UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-10042
ATMOS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 75-1743247
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1800 Three Lincoln Centre
5430 LBJ Freeway, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
(214) 934-9227
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X .No .
Number of shares outstanding of each of the issuer's classes of
common stock, as of July 27, 1994.
Class Shares Outstanding
------------ ------------------
No Par Value 15,261,505<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
ATMOS ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, September 30,
1994 1993
--------- -------------
ASSETS (Unaudited)
Property, plant and equipment $537,276 $501,512
Less accumulated depreciation and
amortization 218,199 202,237
-------- --------
Net property, plant and equipment 319,077 299,275
Current assets
Cash and cash equivalents 961 2,286
Accounts receivable, net 36,801 29,200
Inventories 6,025 6,064
Gas stored underground 8,596 17,603
Other current assets 2,340 4,240
-------- --------
Total current assets 54,723 59,393
Deferred charges and other assets 37,374 32,950
-------- --------
$411,174 $391,618
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock outstanding: 15,249,954
shares at 6/30/94 and 14,868,902
shares at 9/30/93 $ 76 $ 74
Additional paid-in capital 101,476 94,279
Retained earnings 54,811 45,076
-------- --------
Total shareholders' equity 156,363 139,429
Long-term debt 98,303 105,853
-------- --------
Total capitalization 254,666 245,282
Current liabilities
Current maturities of long-term debt 4,000 6,300
Notes payable to banks 33,600 35,700
Accounts payable 31,667 27,803
Taxes payable 7,442 3,797
Customers' deposits 8,167 7,862
Other current liabilities 8,608 6,455
-------- --------
Total current liabilities 93,484 87,917
Deferred income taxes 30,200 32,614
Deferred credits and other liabilities 32,824 25,805
-------- --------
$411,174 $391,618
======== ========
See accompanying notes to consolidated financial statements.
2<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Three months ended
June 30,
-----------------------
1994 1993
-------- --------
Operating revenues $ 90,013 $ 91,219
Purchased gas cost 58,223 56,756
-------- --------
Gross profit 31,790 34,463
Operating expenses
Operation 20,796 20,543
Maintenance 1,634 1,626
Depreciation and amortization 4,941 4,454
Taxes, other than income 3,673 3,640
Income taxes (benefit) (687) 353
------- --------
Total operating expenses 30,357 30,616
------- --------
Operating income 1,433 3,847
Other income 203 73
Interest charges 2,860 3,089
------- --------
Net income (loss) $(1,224) $ 831
======= =======
Net income (loss) per share $ (.08) $ .06
======= =======
Cash dividends per share
(See Note 2) $ .22 $ .21
======= =======
Average shares outstanding 15,233 14,681
======= =======
See accompanying notes to consolidated financial statements.
3<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Nine months ended
June 30,
-----------------------
1994 1993
-------- --------
Operating revenues $422,458 $388,157
Purchased gas cost 282,881 252,450
-------- --------
Gross profit 139,577 135,707
Operating expenses
Operation 67,815 62,569
Maintenance 4,630 4,595
Depreciation and amortization 14,280 13,353
Taxes, other than income 14,020 13,632
Income taxes 10,752 11,104
-------- --------
Total operating expenses 111,497 105,253
-------- --------
Operating income 28,080 30,454
Other income 288 589
Interest charges 9,262 9,687
-------- --------
Net income $ 19,106 $ 21,356
======== ========
Net income per share $ 1.26 $ 1.47
======== ========
Cash dividends per share
(See Note 2) $ .66 $ .64
======== ========
Average shares outstanding 15,168 14,556
======== ========
See accompanying notes to consolidated financial statements.
4<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Twelve months ended
June 30,
-----------------------
1994 1993
-------- --------
Operating revenues $493,942 $455,346
Purchased gas cost 326,963 294,452
-------- --------
Gross profit 166,979 160,894
Operating expenses
Operation 88,025 81,652
Maintenance 6,370 5,939
Depreciation and amortization 18,246 17,334
Taxes, other than income 17,194 16,624
Income taxes 9,721 9,038
-------- --------
Total operating expenses 139,556 130,587
-------- --------
Operating income 27,423 30,307
Other income 249 422
Interest charges 12,377 12,899
-------- --------
Net income $ 15,295 $ 17,830
======== ========
Net income per share $ 1.02 $ 1.26
======== ========
Cash dividends per share
(See Note 2) $ .87 $ .85
======== ========
Average shares outstanding 15,045 14,142
======== ========
See accompanying notes to consolidated financial statements.
5<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine months ended
June 30,
-----------------------
1994 1993
-------- --------
Cash Flows From Operating Activities
Net income $ 19,106 $ 21,356
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization
Charged to depreciation and
amortization 14,280 13,353
Charged to other accounts 2,092 3,032
Deferred income taxes (2,414) 1,832
Other 605 390
-------- --------
33,669 39,963
Net change in operating assets and
liabilities 15,302 6,127
-------- --------
Net cash provided by operating
activities 48,971 46,090
Cash Flows From Investing Activities
Capital expenditures (35,682) (30,387)
Retirements of property, plant and
equipment (492) 57
-------- --------
Net cash used in investing activities (36,174) (30,330)
Cash Flows From Financing Activities
Net decrease in notes payable to banks (2,100) (12,153)
Cash dividends and distributions paid (9,371) (7,089)
Repayment of long-term debt (9,850) (4,800)
Issuance of common stock 7,199 8,736
-------- --------
Net cash used in financing
activities (14,122) (15,306)
-------- --------
Net increase (decrease) in cash and cash
equivalents (1,325) 454
Cash and cash equivalents at beginning
of period 2,286 3,144
-------- --------
Cash and cash equivalents at end
of period $ 961 $ 3,598
======== ========
See accompanying notes to consolidated financial statements.
6<PAGE>
ATMOS ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1994
1. Unaudited interim financial information
In the opinion of management, all material adjustments necessary
for a fair presentation have been made to the unaudited interim
period financial statements. Such adjustments consisted only of
normal recurring accruals. Because of seasonal and other fac-
tors, the results of operations for the nine month period ended
June 30, 1994 are not indicative of expected results of opera-
tions for the year ending September 30, 1994. These interim
financial statements and notes are condensed as permitted by the
instructions to Form 10-Q, and should be read in conjunction with
the audited consolidated financial statements in the Form 8-K of
Atmos Energy Corporation ("Atmos" or the "Company"), filed July
21, 1994, restating Atmos' 1993 financial statements to include
Greeley Gas Company (See Note 2).
Deferred charges and other assets - Deferred charges and other
assets at June 30, 1994 and September 30, 1993 include assets of
the Company's qualified defined benefit retirement plans in
excess of the plans' recorded obligations in the amounts of
$12,528,000 and $13,289,000, respectively, and Company assets
related to the Company's nonqualified retirement plans at June
30, 1994 and September 30, 1993 of $16,640,000 and $12,758,000,
respectively.
Stock split - As of June 30, 1994, the Company had 50,000,000
shares of common stock, no par value (stated at $.005 per share),
authorized and 15,249,954 shares outstanding. On February 9,
1994, the Board of Directors of Atmos approved a three-for-two
split of its common stock implemented in the form of a stock
dividend, which resulted in shareholders receiving one new share
for every two shares previously held. Fractional shares were not
issued but were paid in cash or credited to the accounts of
participants of the Dividend Reinvestment and Stock Purchase Plan
("DRSPP") and ESOP. The record date for the split was May 4,
1994 and the payment date for mailing the new shares and cash for
fractional shares to shareholders was May 16, 1994. Shares
outstanding increased from approximately 10 million to slightly
more than 15 million. All share information in this report is
adjusted for the 3-for-2 stock split unless otherwise noted.
Reclassifications - Certain prior period balances have been
reclassified to be consistent between Atmos and Greeley Gas
Company (see Note 2) and to make classification of prior year
amounts consistent with the 1994 presentation.
2. Business combination
On December 22, 1993, Atmos acquired by means of a merger all of
the assets and liabilities of Greeley Gas Company ("GGC") in
7<PAGE>
accordance with the terms and provisions of an Agreement and Plan
of Reorganization dated July 2, 1993. All the shares of GGC's
common stock were exchanged for a total of 2,329,330 shares of
Atmos common stock before the 3-for-2 stock split (3,493,995
shares on a post-split basis).
GGC was a privately owned natural gas utility and is engaged in
the distribution and sale of natural gas to residential, commer-
cial, industrial, agricultural, and other customers throughout
Colorado, Kansas, and a small portion of Missouri.
This transaction was accounted for as a pooling of interests;
therefore, prior year financial statements have been restated to
reflect this merger. GGC prepared its financial statements on a
December 31 fiscal year end. GGC's fiscal year has been changed
to September 30 to conform to the Company's year end. The Sep-
tember 30, 1993 balances, as presented, are the combined balances
of Atmos and GGC reflecting the pooling of interests of the
companies that occurred on December 22, 1993. The restated
consolidated statements of income and cash flows presented herein
for the three-month, nine-month and twelve-month periods ended
June 30, 1994 and 1993 include GGC's operating results for the
full period presented. Results of operations for the previously
separate enterprises for the three months ended June 30, 1994 and
1993 are summarized as follows:
Three months ended June 30,
-----------------------
1994 1993
-------- --------
(In thousands)
Operating revenue:
Atmos $ 76,768 $ 77,176
GGC 13,245 14,043
-------- --------
$ 90,013 $ 91,219
======== ========
Net income (loss):
Atmos $ (32) $ 1,256
GGC (1,192) (425)
-------- --------
$ (1,224) $ 831
======== ========
8<PAGE>
Operating revenue and net income included in the Company's conso-
lidated statements of income for the nine months ended June 30,
1994 and 1993 are as follows:
Nine months ended June 30,
-----------------------
1994 1993
-------- --------
(In thousands)
Operating revenue:
Atmos $353,627 $325,747
GGC 68,831 62,410
-------- --------
$422,458 $388,157
======== ========
Net income:
Atmos $ 15,161 $ 18,016
GGC 3,945 3,340
-------- --------
$ 19,106 $ 21,356
======== ========
Operating revenue and net income included in the Company's con-
solidated statements of income for the twelve months ended June
30, 1994 and 1993 are as follows:
Twelve months ended June 30,
-----------------------
1994 1993
-------- --------
(In thousands)
Operating revenue:
Atmos $416,375 $384,691
GGC 77,567 70,655
-------- --------
$493,942 $455,346
======== ========
Net income:
Atmos $ 11,924 $ 16,009
GGC 3,371 1,821
-------- --------
$ 15,295 $ 17,830
======== ========
9<PAGE>
The dividends per share presentation on the consolidated state-
ment of income reflects historical Atmos dividends per share and
has not been restated under the pooling of interests method of
accounting for the merger. The historical and restated cash
dividends and distributions per share of Atmos are as follows:
Three months ended June 30,
-----------------------
1994 1993
-------- --------
Historical Atmos cash
dividends per share $.22 $.21
Restated cash dividends and
distributions per share,
including GGC $.22 $.17
Nine months ended June 30,
-----------------------
1994 1993
-------- --------
Historical Atmos cash
dividends per share $.66 $.64
Restated cash dividends and
distributions per share,
including GGC $.62 $.49
Twelve months ended June 30,
-----------------------
1994 1993
-------- --------
Historical Atmos cash
dividends per share $.87 $.85
Restated cash dividends and
distributions per share,
including GGC $.80 $.65
3. Accounting for income taxes
Effective October 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109") and, as permitted under the new rules,
prior years' financial statements have not been restated. A
regulatory liability reflecting the expected future rate treat-
ment of approximately $2,673,000 in deferred tax deductions has
been recorded in accordance with SFAS No. 109 and is included in
other deferred credits. The effect of applying the new standard
in the first nine months of fiscal 1994 had no significant effect
on net income.
