AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1995
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)
ARIZONA 86-0011170
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
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 L.L.P.
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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
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C A L C U L A T I O N O F R E G I ST R A T I O N F E E
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Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of to be Price Offering Registration
Securities to be Registered Registered Per Unit Price Fee
- -------------------------------------------------------------------------------
First Mortgage Bonds (1)(3) (2) (1)(2)(3) N/A
- -------------------------------------------------------------------------------
Debt Securities (1)(4) (2) (1)(2)(4) N/A
- -------------------------------------------------------------------------------
Total $25,000,000 (2) $25,000,000 $8,621(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
$25,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $25,000,000, 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
$25,000,000 principal amount of securities registered hereby, $25,000,000
principal amount of securities registered on October 3, 1994 pursuant to
Registration No. 33-55473, and $100,000,000 principal amount of First Mortgage
Bonds registered on April 26, 1993 pursuant to Registration No. 33-61228. The
previously-paid filing fees associated with the referenced securities registered
under Registration Nos. 33-55473 and 33-61228 totalled $8,621 and $34,483,
respectively.
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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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 1995
$150,000,000
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 $150,000,000 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 $50,000,000 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 , 1995.
<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 Seven World Trade Center, Suite 1300, 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,
1994 (the "1994 10-K Report");
2. The Company's Form 10-Q Reports for the fiscal quarters ended March 31,
June 30, and September 30, 1995 (the "September 10-Q Report"); and
3. The Company's Form 8-K Reports, dated January 1 and September 29, 1995.
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 September 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.
<PAGE>
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.
THE OFFERING
Securities Offered ....................... Up to $150,000,000 of First Mortgage
Bonds or up to $100,000,000 of
First Mortgage Bonds and up to
$50,000,000 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 invest-
ment pending such application.
THE COMPANY
Business ................................. Electric utility servicing approx-
imately 681,000 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 September 30,
1995).................................... Coal--54.1%; Nuclear--40.1%; Gas--
5.7%; Other--0.1%.
<TABLE>
<CAPTION>
FINANCIAL DATA (THOUSANDS OF DOLLARS):
TWELVE MONTHS ENDED
------------------------------------------------------------
DECEMBER 31,
----------------------------------------
SEPTEMBER 30,1995(1) 1994 1993 1992
------------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Electric Operating Revenues ..... $1,608,308 $1,626,168 $ 1,602,413 $ 1,587,582
=========== ============ ============= =============
Net Income ....................... $ 242,529 $ 243,486 $ 250,386 $ 246,805
=========== ============ ============= =============
Ratio of Earnings to Fixed Charges 2.82 2.96 2.99 2.73
</TABLE>
<TABLE>
<CAPTION>
CAPITALIZATION DATA (THOUSANDS OF DOLLARS):
AS ADJUSTED(2)
AS OF -------------------------
SEPTEMBER 30, 1995 AMOUNT PERCENTAGE
------------------ ------------ ------------
<S> <C> <C> <C>
Long-Term Debt (excluding current maturities) $2,153,116 $2,132,616 52.6%
Redeemable Preferred Stock ................... 75,000 75,000 1.9
Non-Redeemable Preferred Stock ............... 193,561 193,561 4.8
Common Stock Equity .......................... 1,648,886 1,648,886 40.7
------------------ ------------ ------------
Total Capitalization ......................... $4,070,563 $4,050,063 100.0%
================== ============ ============
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(1) Financial data as of and for the twelve months ended September 30, 1995 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.
(2) For the Company's repurchase and incurrence of approximately $24 million and
$4 million, respectively, of long-term debt. It is assumed that the net
proceeds from the issuance of the Offered Securities will be used for the
redemption, repurchase, repayment, or retirement of a similar amount of
outstanding long-term debt.
</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
- --------------------------------------------------------------------------------
DECEMBER 31,
SEPTEMBER 30, ---------------------------------------------------
1995 1994 1993 1992 1991 1990
- --------------- ------ ------ ------ ------ ------
2.82 2.96 2.99 2.73 (1) 2.05
- ----------
(1) A write-off resulting from a December 1991 Arizona Corporation Commission
("ACC") order settling the Company's then-pending rate case 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 The Bank of New
York, as successor 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, or will be 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
or in a Prospectus Supplement, such provisions or defined terms are incorporated
by reference herein or therein, as the case may be.
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; (6) whether any of such Offered Bonds will be issuable in
whole or in part in the form of one or more Global Securities and, if so, the
Depositaries for such Global Securities, the form of any legend or legends to be
borne by any such Global Security, and any circumstances under which any such
Global Security may be exchanged in whole or in part for Offered Bonds,
registered in the names of persons other than the Depositary for such Global
Security or its nominee; and (7) 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 interest in 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.
As of September 30, 1995, and adjusting for the repurchase and incurrence of
approximately $24 million and $4 million, respectively, of long-term debt, the
Company estimates that the Mortgage and the articles of incorporation would have
allowed the Company to issue up to approximately $1.516 billion and $1.043
billion of additional first mortgage bonds and preferred stock, respectively.
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
1994, such requirement amounted to approximately $125 million. 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 1994 replacement fund
requirements was used to redeem $49.15 million in aggregate principal amount of
the Company's First Mortgage Bonds, 10.25% Series due 2000, at their principal
amount plus accrued interest.
