25
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . 27
Section 307. Payment of Interest; Interest Rights Preserved . . . 27
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . 29
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . 29
Section 310. Computation of Interest . . . . . . . . . . . . . . 29
Section 311. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . 29
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture . . . . . . 30
Section 402. Application of Trust Money . . . . . . . . . . . . . 31
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . 31
Section 502. Acceleration of Maturity; Rescission and Annulment . 32
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . 33
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . 34
Section 505. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . . . . 35
Section 506. Application of Money Collected . . . . . . . . . . . 35
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . 35
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . 36
Section 509. Restoration of Rights and Remedies . . . . . . . . . 36
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . 36
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . 37
Section 512. Control by Holders . . . . . . . . . . . . . . . . . 37
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . 37
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . 38
Section 515. Waiver of Usury, Stay or Extension Laws . . . . . . 38
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . 38
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . 38
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . 39
Section 604. Not Responsible for Recitals or Issuance of Securities
40
Section 605. May Hold Securities . . . . . . . . . . . . . . . . 40
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . 40
Section 607. Compensation and Reimbursement . . . . . . . . . . . 40
Section 608. Conflicting Interests . . . . . . . . . . . . . . . 41
Section 609. Corporate Trustee Required; Eligibility . . . . . . 41
Section 610. Resignation and Removal; Appointment of Successor . 42
Section 611. Acceptance of Appointment by Successor . . . . . . . 43
Section 612. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . 44
Section 613. Preferential Collection of Claims Against Company . 44
Section 614. Appointment of Authenticating Agent . . . . . . . . 45
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses
of Holders . . . . . . . . . . . . . . . . . . . 46
Section 702. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . . 47
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . 47
Section 704. Reports by Company . . . . . . . . . . . . . . . . . 47
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . 48
Section 802. Successor Substituted . . . . . . . . . . . . . . . 49
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders . 49
Section 902. Supplemental Indentures With Consent of Holders . . 50
Section 903. Execution of Supplemental Indentures . . . . . . . . 51
Section 904. Effect of Supplemental Indentures . . . . . . . . . 51
Section 905. Conformity with Trust Indenture Act . . . . . . . . 52
Section 906. Reference in Securities to Supplemental Indentures . 51
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . 52
Section 1002. Maintenance of Office or Agency . . . . . . . . . . 52
Section 1003. Money for Securities Payments to Be Held in Trust . 53
Section 1004. Statement by Officers as to Default . . . . . . . . 54
Section 1005. Existence . . . . . . . . . . . . . . . . . . . . . 54
Section 1006. Maintenance of Properties . . . . . . . . . . . . . 54
Section 1007. Payment of Taxes and Other Claims . . . . . . . . . 55
Section 1008. Waiver of Certain Covenants . . . . . . . . . . . . 55
Section 1009. Calculation of Original Issue Discount. . . . . . . . 55
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . 55
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . 56
Section 1103. Selection by Trustee of Securities to Be Redeemed . 56
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . 57
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . 57
Section 1106. Securities Payable on Redemption Date . . . . . . . 57
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . 58
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article . . . . . . . . . . . . . . 58
Section 1202. Satisfaction of Sinking Fund Payments with Securities
59
Section 1203. Redemption of Securities for Sinking Fund . . . . . 59
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . 59
Section 1302. Defeasance and Discharge . . . . . . . . . . . . . . 60
Section 1303. Covenant Defeasance . . . . . . . . . . . . . . . . 60
Section 1304. Conditions to Defeasance or Covenant Defeasance . . 61
Section 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions . . 63
Section 1306. Reinstatement . . . . . . . . . . . . . . . . . . . 63
ARTICLE FOURTEEN
Subordination of Debentures
Section 1401. Securities Subordinate to Senior Debt. . . . . . . . 64
Section 1402. Payment Over of Proceeds Upon Default . . . . . . . 64
Section 1403. Payment Over of Proceeds Upon Dissolution, Etc . . . 65
Section 1404. Subrogation to Rights of Holders of Senior Debt . . 66
Section 1405. Trustee to Effectuate Subordination . . . . . . . . 67
Section 1406. Notice to Trustee . . . . . . . . . . . . . . . . . 67
Section 1407. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights . . . . . . . . 68
Section 1408. Trustee Not Fiduciary for Holders of Senior Debt . . 68
Section 1409. No Waiver of Subordination Provisions . . . . . . . 68
Section 1410. Defeasance of this Article Fourteen . . . . . . . . 69
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Signatures and Seals . . . . . . . . . . . . . . . . . . . . . . . . 70
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . 71
<PAGE>
Trust Indenture
Act Section Indenture Section
Section 310(a)(1) . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . 701
702
(b) . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . 702
Section 313(a) . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . 703
Section 314(a) . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . 101
(a)(1)(A). . . . . . . . . . . . . . 502
512
(a)(1)(B). . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . 104
Section 317(a)(1) . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . 107
___________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>
INDENTURE, dated as of September 1, 1994, between Arizona Public Service
Company, a corporation duly organized and existing under the laws of the State
of Arizona (herein called the "Company"), having its principal office at 400
North Fifth Street, Phoenix, Arizona 85004, and The Bank of New York, a New York
banking corporation, as Trustee (herein called the "Trustee").
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
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 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:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) 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.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the 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 any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee in the City of New York, New York at which at any particular time its
corporate trust business shall be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed 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, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term "Indenture" shall also include the terms
of particular series of Securities established as contemplated by
Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes
due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, or other counsel who shall be acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) 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 that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original
Issue Discount Security which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such
date upon acceleration of the Maturity thereof to such date pursuant to
Section 502, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a Security is not determinable, the principal amount of
such Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (C) the principal
amount of a Security denominated in one or more foreign currencies or
currency units which shall be deemed to be Outstanding shall be the U.S.
dollar equivalent, determined as of such date in the manner provided as
contemplated by Section 301, of the principal amount of such Security (or,
in the case of a Security described in Clause (A) or (B) above, of the
amount determined as provided in such Clause), and (D) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities which
the Trustee actually knows to be so owned shall be so disregarded. 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.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer,
the cashier, any assistant cashier, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of
the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Debt" of the Company means the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Indenture or thereafter
incurred, created or assumed: (a) all indebtedness of the Company evidenced by
notes, debentures, bonds or other securities sold by the Company for money,
including all first mortgage bonds of the Company outstanding from time to time;
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Company, including through
an agreement to purchase, contingent or otherwise; and (c) all renewals,
extensions or refundings of indebtedness of the kinds described in any of the
preceding causes (a) and (b); unless, in the case of any particular
indebtedness, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is not
superior in right of payment to or is pari passu with the Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee"
shall mean 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.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the
Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is 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 representa-
tions 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 consoli-
dated and form one instrument.
Section 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made 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 agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
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. 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. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registra-
tion 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.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to
be given, made or taken by Holders of Securities of such series, provided
that the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph.
If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to
the Trustee in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction
referred to in Section 512, in each case with respect to Securities of such
series. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of such series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken
on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record
date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities of the relevant series on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Trustee, at the Company's expense, shall cause notice of
such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of
the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the
manner set forth in Section 106, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the party hereto which set such record
date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, 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,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any
case where notice to 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. Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
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 by mail,
then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act which is required under such Act to be a part of
and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded,
as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and 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 law of the State of New York, without regard to conflicts of
laws principles thereof.
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 of any Security which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place
of Payment on such date, but may be made on the next succeeding Business Day
at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, sub-
stitutions 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 Depositary
therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof. If the
form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
ARIZONA PUBLIC SERVICE COMPANY
..........................................................................
No. ......... $ ........
CUSIP NO. ________
Arizona Public Service Company, a corporation duly organized and
existing under the laws of Arizona (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of ...................................... Dollars on
........................................................ [if the Security is
to bear interest prior to Maturity, insert , and to pay interest thereon
from ............. or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on ............
and ............ in each year, commencing ........., at the rate of ....%
per annum, until the principal hereof is paid or made available for payment
[if applicable, insert , provided that any principal and premium, and any
such instalment of interest, which is overdue shall bear interest at the
rate of ...% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until
they are paid or made available for payment, and such interest shall be
payable on demand]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ....... or .......
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ....% per annum (to the extent
that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for
payment. Interest on any overdue principal or premium shall be payable on
demand. Any such interest on overdue principal or premium which is not paid
on demand shall bear interest at the rate of ......% per annum (to the
extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is
paid or made available for payment. Interest on any overdue interest shall
be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such
coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable,
insert ; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
In Witness Whereof, the Company has caused this instrument to be duly
executed under its corporate seal.
ARIZONA PUBLIC SERVICE COMPANY
By...................................................
Attest:
.........................................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of September 1, 1994 (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof
[if applicable, insert , limited in aggregate principal amount to
$...........].
[If applicable, insert The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable,
insert (1) on ........... in any year commencing with the year ...... and
ending with the year ...... through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert on or after .........., 19..], as
a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed [if applicable, insert on or before ..............., ...%, and if
redeemed] during the 12-month period beginning ............. of the years
indicated,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to .....% of the principal
amount, together in the case of any such redemption [if applicable, insert
(whether through operation of the sinking fund or otherwise)] with accrued
interest to the Redemption Date, but interest instalments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on the
face hereof, all as provided in the Indenture.]
[If applicable, insert The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............
in any year commencing with the year .... and ending with the year ....
through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and
(2) at any time [if applicable, insert on or after ............], as a
whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ............ of the
years indicated,
Redemption Price
For Redemption Redemption Otherwise
Through Operation Than Through
of the Operation
Year Sinking Fund of the Sinking Fund
---- ------------ --------------------
and thereafter at a Redemption Price equal to .....% of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by
the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than .....% per annum.]
[If applicable, insert The sinking fund for this series provides for
the redemption on ............ in each year beginning with the year .......
and ending with the year ...... of [if applicable, insert not less than
$.......... ("mandatory sinking fund") and not more than] $.........
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert mandatory] sinking fund payments may be credited
against subsequent [if applicable, insert mandatory] sinking fund payments
otherwise required to be made [if applicable, insert , in the inverse
order in which they become due].]
[If the Security is subject to redemption of any kind, insert In the
event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
[If applicable, insert paragraph regarding subordination of the
Security.]