This standard changes the Company's method of accounting for
income taxes from the deferred method (APB 11) to the liability
method. Previously the Company deferred the past tax effects of
10<PAGE>
timing differences between financial reporting and taxable in-
come. Under the liability method of SFAS No. 109, deferred tax
assets and liabilities are recognized for the estimated future
tax effects of differences between the financial statement carry-
ing amounts of existing assets and liabilities and their respec-
tive tax bases.
4. Other postretirement benefits
Effective October 1, 1993, the Company adopted Financial Account-
ing Standards No. 106 ("SFAS No. 106"), the "Employers' Account-
ing for Postretirement Benefits Other Than Pensions". SFAS No.
106 focuses principally on postretirement health care benefits
and will significantly change the practice of accounting for
postretirement benefits on a pay-as-you-go basis by requiring
accrual of such benefit costs on an actuarial basis over the
active service period of employees to the date of full eligibili-
ty for such benefits. The Company is amortizing on a straight
line basis the initial transition obligation of $33,354,000 over
20 years. The effect of adopting the new rules increased net
periodic postretirement benefit cost for the nine months ended
June 30, 1994 by $2,231,000 and decreased net income for the
period by $1,427,000.
Atmos sponsors two defined benefit postretirement plans other
than pensions. One plan provides medical, dental, vision and
life insurance benefits to retired employees of Greeley Gas
Company. The other offers medical benefits to all other Atmos
employees. Substantially all of the Company's employees may
become eligible for these benefits if they reach retirement age
while working for the Company and attain 10 consecutive years of
service. Both the plan participant and the participant's spouse
are required to contribute under these plans. The Atmos plan is
not currently funded. During the quarter ended June 30, 1994,
the Company made its first payment to the external trust set up
to fund SFAS No. 106 costs in excess of the pay-as-you-go cost in
Kansas in accordance with an order of the Kansas Corporation
Commission. The amount of funding will ultimately depend upon
the ratemaking treatment allowed in the Company's various rate
jurisdictions.
The following is a reconciliation of the funded status of the
plans to the net postretirement benefits liability on the balance
sheet as of September 30, 1993 (in thousands):
Accumulated postretirement benefit obligation
Retirees $(18,237)
Fully eligible employees (8,596)
Other employees (6,521)
--------
$(33,354)
========
11<PAGE>
Accumulated postretirement benefit obligation
in excess of plan assets $(33,354)
Unrecognized transition obligation 33,354
--------
Accrued postretirement benefits liability $ -
========
In the latest actuarial calculation of the accrued postretirement
benefits liability, the assumed health care cost trend rate used
to estimate the cost of postretirement benefits was 10.5% for the
1993-1994 year and is assumed to decrease gradually to 5.0% for
1999-2000 and remain at that level thereafter. Similarly, the
dental trend rate is 8.0% for the 1993-1994 year and gradually
decreases to 5.0% for 1999-2000 and remains level thereafter.
The trend for vision benefits is assumed to remain level for all
years at 4.5%. The effect of a 1% increase in the assumed health
care cost trend rate for each future year is $410,000 on the
annual aggregate of the service and interest cost components of
net periodic postretirement benefit costs and $2,793,000 on the
accumulated postretirement benefit obligation as of September 30,
1993. Other assumptions used in postretirement benefit account-
ing are as follows:
Discount rate - rate at which liabilities
could be settled 7.0%
Rate of increase in compensation levels 5.0%
The Company is currently allowed to recover other postretirement
benefit ("OPEB") costs through its regulated rates on a pay-as-
you-go basis in a majority of its service areas. It is allowed
to recover OPEB costs in its remaining service areas under SFAS
No. 106 accrual accounting. The rate recovery of SFAS No. 106
cost by jurisdiction is discussed below. Management believes
that accrual accounting in accordance with SFAS No. 106 is appro-
priate and will seek rate recovery of accrual-based expenses in
all of its ratemaking jurisdictions. The portion of the addi-
tional expense in excess of the pay-as-you-go amount that will
immediately or ultimately be allowed in rates cannot presently be
determined. The difference of $2,231,000 between the level of
expense using SFAS No. 106 and that using the prior accounting
method for the nine months ended June 30, 1994 was expensed and
no regulatory asset was recorded.
In May 1993, the Louisiana Commission issued an order for all
utilities under its jurisdiction to continue to use the pay-as-
you-go accounting method for rate treatment of SFAS No. 106
costs. Utilities may apply to the Louisiana Commission for
authority to recognize a regulatory asset to be amortized on a
pay-as-you-go basis to bridge the gap between ratemaking and
accounting. The Louisiana Commission retains the flexibility to
examine individual companies' accounting for SFAS No. 106 costs
to determine if special exceptions to this order are warranted.
12<PAGE>
Recovery of SFAS No. 106 costs were not allowed in the Company's
Rate Stabilization Clause increase implemented March 1, 1994.
In June 1992, the Kentucky Public Service Commission ("Kentucky
Commission") declined a request by a group of utilities to grant
a blanket commitment for the future recovery of SFAS No. 106
costs in excess of pay-as-you-go costs for all utilities. The
Kentucky Commission's order stated that each utility could file
an individual application to seek recovery of such costs. At a
rehearing held in December 1992, the Kentucky Commission affirmed
its initial order.
In May 1993, the Company filed rate requests which included SFAS
No. 106 costs in Fritch and Sanford, Texas and for the surround-
ing environs. The rates for the environs are subject to the
jurisdiction of the Railroad Commission of Texas ("Railroad
Commission"). In its order of August 30, 1993, the Railroad
Commission approved recovery of SFAS No. 106 costs and internal
funding.
In September 1993, GGC filed a rate request for its Colorado
service area which included SFAS No. 106 costs. In May 1994, the
Company began implementing new rates in its Colorado service
area. The new rates will increase annual revenues by $3,200,000
and include recovery of accrual-based SFAS No. 106 costs.
In its December 1993, rate order to GGC, the Kansas Corporation
Commission approved recovery of SFAS No. 106 expenses with the
agreement that the difference between amounts computed as SFAS
No. 106 expense and pay-as-you-go expense shall be remitted
quarterly to an external trust fund.
The ultimate impact of the adoption of SFAS No. 106 on the Com-
pany's financial position and results of operations will not be
known with certainty until the regulatory treatment that will be
allowed in each of the Company's ratemaking jurisdictions is
determined.
5. Postemployment benefits
The Company also provides postemployment benefits, primarily
workers' compensation and long-term disability insurance, to
former or inactive employees after employment but before retire-
ment. The Financial Accounting Standards Board has issued State-
ment of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" ("SFAS No. 112"), which
applies to such benefits and will be effective for the Company's
1995 fiscal year. Under SFAS No. 112, employers are required to
recognize the obligation to provide postemployment benefits if
certain conditions are met. Postemployment benefit costs are
currently recorded and recovered in rates on the pay-as-you-go
basis. The rate treatment of SFAS No. 112 accrual based costs
has not been determined at this time. The reduction in future
earnings, if any, that would result from this accrual would be
offset to the extent that it is approved to be recovered in
13<PAGE>
rates. Based on a preliminary actuarial study, the Company
currently estimates the cumulative effect of implementation of
SFAS No. 112 and the increase in future annual costs to be mini-
mal.
6. Contingencies
On March 15, 1991, suit was filed in the 15th Judicial District
Court of Lafayette Parish, Louisiana, by the "Lafayette Daily
Advertiser" and others against the Trans La Division, Trans
Louisiana Industrial Gas Company, Inc. ("TLIG"), a wholly owned
subsidiary of the Company, and Louisiana Intrastate Gas Corpora-
tion and certain of its affiliates ("LIG"). LIG is the Company's
primary supplier of natural gas in Louisiana and is not otherwise
affiliated with the Company.
The plaintiffs purported to represent a class consisting of all
residential and commercial gas customers in the Trans La Divi-
sion's service area. Among other things, the lawsuit alleged
that the defendants violated antitrust laws of the state of
Louisiana by manipulating the cost-of-gas component of the Trans
La Division's gas rate to the purported customer class, thereby
causing such purported class members to pay a higher rate. The
plaintiffs made no specific allegation of an amount of damages.
The defendants brought an appeal to the Louisiana Supreme Court
of rulings by the trial court and the Third Circuit Court of
Appeal which denied defendants' exceptions to the jurisdiction of
the trial court. It was the position of the defendants that the
plaintiffs' claims amount to complaints about the level of gas
rates and should be within the exclusive jurisdiction of the
Louisiana Commission.
On January 19, 1993, the Louisiana Supreme Court issued a deci-
sion reversing in part the lower courts' rulings, dismissing all
of plaintiffs' claims against the defendants which seek damages
due to alleged overcharges and further ruling that all such
claims are within the exclusive jurisdiction of the Louisiana
Commission. Any claims which seek damages other than overcharges
were remanded to the trial court but were stayed pending the
completion of the Louisiana Commission proceeding referred to
below.
The Louisiana Commission has instituted a docketed proceeding for
the purpose of investigating the costs included in the Trans La
Division's purchased gas adjustment component of its rates. Both
the Trans La Division and LIG are parties to the proceeding.
Much of the discovery in this proceeding has been conducted and a
procedural schedule has been established. The Company believes
the allegations as they relate to the Company, whether brought in
court or at the Louisiana Commission, are without merit, and that
the chances of a material adverse outcome are remote. The Com-
pany will continue to vigorously protect its interest in this
matter.
14<PAGE>
From time to time, claims are made and lawsuits are filed against
the Company arising out of the ordinary business of the Company.
In the opinion of the Company's management, liabilities, if any,
arising from these actions are either covered by insurance,
adequately reserved for by the Company or would not have a mate-
rial adverse effect on the financial condition of the Company.
7. Long-term and short-term debt
During the nine months ended June 30, 1994, the Company paid
installments due of $3,000,000 on its 9.75% Senior Notes,
$2,000,000 on its 11.2% Senior Notes, and paid the balance of
$3,250,000 on its 13.75% Series I, First Mortgage Bonds, and
$1,600,000 on its 13% Series G, First Mortgage Bonds.
At June 30, 1994, the Company had committed, short-term, unse-
cured bank credit facilities totaling $72,000,000, all of which
was unused. The Company also had aggregate uncommitted lines of
$120,000,000, of which $86,400,000 was unused at June 30, 1994.
8. Statements of cash flows
Supplemental disclosures of cash flow information for the nine-
month periods ended June 30, 1994 and 1993 are presented below.