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 or her bonds, or (d) reduce the percentage of bondholders authorized to
effect any such modification.
GLOBAL SECURITIES
Some or all of the New Bonds 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 New Bonds 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
applicable Bond Supplemental Indenture.
Notwithstanding any provision of the Mortgage or any New Bond described
herein, no Global Security may be exchanged in whole or in part for New Bonds
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 Mortgage, (ii) there shall have occurred and be continuing a
default with respect to the New Bonds 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 Bond Supplemental
Indenture and 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.
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 New Bonds
represented thereby for all purposes under the New Bonds and the Mortgage.
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 New Bonds represented thereby registered in their names, will not receive
or be entitled to receive physical delivery of certificated New Bonds in
exchange therefor and will not be considered to be the owners or holders of such
Global Security or any New Bonds represented thereby for any purpose under the
New Bonds or the Mortgage. 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 New Bonds represented by the Global Security to
the accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
depositary from time to time. None of the Company, the Bond Trustee or any agent
of the Company or the Bond 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 case 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.
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, security registrar and paying agent under the Mortgage is
The Bank of New York. The Company maintains normal banking arrangements with The
Bank of New York, which includes 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
September 30, 1995. The Bank of New York also serves as (i) trustee for the
holders of several issues of pollution control bonds issued on behalf of the
Company, (ii) trustee under the Indenture relating to the subordinated Debt
Securities, (iii) investment manager for the Company's nonunion post-retirement
medical fund, and (iv) custodian of international fixed-income assets for the
Company's pension plan.
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 (i) The Bank of New York, in the
case of subordinated Debt Securities, and (ii) Chemical Bank, in the case of
senior Debt Securities, or any other trustees 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 Indentures pursuant to which the subordinated and senior Debt
Securities are to be issued and to 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. 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. Separate
Indentures will be used for senior Debt Securities and subordinated Debt
Securities, respectively, although the description of the Indenture herein,
except as specifically stated otherwise, applies to both Indentures.
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 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 "-- 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 relating to the subordinated Debt Securities 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 "Subordination" heading 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 subordinated 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 subordinated Debt
Securities are entitled to receive or retain any payment. (Section 1403). The
rights of the holders of the subordinated Debt Securities will be subordinated
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 September 30, 1995, outstanding Senior Debt and
subordinated debt of the Company aggregated approximately $1.6 billion and $75
million, respectively.
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 series and specified tenor)
are to be redeemed, 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 case 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 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 provides 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 (included in the Indenture relating to
subordinated Debt Securities) 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 TRUSTEES
The Trustee under the Indenture relating to the subordinated Debt Securities
is The Bank of New York. The Company maintains normal banking arrangements with
The Bank of New York, which includes 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
September 30, 1995. The Bank of New York also serves as (i) trustee under the
Mortgage, (ii) trustee for the holders of several issues of pollution control
bonds issued on behalf of the Company, (iii) investment manager for the
Company's nonunion post-retirement medical fund and (iv) custodian of
international fixed-income assets for the Company's pension plan. The Trustee
under the Indenture relating to the senior Debt Securities is Chemical Bank. The
Company maintains normal banking arrangements with Chemical Bank. Chemical Bank
also serves as trustee for the holders of several series of bonds secured by,
among other things, the Company's payments under its Palo Verde Nuclear
Generating Station leases; these bonds were issued by a party unaffiliated with
the Company.
PLAN OF DISTRIBUTION
The Company intends to sell up to $150 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 1994 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, June 30, and September 30, 1995 and 1994, 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, June 30, and September 30, 1995,
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 L.L.P., 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 L.L.P. 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 L.L.P.,
and Snell & Wilmer L.L.P. may rely as to all matters of New York law upon the
opinion of Sullivan & Cromwell.
<PAGE>
===================================== ===================================
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED.THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A $150,000,000
SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEITHER ARIZONA PUBLIC SERVICE
THE DELIVERY OF THIS PROSPECTUS NOR COMPANY
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 FIRST MORTGAGE BONDS
THAT THERE HAS BEEN NO CHANGE IN THE DEBT SECURITIES
AFFAIRS OF THE COMPANY SINCE SUCH
DATE.
----------
TABLE OF CONTENTS ----------
PAGE
----
Available Information ..............2
Incorporation of Certain
Documents by Reference .............2
Selected Information ...............3 [APS LOGO]
The Company ........................4
Application of Proceeds ............4
Earnings Ratios ....................4
Description of New Bonds ...........4
Description of Debt
Securities ........................10
Plan of Distribution ..............17 ----------
Experts ...........................18
Legal Opinions ....................18
===================================== ===================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission registration fee $ 8,621
Printing, engraving, and postage expenses ......... 30,000*
Legal fees ......................................... 100,000*
Accounting fees .................................... 25,000*
Rating Agency fees ................................. 125,000*
Trustee's fees and expenses ........................ 25,000*
Blue Sky fees and expenses ......................... 15,000*
Miscellaneous ...................................... 6,379*
----------
Total .............................................. $ 335,000
==========
- ----------
*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.