[If applicable, insert The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth
in the Indenture.]
[If the Security is not an Original Issue Discount Security, insert If
an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security, insert If an
Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to insert formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal,
premium and interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and premium and interest, if any,
on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of 66 2/3% in principal amount of the Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding,
on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Securities of this series, the Holders of not less than
25% in principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of a majority in principal amount of Securities of this series
at the time Outstanding a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall
not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any premium
and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at
the office or agency of the Company in any place where the principal of and
any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $....... and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of
a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be exchanged in whole or in part for
a Security registered, and no transfer of this Security in whole or in part
may be registered, in the name of any Person other than such Depositary or a
nominee thereof, except in the limited circumstances described in the
Indenture.
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK
...........................................
As Trustee
By.........................................
Authorized Signatory
ARTICLE THREE
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. There shall be
established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than 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;
(4) the date or dates on which the principal of any Securities of the
series is payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable the manner of determination of such Interest Payment Dates and the
Regular Record Date for any such interest payable on any Interest Payment
Date;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if
other than by a Board Resolution, the manner in which any election by the
Company to redeem the Securities shall be evidenced;
(9) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(11) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(12) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(13) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or
those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which
such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion of
the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(15) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any date prior
to the Stated Maturity (or, in any such case, the manner in which such
amount deemed to be the principal amount shall be determined);
(16) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or
Section 1303 or both such Sections and, if other than by a Board
Resolution, the manner in which any election by the Company to defease
such Securities shall be evidenced;
(17) if applicable, that any Securities of the series shall be issuable
in whole or in part in the form of one or more Global Securities and, in
such case, the respective Depositaries for such Global Securities, the
form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and
any circumstances in addition to or in lieu of those set forth in
Clause (2) of the last paragraph of Section 305 in which any such Global
Security may be exchanged in whole or in part for Securities registered,
and any transfer of such Global Security in whole or in part may be
registered, in the name or names of Persons other than the Depositary for
such Global Security or a nominee thereof;
(18) any addition to or change in the Events of Default which applies to
any Securities of the series and any change in the right of the Trustee or
the requisite Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in Article Ten
which applies to Securities of the series; and
(20) the non-application of, or any addition to or change in, Article
Fourteen with respect to Securities of the series;
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested
by its Secretary or one of its Assistant Secretaries. The signature of any
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Security shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denom-
ination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized denom-
inations and of like tenor and aggregate principal amount. Until so
exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities
of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
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 and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series
at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or
more new Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at 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 issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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, 906 or 1107 not involving any
transfer.
If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing
of a notice of redemption of any such Securities selected for redemption
under Section 1103 and ending at the close of business on the day of such
mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) there shall have occurred
and be continuing an Event of Default with respect to such Global Security
or (C) there shall exist such circumstances, if any, in addition to or in
lieu of the foregoing as have been specified for this purpose as
contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1107 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be 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 has been acquired by
a bona fide purchaser, 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 of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) 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, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that 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.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant 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 (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each 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 cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given
to each Holder of Securities of such series in the manner set forth in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall,
if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other
Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and
sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee
shall be disposed of as directed by a Company Order; provided, however, that
the Trustee shall not be required to destroy such cancelled Securities.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange
of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose money in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Company to any Authenticating Agent under Section 614 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with
the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default
for a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due
by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of a series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or compo-
sition of or in respect of the Company under any applicable Federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 90 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state bank-
ruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substan-
tial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities of
that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of
such Securities as may be specified by the terms thereof) to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If
an Event of Default specified in Section 501(5) or 501(6) with respect to
Securities of any series at the time Outstanding occurs, the principal
amount of all the Securities of that series (or, if any Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms thereof) shall
automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on
such Securities for principal and any premium and interest and, to the
extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and premium and on any overdue interest, at the
rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the 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 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any
such proceeding. In particular, the Trustee shall be authorized 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 amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 607.
No provision of this Indenture 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;
provided, however, that the Trustee may, on behalf of the Holders, vote for
the election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.
Section 505. 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 of the Securities in respect of
which such judgment has been recovered.
Section 506. 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
any premium or interest, upon presentation of the Securities 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 607;
and
Second: To the payment of the amounts then due and unpaid for principal
of and any premium and interest on the Securities 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 pay-
able on such Securities for principal and any premium and interest,
respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
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 508. 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 any premium and (subject to
Section 307) interest on such Security on the respective Stated 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 509. 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 has been
discontinued or abandoned for any reason, or has 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, the Trustee and the
Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to
the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. 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
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, a court may require any party litigant in such
suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent
provided in the Trust Indenture Act; provided that neither this Section nor
the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by
the Company or the Trustee.
Section 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, 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 SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, 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. 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 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of
such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no
such notice to Holders shall be given until at least 30 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 with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) 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;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders 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;
(6) 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 be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(7) 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.
Section 604. 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
any 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 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall be
agreed to in writing between the Company and the Trustee 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);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances 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 any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or admini-
stration of the trust or trusts 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.
The Trustee shall have a lien prior to the Securities as to all property and
funds held by it hereunder for any amount owing it or any predecessor Trustee
pursuant to this Section 607, except with respect to funds held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
Section 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Indenture. To the
extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the
purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee with respect to the
Securities of any series shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
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 611.
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 611
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.
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.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 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 514, any
Holder who has been a bona fide Holder of a Security 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.
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, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular series)
and shall comply with the applicable requirements of Section 611. 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 611, 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 611, any Holder who has been a bona fide Holder of a Security of
such series for at least six months may, on behalf of himself 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.
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 to all Holders of Securities of such series in the manner provided in
Section 106. 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 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, 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.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee 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.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 612. 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 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon 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 authen-
tication 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 of America, any State thereof
or the District of Columbia, 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 Authen-
ticating Agent.
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 Authen-
ticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all
Holders of Securities of the series with respect to which such
Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this
Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative cer-
tificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK
........................................,
As Trustee
By......................................,
As Authenticating Agent
By.......................................
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) monthly, on each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Holders of Securities of each series as of such Regular Record Date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
Section 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within sixty days after each May 15 following the date of this Indenture
deliver to Holders a brief report, dated as of such May 15, which complies with
the provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within 15 days after the same is so required to be
filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person 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 corporation,
partnership, unincorporated organization or trust, shall be organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor Person, as the case may be, shall take such steps as shall
be necessary effectively to secure the Securities equally and ratably with
(or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in
accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein, 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.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, 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:
(1) 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; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply to
any Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the Holder of any such Security with respect to
such provision or (B) shall become effective only when there is no such
Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 611; or
(9) 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 provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, 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 or of modifying in any
manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of 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.
Section 903. 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 601) 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 or immunities under
this Indenture or otherwise.
Section 904. 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.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such
series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series
and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Section 1003. 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 any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided
by the Trust Indenture Act, and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent for any series of Securities
other than 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 will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two
years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The
City of New York, New York, notice 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 publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to
the Holders.
Section 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will 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 and advantageously conducted at all
times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary
and not disadvantageous in any material respect to the Holders.
Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested
in good faith by appropriate proceedings.
Section 1008. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
series if before the time for such compliance the Holders of at least 66-
2/3% in principal amount of the Outstanding Securities of such series shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
Section 1009. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each calendar
year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities
as of the end of such year.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by
Section 301 for such Securities. In case of any redemption at the election of
the Company the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Securities of such series to be redeemed and, if applicable, of the tenor
of the Securities to be redeemed. In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities
of such series not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any
Security of such series, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination) for such
Security. If less than all the Securities of such series and of a specified
tenor are to be redeemed (unless such redemption affects only a single
Security), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously
called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal
amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series con-
sisting of more than a single Security are to be redeemed, the identifi-
cation (and, in the case of partial redemption of any such Securities, the
principal amounts) of the particular Securities to be redeemed and, if
less than all the Outstanding Securities of any series consisting of a
single Security are to be redeemed, the principal amount of the particular
Security to be redeemed,
(4) that on the Redemption Date the Redemption Price 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,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be
irrevocable.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, instalments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor
in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the
same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified
as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms
of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of such Securities is herein referred to as an "optional sinking
fund payment". If provided for by the terms of any Securities, the cash
amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities as provided for by the terms of such Securities.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to any Securities of such series
required to be made pursuant to the terms of such Securities as and to the
extent provided for by the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose
by the Trustee at the Redemption Price, as specified in the Securities so to
be redeemed, for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment
for such Securities pursuant to the terms of such Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days prior to each such
sinking fund payment date, the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in
Section 1103 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 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sec-
tions 1106 and 1107.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1302
or Section 1303 applied to any Securities or any series of Securities, as
the case may be, designated pursuant to Section 301 as being defeasible
pursuant to such Section 1302 or 1303, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations, and the
provisions of Article Fourteen shall cease to be effective, with respect to
such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of
such Securities to receive, solely from the trust fund described in Section
1304 and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments are
due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Securities notwithstanding the prior exercise
of its option (if any) to have Section 1303 applied to such Securities.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3),
Sections 1006 through 1007, inclusive, and any covenants provided pursuant to
Section 301(19), 901(2) or 901(7) for the benefit of the Holders of such
Securities and (2) the occurrence of any event specified in Sections 501(4)
(with respect to any of Section 801(3), Sections 1006 through 1007, inclusive,
and any such covenants provided pursuant to Section 301(19), 901(2) or
901(7)), and 501(7) shall be deemed not to be or result in an Event of
Default and the provisions of Article Fourteen shall cease to be effective, in
each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit
to comply with and shall have no liability in respect of any term, condition
or limitation set forth in any such specified Section (to the extent so
specified in the case of Section 501(4)) or Article Fourteen, whether directly
or indirectly by reason of any reference elsewhere herein to any such Section
or Article or by reason of any reference in any such Section or Article to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302
or Section 1303 to any Securities or any series of Securities, as the case
may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or (ii)
an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the account
of the holder of such depositary receipt, or with respect to any specific
payment of principal of or interest on any U.S. Government Obligation which
is so specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
instrument, there has been a change in the applicable Federal income tax
law, in either case (A) or (B) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5) and
(6), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) At the time of such deposit, (A) no default in the payment of any
principal of or premium or interest on any Senior Debt shall have occurred
and be continuing, (B) no event of default with respect to any Senior Debt
shall have resulted in such Senior Debt becoming, and continuing to be, due
and payable prior to the date on which it would otherwise have become due
and payable (unless payment of such Senior Debt has been made or duly
provided for), and (C) no other event of default with respect to any Senior
Debt shall have occurred and be continuing permitting (after notice or lapse
of time or both) the holders of such Senior Debt (or a trustee on behalf of
such holders) to declare such Senior Debt due and payable prior to the date
on which it would otherwise have become due and payable.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
Section 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes
of this Section and Section 1306, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1304 in
respect of any Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to
the payment, either directly or through any such Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in
respect of principal and any premium and interest, but money so held in
trust need not be segregated from other funds except to the extent required
by law.