Nine months ended
June 30,
-------------------
1994 1993
------ ------
(In thousands)
Cash paid for
Interest $10,806 $11,646
Income taxes 6,370 7,564
15<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Atmos Energy Corporation
We have reviewed the accompanying condensed consolidated balance
sheet of Atmos Energy Corporation as of June 30, 1994, and the
related condensed consolidated statements of income for the
three-month and nine-month periods ended June 30, 1994 and the
condensed consolidated statement of cash flows for the nine-
month period ended June 30, 1994. These financial statements are
the responsibility of the Company's management. We did not make
a similar review of the condensed consolidated financial state-
ments for the three-month and nine-month periods ended June 30,
1993.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit con-
ducted in accordance with generally accepted auditing standards,
which will be performed for the full year with the objective of
expressing an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifica-
tions that should be made to the accompanying condensed consoli-
dated financial statements at June 30, 1994, and for the three-
month and nine-month periods then ended for them to be in confor-
mity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Atmos
Energy Corporation as of September 30, 1993, and the related
consolidated statements of income, shareholders' equity, and cash
flows for the year then ended (not presented herein) and in our
report dated November 10, 1993, except for Notes 2 and 5, as to
which the date is February 9, 1994, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of September 30, 1993, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
ERNST & YOUNG LLP
Dallas, Texas
August 5, 1994
16<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company distributes and sells natural gas to residential,
commercial, industrial and agricultural customers in six states.
Such business is subject to regulation by state and/or local
authorities in each of the states in which the Company operates.
In addition, the Company's business is affected by seasonal
weather patterns, competitive factors within the energy industry,
and economic conditions in the areas that the Company serves.
Revenues and sales volume statistics for the three-month, nine-
month and twelve-month periods ended June 30, 1994 and 1993
appear on pages 23-25. Meters in service are as follows:
June 30
---------------------
1994 1993
------- -------
Meters in Service
Residential 564,149 551,505
Commercial 59,683 57,961
Industrial (including agricultural) 19,718 20,102
Public authority and other 4,954 4,794
------- -------
Total 648,504 634,362
======= =======
Rate Activity
Rate activity through September 1993 was discussed in the
Company's 1993 Annual Report to Shareholders. Changes in pending
rate matters and new developments since September 1993 are dis-
cussed below.
There has been no change in status of the Company's appeal re-
garding the effective date of its last rate increase in Kentucky.
The Company lost the issue at the trial court level. If the
Company is successful, it could recover approximately $1.0 mil-
lion in additional revenue; if it is unsuccessful, there would be
no impact on its revenue.
In December 1993, the Company received an order from the Kentucky
Commission approving a large volume sales program and a revised
gas cost adjustment method. Also in December 1993, the Kentucky
Commission issued an order in a generic proceeding relating to
the implications of FERC Order 636 on local distribution com-
panies ("LDCs"). The order permitted the LDCs to flow through
Order 636 transition costs incurred from their pipeline suppli-
ers.
17<PAGE>
On March 1, 1994, the Company implemented an increase of $1.1
million or 2.7% under its second annual rate stabilization clause
filing in Louisiana.
In February 1993, the city of Amarillo, Texas appealed the Rail-
road Commission's November 1992 rate order to the District Court
of Travis County, Texas. In January 1994, the District Court
denied the city's appeal. The city has appealed to the Court of
Appeals.
GGC filed a request for an increase in annual revenues of $4.5
million with the Colorado Public Utility Commission ("Colorado
Commission") in September, 1993. On May 1, 1994, the Company
implemented an annual increase of $3.2 million or 6.9%. The new
rates reflect settlement of all issues and recovery of accrual
accounting of postretirement benefits in accordance with SFAS No.
106. Following issuance of an order by the Colorado Commission,
Phase 2 of the rate proceeding will commence, which will address
rate redesign issues.
Effective December 1, 1993, GGC received an annual rate increase
of approximately $2.1 million or 10.6% in its Kansas service
area. The settlement included recovery of SFAS No. 106 costs
with external funding and a moratorium on rate requests in Kansas
until December 1, 1996.
In 1992 the Federal Energy Regulatory Commission (FERC) issued an
order ("Order 636") which continues past FERC initiatives to
substantially restructure the interstate natural gas pipeline
industry by unbundling the availability and pricing of interstate
pipeline services. The Company intervened in the restructuring
proceedings of the interstate pipelines that serve its various
service areas and actively participated in the proceedings of its
major suppliers. New service agreements for its Western Kentucky
Division became effective in September and November 1993 with
Tennessee Gas and Texas Gas, respectively. Prior to October
1993, GGC purchased a portion of its natural gas supplies from
interstate pipeline companies. It now has term commitments for
the transportation of natural gas with the interstate pipelines
but must secure that portion of its natural gas supplies previ-
ously purchased from them from other parties. The Company be-
lieves it has restructured its portfolio of natural gas supplies
and pipeline services under Order 636 to replace the traditional
pipeline sales service and enable it to continue to provide
adequate and reliable service to its customers in 1994.
Recently Issued Accounting Standards Not Yet Adopted
The Company has not adopted Statement of Financial Accounting
Standards No. 112 "Employers' Accounting for Postemployment
Benefits" which is discussed in Note 5 of notes to consolidated
financial statements. The rate treatment of SFAS No. 112 costs
has not been determined at this time. Such costs are currently
recorded and recovered on the pay-as-you-go basis.
18<PAGE>
FINANCIAL CONDITION
For the nine months ended June 30, 1994, net cash provided by
operating activities totaled $49.0 million compared with $46.1
million for the nine months ended June 30, 1993. Net operating
assets and liabilities decreased $15.3 million for the nine
months ended June 30, 1994 compared with a decrease of $6.1
million for the nine months ended June 30, 1993. Due to the
seasonal nature of the natural gas distribution business, large
swings in accounts receivable, accounts payable and inventories
of gas in underground storage will occur when entering and leav-
ing the winter or heating season.
Major cash flows from investing activities for the nine months
ended June 30, 1994 included capital expenditures of $35.7 mil-
lion compared with $30.4 million for the nine months ended June
30, 1993. The capital expenditures budget for fiscal year 1994
is currently $52.6 million, as compared with actual capital
expenditures of $44.8 million in fiscal 1993. Capital projects
planned for 1994 include major expenditures for mains, services,
meters, vehicles and computer software. These expenditures will
be financed from internally generated funds and financing activi-
ties.
For the nine months ended June 30, 1994, cash used in financing
activities amounted to $14.1 million compared with $15.3 million
for the nine months ended June 30, 1993. During the nine months
ended June 30, 1994, notes payable to banks was reduced $2.1
million, as compared with $12.2 million for the nine months ended
June 30, 1993. Payments of long-term debt increased $5.1 million
to $9.9 million for the nine months ended June 30, 1994. Pay-
ments of long-term debt consisted of a $3.0 million installment
on the Company's 9.75% Senior Notes due in 1996, a $2.0 million
installment on the 11.2% Senior Notes, the balance of $3.25
million on the 13.75% Series I First Mortgage Bonds and the
balance of $1.6 million on the 13% Series G First Mortgage Bonds.
The Company paid $9.4 million in cash dividends and distributions
during the nine months ended June 30, 1994, compared with $7.1
million paid during the nine months ended June 30, 1993. This
reflects an increase in the quarterly dividend rate and an in-
creased number of shares outstanding. During the nine months
ended June 30, 1994, the Company issued common stock in connec-
tion with the merger, under its Employee Stock Ownership Plan
("ESOP"), under its Restricted Stock Grant Plan and under its
Dividend Reinvestment and Stock Purchase Plan ("DRSPP"). In the
quarter ended December 31, 1993, the Company registered an addi-
tional 700,000 shares (pre-split) of common stock with the Secu-
rities and Exchange Commission for future issuance under the
DRSPP.
On February 9, 1994, the Board of Directors of Atmos approved a
3-for-2 split of its common stock implemented in the form of a
stock dividend, which resulted in shareholders receiving one new
share for every two shares previously held. Fractional shares
were not issued but were paid in cash or credited to the accounts
19<PAGE>
of participants of the DRSPP and ESOP. The record date for the
split was May 4, 1994 and the payment date for mailing the new
shares and cash for fractional shares to shareholders was May 16,
1994. Shares outstanding increased from approximately 10 million
to slightly more than 15 million.
The Company believes that internally generated funds, its short-
term credit facilities and access to the debt and equity capital
markets will provide necessary working capital and liquidity for
capital expenditures and other cash needs for the remainder of
fiscal 1994. At June 30, 1994 the Company had $72.0 million of
committed short-term credit facilities, all of which was avail-
able for additional borrowing. The committed lines are renewed
or renegotiated at least annually. At June 30, 1994, the Company
also had $120.0 million of uncommitted short-term lines, of which
$86.4 million was unused.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1994, COMPARED WITH THREE MONTHS
ENDED JUNE 30, 1993
Operating revenues decreased by approximately 1% to $90.0 million
for the three months ended June 30, 1994 from $91.2 million for
the three months ended June 30, 1993. The primary factor con-
tributing to the decrease in operating revenues was decreased
sales to weather sensitive customers. During the quarter ended
June 30, 1994, temperatures averaged 13% warmer than in the
corresponding quarter of the prior year, and approximately 10%
warmer than normal. The total volume of gas sold and transported
for the three months ended June 30, 1994 was 28.9 billion cubic
feet ("Bcf") compared with 32.4 Bcf for the three months ended
June 30, 1993. Reasons for the decreased volumes include lower
transportation volumes and decreased weather sensitive sales due
to warmer weather in all service areas. Part of the decrease in
transportation volumes and increase in industrial sales resulted
from certain industrial customers switching from transportation
service to firm sales in Kentucky. The average sales price per
Mcf sold increased $.12 to $4.05 as a result of an $.18 increase
in the average cost of gas and rate increases in the Trans La and
Greeley Divisions implemented since the corresponding quarter of
the prior year.
Gross profit decreased by approximately 8% to $31.8 million for
the three months ended June 30, 1994, from $34.5 million for the
three months ended June 30, 1993. Factors contributing to the
decrease were lower sales and transportation volumes. Operating
expenses, excluding income taxes, increased from $30.3 million
for the three months ended June 30, 1993 to $31.0 million for the
three months ended June 30, 1994. The small increase in operat-
ing expenses, excluding income taxes, resulted from small in-
creases in each of the captions comprising this group. Operating
income decreased for the three months ended June 30, 1994 to $1.4
million from $3.8 million for the three months ended June 30,
20<PAGE>
1993. The decrease in operating income primarily resulted from
decreased gross profit.
Net income decreased from $.8 million for the three months ended
June 30, 1993 to a loss of $1.2 million for the three months
ended June 30, 1994. This decrease in net income primarily re-
sulted from the decrease in operating income.
On June 29, 1994, Atmos announced a special early retirement
program for eligible employees of Greeley Gas Company. Employees
who were actively employed by Greeley Gas on July 1, 1994, and
are age 55 or older and have completed ten years of vesting
service in the Greeley Gas Company Employees' Pension Plan by
August 15, 1994, are eligible for the voluntary program. Eligi-
ble employees who elect to participate will retire effective
September 16, 1994, and will begin receiving benefits on that
date. The offering opened July 1, 1994, and closes August 15,
1994. The program was offered to 46 employees of Greeley Gas
Company's approximately 340 employees in Colorado and Kansas.