On January 1, 1996, the new Arizona Business Corporation Act (the "ABCA")
will become effective. The ABCA 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. Under the ABCA,
in order for a corporation to provide indemnification, a majority of the
corporation's disinterested directors, independent legal counsel, or the
shareholders must find that the conduct of the individual to be indemnified was
in good faith and that the individual reasonably believed that the conduct was
in the corporation's best interests (in the case of conduct in an "official
capacity" with the corporation) or that the conduct was at least not opposed to
the corporation's best interests (in all other cases). In the case of any
criminal proceeding, the finding must be to the effect that the individual had
no reasonable cause to believe the conduct was unlawful. Indemnification is
permitted with respect to expenses, judgements, fines, and amounts paid in
settlement by such individuals.
Indemnification under the ABCA is permissive, except in the event of a
successful defense, in which case a director, officer, employee, or agent must
be indemnified against reasonable expenses, including attorneys' fees, incurred
in connection with the proceeding. In addition, the ABCA requires Arizona
corporations to indemnify any "outside director" (a director who is not an
officer, employee, or holder of five percent or more of any class of the
corporation's stock) against liability unless (i) the corporation's articles of
incorporation limit such indemnification, (ii) the outside director is adjudged
liable in a proceeding by or in the right of the corporation or in any other
proceeding charging improper personal benefit to the director, or (iii) a court
determines, before payment to the outside director, that the director failed to
meet the standards of conduct described in the preceding paragraph. A court may
also order that an individual be indemnified if the court finds that the
individual is fairly and reasonably entitled to indemnification in light of all
of the relevant circumstances, whether or not the individual has met the
standards of conduct in this and the preceding paragraph.
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.
1.2 Form of Underwriting Agreement for Debt Securities.
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 senior Debt Securities.
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 L.L.P.
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 L.L.P. (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 The Bank of New York, 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 subordinated Debt Securities.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Chemical Bank, as Trustee under the Indenture relating to the
senior Debt Securities.
<PAGE>
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 PREVIOUSLY FILED DATE
NO. DESCRIPTION AS EXHIBIT: FILE NO. EFFECTIVE
- --------- -------------------------------- --------------------------------- ---------- ------------
<S> <C> <C> <C> <C>
4.6 Mortgage and deed of trust 4.1 TO SEPTEMBER 1992 FORM 10-Q
relating to company's first Report 1-4473 11-9-92
mortgage bonds, together with
forty-eight indentures
supplemental thereto.
Forty-ninth Supplemental 4.1 to 1992 Form 10-K Report 1-4473 3-30-93
Indenture.
Fiftieth Supplemental Indenture. 4.2 to 1993 Form 10-K Report 1-4473 3-30-94
Fifty-first Supplemental 4.1 to August 1, 1993 Form 8-K
Indenture. Report 1-4473 9-27-93
Fifty-second Supplemental 4.1 to September 30, 1993 Form
Indenture. 10-Q Report 1-4473 11-15-93
Fifty-third Supplemental 4.5 to Registration Statement No.
Indenture. 33-61228 by means of February 23,
1994 Form 8-K Report 1-4473 3-1-94
4.7 Indenture dated as of January 1, 4.6 to January 1, 1995 Form 8-K
1995 among the Company and The Report 1-4473 1-11-95
Bank of New York, as Trustee,
relating to subordinated Debt
Securities.
4.8 First Supplemental Indenture 4.4 to January 1, 1995 Form 8-K
dated as of January 1, 1995, Report 1-4473 1-11-95
relating to the issuance of
$75,000,000 of 10% Junior
Subordinated Deferrable Interest
Debentures, Series A, Due 2025.
4.9 Agreement of Resignation, 4.1 to September 29, 1995 Form
Appointment, Acceptance, and 8-K Report 1-4473 10-24-95
Assignment dated as of August
18, 1995 among the Company,
Bank of America National Trust
and Savings Association and
The Bank of New York.
</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
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided however, that paragraphs (1)(i) and (1)(ii) do not apply if 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) 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.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the provisions referred to
in Item 15 of this Registration Statement, or otherwise, the Company has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer, or controlling person of
the registrant in the successful defense of any action, suit, or proceeding)
is asserted by such director, officer, or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on the 20th day of
November, 1995.
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, William J. Post, Jaron B. Norberg, 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------- -------------------------------- -------------------
<S> <C> <C>
O. MARK DE MICHELE
----------------------------------
(O. Mark De Michele, President Principal Executive Officer
and Chief Executive Officer) and Director November 20, 1995
WILLIAM J. POST
----------------------------------
(William J. Post,
Senior Vice President and Principal Accounting Officer
Chief Operating Officer) and Director November 20, 1995
JARON B. NORBERG
----------------------------------
(Jaron B. Norberg,
Executive Vice President and Principal Financial Officer
Chief Financial Officer) and Director November 20, 1995
KENNETH M. CARR
----------------------------------
(Kenneth M. Carr) Director November 20, 1995
MARTHA O. HESSE
----------------------------------
(Martha O. Hesse) Director November 20, 1995
MARIANNE M. JENNINGS
----------------------------------
(Marianne M. Jennings) Director November 20, 1995
ROBERT G. MATLOCK
----------------------------------
(Robert G. Matlock) Director November 20, 1995
JOHN R. NORTON III
----------------------------------
(John R. Norton III) Director November 20, 1995
DONALD M. RILEY
----------------------------------
(Donald M. Riley) Director November 20, 1995
HENRY B. SARGENT
----------------------------------
(Henry B. Sargent) Director November 20, 1995
WILMA W. SCHWADA
----------------------------------
(Wilma W. Schwada) Director November 20, 1995
VERNE D. SEIDEL
----------------------------------
(Verne D. Seidel) Director November 20, 1995
RICHARD SNELL
----------------------------------
(Richard Snell) Director November 20, 1995
DIANNE C. WALKER
----------------------------------
(Dianne C. Walker) Director November 20, 1995
BEN F. WILLIAMS, JR.