Money and U.S. Government Obligations so held in trust shall not be subject
to the provisions of Article Fourteen.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request
any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 1302 or 1303 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent
is permitted to apply all money held in trust pursuant to Section 1305 with
respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE FOURTEEN
Subordination of Debentures
Section 1401. Securities Subordinate to Senior Debt.
Unless otherwise provided in a supplemental indenture or pursuant to
Section 301, the Company covenants and agrees, and each Holder of Securities
issued hereunder by his acceptance thereof likewise covenants and agrees,
that all Securities shall be issued subject to the provisions of this
Article Fourteen; and each Holder of a Security, whether upon original issue
or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.
The payment of the principal of, premium, if any, and interest on all
Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinate and subject in right of payment to
the prior payment in full of all Senior Debt, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the occurrence of
any default or Event of Default hereunder.
Section 1402. Payment Over of Proceeds Upon Default.
In the event and during the continuation of any default in the payment
of principal, premium, interest or any other payment due on any Senior Debt
continuing beyond the period of grace, if any, specified in the instrument
evidencing such Senior Debt, unless and until such default shall have been
cured or waived or shall have ceased to exist, and in the event that the
maturity of any Senior Debt has been accelerated because of a default, then
no payment shall be made by the Company with respect to the principal
(including redemption and sinking fund payments) of, or premium, if any, or
interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraphs of this Section 1402, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Debt (or their
representative or representatives or a trustee) notify the Trustee within 90
days of such payment of the amounts then due and owing on the Senior Debt
and only the amounts specified in such notice to the Trustee shall be paid
to the holders of Senior Debt.
Section 1403. Payment Over of Proceeds Upon Dissolution, Etc.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due
or to become due upon all Senior Debt shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before
any payment is made on account of the principal with its terms, before any
payment is made on account of the principal (and premium, if any) or
interest on the Securities; and upon any such dissolution or winding-up or
liquidation or reorganization any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provisions of this Article Fourteen, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, or by
the Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing any Senior Debt may have been issued, as
their respective interests may appear, to the extent necessary to pay all
Senior Debt in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt,
before any payment or distribution is made to the holders of Securities or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the holders of the Securities before all Senior Debt is
paid in full, or provision is made for such payment in money in accordance
with its terms, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior Debt
or their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Debt may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all Senior Debt in full in
money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Debt.
For purposes of this Article Fourteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article Fourteen with respect to the Securities to the payment of all Senior
Debt which may at the time be outstanding; provided that (i) the Senior Debt
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the
Senior Debt are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article Eight
hereof shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the proposes of this Section 1403 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight hereof. Nothing
in Section 1402 or in this Section 1403 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
Section 1404. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, the rights of the
holders of the Securities shall be subrogated to the rights of the holders
of Senior Debt to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Debt until the principal
(and premium, if any) and interest on the Securities shall be paid in full;
and, for the purposes of such subrogation, no payment or distributions to
the holders of the Senior Debt of any cash, property or securities to which
the holders of the Securities or the Trustee would be entitled except for
the provisions of this Article Fourteen, and no payment over pursuant to the
provisions of this Article Fourteen, to or for the benefit of the holders of
Senior Debt by holders of the Securities or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Debt. It is understood that the provisions of this
Article Fourteen are and are intended solely for the purposes of defining
the relative rights of the holders of the Securities, on the one hand, and
the holders of the Senior Debt on the other hand.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Debt, and the
holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the holders of the Securities the principal of
(and premium, if any) and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the holders of the Securities and
creditors of the Company other than the holders of the Senior Securities,
nor shall anything herein or therein prevent the Trustee or the holder of
any Security from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article Fourteen of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment of distribution of assets of the Company referred to in
this Article Fourteen, the Trustee, subject to the provision of Article Six,
and the holders of the Securities shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
the Securities, for the purposes of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Company, the amount hereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Fourteen.
Section 1405. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article
Fourteen and appoints the Trustee his attorney-in-fact for any and all such
purposes.
Section 1406. Notice to Trustee.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making
of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Fourteen. Notwithstanding the
provisions of this Article Fourteen or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or
by the Trustee in respect of the Securities pursuant to the provisions of
this Article Fourteen, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof at the Principal Office of the
Trustee from the Company or a holder or holders of Senior Debt or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article Six, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 1406
at least two Business Days prior to the date upon which by the terms hereof
any money may become payable for any purpose (including, without limitation,
the payment of the principal of (or premium, if any) or interest on any
Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not
be affected by any notice to the contrary which may be received by it within
two Business Days prior to such date.
The Trustee, subject to the provisions of Article Six, shall be entitled
to rely on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Debt (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Debt or a trustee on behalf of any such holder or holders. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any person as a holder of Senior Debt to participate
in any payment or distribution pursuant to this Article Fourteen, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article Fourteen, and if such evidence is not furnished
the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
Section 1407. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Fourteen in respect of any Senior Debt at
any time held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights
as such holder.
Nothing in this Article Fourteen shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.
Section 1408. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and, subject to the provisions of Article Six, the Trustee
shall not be liable to any holder of Senior Debt if it shall in good faith
mistakenly pay over or deliver to holders of Securities, the Company or any
other person money or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article Fourteen or otherwise.
Section 1409. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof which any such holder
may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without
the consent of or notice to the Trustee or the holders of the Securities,
without incurring responsibility to the holders of the Securities and
without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior Debt;
(iii) release any person liable in any manner for the collection of Senior
Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other person.
Section 1410. Defeasance of this Article Fourteen.
The subordination of the Securities provided by this Article Fourteen is
expressly made subject to the provisions for Defeasance or Covenant
Defeasance in Article Thirteen hereof and, anything herein to the contrary
notwithstanding, upon the effectiveness of any such Defeasance or Covenant
Defeasance, the Securities then outstanding shall thereupon cease to be
subordinated pursuant to this Article Fourteen.
_____________________________
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.
ARIZONA PUBLIC SERVICE COMPANY
By.................................
Attest:
......................................
THE BANK OF NEW YORK,
as Trustee
By.................................
Attest:
......................................
<PAGE>
State of Arizona )
) ss.:
County of Maricopa )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of Arizona Public Service
Company, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and that
he signed his name thereto by like authority.
...............................................
State of New York )
) ss.:
County of New York )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of The Bank of New York, one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
...............................................
September 14, 1994
Arizona Public Service Company
400 North Fifth Street
Phoenix, Arizona 85004
Ladies and Gentlemen:
Reference is made to your proposed offering of up to $200,000,000 of
your Securities (the "Securities"), as contemplated by the combined
prospectus contained in the Registration Statement (the "Registration
Statement") on Form S-3 to be filed by you on September 14, 1994, with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, which Securities include $100,000,000 of either New Bonds or Debt
Securities (as such terms are defined in the Registration Statement), or any
combination thereof, to be registered pursuant to the Registration
Statement, and $100,000,000 of First Mortgage Bonds previously registered
under Registration No. 33-61228.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such corporate records, agreements, and other
instruments, certificates, orders, opinions, correspondence with public
officials, certificates provided by your officers and representatives, and
other documents as we have deemed necessary or advisable for the purposes of
rending the opinions set forth herein.
Based on the foregoing, it is our opinion that after (i) the
Registration Statement shall have become effective, and (ii) you shall have
entered into one or more underwriting agreements with the underwriters of
the Securities then to be offered or the representatives of such
underwriters, and you and such underwriters or representatives shall have
determined by agreement the initial public offering price for each of such
Securities and the underwriters' discounts therefrom and commission
therefor, pursuant to the authorization of your Board of Directors and the
applicable order of the Arizona Corporation Commission, then, when (i) the
Securities have been issued, sold, executed, authenticated, and delivered,
and (ii) the purchase price therefor has been paid to you as contemplated in
the Registration Statement (including the Exhibits thereto) and in any
relevant amendment thereto or in any Rule 424 supplement to the prospectus
contained in the Registration Statement, the Securities will be validly
issued and will constitute legal, valid, and binding obligations of you
except as the same may be limited by (a) general principles of equity or by
bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
laws or equitable principles relating to or affecting the enforcement of
creditors' rights generally, or by equitable principles that limit the right
to specific performance or otherwise limit remedial action or the
enforcement of the security provided for the Securities, (b) the necessity
for compliance with the statutory procedural requirements governing the
exercise of remedies by a secured creditor, and (c) the qualification that
certain waivers, procedures, remedies, and other provisions of the
Securities may be unenforceable under or limited by the law of the State of
Arizona; however, such law does not in our opinion substantially prevent the
practical realization of the benefits thereof.
In giving the foregoing opinion, we are relying upon the opinion of
Keleher & McLeod, P.A., your New Mexico counsel, to the effect that your
activities to date do not constitute you a "public utility" as that term is
defined in the laws of New Mexico, and that, accordingly, no approval,
authorization, or consent of the New Mexico Public Service Commission or any
other public board or body of the State of New Mexico is required for the
issuance and sale of the Securities.
Consent is hereby given to the use of this opinion as part of the
Registration Statement referred to above and to the use of our name wherever
it appears in said Registration Statement and the related prospectus.