The program is limited to Greeley Gas. No such program is
planned for Atmos or any of the other operating companies. The
Company will not know until August 15, 1994, how many employees
will accept this offer. The one-time cost associated with the
program will be recognized in September 1994. The maximum charge
would be approximately $1.7 million if all eligible employees ac-
cepted the early retirement program.
NINE MONTHS ENDED JUNE 30, 1994, COMPARED WITH NINE MONTHS ENDED
JUNE 30, 1993
Operating revenues increased by approximately 9% to $422.5 mil-
lion for the nine months ended June 30, 1994 from $388.2 million
for the nine months ended June 30, 1993. Factors contributing to
the higher operating revenues were the higher average cost of
gas, which is reflected in the sales price, colder weather in
Kentucky and Louisiana, drier weather in the West Texas irriga-
tion market, and rate increases implemented in the Greeley Gas
Division and the Trans La Division. Volumes sold to irrigation
customers increased from the corresponding period of the prior
year by 16%. The average sales price per Mcf increased from
$4.04 for the nine months ended June 30, 1993 to $4.19 for the
nine months ended June 30, 1994. The increase in the average
sales price reflects increased cost of gas and rate increases in
the Trans La and Greeley Gas Divisions implemented since June 30,
1993. The average cost of gas per Mcf sold increased from $2.73
for the nine months ended June 30, 1993 to $2.91 for the nine
months ended June 30, 1994.
Gross profit increased to $139.6 million for the nine months
ended June 30, 1994, compared with $135.7 million for the nine
months ended June 30, 1993. Operating expenses, excluding income
taxes, increased from $94.1 million in the nine months ended June
30, 1993, to $100.7 million in the nine months ended June 30,
1994. The principal factors contributing to the increase in
operating expenses were increases in distribution expense, em-
21<PAGE>
ployee welfare expenses including adoption of SFAS No. 106,
acquisition costs, and outside services.
Net income decreased for the nine months ended June 30, 1994, by
approximately 11% to $19.1 million from $21.4 million for the
nine months ended June 30, 1993. Earnings per share decreased to
$1.26 for the nine months ended June 30, 1994 from $1.47 for the
nine months ended June 30, 1993, while average shares outstanding
increased approximately 4%. Dividends per share increased 3% to
$.66 for the nine months ended June 30, 1994. All per share
information is adjusted for the 3-for-2 stock split in May 1994.
TWELVE MONTHS ENDED JUNE 30, 1994, COMPARED WITH TWELVE MONTHS
ENDED JUNE 30, 1993
Operating revenues increased by approximately 8% to $493.9 mil-
lion for the 12 months ended June 30, 1994 from $455.3 million
for the 12 months ended June 30, 1993. The increased revenues
resulted from increased sales volumes and increased sales prices
for the 12 months ended June 30, 1994. Sales and transportation
volumes increased to 114.1 Bcf for the 12 months ended June 30,
1994 compared with 110.1 Bcf for the corresponding prior period.
The average sales price per Mcf increased from $3.97 to $4.16.
The average cost of gas per Mcf sold increased from $2.67 to
$2.86. The increase in the average sales price reflects the
increased cost of gas and rate increases in the Trans La and
Greeley Divisions implemented since June 30, 1993.
Gross profit increased by approximately 4% to $167.0 million for
the 12 months ended June 30, 1994, from $160.9 million for the 12
months ended June 30, 1993. Operating expenses, excluding income
taxes, increased from $121.5 million for the 12 months ended June
30, 1993, to $129.8 million for the 12 months ended June 30,
1994. Factors contributing to the increase in operating expenses
were increased wages and benefits expenses, outside services, GGC
acquisition costs and the adoption of SFAS No. 106, as discussed
in Note 4 of notes to consolidated financial statements. Income
taxes increased $.7 million for the 12 months ended June 30,
1994, as compared with the 12 months ended June 30, 1993. Oper-
ating income decreased in the 12 months ended June 30, 1994 by
approximately 10% to $27.4 million. The primary reason for the
decrease in operating income was the increase in operating ex-
penses discussed above.
Net income for the 12 months ended June 30, 1994 was $15.3 mil-
lion compared with $17.8 million for the 12 months ended June 30,
1993. The decrease in net income resulted primarily from the
decrease in operating income discussed above. Earnings per share
decreased by 19% to $1.02. Average shares outstanding increased
approximately 6% as compared with the prior year. Dividends per
share increased approximately 2% to $.87. All per share informa-
tion is adjusted for the 3-for-2 stock split in May 1994.
22<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS (1)
Three months ended June 30,
1994 1993
------- -------
Sales Volumes -- MMcf (2)
Residential 6,160 7,676
Commercial 2,713 3,232
Industrial (including agricultural) 11,768 10,488
Public authority and other 522 647
------- -------
Total 21,163 22,043
Transportation Volumes -- MMcf (2) 7,720 10,403
------- -------
Total Volumes Handled - MMcf (2) 28,883 32,446
======= =======
Operating Revenues (000's)
Gas Sales Revenues
Residential $ 34,709 $ 39,318
Commercial 12,998 14,354
Industrial (including agricultural) 35,705 30,047
Public authority and other 2,402 2,872
-------- --------
Total Gas Revenues 85,814 86,591
Transportation Revenues 2,859 3,356
Other Revenues 1,340 1,272
-------- --------
Total Operating Revenues $ 90,013 $ 91,219
======== ========
Average Gas Sales Revenues per Mcf $ 4.05 $ 3.93
Average Transportation Revenue per Mcf $ .37 $ .32
Cost of Gas per Mcf Sold $ 2.75 $ 2.57
HEATING DEGREE DAYS
Weather Three months ended June 30,
Service Sensitive -------------------------
Area Customers % 1994 1993 Normal
- - -------------- ----------- ---- ---- ------
Texas 47% 250 258 237
Kentucky 26% 287 307 349
Louisiana 11% 71 122 37
Colorado, Kansas
and Missouri 16% 599 783 768
----
System Average 100% 295 339 328
1. Consolidated operating statistics have been restated to
include Greeley operations for all periods presented.
2. Volumes are reported as metered in million cubic feet("MMcf").
23<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS (1)
Nine months ended June 30,
1994 1993
------- -------
Sales Volumes -- MMcf (2)
Residential 47,552 47,699
Commercial 19,102 19,811
Industrial (including agricultural) 25,701 20,937
Public authority and other 4,853 4,030
------- -------
Total 97,208 92,477
Transportation Volumes --
MMcf (2) 24,944 29,072
------- -------
Total Volumes Handled - MMcf (2) 122,152 121,549
======= =======
Operating Revenues (000's)
Gas Sales Revenues
Residential $222,431 $212,716
Commercial 82,601 81,278
Industrial (including agricultural) 81,975 62,825
Public authority and other 20,746 16,553
-------- --------
Total Gas Revenues 407,753 373,372
Transportation Revenues 10,854 11,138
Other Revenues 3,851 3,647
-------- --------
Total Operating Revenues $422,458 $388,157
======== ========
Average Gas Sales Revenues per Mcf $ 4.19 $ 4.04
Average Transportation Revenue per Mcf $ .44 $ .38
Cost of Gas per Mcf Sold $ 2.91 $ 2.73
HEATING DEGREE DAYS
Weather
Service Sensitive Nine months ended June 30,
Area Customers % 1994 1993 Normal
- - -------------- ----------- ----- ----- ------
Texas 47% 3,546 3,638 3,512
Kentucky 26% 4,290 4,088 4,341
Louisiana 11% 1,922 1,810 1,760
Colorado, Kansas
and Missouri 16% 5,793 6,384 6,060
----
System Average 100% 3,917 3,989 3,939
See footnotes on page 23.
24<PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS (1)
Twelve months ended June 30,
1994 1993
------- -------
Sales Volumes -- MMcf (2)
Residential 51,616 51,721
Commercial 21,164 21,945
Industrial (including agricultural) 36,130 32,161
Public authority and other 5,226 4,296
------- -------
Total 114,136 110,123
Transportation Volumes --
MMcf (2) 35,654 36,773
------- -------
Total Volumes Handled - MMcf (2) 149,790 146,896
======= =======
Operating Revenues (000's)
Gas Sales Revenues
Residential $247,629 $236,109
Commercial 92,573 90,925
Industrial (including agricultural) 111,605 92,875
Public authority and other 22,508 17,771
-------- --------
Total Gas Sales Revenues 474,315 437,680
Transportation Revenues 14,730 13,241
Other Revenues 4,897 4,425
-------- --------
Total Operating Revenues $493,942 $455,346
======== ========
Average Gas Sales Revenues per Mcf $ 4.16 $ 3.97
Average Transportation Revenue per Mcf $ .41 $ .36
Cost of Gas per Mcf Sold $ 2.86 $ 2.67
HEATING DEGREE DAYS
Weather
Service Sensitive Twelve months ended June 30,
Area Customers % 1994 1993 Normal
- - -------------- ----------- ----- ----- ------
Texas 47% 3,569 3,645 3,528
Kentucky 26% 4,338 4,133 4,376
Louisiana 11% 1,924 1,812 1,760
Colorado, Kansas
and Missouri 16% 6,001 6,545 6,234
----
System Average 100% 3,974 4,030 3,983
See footnotes on page 23.
25<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 6 of notes to consolidated financial statements on pages
14 and 15 herein for a description of legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the accompanying Exhibits Index are
filed as part of this report.
(b) Reports on Form 8-K
On July 21, 1994, Atmos Energy Corporation filed a Current
Report on Form 8-K, Item 5 Other Events, restating its 1993
financial statements as a result of the acquisition of
Greeley Gas Company ("GGC") on December 22, 1993.