----------------------------------
(Ben F. Williams, Jr.) Director November 20, 1995
THOMAS G. WOODS, JR.
----------------------------------
(Thomas G. Woods, Jr.) Director November 20, 1995
</TABLE>
<PAGE>
REGISTRATION NO. 33-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
EXHIBITS TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------
ARIZONA PUBLIC SERVICE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
===============================================================================
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- -------- ----------------------------------------------------------------------
1.1 Form of Underwriting Agreement for First Mortgage Bonds.
1.2 Form of Underwriting Agreement for Debt Securities.
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 senior Debt Securities.
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 L.L.P.
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 L.L.P. (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 The Bank of NewYork, 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 subordinated Debt Securities.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Chemical Bank, as Trustee under the Indenture relating to the
senior Debt Securities.
For a description of the Exhibits incorporated in this filing by reference
see page II-3.
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 $150,000,000
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 The Bank of New York, as successor 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, a registration statement (No. 33-55473)
relating to $25,000,000 of the Bonds or unsecured debentures, notes, or
other evidences of indebtedness (the "Securities") and a registration
statement (No. ______) relating to $25,000,000 of the Bonds or
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," the
"Second Registration Statement," and the "Third 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 (a) statements
in or omissions from any such documents based upon written information
furnished to the Company by any Underwriter specifically for use
therein or (b) that part of the Registration Statements that consists
of the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of 1939 of The Bank of New York, as successor
Trustee under the Mortgage.
(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, 1994 (the "1994 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 1994 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
interest of the Navajo Tribe in the lands leased, the Company does not
give any representation with respect to the interest of the Navajo
Tribe in 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,
the Third 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, the Third
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, the Third 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 Third
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 Third 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, the Third
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 L.L.P., 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
interest of the Navajo Tribe in 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 set forth or contemplated herein and in
the Prospectus and the Terms Agreement relating to the
Purchased Bonds 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, the Second
Registration Statement, and the Third 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, the Second
Registration Statement, or the Third 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 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, the Third
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 L.L.P. 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 L.L.P. 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 L.L.P. 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 interest of the Navajo Tribe in
the lands leased, such counsel shall not be required to express any
opinion with respect to the interest of the Navajo Tribe in 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 L.L.P. 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, the Second Registration Statement, or the Third 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 Third 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 Third 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.
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Exhibit 1.2
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 $50,000,000
in aggregate principal amount of its unsecured debentures, notes or other
evidences of indebtedness (the "Securities") registered under the registration
statements referred to in Section 2(a). The Securities will be issued under the
Indenture, dated as of , between the Company and
----------------
, 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
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each offering of the Purchased Securities, the Company represents and warrants
to, and agrees with, the Underwriters that:
(a) A registration statement (No. 33-55473) relating to $25,000,000 of
the Securities and a registration statement (No. ) relating to
------
$25,000,000 of the Securities (including a combined prospectus relating to
up to $150,000,000 of the Company's first mortgage bonds) 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
Securities, 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 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 Statements 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 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 (a) statements in or omissions from any such
documents based upon written information furnished to the Company by any
Underwriter specifically for use therein or (b) that part of the
Registration Statements that consists of the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939 of
, as Trustee under the Indenture.
------------------
(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 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 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 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
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 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 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 Second
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 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 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 audited 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 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 L.L.P., 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 set forth or contemplated herein and in the Prospectus
and the Terms Agreement relating to the Purchased Securities 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 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 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 Statements, 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 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
(vii) This Agreement and the Terms Agreement have been duly
authorized, executed, and delivered by the Company.
In giving such opinion, (a) Snell & Wilmer L.L.P. 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 L.L.P. 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 L.L.P. 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 L.L.P. 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 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 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 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
By
-----------------------------------
Exhibit 4.3
ARIZONA PUBLIC SERVICE COMPANY
TO
CHEMICAL BANK
Trustee
--------------
Indenture
Dated as of _____________
--------------
(For Senior Securities)
..............................................................