Very truly yours,
Snell & Wilmer
<TABLE>
<CAPTION>
EXHIBIT 12.1
ARIZONA PUBLIC SERVICE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS)
Twelve Months Ended
------------------------------------------------------------------------------------------------------
June 30, December 31,
------------ ----------------------------------------------------------------------------------------
1991
1994 1993 1992 1991 <F1> Adjusted <F1> 1990 1989
------------ ------------ ------------ -------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net Income............ $ 246,175 $ 250,386 $ 246,805 $ (222,649) $ 184,380 $ 180,012 $ 212,354
Income taxes (1)...... 181,090 188,907 181,355 (94,750) 128,801 126,831 145,678
Fixed Charges......... 216,506 220,590 246,246 281,959 281,959 292,117 276,429
------------ ------------ ------------ -------------- -------------- ------------ ------------
Total............. $ 643,771 $ 659,883 $ 674,406 $ (35,440) $ 595,140 $ 598,960 $ 634,461
------------ ------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ ------------ -------------- -------------- ------------ ------------
Fixed Charges:
Interest expense...... $ 168,453 $ 171,272 $ 190,746 $ 227,624 $ 227,624 $ 239,992 $ 224,243
Amortization of debt
discount, premium
and expense......... 9,502 9,203 8,000 5,995 5,995 5,302 5,967
Estimated interest
portion of annual
rentals (2)......... 38,551 40,115 47,500 48,340 48,340 46,823 46,219
------------ ------------ ------------ -------------- -------------- ------------ ------------
Total............. $ 216,506 $ 220,590 $ 246,246 $ 281,959 $ 281,959 $ 292,117 $ 276,429
------------ ------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ ------------ -------------- -------------- ------------ ------------
Ratio of Earnings to
Fixed Charges (rounded
down)................. 2.97 2.99 2.73 -0.13 2.11 2.05 2.29
------------ ------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ ------------ -------------- -------------- ------------ ------------
(1) Income Taxes:
Charged to operations. $ 155,799 $ 168,056 $ 164,620 $ 96,273 $ 117,408 $ 106,044 $ 122,674
Charged (credited) to
other accounts...... 25,291 20,851 16,735 (191,023) 11,393 20,787 23,004
------------ ------------ ------------ -------------- -------------- ------------ ------------
Total............. $ 181,090 $ 188,907 $ 181,355 $ (94,750) $ 128,801 $ 126,831 $ 145,678
------------ ------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ ------------ -------------- -------------- ------------ ------------
(2) Estimated interest
portion of Unit 2
lease payments
included in estimated
interest portion of
annual rentals...... $ 35,675 $ 37,407 $ 43,581 $ 43,625 $ 43,625 $ 43,666 $ 43,703
------------ ------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ ------------ -------------- -------------- ------------ ------------
- ----------
<FN>
<F1> The write-off resulting from the Arizona Corporation Commission order
settling the Company's rate case resulted in a negative coverage ratio and
an earnings coverage deficiency of approximately $317 million at December
31, 1991. Excluding the effects of the write-off, the coverage ratio would
have been 2.11 for the same period.
</FN>
</TABLE>
EXHIBIT 15.1
September 12, 1994
Arizona Public Service Company
Post Office Box 53999
Phoenix, Arizona 85072-3999
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of Arizona Public Service Company for the periods ended
March 31 and June 30, 1994 and 1993, as indicated in our reports dated May 13,
and August 11, 1994, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30,
1994, are incorporated by reference in this Registration Statement.
We are also aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the
registration statement prepared or certified by an accountant or reports
prepared or certified by an accountant within the meaning of Sections 7 and 11
of that Act.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Arizona Public Service Company on Form S-3 of our report dated
February 21, 1994, appearing in the Annual Report on Form 10-K of Arizona
Public Service Company for the year ended December 31, 1993 and to the
reference to us under the heading Experts in the Prospectus, which is part of
this Registration Statement.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
September 12, 1994
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
Form T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER
THE TRUST INDENTURE ACT OF 1939, AS AMENDED OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
______________
Bank of America National Trust
and Savings Association
(Exact name of trustee as specified in its charter)
94-1687665
(State of incorporation (I.R.S. employer
if not a national bank) identification no.)
Los Angeles Headquarters: 90017
333 South Beaudry Avenue 25th Floor (Zip Code)
Los Angles, California
Head Office: 94120
555 California Street (Zip Code)
San Francisco, California
________________
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400 North Fifth Street
Phoeniz, Arizona 85004
(602) 250-1000
(Address and telephone number of principal executive offices)
_______________
First Mortgage Bonds
(Title of the indenture securities)
<PAGE>
FORM T-1
1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of San Francisco (Twelfth District)
San Francisco, California
Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate
trust powers.
Yes.
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS. If the obligor
or any underwriter for the obligor is an affiliate of the
trustee, describe each affiliation.
None
In answering this item the trustee has relied in part on
information furnished by the obligor and the underwriters,
and the trustee disclaims responsibility for the accuracy or
completeness of such information. Trustee has also examined
its own books and records for the purpose of answering this
item.
3-15. Not applicable. There is no existing default under any
indenture of the Obligors for which the trustee is the
indenture trustee.
16. LIST OF EXHIBITS
List below all exhibits filed as a part of this statement of
eligibility and qualification.
Exhibit A
Articles of Association of Bank of America
National Trust and Savings Association
(formerly Bank of Italy). By-Laws of Bank of
America National Trust and Savings
Association.
*Exhibit B
Copy of Charter under date of March 1, 1927
authorizing Bank of Italy National Trust and
Savings Association to commence business of
banking.
*Exhibit C
Copy of authorization of the Federal Reserve
Board issued under date of November 1, 1930,
granting Bank of America National Trust and
Savings Association the right to act in a
fiduciary capacity.
*Exhibit D
Certificate issued by the Comptroller of the
Currency under date of November 1, 1930
evidencing consolidation of Bank of Italy
National Trust and Savings Association and
Bank of America of California under the
corporate title of Bank of America National
Trust and Savings Association.
*Exhibit E
Copy of Charter under date of March 31, 1969,
authorizing B. A. National Bank to commence
business of banking.
*Exhibit F
Copy of certificate issued by the Comptroller
of the Currency under date of April 1, 1969,
evidencing the merger of Bank of America
National Trust and Savings Association into
B.A. National Bank under the title "Bank of
America National Trust and Savings
Association."
*Exhibit G
A copy of the approval for "Bank of America
National Trust and Savings Association" to
operate the presently existing branches of
Bank of America National Trust and Savings
Association.
Exhibit H
Consent of Bank of America National Trust And
Savings Association required by Section 321
(b) of the Act.
Exhibit I
Copy of the latest Report of Condition at the
close of business on June 30, 1994 of the
Trustee published in response to call made by
Comptroller of Currency.
Exhibit J
A copy of any order pursuant to which the
foreign trustee is authorized to act as sole
trustee under indentures qualified or to be
qualified under the Act. (Not applicable)
Exhibit K
Foreign trustees are required to furnish a
consent to service of process (see Rule 10a-4
under the Act). (Not Applicable)
*Exhibits prefaced by this designation are filed with Securities and
Exchange Commission as exhibits to Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939, as amended, in
connection with the Registration Statement of Border, Inc., File No. 2-
50369, under the same exhibit number and are incorporated herein by
reference.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, Bank of America National Trust and Savings
Association, a corporation organized and existing under the laws of the
United States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in the
City and County of Los Angeles, State of California, on the 1st day of
September 1994.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: F. Hall
---------------------------
F. Hall
Trust Officer
(Name and Title)
Attest: A. Soderholm
--------------------------
A. Soderholm
Assistant Secretary
<PAGE>
EXHIBIT "H"
The undersigned, as Indenture Truestee or prospective Indenture Trustee
does hereby consent that reports of examinations by Federal, State,
Territorial, or District authorities may be furnished by such authorities to
the Securities and Exchange Commission upon its request, in accordance with
and to the extend prescribed under Section 321 of the Trust Indenture Act of
1939.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: Fonda Hall
---------------------------
Fonda Hall
Trust Officer
Attest: A. Soderholm
--------------------------
A. Soderholm
Assistant Secretary
<PAGE>
EXHIBIT I
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the BANK OF AMERICA NT&SA
of San Francisco in the State of California, at the close of business on
June 30, 1994 published in response to call made by Comptroller of the
Currency, under Title 12, United States Code, Section 161.
Charter number 13044 - National Bank Region Number 14.
STATEMENT OF RESOURCES AND LIABILITIES
$ in Thousands
--------------
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . $7,468,000
Interest-bearing balances. . . . . . . . . . . . . . . . . 4,640,000
Securities:
a. Held-to-maturity securities . . . . . . . . . . . . . . 6,199,000
b. Available-for-sale securities . . . . . . . . . . . . . 3,600,000
Federal funds sold and securities purchased under
agreements to resell in domestic offices of
the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold . . . . . . . . . . . . . . . . . . . . 4,250,000
Securities purchased under agreements to resell . . . . . 0
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . $99,493,000
Less: Allowance for loan and lease losses. . . 2,551,000
Less: Allocated transfer risk reserve. . . . . 0
-----------
Loans and losses, net of unearned income,
allowance, and reserve . . . . . . . . . . . . . . . . . 96,942,000
Assets held in trading accounts . . . . . . . . . . . . . 12,552,000
Premises and fixed assets
(including capitalized leases) . . . . . . . . . . . . . 2,706,000
Other real estate owned . . . . . . . . . . . . . . . . . 390,000
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . . . 365,000
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . . . . 837,000
Intangible assets . . . . . . . . . . . . . . . . . . . . . . 2,462,000
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . 3,539,000
------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . 145,950,000
------------
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . $82,537,000
Noninterest-bearing . . . . . . . . . . . $24,110,000
Interest-bearing . . . . . . . . . . . . . 58,427,000
-----------
In domestic offices . . . . . . . . . . . . . . . . . . . $26,613,000
Noninterest-bearing . . . . . . . . . . . $ 1,561,000
Interest-bearing . . . . . . . . . . . . . $25,052,000
-----------
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreements subsidiaries
and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . . . 1,965,000
Securities sold under agreements to repurchase . . . . . . . 149,000
Demand notes issued to the U.S. Treasury . . . . . . . . . . 1,000
Trading liabilities . . . . . . . . . . . . . . . . . . . . . 9,639,000
Other borrowed money:
a. With original maturity of one year or less . . . . . . . 4,453,000
b. With original maturity of more than one year . . . . . . 473,000
Mortgage indebtedness and obligations under
capitalized leases. . . . . . . . . . . . . . . . . . . . . 35,000
Bank's liability on acceptances executed and outstanding . . 837,000
Subordinated notes and debentures . . . . . . . . . . . . . . 4,159,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . 3,612,000
------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 134,473,000
------------
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 616,000
Surplus (exclude all surplus related to preferred stock . . . 5,465,000
Undivided profits and capital reserves . . . . . . . . . . . 5,623,000
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . . . . . (142,000)
Cumulative foreign currency translation adjustments . . . (85,000)
Total equity capital . . . . . . . . . . . . . . . . . . . 11,477,000
------------
Total liabilities and equity capital . . . . . . . . . . . $146,950,000
------------
I, Paul R. Ogorzelec, Executive Vice President of the above-named bank do
hereby declare that this Rreport of Ccondition is true and correct to the best
of my knowledge and belief.