The financial statements of Atmos Energy Corporation were
restated to include the operations of GGC for all periods pre-
sented under the pooling of interests accounting method and were
adjusted for Atmos' 3-for-2 stock split, effected in the form of
a stock dividend, in May 1994. The Form 8-K included the follow-
ing restated financial information:
Management's discussion and analysis of financial condition
and results of operations for the three years ended Septem-
ber 30, 1993
Report of independent auditors
Financial statements and supplementary data:
- - - Consolidated balance sheets at September 30, 1993 and
1992
- - - Consolidated statements of income for the years ended
September 30, 1993, 1992 and 1991
- - - Consolidated statements of shareholders' equity for the
years ended September 30, 1993, 1992 and 1991
- - - Consolidated statements of cash flows for the years ended
September 30, 1993, 1992 and 1991
- - - Notes to consolidated financial statements
- - - Supplementary data (unaudited)
Financial statement schedules for the years ended September 30,
1993, 1992 and 1991:
V - Property, plant and equipment
VI - Accumulated depreciation and amortization of
property, plant and equipment
26<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ATMOS ENERGY CORPORATION
(Registrant)
Date: August 11, 1994 By: /s/ JAMES F. PURSER
------------------------------
James F. Purser
Executive Vice President
and Chief Financial Officer
Date: August 11, 1994 By: /s/ DAVID L. BICKERSTAFF
------------------------------
David L. Bickerstaff
Vice President and Controller
(Principal Accounting Officer)
27<PAGE>
EXHIBITS INDEX
Item 6. (a)
Exhibit Page Number or
Number Description Incorporation
by Reference to
3 By-Laws of Atmos Energy Corporation
(Amended and restated as of May 11,
1994)
10.1 Seventh Supplemental Indenture, dated
as of October 1, 1983 between Greeley
Gas Company ("The Greeley Gas Divi-
sion") and the Central Bank of Denver,
N.A. ("Central Bank")
10.2 Ninth Supplemental Indenture, dated as
of April 1, 1991, between The Greeley
Gas Division and Central Bank
10.3 Bond Purchase Agreement, dated as of
April 1, 1991, between The Greeley Gas
Division and Central Bank
10.4 Tenth Supplemental Indenture, dated as
of December 1, 1993, between the Com-
pany and Colorado National Bank, for-
merly Central Bank
15 Letter regarding unaudited interim
financial information
28<PAGE>
[CONFORMED COPY]
GREELEY GAS COMPANY
TO
CENTRAL BANK OF DENVER
(Formerly The Central Bank and Trust Company)
TRUSTEE
SEVENTH SUPPLEMENTAL INDENTURE
Dated as of October 1, 1983
Supplementing and Amending Indenture of Mortgage and
Deed of Trust dated as of March 1, 1957 and creating
First Mortgage Bonds, 12-3/4% Series F, Due November 1, 1991
First Mortgage Bonds, 13% Series G, Due November 1, 1995<PAGE>
TABLE OF CONTENTS
Section Heading Page
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Mortgage of Property
Section l.01 . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO
Series F and G Bonds and Provisions Applicable Thereto
Section 2.01. Series F Bonds . . . . . . . . . . . . . . . . 2
Section 2.02. Series G Bonds . . . . . . . . . . . . . . . . 3
Section 2.03. Restriction on Refunding of Series F and
Series G Bonds . . . . . . . . . . . . . . . 4
Section 2.04. Provisions Generally Applicable to Sinking
Funds for Bonds of Series F and G . . . . . . 4
Section 2.05. Place and Form of Payment on Bonds of
Series F and G . . . . . . . . . . . . . . . 5
Section 2.06. Restriction on Dividends and Stock
Purchases . . . . . . . . . . . . . . . . . . 5
Section 2.07. Authentication of Series F and
Series G Bonds . . . . . . . . . . . . . . . 6
ARTICLE THREE
Amendment of Indenture
Section 3.01. Amendment of Original Indenture as Heretofore
Amended . . . . . . . . . . . . . . . . . . . 6
ARTICLE FOUR
General Provisions to the Bonds
Section 4.01. General Designation, Form, Registration and
Limitation in Amount of Bonds . . . . . . . . 7
Section 4.02. Execution of Bonds . . . . . . . . . . . . . . 7
Section 4.03. Number and Designation of Bonds . . . . . . . . 7
Section 4.04. Authentication and Delivery of Bonds by
Trustee . . . . . . . . . . . . . . . . . . . 8
Section 4.05. Bonds Issuable in Series; Terms of Bonds . . . 8
Section 4.06. Procedure for Creation of New Series of Bonds . 8
Section 4.07. Equal Security of Bonds . . . . . . . . . . . . 9
Section 4.08. Date of Bonds and Interest . . . . . . . . . . 9
-i-<PAGE>
Section 4.09. Bond Register, Registrar and Transfer
Agent . . . . . . . . . . . . . . . . . . . . 9
Section 4.10. Transfer of Bonds; Charges Therefor;
Ownership of Bonds . . . . . . . . . . . . . 9
Section 4.11. Temporary Bonds . . . . . . . . . . . . . . . 10
Section 4.12. Replacement Bonds . . . . . . . . . . . . . . 11
Section 4.13. Effect of Replacement . . . . . . . . . . . . 11
Section 4.14. Disposition of Surrendered Bonds . . . . . . 11
ARTICLE FIVE
Issuance of Additional Bonds
Section 5.01. Issuance of Additional Bonds Based on
Net Bondable Property Additions . . . . . . 12
Section 5.02. Additional Bonds for Refunding . . . . . . . 15
Section 5.03. Additional Bonds Against Deposit of Cash . . 17
Section 5.04. Withdrawal of Deposited Cash . . . . . . . . 17
Section 5.05. Supplemental Indenture . . . . . . . . . . . 18
ARTICLE SIX
Covenants of the Corporation
Section 6.01. Payment . . . . . . . . . . . . . . . . . . . 18
Section 6.02. Taxes and Assessments . . . . . . . . . . . . 19
Section 6.03. Maintenance of Corporate Existence
and Rights; Compliance With Laws . . . . . 19
Section 6.04. Carry on Business and Maintain Property . . . 19
Section 6.05. Insurance . . . . . . . . . . . . . . . . . . 20
Section 6.06. Restrictions on Encumbrances . . . . . . . . 21
Section 6.07. Records of Account and Certificate . . . . . 22
Section 6.08. Certificate as to Compliance . . . . . . . . 23
Section 6.09. Warranty of Title and Further Assurances . . 23
Section 6.10. Paying Agents . . . . . . . . . . . . . . . . 23
Section 6.11. Payment of Certain Charges . . . . . . . . . 24
Section 6.12. Appointment of Successor Trustee . . . . . . 25
Section 6.13. Transactions with Affiliates . . . . . . . . 26
Section 6.14. Inspection of Mortgaged Properties . . . . . 27
ARTICLE SEVEN
Bondholder's Lists and Reports by the Corporation
and the Trustee
Section 7.01. Corporation to Furnish Trustee and
Trustee to Preserve Lists of
Bondholders . . . . . . . . . . . . . . . . 26
Section 7.02. Transmittal of Information . . . . . . . . . 27
Section 7.03. Corporation's and Trustee's
Accountability for Disclosure . . . . . . . 28
-ii-<PAGE>
Section 7.04. Reports to be filed With Trustee and
Commission . . . . . . . . . . . . . . . . 28
Section 7.05. Opinions of Counsel to be Filed With
Trustee . . . . . . . . . . . . . . . . . . 29
Section 7.06. Trustee's Reports to Bondholders . . . . . . 29
ARTICLE EIGHT
Remedies of the Trustee and Bondholders on Event of Default
Section 8.01. Events of Default Defined;
Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . 31
Section 8.02. Covenant to Make Payments upon Default . . . 34
Section 8.03. Remedies in Case of Default . . . . . . . . . 34
Section 8.04. Trustee's Powers . . . . . . . . . . . . . . 36
Section 8.05. Application of Moneys by Trustee . . . . . . 37
Section 8.06. Limitation on Suits; Preservation of
Rights to Payment and to Sue . . . . . . . 38
Section 8.07. Remedies Cumulative . . . . . . . . . . . . . 39
Section 8.08. Rights of Bondholders to Direct
Trustee; Waivers . . . . . . . . . . . . . 39
Section 8.09. Notice by Trustee of Defaults . . . . . . . . 40
Section 8.10. Costs of Suit . . . . . . . . . . . . . . . . 40
ARTICLE NINE
The Trustee
Section 9.01. Certain Duties and Responsibilities . . . . . 41
Section 9.02. Certain Rights of the Trustee . . . . . . . . 42
Section 9.03. Trustee Not Responsible for Certain
Matters . . . . . . . . . . . . . . . . . . 43
Section 9.04. Trustee's Relationship with Corporation . . . 43
Section 9.05. Trust Moneys . . . . . . . . . . . . . . . . 43
Section 9.06. Trustee's Compensation . . . . . . . . . . . 43
Section 9.07. Reliance on Officer's Certificates
by Trustee and Other Persons . . . . . . . 44
Section 9.08. Conflicting Interests of Trustee . . . . . . 44
Section 9.09. Corporate Trustee Required; Eligibility . . . 50
Section 9.10. Resignation and Removal of Trustee;
Appointment of Successor . . . . . . . . . 51
Section 9.11. Acceptance of Appointment by Successor . . . 52
Section 9.12. Successor to Trustee . . . . . . . . . . . . 53
Section 9.13. Trustee as Creditor of Corporation . . . . . 53
Section 9.14. Excluded Creditor Relationship . . . . . . . 56
Section 9.15. Particular Definitions . . . . . . . . . . . 56
Section 9.16. Separate or Co-Trustee, Powers . . . . . . . 57
-iii-<PAGE>
ARTICLE TEN
Concerning the Bondholders
Section 10.01. Evidence of Action . . . . . . . . . . . . . 58
Section 10.02. Proof of Execution . . . . . . . . . . . . . 59
Section 10.03. Effect of Actions by Holders of Bonds . . . . 59
ARTICLE ELEVEN
Bondholders' Meetings
Section 11.01. Purposes . . . . . . . . . . . . . . . . . . 60
Section 11.02. Manner of Calling Meetings . . . . . . . . . 60
Section 11.03. Call of Meetings by Corporation or
Bondholders . . . . . . . . . . . . . . . . 61
Section 11.04. Voting and Attending Meetings . . . . . . . . 61
Section 11.05. Conduct of Meetings . . . . . . . . . . . . . 61
Section 11.06. Voting and Records . . . . . . . . . . . . . 62
Section 11.07. Effect of Call of Meeting . . . . . . . . . . 62
ARTICLE TWELVE
Supplemental Indentures
Section 12.01. Supplemental Indentures Without Consent
of Bondholders . . . . . . . . . . . . . . 63
Section 12.02. Modification of Indenture . . . . . . . . . . 64
Section 12.03. Effect of Supplemental Indentures . . . . . . 65
Section 12.04. Trust Indenture Act . . . . . . . . . . . . . 65
Section 12.05. Notation of Changes on Bonds . . . . . . . . 65
Section 12.06. Trustee's Reliance on Opinion of Counsel . . 66
ARTICLE THIRTEEN
Consolidation, Merger, and Sale
Section 13.01. Consolidation, Mergers or Sales
Permitted on Certain Terms . . . . . . . . 66
Section 13.02. Successor Corporation Substituted . . . . . . 67
ARTICLE FOURTEEN
Possession, Use and Release of Mortgaged Property
Section 14.01. Possession and Use of Mortgaged Property . . 69
Section 14.02. Disposition of Mortgaged Property
Without Release . . . . . . . . . . . . . . 69
Section 14.03. Release of Mortgaged Property . . . . . . . . 70
Section 14.04. Eminent Domain and Other Governmental
Takings . . . . . . . . . . . . . . . . . . 73
-iv-<PAGE>
Section 14.05. Purchaser Protected . . . . . . . . . . . . . 75
Section 14.06. Powers Exercisable Notwithstanding
Event of Default . . . . . . . . . . . . . 75
Section 14.07. Powers Exercisable by Receiver or
Trustee . . . . . . . . . . . . . . . . . . 75
ARTICLE FIFTEEN
Redemption of Bonds
Section 15.01. Redemption Price and Manner of Redemption . . 76
Section 15.02. Selection of Bonds to be Redeemed . . . . . . 76
Section 15.03. Notice of Redemption . . . . . . . . . . . . 77
Section 15.04. Payment of Redemption Price . . . . . . . . . 78
Section 15.05. Notation on Bond for Partial Redemption . . . 78
Section 15.06. Cancellation of Bonds . . . . . . . . . . . . 79
ARTICLE SIXTEEN
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 16.01. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . 79
Section 16.02. Funds Deposited for Payment of Bonds . . . . 80
Section 16.03. Moneys Held by Paying Agent . . . . . . . . . 80
Section 16.04. Moneys Held by Trustee . . . . . . . . . . . 80
ARTICLE SEVENTEEN
Application, Investment and Withdrawal of Trust Moneys
Section 17.01. Trust Moneys Defined . . . . . . . . . . . . 81
Section 17.02. Withdrawal on Basis of Bondable Property . . 81
Section 17.03. Payment of Outstanding Bonds . . . . . . . . 82
Section 17.04. Withdrawal of Insurance Proceeds . . . . . . 83
Section 17.05. Powers Exercisable Notwithstanding
Event of Default . . . . . . . . . . . . . 85
Section 17.06. Powers Exercisable by Trustee or
Receiver . . . . . . . . . . . . . . . . . 85
Section 17.07. Disposition of Bonds Retired . . . . . . . . 86
Section 17.08. Condemnation of All Mortgaged Property . . . 86
Section 17.09. Investment of Trust Moneys . . . . . . . . . 87
ARTICLE EIGHTEEN
Immunity of Incorporators, Stockholders,
Officers, and Directors . . . . . . . . . . 88
-v-<PAGE>
ARTICLE NINETEEN
Definitions
Section 19.01. General . . . . . . . . . . . . . . . . . . . 89
Section 19.02. Specific Definitions . . . . . . . . . . . . 89
ARTICLE TWENTY
Miscellaneous Provisions
Section 20.01. Certain Assignments of Bonds . . . . . . . . 97
Section 20.02. Successors and Assigns . . . . . . . . . . . 97
Section 20.03. Board and Other Action . . . . . . . . . . . 97
Section 20.04. Surrender of Powers . . . . . . . . . . . . . 97
Section 20.05. Service of Notices . . . . . . . . . . . . . 98
Section 20.06. Colorado Law Applicable . . . . . . . . . . . 98
Section 20.07. Certificates to Trustee . . . . . . . . . . . 98
Section 20.08. Payments Coming Due on Saturday, Sunday
or Legal Holiday . . . . . . . . . . . . . 99
Section 20.09. Trust Indenture Act . . . . . . . . . . . . . 99
Section 20.10. Publication of Notice . . . . . . . . . . . . 99
Section 20.11. Counterparts . . . . . . . . . . . . . . . . 99
Section 20.12. Effect of Headings and Table of Contents . . 99
Section 20.13. Acceptance of Trust by Trustee . . . . . . . 99
Section 20.14. Separability of Provisions . . . . . . . . . 99
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 100
Attachments:
Exhibit A - Form of Registered Bond
Exhibit B - Available Income Certificate
Schedule 1
to
Exhibit B - Statement of Net Income Available
for Interest Charges
Exhibit C - Bondable Additions Certificate
-vi-<PAGE>
This is a SEVENTH SUPPLEMENTAL INDENTURE, dated
as of October l, 1983, between GREELEY GAS COMPANY, a corporation
organized and existing under the laws of the State of Colorado
(the Corporation) having its principal place of business in
Denver, Colorado, party of the first part, and CENTRAL BANK OF
DENVER (formerly named The Central Bank and Trust Company), a
banking corporation organized and existing under the laws of
Colorado (the Trustee), as Trustee, party of the second part.