Certain Sections of this Indenture relating to Sections 310
through 318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
ss.310(a)(1) ............................................. 609
(a) (2) .............................................. 609
(a) (3) .............................................. Not Applicable
(a) (4) .............................................. Not Applicable
(b) .............................................. 608
610
ss.311(a) ............................................. 613
(b) .............................................. 613
ss.312(a) ............................................. 701
702
(b) .............................................. 702
(c) .............................................. 702
ss.313(a) ............................................. 703
(b) .............................................. 703
(c) .............................................. 703
(d) .............................................. 703
ss.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
ss.315(a) ............................................. 601
(b) .............................................. 602
(c) .............................................. 601
(d) .............................................. 601
(e) .............................................. 514
ss.316(a) ............................................. 101
(a) (1)(A) .............................................. 502
512
(a) (1)(B) .............................................. 513
(a) (2) .............................................. Not Applicable
(b) .............................................. 508
(c) .............................................. 104
ss.317(a) (1) ............................................. 503
(a) (2) .............................................. 504
(b) .............................................. 1003
ss.318(a) ............................................. 107
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
This is the MASTER Table of Contents. You may generate the table of contents
which will appear at the very, very end of this document, then change the page
numbers and headings here accordingly.
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 3
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 4
Interest Payment Date 4
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 6
Place of Payment 6
Predecessor Security 6
Redemption Date 6
Redemption Price 6
Regular Record Date 6
Responsible Officer 6
Securities 6
Securities Act 6
Security Register; Security Registrar 6
Special Record Date 7
Stated Maturity 7
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 9
SECTION 105. Notices, Etc., to Trustee and Company 11
SECTION 106. Notice to Holders; Waiver 11
SECTION 107. Conflict with Trust Indenture Act 12
SECTION 108. Effect of Headings and Table of Contents 12
SECTION 109. Successors and Assigns 12
SECTION 110. Separability Clause 12
SECTION 111. Benefits of Indenture 12
SECTION 112. Governing Law 13
SECTION 113. Legal Holidays 13
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally 13
SECTION 202. Form of Face of Security 14
SECTION 203. Form of Reverse of Security 16
SECTION 204. Form of Legend for Global Securities 21
SECTION 205. Form of Trustee's Certificate of Authentication 21
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series 21
SECTION 302. Denominations 24
SECTION 303. Execution, Authentication, Delivery and Dating 25
SECTION 304. Temporary Securities 26
SECTION 305. Registration, Registration of Transfer and Exchange 27
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities 29
SECTION 307. Payment of Interest; Interest Rights Preserved 29
SECTION 308. Persons Deemed Owners 31
SECTION 309. Cancellation 31
SECTION 310. Computation of Interest 31
SECTION 311. CUSIP Numbers 31
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture 32
SECTION 402. Application of Trust Money 33
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default 33
SECTION 502. Acceleration of Maturity; Rescission and Annulment 35
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee 36
SECTION 504. Trustee May File Proofs of Claim 37
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities 37
SECTION 506. Application of Money Collected 37
SECTION 507. Limitation on Suits 38
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest 39
SECTION 509. Restoration of Rights and Remedies 39
SECTION 510. Rights and Remedies Cumulative 39
SECTION 511. Delay or Omission Not Waiver 39
SECTION 512. Control by Holders 40
SECTION 513. Waiver of Past Defaults 40
SECTION 514. Undertaking for Costs 41
SECTION 515. Waiver of Usury, Stay or Extension Laws 41
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities 41
SECTION 602. Notice of Defaults 42
SECTION 603. Certain Rights of Trustee 42
SECTION 604. Not Responsible for Recitals or Issuance of Securities 43
SECTION 605. May Hold Securities 43
SECTION 606. Money Held in Trust 43
SECTION 607. Compensation and Reimbursement 44
SECTION 608. Conflicting Interests 44
SECTION 609. Corporate Trustee Required; Eligibility 45
SECTION 610. Resignation and Removal; Appointment of Successor 45
SECTION 611. Acceptance of Appointment by Successor 47
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business 48
SECTION 613. Preferential Collection of Claims Against Company 48
SECTION 614. Appointment of Authenticating Agent 49
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders 51
SECTION 702. Preservation of Information; Communications
to Holders 51
SECTION 703. Reports by Trustee 52
SECTION 704. Reports by Company 52
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on
Certain Terms 52
SECTION 802. Successor Substituted 53
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders 54
SECTION 902. Supplemental Indentures With Consent of Holders 55
SECTION 903. Execution of Supplemental Indentures 56
SECTION 904. Effect of Supplemental Indentures 56
SECTION 905. Conformity with Trust Indenture Act 56
SECTION 906. Reference in Securities to Supplemental Indentures 57
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest 57
SECTION 1002. Maintenance of Office or Agency 57
SECTION 1003. Money for Securities Payments to Be Held in Trust 58
SECTION 1004. Statement by Officers as to Default 59
SECTION 1005. Existence 59
SECTION 1006. Maintenance of Properties 60
SECTION 1007. Payment of Taxes and Other Claims 60
SECTION 1008. Waiver of Certain Covenants 60
SECTION 1009. Calculation of Original Issue Discount 61
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article 61
SECTION 1102. Election to Redeem; Notice to Trustee 61
SECTION 1103. Selection by Trustee of Securities to Be Redeemed 62
SECTION 1104. Notice of Redemption 62
SECTION 1105. Deposit of Redemption Price 63
SECTION 1106. Securities Payable on Redemption Date 64
SECTION 1107. Securities Redeemed in Part 64
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article 64
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities 65
SECTION 1203. Redemption of Securities for Sinking Fund 65
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or
Covenant Defeasance 66
SECTION 1302. Defeasance and Discharge 66
SECTION 1303. Covenant Defeasance 67
SECTION 1304. Conditions to Defeasance or Covenant Defeasance 67
SECTION 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions 69
SECTION 1306. Reinstatement 70
TESTIMONIUM 71
SIGNATURES AND SEALS 71
ACKNOWLEDGEMENTS 72
INDENTURE, dated as of _________, 1995, 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 Chemical Bank, 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,
and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States of America;
(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 office of the Trustee in the City of New
York, New York at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located at
450 West 33rd Street, New York, New York 10001.
"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 senior trust officer, 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.