Paul R. Ogorzelec
August 12, 1994
We, the undersigned directors, attest to the correctness of this statement of
resorces and liabilities. We declare that is has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
Richard M. Rosenberg
Richard A. Clarke
Lewis W. Coleman,
Directors
<PAGE>
EXHIBIT A
BYLAWS
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Bylaws: Last Amended May 26, 1994
<PAGE>
BYLAWS
OF
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
ARTICLE I
OFFICES
Section 1. OFFICES. The Bank may have offices at such places where the
Bank is permitted by law to have offices as the Board of Directors may from
time to time determine or the business of the Bank may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETING. The regular annual
meeting of the shareholders of the Bank shall be held in the City of San
Francisco, State of California at such place therein as shall be designated in
the notice of meeting or at such other place either within or without the State
of California as shall be designated in the notice of meeting. Special meetings
of the shareholders of the Bank shall be held at such place as may be fixed from
time to time by the Board of Directors and stated in the notice of the meeting.
Section 2. ANNUAL MEETINGS. The annual meeting
of the shareholders for the election of Directors and for the transaction of
such other business as may come before the meeting shall be held on the Thursday
in May immediately preceding the federal observance of the Memorial Day Holiday
of each year at such time as may be designated by the Board of Directors. If,
for any reason, an election of directors is not made on that day, the Board of
Directors shall order the election to be held on some subsequent day, as soon
thereafter as practicable, according to the provisions of law; and notice
thereof shall be given in the manner herein provided for the annual meeting.
All elections shall be held according to such regulations as may be prescribed
by the Board of Directors, not inconsistent with the provisions of the National
Banking Laws, the Articles of Association of the Bank, and these By-laws.
Section 3. NOTICE OF ANNUAL MEETING. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each shareholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 4. NOMINATIONS. Nominations for election
to the Board of Directors may be made by the Board of Directors or by any
shareholder entitled to vote for the election of Directors. Nominations other
than those made by or on behalf of the existing management of the Bank, shall be
made in writing and shall include the following information to the extent known
to the nominating shareholder:
(1) Name and address of each proposed nominee;
(2) The principal occupation of each proposed
nominee;
(3) The total number of shares that, to the
knowledge of the nominating shareholder, will
be voted for each proposed nominee;
(4) The name and residence address of the
nominating shareholder; and
(5) The number of shares owned by the nominating
shareholder.
Such nominations shall be delivered or mailed to
the President of the Bank and to the Comptroller of the Currency, Washington,
D.C., not less than fourteen days nor more than fifty days prior to any meeting
of stockholders called for the election of Directors, provided however, that if
less than twenty-one days' notice of the meeting is given to shareholders, such
nomination shall be mailed or delivered to the President of the Bank and to the
Comptroller of the Currency not later than the close of business on the seventh
day following the day on which the notice of meeting was mailed. Nominations not
made in accordance herewith may, in his or her discretion, be disregarded by the
Chairman of the meeting, and upon his or her instructions, the vote tellers may
disregard all votes cast for each such nominee.
Section 5. SPECIAL MEETINGS. Special meetings of
the shareholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the Articles of Association, may be called by the Chairman of the
Board or the President and shall be called by the Chairman of the Board or the
President or Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of shareholders owning a majority in
amount of the entire capital stock of the Bank issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. NOTICE OF SPECIAL MEETING. Written
notice of a special meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called, shall be given not less
than ten nor more than fifty days before the date of the meeting, to each
shareholder entitled to vote at such meeting.
Section 7. BUSINESS. Business transacted at any
special meeting of shareholders shall be limited to the purposes stated in the
notice of the meeting or in a duly executed waiver of notice.
Section 8. QUORUM AND ADJOURNMENT. The holders of
a majority of the stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at all
meetings of the shareholders for the transaction of business except as otherwise
provided by statute or by the Articles of Association. If, however, such quorum
shall not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
Section 9. ORGANIZATION. At every meeting of the
shareholders, the Chairman of the Board shall preside. In the absence of such
officer, any other officer of the rank of President, Vice Chairman of the Board,
Vice Chairman, Group Executive Vice President, Executive Vice President or
Senior Vice President, or in the absence of all such officers a presiding
officer chosen by a majority vote of the shareholders present in person or by
proxy and entitled to vote thereat shall call such meeting to order and preside.
The Secretary, or in his or her absence, the appointee of the presiding officer
of the meeting shall act as Secretary at the meetings.
Section 10. VOTING. A majority of the votes cast
shall decide every question or matter submitted to the shareholders at any
meeting, unless otherwise provided by law or by the Articles of Association.
Shareholders may vote at any meeting of the shareholders by proxies duly
authorized in writing, but no officer, clerk, teller or bookkeeper of the Bank
shall act as proxy. Proxies shall be valid only for one meeting, to be
specified therein, and any adjournment of such meeting. Proxies shall be dated
and shall be filed with the records of the meeting.
ARTICLE III
DIRECTORS
Section 1. NUMBER, ELECTION AND TERM. The Board
of Directors of the Bank shall consist of not less than five nor more than
twenty-five Directors, as shall be determined from time to time by resolution of
a majority of the full Board or by resolution of the shareholders at any annual
or special meeting; provided, however, that a majority of the full Board may not
increase the number of Directors to a number which (i) exceeds by more than two
the number of Directors last elected by shareholders where such number was
fifteen or less, or (ii) exceeds by more than four the number of Directors last
elected by shareholders where such number was sixteen or more, but in no event
shall the number of Directors exceed twenty-five. Each Director shall take and
subscribe his or her Oath of Office before entering upon the duties of a
Director. Each Director shall be a shareholder of BankAmerica Corporation, if
and to the extent required by law. The Directors shall be elected at the annual
meeting of shareholders, except as provided in Section 2 of this Article III,
and each Director shall hold office until his or her successor is elected and
qualified or until his or her earlier removal.
Section 2. VACANCIES AND NEWLY CREATED
DIRECTORSHIPS. Vacancies and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a majority of
the Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify or until
their earlier resignations or removals. If there are no Directors in office,
then an election of Directors may be held in the manner provided by statute.
Section 3. RESIGNATIONS. Any Director of the Bank
may resign at any time by giving written notice to the Chairman of the Board or
President or to the Secretary of the Bank. The resignation of any Director
shall take effect at the date of receipt of such notice or at any later date
specified therein; and unless otherwise specified therein the acceptance of such
resignation by the Board of Directors shall not be necessary to make it
effective.
Section 4. GENERAL POWERS. The business of the
Bank shall be managed by or under the direction of its Board of Directors which
may exercise all such powers of the Bank and do all such lawful acts and things
as are not by statute or by the Articles of Association or by these By-laws
directed or required to be exercised or done by the shareholders.
Section 5. COMPENSATION OF DIRECTORS, OFFICERS AND
EMPLOYEES. Fees and expenses payable to Directors shall be in such amounts as
shall be determined by the Board of Directors, except that no Director of the
Bank who receives any salary as an officer or employee thereof shall receive any
per diem or other compensation for attending any meeting of the Board of
Directors or of the Executive Committee or of any other committee. The Board of
Directors shall have power to fix the compensation of all officers and employees
of the Bank.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. PLACE OF MEETINGS. The Board of
Directors of the Bank may hold meetings, both regular and special, either within
or without the State of California.
Section 2. ORGANIZATIONAL MEETING. The Board of
Directors shall meet for the purpose of organization, the election of officers
and the transaction of other business, on the same day as each annual meeting of
shareholders at such place as may be designated by the presiding officer of such
meeting, or as may be otherwise provided by vote of the shareholders at such
meeting. Notice of such meeting shall not be necessary.
Section 3. REGULAR MEETINGS. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board.
Section 4. SPECIAL MEETINGS. Special meetings of
the Board may be called by the Chairman of the Board or a Vice Chairman of the
Board or the President on two days' notice to each Director, either personally
or by mail or by telegram; special meetings shall be called by the Chairman of
the Board or a Vice Chairman of the Board or President or Secretary in like
manner and on like notice on the written request of any three Directors.
Section 5. QUORUM. At all meetings of the Board
a majority of the Directors shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Articles of
Association. If a quorum shall not be present at any meeting of the Board of
Directors the Directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 6. ACTION BY WRITTEN CONSENT. Unless
otherwise restricted by the Articles of Association or these By-laws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting, if all members of the
Board or committee, as the case may be, consent thereto in writing. The written
consents shall be filed with the minutes of proceedings of the Board or
committee.
Section 7. TELEPHONE PARTICIPATION IN MEETINGS.
Members of the Board of Directors or any committees thereof may participate in a
meeting of the Board of Directors or of such committees by means of conference
telephone or other communications equipment by means of which all persons
participating can hear each other, and such participation shall constitute
presence in person at such meeting.
ARTICLE V
COMMITTEES
Section 1. EXECUTIVE COMMITTEE. During the intervals
between meetings of the Board, all power and authority of the Board
regarding the management of the business and affairs of the Bank shall be
exercised by the Executive Committee, except that the committee shall have
no power:
(a) To amend the Articles of Association or the By-laws of
the Bank.
(b) To recommend to the shareholders of the Bank the sale,
lease or exchange of all or substantially all of the Bank's
property and assets.
(c) To adopt an agreement of merger or consolidation.
(d) To recommend to the shareholders of the Bank the
dissolution of the Bank or a revocation of a dissolution.