R E C I T A L S
The background of this Seventh Supplemental
Indenture is:
A. The Corporation heretofore executed and
delivered to the Trustee its Indenture of Mortgage and Deed of
Trust dated as of March 1, 1957 (the Original Indenture) to
secure the payment of the principal of, premium, if any, and
interest on, all Bonds at any time issued and outstanding there-
under, and to establish and declare the terms and conditions upon
which Bonds are to be issued and secured thereunder.
B. The Corporation thereafter executed and
delivered to the Trustee six Supplemental Indentures respectively
dated as of November 1, 1957, October 1, 1959, March 1, 1961,
June 1, 1965, March 1, 1973 and March 2, 1973 (the Original
Indenture and all Supplemental Indentures being hereinafter
sometimes collectively referred to as the Indenture), for the
various purposes of creating and authorizing additional series of
Bonds to be secured by the Indenture, conveying to the Trustee
certain additional property, amending the Original Indenture and
correcting the description of certain property.
C. The Corporation proposes (1) to create and
issue two additional series of bonds to be designated "First
Mortgage Bonds, 12-3/4% Series F, due November 1, 1991," limited
in aggregate principal amount to $2,500,000 (the Series F Bonds),
and "First Mortgage Bonds, 13% Series G, due November 1, 1995,"
limited in aggregate principal amount to $2,500,000 (the Series G
Bonds), (2) to mortgage and convey additional properties acquired
or constructed by the Company since the date of the Original
Indenture and (3) to amend the Original Indenture, as heretofore
amended, as hereinafter set forth.
D. The Corporation has obtained and filed with
the Trustee the written consent of the holders of the requisite
percentage of outstanding Bonds to the amendments herein con-
tained. All acts and things necessary to make the Series F Bonds
and the Series G Bonds, when executed by the Company and authen-
ticated and delivered by the Trustee, the valid, binding and
legal obligations of the Corporation, and to constitute these
presents a valid indenture and agreement according to its terms,
have been done and performed, and the execution of this Seventh
Supplemental Indenture and the issue of the Series F Bonds and
the Series G Bonds have in all respects been duly authorized, and<PAGE>
the Corporation, in the exercise of the legal right and power
vested in it, executes this Seventh Supplemental Indenture.
NOW, THEREFORE, in consideration of the premises
and of the sum of One Dollar to the Corporation duly paid by the
Trustee at or before the ensealing and delivery hereof and for
other good and valuable considerations, the receipt whereof is
hereby acknowledged, the Corporation hereby covenants to and with
the Trustee and its successors in the trusts under the Indenture,
for the equal and pro rata benefit of all present and future
holders of all Bonds issued and to be issued under the Indenture,
without any preference, priority or distinction whatsoever, as
follows:
ARTICLE ONE
Mortgage of Property
Section 1.01. The Corporation in order to better
secure the principal of and interest (and premium, if any) on all
Bonds of the Corporation at any time outstanding under the Inden-
ture according to their tenor and effect and the performance of
and compliance with the covenants and conditions in the Indenture
contained, does hereby mortgage, assign, grant, bargain, sell and
convey unto the Trustee, and to its successors in said trust,
forever, all of the property, rights and franchises acquired or
constructed by the Corporation since the date of the Original
Indenture, except property of the character specifically excepted
from the lien of the Original Indenture. In trust, nevertheless,
for the same purposes and upon the same conditions as are set
forth in the Original Indenture.
ARTICLE TWO
Series F and G Bonds and Provisions Applicable Thereto
Section 2.01. Series F Bonds
(a) There is hereby created under the Indenture a
series of Bonds entitled First Mortgage Bonds, 12-3/4% Series F,
due November 1, 1991 (the Series F Bonds). The aggregate princi-
pal amount of Series F Bonds that may be issued shall be limited
to $2,500,000, exclusive of Series F Bonds issued in exchange or
substitution for other Series F Bonds. The Series F Bonds shall
be registered Bonds without coupons, issued in denominations of
$1,000 or any multiple thereof and numbered F-1 and upward.
The Series F Bonds shall be dated and shall bear
interest as provided in Section 4.08, except that the Series F
Bonds issued before May 1, 1984 (the first interest payment date
for the Series F Bonds) shall be dated as of and shall bear
interest from the date of initial issuance thereof. The Series F
Bonds shall be due November 1, 1991 and shall bear interest on
their unpaid principal amounts from their dates until due and
-2-<PAGE>
payable at the rate of 12-3/4% per annum (computed on the basis
of a 360-day year of twelve 30-day months) payable semi-annually
on May 1 and November 1 in each year, and at the rate of 13-3/4%
per annum on any overdue principal and (to the extent legally
enforceable) on any overdue installment of interest.
(b) The Series F Bonds shall, subject to Section
2.03, be redeemable at the option of the Corporation, either as a
whole or in part in multiples of $1,000, at any time or from time
to time on or after November 1, 1988 at the following percentages
of the principal amount thereof:
If Redeemed During the The Redemption
12-Month Period ending Price is
---------------------- --------------
November 1, 1989 103.65%
November 1, 1990 101.83%
November 1, 1991 100.00%
together in any case with the interest accrued thereon to the
date of redemption.
(c) There shall be a sinking fund of $250,000 per
year payable on November 1 in each of the years 1986 through 1990
for retirement of Series F Bonds.
Section 2.02. Series G Bonds.
(a) There is hereby created under the Indenture a
series of Bonds entitled First Mortgage Bonds, 13% Series G, due
November 1, 1995 (the Series G Bonds). The aggregate principal
amount of Series G Bonds that may be issued shall be limited to
$2,500,000, exclusive of Series G Bonds issued in exchange or
substitution for other Series G Bonds. The Series G Bonds shall
be registered Bonds without coupons, issued in denominations of
$1,000 or any multiple thereof and numbered G-1 and upward.
The Series G Bonds shall be dated and shall bear
interest as provided in Section 4.08, except that the Series G
Bonds issued before May l, 1984 (the first interest payment date
for the Series G Bonds) shall be dated as of and shall bear
interest from the date of initial issuance thereof. The Series G
Bonds shall be due November 1, 1995 and shall bear interest on
their unpaid principal amounts from their dates until due and
payable at the rate of 13% per annum (computed on the basis of a
360-day year of twelve 30-day months) payable semi-annually on
May 1 and November 1 in each year, and at the rate of 14% per
annum on any overdue principal and (to the extent legally en-
forceable) on any overdue installment of interest.
(b) The Series G Bonds shall, subject to Section
2.03, be redeemable at the option of the Corporation, either as a
whole or in part in multiples of $1,000, at any time or from time
to time on or after November 1, 1988 at the following percentages
of the principal amount thereof:
-3-<PAGE>
If Redeemed During the The Redemption
12-Month Period Ending Price is
---------------------- ---------------
November 1, 1989 107.10%
November 1, 1990 105.92%
November 1, 1991 104.74%
November 1, 1992 103.56%
November 1, 1993 102.38%
November 1, 1994 101.20%
November 1, 1995 100.00%
(c) There shall be a sinking fund of $300,000 per
year payable on November 1 in each of the years 1989 and 1990 and
on November 1 in each of the years 1992, 1993 and 1994 for re-
tirement of the Series G Bonds. No sinking fund payment shall be
made in the year 1991.
Section 2.03. Restriction on Refunding of Series F
and Series G Bonds. The Company may not redeem any of the Series
F Bonds Pursuant to Section 2.01 (b) or any of the Series G Bonds
pursuant to Section 2.02 (b) as part of a refunding or antici-
pated refunding operation by the application, directly or indi-
rectly, of funds derived from any issuance or incurring of any
indebtedness for borrowed money of the Company having (i) an
effective interest cost (determined by standard financial prac-
tice) less than 12-3/4% per annum in the case of the Series F
Bonds or less than 13% per annum in the case of the Series G
Bonds, or (ii) as of the date of the proposed redemption, a
Weighted Average Life to Maturity less than the remaining
Weighted Average Life to Maturity of the Series F Bonds or the
Series G Bonds then to be redeemed.