"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 representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 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 registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
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 or revoke
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 or to revoke
the same, 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 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, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or 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 ______________, 1995 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Chemical Bank, 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 installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert__ The Securities of this series are subject to
redemption upon not less than 30 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 Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert__ Notwithstanding the foregoing, the Company may not,
prior to ............., redeem any Securities of this series as contemplated by
[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__ 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 therefor 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.
CHEMICAL BANK,
As Trustee
By...................................
Authorized Officer
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 (if any) 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) 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 fully 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 of an authorized officer, 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 denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of 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 denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
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 or in any other
office or agency of the Company in a Place of Payment being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities 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, 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 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 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 composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 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 bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate action
by the Company in furtherance of any such action; or
(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;
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 payable on such
Securities for principal and any premium and interest, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other
Person or Persons legally entitled thereto.
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,
(2) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
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 administration 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 upon 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.
Without limiting any rights available to the Trustee under applicable law,
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 exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States 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 Authenticating 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 Authenticating
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
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
CHEMICAL BANK,
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) fifteen days after 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(19), 901(2) or 901(7)
for the benefit of the Holders of such series or in any of Sections 1006 through
1007 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 (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction or
condition.
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 and of a
specified tenor consisting of more than a single Security are to be redeemed,
the identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be redeemed
and, if less than all the Outstanding Securities of any series and of a
specified tenor 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, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 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 stating the basis for such credit and that such Securities have
not been previously so credited 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 Sections 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 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 and with respect to the Trustee under Section 607, (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), 901(6) 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), 901(6) or
901(7)) and 501(7) shall be deemed not to be or result in an Event of Default
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)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 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 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 to pay and discharge,
the principal of and any premium and interest on such Securities on the
respective Stated Maturities or on any Redemption Date established pursuant to
clause (9) below, 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) If the Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of
such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made.
(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 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.
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.
-----------------------------
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......................................
Treasurer
Attest:
......................................
CHEMICAL BANK, as Trustee
By......................................
Vice President
Attest:
......................................
STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On the .... day of________, before me personally came Nancy E. Newquist, to
me known, who, being by me duly sworn, did depose and say that she is Treasurer
of Arizona Public Service Company, one of the corporations described in and
which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that she signed her 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 Vice President
of Chemical Bank, 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.
..............................
Exhibit 5.1
November 20, 1995
Arizona Public Service Company
400 North Fifth Street
Phoenix, Arizona 85004
Ladies and Gentlemen:
Reference is made to (a) your proposed offering of up to $150,000,000 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 November 20, 1995, with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), which
Securities include (i) $25,000,000 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, (ii)
$25,000,000 of either New Bonds or Debt Securities previously registered under
Registration No. 33-55473, and (iii) $100,000,000 of First Mortgage Bonds
previously registered under Registration No. 33-61228; and (b) any registration
statement registering additional Securities pursuant to Rule 462(b) of the Act
that relates to the Registration Statement (the "Rule 462(b) Registration
Statement").
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, and the Rule 462(b) Registration Statement, if
applicable, 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, and the Rule 462(b)
Registration Statement, if applicable, 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, and the Rule 462(b) Registration Statement, if
applicable, and to the use of our name wherever it appears in said Registration
Statement, the related prospectus, and the Rule 462(b) Registration Statement,
if applicable.
Very truly yours,
Snell & Wilmer L.L.P.