(e) To declare a dividend.
(f) To authorize the issuance of stock.
(g) To appoint or remove the Chairman of the Board or the
President of the Bank.
The committee shall consist of such Directors as the Board
may from time to time appoint by resolution passed by a majority of the
whole Board.
Section 2. MANAGING COMMITTEE. During intervals between
meetings of the Executive Committee, the Managing Committee shall exercise
the power and authority of the Executive Committee. The committee shall
consist of such Directors or officers as the Board may from time to time
appoint by resolution passed by a majority of the whole Board.
Section 3. AUDITING AND EXAMINING COMMITTEE. The Auditing
and Examining Committee shall provide assistance to the Board in meeting its
responsibilities regarding the adequacy of internal controls, the quality
and integrity of regulatory and financial accounting and reporting and the
effectiveness of internal and external auditing of the Bank and its
subsidiaries. The committee shall take appropriate action to encourage free
and open communication among the Board, the independent accountants, and the
officers of the Bank responsible for internal audit, credit examination,
regulatory and financial accounting and reporting and the internal
accounting controls of the Bank. In carrying out its duties, the committee
shall review reports of regulatory examinations of the Bank, and management
letters and other assessments of the adequacy of internal accounting
controls from the independent accountants and from the internal auditors,
together with any proposed response by management of the Bank; monitor the
general condition of the Bank's credit exposure and deposit concentration;
review the adequacy of the Bank's controls of regulatory and financial
accounting and reporting; recommend to the Board the firm to be employed by
the Bank as its independent accountants, review and make recommendations to
the Board regarding the terms and scope of such firm's engagement, and
monitor its performance and independence; review the Bank's principal
periodic financial reports to the public and to regulatory agencies; review
the application of significant accounting policies to such reports; review
significant new or proposed accounting policy or reporting issues; and
review unused Bank properties and plans for their future use.
The committee shall annually review and approve the scope
of the auditing and credit examination functions of the Bank and shall
monitor their performance. The committee shall also review the adequacy of
the oversight by the boards of directors of the Bank's subsidiaries over the
auditing and credit examination functions in such subsidiaries and may
inquire into such matters and review such reports and other documents
regarding the subsidiaries as it deems appropriate.
The committee may employ independent accountants, outside
counsel and other experts as it deems necessary, and shall have all
additional powers necessary to carry out the foregoing functions and such
other functions as may be assigned by the Board from time to time.
The committee shall consist of such members as the Board
may from time to time appoint by resolution passed by a majority of the
whole Board. At least two members of the committee shall have significant
executive, professional, educational, or regulatory experience in financial,
auditing, accounting, or banking matters as shall be determined by the
Board.
No member of the committee shall be, or shall have been
within one year prior to serving as a member of the committee, an officer or
employee of the Bank, BankAmerica Corporation or any of their subsidiaries
or affiliates, and no member shall have any relationship that, in the
opinion of the Board, would interfere with the member's exercise of
independent judgment as a member of the committee, including any significant
direct or indirect credit or other relationships with the Bank, the
termination of which likely would materially and adversely affect the Bank's
financial condition or results of operations.
Section 4. EXECUTIVE PERSONNEL AND COMPENSATION
COMMITTEE. The Executive Personnel and Compensation Committee shall have
responsibility for, and shall review and approve, the overall compensation
programs for the Bank's Managing Committee and such other members of the
senior management of the Bank as determined by the committee from time to
time by resolution.
The committee shall also advise management regarding
executive succession planning and the selection, development and performance
of the Bank's Managing Committee and senior management as determined by the
committee from time to time.
The committee shall have all additional powers necessary to
carry out its responsibilities and such other duties as may be assigned by
the Board from time to time.
The committee shall consist of such Directors as the Board
may from time to time appoint by resolution passed by a majority of the
whole Board.
No member of the committee shall be an active officer of
the Bank or any of its subsidiaries, and no member shall have any
relationship that, in the opinion of the Board, would interfere with the
member's exercise of independent judgment as a member of the committee.
In taking actions with respect to compensation of members
of senior management as determined from time to time by BankAmerica
Corporation, the committee shall take into account the recommendations of
the Executive Personnel and Compensation Committee of BankAmerica
Corporation (BAC committee). If the committee disagrees with any such
recommendation, the committee shall consult with the BAC committee before
taking any action.
Section 5. NOMINATING COMMITTEE. The Nominating Committee
shall recommend to the Board criteria for the selection of candidates to
serve on the Board; evaluate all proposed candidates; recommend to the Board
nominees to fill vacancies on the Board; and recommend to the Board prior to
the annual meeting of shareholders a slate of nominees for election to the
Board by the shareholders of the Bank at the annual meeting.
The committee may also review and make recommendations to
the Executive Committee or the Board with respect to the Bank's overall
compensation program for Directors, including salary, perquisites, deferred
compensation plans, stock or stock option plans or other incentive plans,
and retirement plans.
In carrying out its duties the committee shall seek
possible candidates for the Board and otherwise aid in attracting qualified
candidates to the Board. The committee shall be available to the Chairman
of the Board or President and other members of the Board for consultation
concerning candidates for the Board. The committee shall periodically
review, assess and make recommendations to the Board with regard to the size
and composition of the Board. The committee shall have all additional
powers necessary to carry out its responsibilities and such other duties as
may be assigned by the Board from time to time.
The committee shall consist of such Directors as the Board
may from time to time appoint by resolution passed by a majority of the
whole Board.
No member of the committee shall be an active officer of
the Bank, BankAmerica Corporation or any of their subsidiaries and no member
shall have any relationship that, in the opinion of the Board, would
interfere with the member's exercise of independent judgment as a member of
the committee.
Section 6. PUBLIC POLICY COMMITTEE. The Public Policy
Committee shall advise and make recommendations to the Board and management
of the Bank concerning matters of public and social policy. The committee
shall identify and monitor the social, political and environmental trends
and issues that could affect the Bank's or its subsidiaries' performance and
the related interests of employees, shareholders, customers, and the general
public; evaluate and advise the Board and management on long range plans and
programs for adjusting operations to those trends and issues; provide
Community Reinvestment Act (CRA) oversight to ensure that the CRA activities
of the Bank reflect the Bank's commitment to outstanding performance; and
recommend to the Board and management, as appropriate, action on specific
public policy issues, and advise the Board and management as to the
committee's evaluation of related policies, practices and procedures.
The committee shall have all additional powers necessary to
carry out its responsibilities and such other duties as may be assigned by
the Board from time to time.
The committee shall consist of such Directors as the Board
may from time to time appoint by resolution passed by a majority of the
whole Board.
Section 7. TRUST AUDIT COMMITTEE. The Trust Audit
Committee is responsible for discharging the duties of the board with
respect to audits of the fiduciary activities of the Bank. At least once
during each calendar year and within 15 months of the last such audit, the
Committee shall direct that suitable audits be made by auditors responsible
only to the board of directors, and at such time shall ascertain whether
fiduciary powers have been administered according to law, Part 9 of the
Regulations of the Comptroller of the Currency, and sound fiduciary
principles. The Committee shall be comprised of directors, exclusive of
active officers of the Bank or members of the trust committee designated by
the board. The Committee shall review regulatory reports of examination,
internal audits, and reports from the Bank's independent auditors with
respect to the Bank's fiduciary activities; and, shall monitor the internal
fiduciary audit function and perform such other duties which the Board may
assign from time to time. In discharging its duties, the Committee may rely
on the evaluations, conclusions and reports of internal and external
auditors and legal counsel utilized by it in the performance or review of
audit functions. At least annually, the Trust Audit Committee shall make a
report to the Board of Directors of the audits and examination, action(s)
taken thereon, and recommendations with respect to the fiduciary activities.
Section 8. OTHER COMMITTEES. The Board may by resolution
passed by a majority of the whole Board, designate one or more other
committees, each committee to consist of such members as the Board
determines. The Board may designate one or more persons as alternate
members of any such committee who may replace any absent or disqualified
member at any meeting of the committee. Any such committee shall have and
may exercise such powers as may be specified in the resolution creating such
committee. Each committee shall have such name as may be determined from
time to time by the Board. The Board may change the members of any
committee, fill vacancies and discharge any committee, with or without
cause, at any time.
Section 9. MEETING REQUIREMENTS. The Board shall
designate one member of each committee to serve as chairman of the
committee. Except as otherwise stated in these By-laws or a resolution of
the Board, a number equal to a majority of the members of a committee shall
be deemed to constitute a quorum for actions of the committee. If a quorum
is not present at any meeting of a committee, the committee members present
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. Except as
otherwise stated in these By-laws or in a resolution of the Board, the vote
of a majority of the members of a committee present at a meeting at which a
quorum is present shall be necessary for action to be taken by the
committee, and each committee shall hold regular and special meetings at
times and places and upon notice as the committee may determine. In the
absence of any other notice requirements, meetings of a committee may be
called by the chairman of the committee or the Secretary, and must be called
by the chairman of the committee or the Secretary upon the request of any
two members of the committee, on at least 24 hours' notice to each committee
member before the hour appointed for holding such meeting. Notice shall be
given personally, or by leaving the notice at the member's place of business
or residence, or by mailing the notice in San Francisco or Los Angeles, with
the postage thereon fully prepaid, addressed to the member at his or her
last known place of business or residence, or by telegraphing or telecopying
the notice to the member at his or her last known place of business or
residence. The method of notice of a special meeting shall be entered in
the minutes of the special meeting, and the approval of the minutes at any
subsequent meeting of the committee shall be conclusive upon the question of
service.
Section 10. ACTION BY WRITTEN CONSENT. Unless otherwise
restricted by these By-laws, any action required or permitted to be taken at
any meeting of any committee may be taken without a meeting, if all members
of the committee consent to the action in writing. The written consents
shall be filed in the minute book of the committee.
Section 11. TELEPHONE PARTICIPATION IN MEETINGS. Members
of a committee may participate in a meeting of the committee by means of
conference telephone or other communications equipment by means of which all
persons participating can hear each other, and such participation shall
constitute presence in person at the meeting.