As used in this Section the terms Weighted Average
Life to Maturity means as applied to any indebtedness for
borrowed money at any date, the number of years obtained by
dividing (a) the then outstanding principal amount of
indebtedness into (b) the total of the products obtained by
multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment,
including payment at final maturity by (ii) the number of years
(calculated to the nearest one-twelfth) which will elapse between
such date and the making of the payment.
Section 2.04. Provisions Generally Applicable to
Sinking Funds for Bonds of Series F and G. The following
provisions shall apply to the operation of any and all Sinking
Funds provided in this Article Two for Bonds of Series F and G:
(a) All Bonds redeemed through the operation of
Sinking Funds shall be redeemed at their principal amount and
accrued interest to the date of redemption without premium.
-4-<PAGE>
(b) The Trustee, not less than 30 days before each
Sinking Fund payment date, shall designate for redemption Bonds
of the particular series to be redeemed pursuant to that Sinking
Fund. Such designation shall be made in the manner provided in
Section 15.02. Thereafter, the Trustee shall give notice, unless
notice be waived, as provided in Section 15.03 that the Bonds so
designated for redemption will be redeemed and paid on the next
succeeding Sinking Fund payment date for that series at the
office of the Trustee in Denver, Colorado. In case a portion of
any Bond is designated for redemption under this Subsection (b),
the holder thereof shall be entitled to the same rights as are
set forth in Section 15.02 with respect to the designation for
redemption of a portion of a Bond under such Section 15.02.
(c) The Corporation covenants and agrees, not later
than one day before each Sinking Fund payment date, to pay to the
Trustee such amount of cash as shall be necessary to redeem the
Bonds required to be retired on such Sinking Fund payment date
pursuant to the Sinking Fund, together in any case with interest
accrued thereon to the date of such payment. All sums so paid to
the Trustee by the Corporation shall be applied by the Trustee to
the redemption of the Bonds in accordance with notices
theretofore given by the Trustee as provided above.
(d) Each Bond redeemed in its entirety by the
application of moneys in the Sinking Funds shall be cancelled
immediately by the Trustee and disposed of as directed by
Corporation Order.
Section 2.05. Place and Form of Payment on Bonds
of Series F and G. The principal of and premium (if any) and
interest on Bonds of Series F and G (subject to any agreement
entered into pursuant to section 6.01 hereof) shall be payable at
the principal office of the Trustee in Denver, Colorado, in coin
or currency of the United States of America that at the time of
such payment is legal tender for the payment of public and
private debts.
Section 2.06. Restriction on Dividends and Stock
Purchases. So long as any Bonds of Series F or Bonds of Series G
remain outstanding, the Corporation will not, without the prior
written consent of the holders of at least 66-2/3% in principal
amount of each of the Series F Bonds and the Series G Bonds
(a) declare or pay any dividend on shares of common
stock (except a dividend payable solely in shares of common
stock of the Company), or
(b) directly or indirectly purchase or redeem
shares of any common stock (except in exchange for other
shares of common stock of the Company) or any warrants or
other form of right to purchase any common stock of the
Company,
-5-<PAGE>
all such non-excepted dividends, purchases and redemptions being
herein called Restricted Payments, if after giving effect thereto
the aggregate amount of Restricted Payments made during the
period from and after December 31, 1982, to and including the
date of the making of the Restricted Payment in question, would
exceed the sum of (i) $800,000, plus (or minus in case of a
deficit) the Net Income of the Corporation for such period,
computed on a cumulative basis.
Section 2.07. Authentication of Series F and Series
G Bonds. After the execution and delivery of this Seventh
Supplemental Indenture and upon compliance by the Corporation
with Section 5.01, the Corporation may execute and deliver to the
Trustee, and the Trustee shall authenticate and deliver as
directed by Corporation Order, Series F Bonds in aggregate
principal amount not exceeding $2,500,000 and Series G Bonds in
aggregate principal amount not exceeding $2,500,000.
ARTICLE THREE
Amendment of Indenture
Section 3.01. Amendment of Original Indenture as
Heretofore Amended. Articles 1 through 17 of the Original
Indenture as heretofore amended are deleted. In lieu thereof
there are substituted Articles Four through Twenty hereof. No
amendments effected hereby shall affect the specific terms and
provisions of Bonds heretofore issued and now outstanding or any
covenants for the benefit of any particular series of such bonds.
ARTICLE FOUR
General Provisions To The Bonds
Section 4.01. General Designation, Form,
Registration and Limitation in Amount of Bonds. The Bonds issued
under this Indenture shall be designated generally as the
Corporation's First Mortgage Bonds, with the Bonds of each series
to be designated in such distinctive manner as the Board of
Directors may determine. Bonds of series heretofore issued and
outstanding shall be in the forms prescribed therefor in the
Original Indenture or Supplemental Indenture creating such
series. All Bonds to be hereafter issued shall be registered
bonds without coupons, except as may otherwise be provided in any
supplemental indenture executed pursuant to Section 12.01. Such
Bonds and the Trustee's certificate of authentication to be
endorsed on all Bonds shall be substantially in the form set
forth in Exhibit A attached hereto and made a part hereof,
subject only to such variations, additions, substitutions and
omissions as are required or permitted by this Indenture. The
definitive Bonds shall be printed, lithographed, engraved or
typed or produced by any combination of these methods, or may be
produced in any other manner permitted by the rules of any
-6-<PAGE>
national securities exchange, all as determined by the officers
executing such Bonds, as evidenced by their execution of such
Bonds.
The aggregate principal amount of Bonds that may be
executed and delivered and be Outstanding under this Indenture is
not limited, except as may be provided in Article Five hereof and
except as may by limited by law.
Section 4.02. Execution of Bonds. All Bonds to be
secured hereby, whether temporary or definitive, shall be signed
by the President or a Vice President of the Corporation, and the
corporate seal of the Corporation shall be thereto affixed and
attested by its Secretary or an Assistant Secretary, which seal
and which signatures may be facsimiles. In case any officer who
shall sign or seal or whose facsimile signature has been placed
upon a Bond shall cease to be such officer before the Bonds so
signed or sealed shall have been actually authenticated and
delivered by the Trustee, such Bond may, nevertheless, upon the
request of the Corporation, be issued, authenticated and
delivered as though such person had not ceased to be an officer
of the Corporation. Any Bond secured hereby may be signed or
sealed by any person who may be an officer of the Corporation at
the time of such signing or sealing, although such person may not
have been such officer at the date of such Bond.
Section 4.03. Number and Designation of Bonds.
Bonds authenticated under this Indenture shall bear such letters,
numbers or other identification marks as may be determined by the
Corporation and approved by the Trustee and may contain therein
or have imprinted thereon such legend or legends as may be
required in order to comply with any law or with any rules or
regulations made pursuant thereto or with the rules of any
national securities exchange.
Section 4.04. Authentication and Delivery of Bonds
by Trustee. All Bonds, when executed by the Corporation, shall
be delivered to the Trustee to be authenticated by it and the
Trustee shall authenticate and deliver the same only as provided
in this Indenture. Only such Bonds as shall bear thereon the
certificate of the Trustee, duly signed, shall be secured by this
Indenture, or entitled to any lien or benefit hereunder, and such
certificate of the Trustee upon any such Bond executed on behalf
of the Corporation shall be conclusive evidence, and the only
evidence, that the Bond so authenticated has been duly issued
hereunder and that the holder thereof is entitled to the benefits
of the trusts hereby created.
Section 4.05. Bonds Issuable in Series; Terms of
Bonds. At the option of the Corporation, the Bonds may be
issuable in one or more series. The terms of the Bonds of Series
F and G shall be as specified in Article Two hereof. The terms
of the Bonds of series heretofore issued and outstanding shall be
as specified in the Supplemental Indenture creating such Bonds.
The Bonds of any series other than Series F and G may (1) be of
-7-<PAGE>
such denomination or denominations, (2) bear such rate of
interest, payable on such interest payment dates, (3) mature at
such time, and in the case of Bonds of serial maturities, at such
times, (4) contain such provisions respecting any sinking,
amortization, improvement, renewal or other analogous fund for
the exclusive benefit of any one or more series, (5) be
exchangeable for or convertible into stock or other securities,
(6) be redeemable at such price or prices and upon such terms,
(7) be payable and subject to registration and transfer at such
place or places, and (8) contain such other provisions not
inconsistent with the terms of this Indenture, all as may be
specified in such Bonds and in the Board Resolutions and the
supplemental indenture providing for the creation and issuance of
such series. All Bonds of any one series shall be identical in
all respects, except that they may differ as to denomination,
date and, in the case of Bonds with serial maturities, as to time
to maturity, interest rate and redemption price.
Section 4.06. Procedure for Creation of New Series
of Bonds. Whenever the Corporation shall determine to create a
new series of Bonds (other than Series F and G Bonds) secured by
this Indenture, it shall file with the Trustee a Board Resolution
describing such series, and shall execute, acknowledge and
deliver a supplemental indenture likewise describing such series,
stating the amount of additional Bonds to be issued pursuant
thereto and containing such other provisions as may be necessary
or appropriate, and thereafter Bonds of such series may be issued
from time to time subject to the conditions and provisions of
this Indenture.
Section 4.07. Equal Security of Bonds. No series
of Bonds issued hereunder shall have any preference as to the
security afforded by this Indenture over any other Series of
Bonds issued or to be issued hereunder, and no Bond of any series
shall have any such preference over any other Bond of the same or
any other Series.
Section 4.08. Date of Bonds and Interest. All
Bonds issued under this Indenture shall bear interest from, and
shall be dated as of, the interest payment date next preceding
the date on which the same shall be authenticated by the Trustee,
or, if such date of authentication shall be an interest payment
date, such Bonds shall bear interest from, and shall be dated as
of, such interest payment date, or if such date of authentication
shall be a date prior to the first interest payment date for
Bonds of the series being authenticated, such Bonds shall bear
interest from, and shall be dated as of, the commencement of the
first interest period for such series, which may be the date of
initial issuance of such Bonds; provided, however, that if at the
time of authentication of any Bond of any series, interest is in
default on Outstanding Bonds of such series, such Bonds shall
bear interest from, and shall be dated as of, the interest
payment date for such series to which interest has previously
been paid or made available for payment on Outstanding Bonds of
such series.
-8-<PAGE>
Section 4.09. Bond Register, Registrar and Transfer
Agent. The Corporation hereby constitutes and appoints the
Trustee as Bond Registrar and transfer agent for the purpose of
registering and transferring Bonds entitled to be so registered
or transferred and the Corporation shall keep or cause to be kept
at the principal office of the Trustee, books for the
registration and transfer of Bonds issued hereunder (the Bond
Register) showing, among other things, all original issuances and
subsequent transfers of Bonds.
The Corporation, by Board Resolution, may name such
co-registrars and co-transfer agents of the Bonds as the
Corporation deems appropriate and shall cause to be kept at the
principal office of each such co-registrar or co-transfer agent a
duplicate of the Bond Register.