EXHIBIT 12.1
ARIZONA PUBLIC SERVICE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
-----------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
--------------- -------------------------------------------------------------------------
1991
1995 1994 1993 1992 1991 (A) ADJUSTED (A) 1990
--------------- ---------- ----------- ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net Income ........................ $242,529 $243,486 $ 250,386 $ 246,805 $ (222,649) $ 184,380 $ 180,012
Income taxes (1) .................. 149,612 177,244 188,907 181,355 (94,750) 128,801 126,831
Fixed Charges ..................... 215,061 213,581 220,590 246,246 281,959 281,959 292,117
--------------- ---------- ----------- ----------- ------------- ------------ -----------
Total ........................... $607,202 $634,311 $ 659,883 $ 674,406 $ (35,440) $ 595,140 $ 598,960
=============== ========== =========== =========== ============= ============ ===========
Fixed Charges:
Interest expense .................. $168,764 $166,045 $ 171,272 $ 190,746 $ 227,624 $ 227,624 $ 239,992
Amortization of debt discount,
premium and expense .............. 8,136 8,854 9,203 8,000 5,995 5,995 5,302
Estimated interest portion of
annual rentals (2) ............... 38,161 38,682 40,115 47,500 48,340 48,340 46,823
--------------- ---------- ----------- ----------- ------------- ------------ -----------
Total ........................... $215,061 $213,581 $ 220,590 $ 246,246 $ 281,959 $ 281,959 $ 292,117
=============== ========== =========== =========== ============= ============ ===========
Ratio of Earnings to Fixed Charges
(rounded down) ...................... 2.82 2.96 2.99 2.73 -0.13 2.11 2.05
=============== ========== =========== =========== ============= ============ ===========
(1) Income Taxes:
Charged to operations .............. $181,011 $168,202 $ 168,056 $ 164,620 $ 96,273 $ 117,408 $ 106,044
Charged (credited) to other
accounts .......................... (31,399) 9,042 20,851 16,735 (191,023) 11,393 20,787
--------------- ---------- ----------- ----------- ------------- ------------ -----------
Total ........................... $149,612 $177,244 $ 188,907 $ 181,355 $ (94,750) $ 128,801 $ 126,831
=============== ========== =========== =========== ============= ============ ===========
(2) Estimated interest portion of
Unit 2 lease payments included
in estimated interest portion
of annual rentals ................ $ 34,485 $ 35,710 $ 37,407 $ 43,581 $ 43,625 $ 43,625 $ 43,666
=============== ========== =========== =========== ============= ============ ===========
- ----------
(a) The write-off resulting from a December 1991 Arizona Corporation Commission
order settling the Company's then-pending rate case 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.
</TABLE>
Exhibit 15.1
November 17, 1995
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,
June 30 and September 30, 1995 and 1994, as indicated in our reports dated May
8, August 8, and November 2, 1995, 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 are included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30,
1995, and September 30, 1995 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 a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the 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 March 3, 1995,
appearing in the Annual Report on Form 10-K of Arizona Public Service Company
for the year ended December 31, 1994 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
November 17, 1995
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
400 North Fifth Street Phoenix, Arizona 85004
(Address of principal executive offices) (Zip code)
-----------------
First Mortgage Bonds*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with sale(s) of First Mortgage
Bonds
Item 1. General Information.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
Item 16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- -------------------------------
*Pursuant to General Instruction B, the Trustee has responded only to Items
1, 2 and 16 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 14th day of November, 1995.
THE BANK OF NEW YORK
By: ROBERT F. MCINTYRE
---------------------------------
Robert F. McIntyre
Assistant Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business June 30, 1995, 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
depository institutions:
Noninterest-bearing balances
and currency and coin ................................ $ 3,025,419
Interest-bearing balances ............................... 881,413
Securities:
Held-to-maturity securities ............................. 1,242,368
Available-for-sale securities ........................... 1,774,079
Federal funds sold in domestic
offices of the bank ..................................... 5,503,445
Securities purchased under
agreements to resell .................................... 200,634
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................26,599,533
LESS: Allowance for loan and
lease losses ..............516,283
Loans and leases, net of unearned
income and allowance ................................ 26,083,250
Assets held in trading accounts ........................... 1,455,639
Premises and fixed assets (including
capitalized leases) ..................................... 612,547
Other real estate owned ................................... 79,667
Investments in unconsolidated subsid-
iaries and associated companies ......................... 198,737
Customers' liability to the bank on
acceptances outstanding ................................. 1,111,464
Intangible assets ......................................... 105,263
Other assets .............................................. 1,237,264
-----------
Total assets .............................................. $43,511,189
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices ..................................... $ 19,233,885
Noninterest-bearing ..... 7,677,954
Interest-bearing ........11,555,931
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ........................ 12,641,676
Noninterest-bearing .........72,479
Interest-bearing ........12,569,197
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement subsid-
iaries, and in IBFs:
Federal funds purchased ................................. 1,747,659
Securities sold under agreements
to repurchase ......................................... 73,553
Demand notes issued to the U.S.
Treasury ................................................ 300,000
Trading liabilities ....................................... 738,317
Other borrowed money:
With original maturity of one year or less .............. 1,586,443
With original maturity of more than
one year .............................................. 220,877
Bank's liability on acceptances
executed and outstanding .............................. 1,113,102
Subordinated notes and debentures ......................... 1,053,860
Other liabilities ......................................... 1,489,252
------------
Total liabilities ......................................... 40,198,624
------------
EQUITY CAPITAL
Common stock .............................................. 942,284
Surplus ................................................... 525,666
Undivided profits and capital
reserves ................................................ 1,849,221
Net unrealized holding gains (losses)
on available-for-sale securities ........................ ( 662)
Cumulative foreign currency
translation adjustments ................................. ( 3,944)
------------
Total equity capital ...................................... 3,312,565
------------
Total liabilities and equity capital ...................... $ 43,511,189
============
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Samuel F. Chevalier)
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of obligor as specified in its charter)
Arizona 86-0011170
(State or other jurisdiction (I.R.S. Employer
of 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)
*Specific title(s) to be determined in connection with sale(s) of Debt
Securities
Item 1. General Information.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
Item 16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- -----------------------------------------
*Pursuant to General Instruction B, the Trustee has responded only to
Items 1, 2 and 16 of this form since to the best of the knowledge of the Trustee
the obligor is not in default under any indenture under which the Trustee is a
trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 14th day of November, 1995.