Section 12. SUBCOMMITTEES. Except as otherwise stated in
these By-laws or a resolution of the Board, each committee may appoint and
discharge subcommittees and may delegate to such subcommittees any of the
power and authority of the committee, subject to such restrictions as the
committee may determine. The committee may authorize such subcommittees to
appoint their own subcommittees and to delegate any of their power and
authority. Each subcommittee shall have such members as the committee shall
appoint, provided that at least one member of the committee shall be a
member of the subcommittee. The name of each subcommittee shall be
determined by the committee or subcommittee which appoints it. Each
committee and subcommittee may designate one or more Directors or officers
as alternate members of any subcommittee, who may replace any specified or
unspecified member who is absent or disqualified at any meeting of the
subcommittee. Subcommittees shall be subject to the same procedural
requirements as the committee or subcommittee which appointed it, including
but not limited to the requirements set forth in this Article V for notices,
quorums, action by written consent, and telephone participation in
meetings. Each subcommittee shall report its actions at the next
practicable meeting of the committee or subcommittee for its review and any
action it deems appropriate.
Section 13. REPORTS TO THE BOARD. Except as otherwise
stated in these By-laws or a resolution of the Board, each committee shall
keep minutes of its proceedings and shall report its actions and, at least
on a quarterly basis, the actions of its subcommittees at the next
practicable Board meeting for its review and any action it deems
appropriate. Any action of the Board with respect to the report shall be
recorded in the minutes of the meeting of the Board, as well as in the
minute book of the committee.
ARTICLE VI
ADVISORY DIRECTORS AND ADVISORY BOARDS
Section 1. ADVISORY DIRECTORS. The Board of Directors may
appoint such number of Advisory Directors as shall be determined by the
Board from time to time. Such Advisory Directors shall serve at the
pleasure of the Board of Directors and shall have such rights and functions
as the Board shall determine. Advisory Directors shall receive such
compensation for their services as may be fixed by the Board. No Advisory
Director who receives a salary as an officer or employee of the Bank shall
receive compensation for attending any meeting of the Board of Directors or
of any committee of the Board.
Section 2. REGIONAL BOARDS. The Board of Directors may,
in its discretion, create regional Boards to be composed of such persons and
to consist of such number of members as the Board of Directors may appoint,
and to serve for such territory as the Board of Directors may designate.
Such regional Boards and the members thereof shall serve at the pleasure of
the Board of Directors and shall have such rights and functions, and receive
such compensation, as may be fixed by the Board.
Section 3. ADVISORY BOARDS. Whenever, in the opinion of
the Board of Directors, it shall be deemed advisable to have an Advisory
Board for any branch or group of branches of the Bank, the Board of
Directors may appoint an Advisory Board for such branch or group of
branches, to be composed of such persons and to consist of such number as
the Board of Directors may appoint and designate, and to have such rights
and functions, and receive such compensation, as may be fixed by the Board
of Directors. The Board of Directors may by resolution delegate the powers
given it by this Section 3 of Article VI to the Executive Committee, such
powers, if so delegated to the Executive Committee, to be exercised by it
subject to the approval of the Board of Directors. Such Advisory Boards and
the members thereof shall serve at the pleasure of the Board of Directors.
ARTICLE VII
OFFICERS
Section 1. NUMBER AND TITLES. The officers of the Bank
may be, and to the extent required by law shall include: a Chairman of the
Board, a President, one or more Vice Chairmen of the Board, one or more Vice
Chairmen, one or more Group Executive Vice Presidents, one or more Executive
Vice Presidents, one or more Senior Vice Presidents, one or more Regional
Vice Presidents, one or more Vice Presidents, one or more Assistant Vice
Presidents, a Cashier, one or more Assistant Cashiers, a Secretary, one or
more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers,
and such other officers as the Board may from time to time by resolution
create (the officer titles referenced in such resolutions being deemed
included in these By-laws and incorporated herein by reference as though set
forth fully herein), or as may be appointed in accordance with Section 2 of
this Article. The persons with officer titles listed above or referenced in
the resolutions referred to above, or titles created in accordance with
Section 2 of this Article and referenced in the resolutions referred to
above or listed above, shall be officers of the Bank. The Secretary or the
executive officer of the Bank's human resources or personnel function or the
delegates of either shall maintain or cause to be maintained a current list
of authorized officer titles. The Board of Directors shall approve the list
of authorized officer titles at least annually.
The Board of Directors shall designate one officer of the
Bank as the Chief Executive Officer and may in its discretion confer
additional functional titles, including but not limited to Chief Operating
Officer and Chief Financial Officer. The President shall be a member of the
Board of Directors.
Section 2. APPOINTMENT, TERM OF OFFICE. The officers
shall be appointed by the Board of Directors and shall hold office at the
pleasure of the Board. Notwithstanding anything to the contrary in these
By-laws contained, the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice Chairman, any Group Executive Vice
President, any Executive Vice President or the executive officer of the
Bank's human resources or personnel function or any delegate of any of such
officers may, in the interim between meetings of the Board of Directors,
make appointments pro-tem to any office listed in Section 1 of this Article
or in the resolutions referred to in Section 1, other than the following:
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Chief Financial Officer, Vice Chairman of the Board, Vice Chairman,
Group Executive Vice President, Executive Vice President, Senior Vice
President, Regional Vice President, Vice President, Cashier, Treasurer and
Secretary. Such pro-tem appointments may be made for the purpose of filling
a vacancy or increasing the number of officers, such appointees pro-tem to
hold office until the next succeeding regular meeting of the Board of
Directors or until the earlier revocation of such appointment. All pro-tem
appointees shall hold office at the pleasure of the Board of Directors which
may in its discretion approve, confirm, or revoke any such pro-tem
appointments. Upon any such approval or confirmation, such persons shall
hold office at the pleasure of the Board.
Section 3. COMPENSATION. The compensation of all officers
and other employees of the Bank shall be fixed by the Board of Directors or
by a committee appointed or officers designated for that purpose or in
accordance with procedures established by the Bank's human resources or
personnel function.
Section 4. AUTHORITY, DUTIES, FIDELITY BOND. One person
may hold more than one office, except that the offices of Chairman of the
Board and Secretary or President and Secretary and the offices of President
and Cashier may not be held by the same person. When the signature or
approval of two officers is required, a person holding two offices shall act
only as one signer or approver. The duties and authority of the officers of
the Bank, other than as set forth in these By-laws, may be prescribed and
established by the Board of Directors or the Executive Committee. Each
officer shall perform the duties imposed upon the officer by law, these By-
laws, the Board of Directors and the Executive Committee. Except as
otherwise set forth in these By-laws or by the Board of Directors or the
Executive Committee, each officer shall have such authority and duties as
usually are incident to the title and office held. The Board of Directors
shall provide for such bond and fidelity insurance covering the officers of
the Bank and for the faithful and honest discharge of their duties as they
may determine.
Section 5. THE CHAIRMAN OF THE BOARD. The Chairman of the
Board shall preside at all meetings of the shareholders and the Board of
Directors and shall have such other duties and authority as are set forth in
these By-laws or may be assigned by the Board of Directors.
Section 6. THE VICE CHAIRMEN OF THE BOARD. The Board of
Directors may appoint one or more Vice Chairmen of the Board. Each Vice
Chairman of the Board shall have such duties and authority as may be
assigned by the Board of Directors or by the officer to whom such Vice
Chairman of the Board reports. If more than one Vice Chairman of the Board
is appointed, the Board may designate one such Vice Chairman of the Board as
Senior Vice Chairman of the Board.
Section 7. THE PRESIDENT. The President shall have such
duties and authority as are set forth in these By-laws or may be assigned by
the Board of Directors or by the Chairman of the Board.
Section 8. THE VICE CHAIRMEN. The Board of Directors may
appoint one or more Vice Chairmen. Each Vice Chairman shall have such
duties and authority as may be assigned by the Board of Directors or by the
officer to whom such Vice Chairman reports.
Section 9. THE VICE PRESIDENTS. The Board of Directors
may appoint one or more Vice Presidents. The Board of Directors may create
categories of Vice Presidents, including but not limited to Group Executive
Vice Presidents, Executive Vice Presidents, Senior Vice Presidents, Regional
Vice Presidents and Assistant Vice Presidents. The Board of Directors, the
Chairman of the Board or the President may designate seniority of ranking
among categories of Vice Presidents. Each Vice President shall have such
duties and authority as may be assigned by the Board of Directors or by the
officer to whom such Vice President reports.
Section 10. THE SECRETARY. The Secretary shall have
charge and custody of the corporate seal, records and Minute Books of the
Bank, shall keep correct written minutes of all meetings of shareholders and
Directors, and shall give or cause to be given notice of all meetings of the
shareholders and of the Board of Directors in accordance with these By-laws
and as required by law. The duties of the Secretary may be performed by any
Assistant Secretary.
Section 11. THE CHIEF EXECUTIVE OFFICER. The Chief
Executive Officer shall have general executive supervision of the business
and affairs of the Bank.
Section 12. THE CHIEF OPERATING OFFICER. The Chief
Operating Officer shall have such duties and authority as may be assigned by
the Chief Executive Officer to whom the Chief Operating Officer shall
report.
Section 13. THE CHIEF FINANCIAL OFFICER. The Chief
Financial Officer shall be the principal financial officer of the Bank.
ARTICLE VIII
CAPITAL STOCK--CERTIFICATES OF STOCK
Section 1. CERTIFICATES, TRANSFER AGENTS AND REGISTRARS.
Every holder of stock in the Bank shall be entitled to have a certificate,
signed by, or in the name of the Bank by, the Chairman of the Board, or the
President, or a Vice Chairman of the Board, or a Vice Chairman or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Bank, certifying the number of shares owned
by such shareholder. Where a certificate is countersigned by a transfer
agent other than the Bank or its employee, or by a registrar other than the
Bank or its employee, the signatures of the officers of the Bank may be
facsimiles. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Bank with the same effect as
if he or she were such officer, transfer agent or registrar at the date of
issue.
Section 2. LOST, STOLEN, MUTILATED OR DESTROYED
CERTIFICATES. The Board of Directors, a committee of the Board or an
officer of the Bank may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
Bank alleged to have been lost, stolen, mutilated or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen, mutilated or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors, a
committee of the Board or an officer of the Bank may, as a matter of
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen, mutilated or destroyed certificate or
certificates, or such owner's legal representative, to advertise the same in
such manner as shall be required and give the Bank a bond in such sum as may
be directed as indemnity against any claim that may be made against the Bank
with respect to the certificate alleged to have been lost, stolen, mutilated
or destroyed.
Section 3. TRANSFERS OF STOCK. Upon surrender to the Bank
or the transfer agent of the Bank of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Bank to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. REGISTERED SHAREHOLDERS. The Bank shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends and to vote as such owner,
and to hold liable for calls and assessments a person registered on its
books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by law.
Section 5. DIVIDENDS. Dividends upon the capital stock of
the Bank, subject to the provisions of the Articles of Association and the
national banking laws, may be declared by the Board of Directors at any
regular or special meeting. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions of the Articles of
Association and the national banking laws.
ARTICLE IX
INDEMNIFICATION
Section 1. RIGHT TO INDEMNIFICATION. Except as provided
in Section 4, below, each person who was or is made a party or is threatened
to be made a party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that such person, or another person of
whom such person is the legal representative, is or was a Director, officer,
or employee of the Bank or is or was serving at the request of the Bank as a
director, officer, or employee of, or in some other representative capacity
for, another corporation or a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official
capacity as a Director, officer, or employee or in any other capacity while
serving as a Director, officer, or employee, shall be indemnified and held
harmless by the Bank to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended,
against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has
ceased to be a Director, officer, or employee and shall inure to the benefit
of such person's heirs, executors and administrators; provided, however,
that except as provided in Section 2 hereof with respect to proceedings
seeking to enforce rights to indemnification, the Bank shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Bank. The right to
indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the Bank the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law so requires, the
payment of such expenses incurred by a Director or officer in such person's
capacity as a Director or officer (and not in any other capacity in which
service was or is rendered by such person while a Director or officer,
including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Bank of an undertaking, by or on behalf of such Director or
officer, to repay all amounts so advanced if it shall ultimately be
determined that such Director or officer is not entitled to be indemnified
under this Article or otherwise.
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim
under Section 1 of this Article is not paid in full by the Bank within
ninety days after a written claim has been received by the Bank, the
claimant may at any time thereafter bring suit against the Bank to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding
in advance of its final disposition where the required undertaking, if any
is required, has been tendered to the Bank) that the claimant has not met
the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Bank to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Bank. Neither the failure of the Bank (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of the
claimant is proper in the circumstances because the claimant has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Bank (including its Board of
Directors, independent legal counsel, or its shareholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 3. NON-EXCLUSIVITY OF RIGHTS. The right to
indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in this Article
shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Articles of
Association, By-law, agreement, vote of shareholders or disinterested
Directors or otherwise.
Section 4. LIMITATIONS. The Bank shall not indemnify its
Directors, officers, or employees against expenses, penalties, or other
payments incurred in an administrative proceeding or action instituted by an
appropriate bank regulatory agency acting in its regulatory capacity, which
proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals in
the form of payments to the Bank.
Section 5. INSURANCE. The Bank may maintain insurance, at
its expense, to protect itself and any Director, officer, or employee of the
Bank serving in any capacity on behalf of the Bank or at its request for any
other entity to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, whether or
not the Bank would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law. Any
insurance purchased by the Bank must exclude from coverage any formal order
assessing civil money penalties against a Director, officer, or employee of
the Bank.
ARTICLE X
EMERGENCY
Section 1. APPLICATION. This Article shall operate during
any emergency resulting from any disaster or other emergency condition when
a quorum of the Board of Directors or a Board committee cannot readily be
convened.
Section 2. MEETINGS OF BOARD OR COMMITTEE. A meeting of
the Board of Directors or Board committee may be called by any officer or
Director by giving notice to the Directors or committee members who can be
reached by any means the person calling the meeting deems feasible.
Section 3. CONDUCT OF BUSINESS. During any emergency, the
quorum requirements for all meetings of the Board of Directors and any Board
committee shall be one-fourth of the members.
(a) If no Board of Directors meeting can be held because a
quorum cannot be assembled, then those Directors who can assemble may, by
majority vote, reduce the Board of Directors to not less than five Directors
and may elect emergency Directors.
(b) If only one Director can be found, then that Director
may appoint emergency Directors.
(c) If no Director can be found, then the Chief Executive
Officer or Acting Chief Executive Officer may appoint emergency Directors.
Section 4. SUCCESSION. During any emergency when the
Chief Executive Officer becomes incapacitated, cannot be located, or
otherwise is unable to perform his or her duties, succession to the powers
of the Chief Executive Officer as Acting Chief Executive Officer shall occur
in the following order:
Chairman of the Board,
President,
Vice Chairman of the Board,
Vice Chairman,
any member of Managing Committee,
Cashier.
Priority within rank shall be set by seniority in the ranking office. If
seniority in office dates from the same day, then seniority based on total
length of service shall be determinative.
Notwithstanding the foregoing, the Board of Directors during an emergency
may appoint or replace any Acting Chief Executive Officer, or may change the
priority of succession, as the Board determines.
Section 5. AUTHORITY. During any emergency the Chief
Executive Officer or Acting Chief Executive Officer shall have all authority
that officer deems necessary to protect the interests of the Bank, may
appoint emergency officers, and may delegate authority to them.
Section 6. NO LIABILITY. No officer, Director or employee
acting in accordance with any emergency By-laws or resolutions shall be
liable except for willful misconduct.
Section 7. EFFECT ON BY-LAWS. To the extent not
inconsistent with this emergency By-law, the By-laws of the Bank shall
remain in effect during any emergency. Upon termination of the emergency,
this By-law shall cease to be operative and authority to act as an officer
or Director shall be determined by the other By-laws, except that Directors
and officers elected or appointed pursuant to this By-law shall remain
Directors or officers to the extent that vacancies have been caused by death
or incapacity of regular Directors or officers until their successors are
appointed or elected.
Section 8. TERMINATION OF EMERGENCY. Any emergency
condition which causes this By-law to become operative shall be deemed
terminated whenever one of the following conditions is met:
(a) The Directors and emergency Directors determine by
majority vote at a meeting that the emergency condition
is over; or
(b) A majority of the Directors elected or appointed
pursuant to the regular By-laws holds a meeting and
determines the emergency condition is over.
ARTICLE XI
MISCELLANEOUS
Section 1. MINUTE BOOK. The organization papers of the
Bank, the returns of the judges of election, and the proceedings of all
regular and special meetings of the Directors and of the shareholders shall
be recorded in the Minute Book and the minutes of each meeting shall be
signed by the Secretary and approved by the Presiding Officer. There shall
also be noted by the Secretary and recorded in the Minute Book the receipt
by the Board of reports of all committees of the Board of Directors and said
reports shall be preserved by the Secretary but need not be recorded in the
Minute Book unless especially ordered by the Board of Directors.
Section 2. CONVEYANCE OF REAL PROPERTY, TRANSFER OF
PERSONAL PROPERTY, AND EXECUTION AND DELIVERY OF DEEDS, LEASES, CONTRACTS,
ETC. Authority to convey real property, transfer personal property, sign,
execute and deliver deeds, leases, contracts, notes, negotiable instruments,
agreements and all other written instruments and documents for and on behalf
of the Bank, other than as set forth in these By-laws or as prescribed by
law, shall be prescribed by resolutions adopted by the Board of Directors of
the Bank from time to time.
Section 3. SEAL. In the execution on behalf of the Bank
of any instrument, document, writing, notice or paper, it shall not be
necessary to affix the corporate seal of the Bank thereon, and any such
instrument, document, writing, notice or paper when executed without said
seal affixed thereon shall be of the same force and effect and as binding on
the Bank as if said corporate seal had been affixed thereon in each
instance.
Section 4. WAIVER OF NOTICE. Whenever any notice whatever
is required to be given by law or by these By-laws or the Articles of
Association, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
Section 5. AMENDMENTS. These By-laws may be altered or
repealed at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration or repeal be contained in the notice
of such special meeting.
Section 6. FISCAL YEAR. The fiscal year of the Bank shall
be the calendar year.
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400 North Fifth Street
Phoenix, Arizona 85004
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street
New York New York, N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item
2, the answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the
State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in The City of New York, and State of New York, on the 12th day of
September, 1994.
THE BANK OF NEW YORK
By: ROBERT F. MCINTYRE
Name: Robert F. McIntyre
Title: Assistant Vice President
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1994, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,071,756
Interest-bearing balances .......... 695,722
Securities:
Held-to-maturity securities ........ 1,396,356
Available-for-sale securities ...... 1,495,522
Federal funds sold in domestic
offices of the bank ................ 874,129
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................25,607,366
LESS: Allowance for loan and
lease losses ..............688,226
LESS: Allocated transfer risk
reserve .....................29,781
Loans and leases, net of unearned
income, allowance, and reserve 24,889,359
Assets held in trading accounts ...... 2,427,515
Premises and fixed assets (including
capitalized leases) ................ 634,514
Other real estate owned .............. 51,996
Investments in unconsolidated
subsidiaries and associated
companies .......................... 164,558
Customers' liability to this bank on
acceptances outstanding ............ 1,212,402
Intangible assets .................... 80,153
Other assets ......................... 1,512,404
Total assets ......................... $42,506,386
LIABILITIES
Deposits:
In domestic offices ................ $19,454,858
Noninterest-bearing .......7,576,391
Interest-bearing .........11,878,467
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,753,958
Noninterest-bearing ..........51,653
Interest-bearing .........10,702,305
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,150,270
Securities sold under agreements
to repurchase .................... 49,603
Demand notes issued to the U.S.
Treasury ........................... 300,000
Trading liabilities .................. 1,757,487
Other borrowed money:
With original maturity of one year
or less .......................... 2,452,009
With original maturity of more than
one year ......................... 33,969
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,212,877
Subordinated notes and debentures .... 1,062,320
Other liabilities .................... 1,348,031
Total liabilities .................... 39,575,382
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,495,590
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 26,172)
Cumulative foreign currency transla-
tion adjustments .................. ( 6,364)
Total equity capital ................ 2,931,004
Total liabilities and equity
capital ........................... $42,506,386
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
+
Alan R. Griffith |
Thomas A. Renyi | Directors
J. Carter Bacot |
+