THE BANK OF NEW YORK
By: ROBERT F. MCINTYRE
--------------------------------
Robert F. McIntyre
Assistant Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business June 30, 1995, 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
depository institutions:
Noninterest-bearing balances
and currency and coin ................................ $ 3,025,419
Interest-bearing balances ............................... 881,413
Securities:
Held-to-maturity securities ............................. 1,242,368
Available-for-sale securities ........................... 1,774,079
Federal funds sold in domestic
offices of the bank ..................................... 5,503,445
Securities purchased under
agreements to resell .................................... 200,634
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................26,599,533
LESS: Allowance for loan and
lease losses ..............516,283
Loans and leases, net of unearned
income and allowance ................................ 26,083,250
Assets held in trading accounts ........................... 1,455,639
Premises and fixed assets (including
capitalized leases) ..................................... 612,547
Other real estate owned ................................... 79,667
Investments in unconsolidated subsid-
iaries and associated companies ......................... 198,737
Customers' liability to the bank on
acceptances outstanding ................................. 1,111,464
Intangible assets ......................................... 105,263
Other assets .............................................. 1,237,264
-----------
Total assets .............................................. $43,511,189
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices ..................................... $ 19,233,885
Noninterest-bearing .....7,677,954
Interest-bearing .......11,555,931
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ........................ 12,641,676
Noninterest-bearing ........72,479
Interest-bearing .......12,569,197
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement subsid-
iaries, and in IBFs:
Federal funds purchased ................................. 1,747,659
Securities sold under agreements
to repurchase ......................................... 73,553
Demand notes issued to the U.S.
Treasury ................................................ 300,000
Trading liabilities ....................................... 738,317
Other borrowed money:
With original maturity of one year or less .............. 1,586,443
With original maturity of more than
one year .............................................. 220,877
Bank's liability on acceptances
executed and outstanding .............................. 1,113,102
Subordinated notes and debentures ......................... 1,053,860
Other liabilities ......................................... 1,489,252
------------
Total liabilities ......................................... 40,198,624
------------
EQUITY CAPITAL
Common stock .............................................. 942,284
Surplus ................................................... 525,666
Undivided profits and capital
reserves ................................................ 1,849,221
Net unrealized holding gains (losses)
on available-for-sale securities ........................ ( 662)
Cumulative foreign currency
translation adjustments ................................. ( 3,944)
------------
Total equity capital ...................................... 3,312,565
------------
Total liabilities and equity capital ...................... $ 43,511,189
============
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Samuel F. Chevalier)
Exhibit 25.3
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
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)
-----------------------------------------------------
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, 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 3rd day of November, 1995.
CHEMICAL BANK
By T. J. Foley
----------------------------------
T. J. Foley
Vice President
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1995, 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 Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .......................................... $ 5,573
Interest-bearing balances .................................. 2,681
Securities:
Held to maturity securities ..................................... 6,027
Available for sale securities ................................... 18,304
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 IBF's:
Federal funds sold ......................................... 1,516
Securities purchased under agreements to resell ............ 287
Loans and lease financing receivables:
Loans and leases, net of unearned income .......... $ 73,829
Less: Allowance for loan and lease losses ......... 1,885
Less: Allocated transfer risk reserve ............. 104
--------
Loans and leases, net of unearned income,
allowance, and reserve ..................................... 71,840
Trading Assets .................................................. 25,315
Premises and fixed assets (including capitalized
leases) .................................................... 1,395
Other real estate owned ......................................... 69
Investments in unconsolidated subsidiaries and
associated companies ....................................... 158
Customer's liability to this bank on acceptances
outstanding ................................................ 1,120
Intangible assets ............................................... 484
Other assets .................................................... 7,254
--------
TOTAL ASSETS .................................................... $142,023
========
<PAGE>
LIABILITIES
Deposits
In domestic offices ......................................... $ 46,128
Noninterest-bearing ............................... $ 16,282
Interest-bearing .................................. 29,846
---------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ................................................... 30,833
Noninterest-bearing .................................... $ 199
Interest-bearing .................................. 30,634
---------
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ..................................... 16,779
Securities sold under agreements to repurchase .............. 810
Demand notes issued to the U.S. Treasury ......................... 1,001
Trading liabilities .............................................. 20,888
Other Borrowed money:
With original maturity of one year or less .................. 6,505
With original maturity of more than one year ..................... 602
Mortgage indebtedness and obligations under capitalized
leases ...................................................... 18
Bank's liability on acceptances executed and outstanding ......... 1,126
Subordinated notes and debentures ................................ 3,411
Other liabilities ................................................ 6,287
TOTAL LIABILITIES ................................................ 134,388
---------
EQUITY CAPITAL
Common stock ..................................................... 620
Surplus .......................................................... 4,524
Undivided profits and capital reserves ........................... 2,724
Net unrealized holding gains (Losses)
on available-for-sale securities ................................. (241)
Cumulative foreign currency translation adjustments .............. 8
TOTAL EQUITY CAPITAL ............................................. 7,635
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .................................... $ 142,023
=========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
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 appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