Section 4.10. Transfer of Bonds; Charges Therefor;
Ownership of Bonds. Any Bond may be transferred upon surrender
thereof to the Trustee, at its principal office, accompanied by
such duly executed instruments of transfer as may be required by
the Corporation and the Trustee, and thereupon the Corporation
shall issue in the name of the transferee or transferees or in
the name of the person making the transfer, as the case may be,
and the Trustee shall authenticate and deliver a new Bond or
Bonds of the same series and maturity, in authorized
denominations, for a like aggregate principal amount.
Unless otherwise provided in the supplemental
indenture creating the particular series of Bonds, upon every
transfer of Bonds as permitted in this Section, the Corporation
shall make no service charge against any holder of a Bond or his
transferee for any transfer, except that the Corporation may
require, as a condition to such transfer, the payment of a sum
sufficient to reimburse it for any stamp tax or other
governmental charge that may be imposed thereon, which sum shall
be paid by the party requesting such transfer.
The Corporation shall not be required to make any
transfer or transfers of any Bond or Bonds during the ten days
next preceding any date on which either interest is to be paid
thereon or Bonds of the same series are to be selected for
redemption, nor may transfer be required with respect to any
Bonds that have been called for redemption or that have matured.
The person in whose name any Bond shall be
registered shall for all the purposes of this Indenture be
regarded as the owner thereof, and the payment of or on account
of the principal of or interest (and premium, if any) on such
Bond shall be made only to such registered holder or upon his
order. All payments so made shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the extent
of the sum or sums so paid.
Section 4.11. Temporary Bonds. Pending the
preparation of any definitive Bonds to be issued under and
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secured by this Indenture, the Corporation may execute and
deliver temporary Bonds, which may be printed or typewritten,
substantially of the tenor and effect of the definitive Bonds.
Any such temporary Bond shall be authenticated by the Trustee in
the same manner as the definitive Bonds and such authentication
shall constitute conclusive evidence that the temporary Bonds so
authenticated have been duly issued under this Indenture and that
the holders thereof are entitled to the benefits of the trust
hereby created. Such temporary Bonds so issued and authenticated
shall be exchangeable without expense to the holder for
definitive Bonds of the same series and maturity, to be issued
under and secured by this Indenture, and upon any such exchange
such temporary Bonds shall be forthwith cancelled by the Trustee.
Any such temporary Bonds may also be exchanged for other
temporary Bonds of the same series and maturity and for the same
aggregate principal amount. Until so exchanged, such temporary
Bonds shall be in all respects entitled to the lien and security
of this Indenture as Bonds issued and authenticated hereunder.
Upon demand, without unnecessary delay the Corporation will
execute and will furnish definitive Bonds to be exchanged for
such temporary Bonds upon surrender of such temporary Bonds at
the office of the Trustee.
Section 4.12. Replacement Bonds. In case any Bond
issued hereunder shall be mutilated, lost, stolen, or destroyed,
the Corporation may, in its discretion, issue and deliver and the
Trustee shall authenticate a new Bond of like tenor, effect and
date:
(i) in lieu of and substitution for and upon
surrender and cancellation of the mutilated Bond, or
(ii) in lieu of and substitution for the Bond so
lost, stolen or destroyed, upon receipt of evidence satisfactory
to the Corporation and the Trustee of the loss, theft or
destruction of such Bond, and upon receipt also of indemnity
satisfactory to each of them.
Subject to the provisions of Section 9.01 hereof,
the Trustee shall incur no liability for anything done by it
pursuant to this Section. Any Bond issued pursuant to this
Section shall constitute an original contractual obligation on
the part of the Corporation and shall be secured equally and
ratably with all other Bonds issued hereunder and then
Outstanding. Any such replacement Bond may bear such endorsement
as may be prescribed by the Corporation with the approval of the
Trustee.
Section 4.13. Effect of Replacement. Each Bond
delivered pursuant to any provision of this Indenture in
substitution for the whole or any part, as the case may be, of
one or more other Bonds shall carry all of the rights to interest
accrued and unpaid, and to accrue, that were carried by the whole
or such part, as the case may be, of such one or more other
Bonds, and, notwithstanding anything contained in this Indenture,
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such Bond shall bear such date that neither gain nor loss in
interest shall result from such substitution.
Section 4.14. Disposition of Surrendered Bonds.
All Bonds surrendered for payment, redemption, transfer or
replacement, if surrendered to the Trustee, shall be promptly
cancelled by it, and, if surrendered to the Corporation, shall be
delivered to the Trustee for cancellation and shall be promptly
cancelled by the Trustee. The Corporation may at any time deliver
to the Trustee for cancellation any Bonds previously
authenticated and delivered hereunder that the Corporation may
have acquired in any manner whatsoever and all Bonds so delivered
shall be promptly cancelled by the Trustee. Upon cancellation by
the Trustee of any Bonds pursuant to this Section or
Section 4.11, such Bonds shall be disposed of as directed by a
Corporation Order.
ARTICLE FIVE
Issuance of Additional Bonds
Section 5.01. Issuance of Additional Bonds Based on
Net Bondable Property Additions. In addition to the principal
amount of Bonds of series heretofore issued, the Corporation may,
at any time and from time to time execute and deliver to the
Trustee for authentication additional Bonds (Additional Bonds) in
an aggregate principal amount not exceeding 66-2/3% of Net
Bondable Property Additions. The Additional Bonds so delivered
shall be authenticated and delivered by the Trustee upon
Corporation Order, dated as of the date of authentication and
delivery of Additional Bonds then being applied for, accompanied
by the following:
(a) A Board Resolution authorizing the issuance of a
specified principal amount of Additional Bonds of one or more
designated Series.
(b) An Officer's Certificate, dated the date of
authentication of Additional Bonds, stating that (i) no Default
of Event of Default exists hereunder, (ii) all conditions
precedent set forth in this Indenture relating to the
authentication and delivery of such Additional Bonds have been
complied with, and (iii) there has been no change in the
information set forth in the Certificate filed pursuant to
Subsection (d) of this Section 5.01 that would alter the
information set forth in such Certificates so as to cause such
Certificates to fail to comply with the requirements of said
Subsection as of the date of authentication and delivery of the
Additional Bonds.
(c) An Available Income Certificate, dated the date
of authentication of Additional Bonds, in substantially the form
attached hereto as Exhibit B, showing that the Income Available
for Interest Charges of the Corporation (or its predecessors),
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for a period of twelve consecutive months during the fifteen
months immediately preceding the first day of the month in which
the authentication of the Additional Bonds is made, shall have
been at least two times Pro Forma Interest Charges for the twelve
month period immediately succeeding the date of issuance of the
Additional Bonds. In case the Corporation shall have acquired,
by merger or otherwise, any property as an operating gas
transmission and distribution system (an Acquired System) within
or after the particular period for which the calculation of
Income Available for Interest Charges is made, or, is to acquire
such an Acquired System simultaneously with the authentication
and delivery of the Bonds then applied for, then in computing
Income Available for Interest Charges, there shall be included,
to the extent it may not have been otherwise included, the Income
Available for Interest Charges (or net loss) of such Acquired
System, as if such Acquired System had been owned by the
Corporation during the whole of such period.
(d) A net Bondable Property Additions Certificate,
dated as of a date not more than sixty days before the date of
authentication of such Additional Bonds, substantially in the
form attached hereto as Exhibit C, showing in substance:
(1) The balance, if any, of Net Bondable Property
Additions stated in the most recent Certificate, if any,
theretofore filed with the Trustee, as the balance to remain
after the action applied for in such prior Certificate; provided
that in the first Certificate filed with the Trustee the balance
shall be $13,899,855.
(2) The amount of Property Additions since the
period covered by the previous Certificate (or since June 30,
1983 in the case of the first Certificate delivered pursuant
hereto) and up to a date within 60 days of the date such
Certificate and briefly describing such Property Additions.
(3) The amount of said Property Additions which
constitute Funded Property.
(4) The cost to the Corporation of said Property
Additions and the statement that the fair value thereof to the
Corporation on the date of said Certificate is not less than the
cost so specified or if less, the fair value shall be shown in
lieu of cost.
(5) The aggregate amount of all Retirements during
the period covered by said Certificate.
(6) The amount of all Retirement Credits during the
period covered by such Certificate.
(7) The aggregate amount of Net Bondable Property
Additions during the period covered by such Certificate.
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(8) The amount of Net Bondable Property Additions
then being used.
(9) The balance of Net Bondable Property Additions
that will remain after authentication of the Additional Bonds.
There shall be excluded from the amount shown in
Paragraph (1) above the recorded amount of all property otherwise
reflected by the books of the Corporation in its fixed property
accounts as to which the Opinion of Counsel required by
Subsection (e) of this Section 5.01 cannot be given.
(e) An Opinion of Counsel, dated not more than five
days before the date of authentication of Additional Bonds,
(1) specifying the certificates or other evidence
that will be sufficient to show or provide compliance with the
requirements, if any, of any tax or recording or filing law
applicable to the issuance of the Additional Bonds, or stating
that there are no such legal requirements;
(2) specifying the certificates or other evidence
that will be sufficient to show the authorization or approval of,
or consent, to the issuance by the Corporation of the Additional
Bonds, by any Federal, state or other governmental regulatory
agency at the time having jurisdiction in the premises, or
stating that no such authorization, approval or consent is
required;
(3) stating that the Additional Bonds have been duly
authorized and, when executed by the Corporation, authenticated
and delivered by the Trustee and issued by the Corporation, upon
payment therefor, will be valid and binding obligations of the
Corporation and entitled to the benefits of and secured by the
lien of this Indenture equally and ratably with all other Bonds
hereby secured, subject to the provisions of the National
Bankruptcy Act and all other statutes affecting the rights of
creditors generally;
(4) stating that the document and other items that
have been or are therewith delivered to the Trustee conform to
the requirements of this Indenture, and that, upon the basis of
the Corporation Order and the accompanying documents or other
items specified in this Article, all conditions precedent
specified in this Indenture relating to the Additional Bonds have
been complied with, and the Additional Bonds may be lawfully
authenticated and delivered under this Article;
(5) stating that the Corporation has, or upon
delivery of the instruments of conveyance, transfer or
assignment, if any, specified in such opinion will have, good and
marketable title to all tracts or parcels of land and the
improvements thereon the cost of which is included in Paragraph
(1) of the Net Bondable Property Additions Certificate and that
are specifically described (i) in all supplemental indentures
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previously executed and recorded, or (ii) in the supplemental
indenture providing for the creation of the Additional Bonds
(except any of such tracts, parcels or improvements that have
been duly released from the lien hereof), subject only to
Permitted Encumbrances and that all of such tracts or parcels of
land and improvements thereon have been subjected to the lien of
this Indenture; and
(6) based on an examination of pertinent records in
all jurisdictions in which the Corporation owns personal
property, all personal property of the Corporation (other than
Excepted Property and property acquired within the limitations of
Section 6.06) is free from any recorded lien or security interest
subject only to Permitted Encumbrances.
The Opinion of Counsel may be based, and may state
that such counsel rely, upon title or mortgage insurance policies
or the opinion of other counsel deemed reliable by such counsel
and copies of any such policies or opinions shall be furnished to
the Trustee.
(f) The certificates and other evidence, specified
in the Opinion of Counsel as provided by Paragraphs (1) and (2)
of the foregoing Subsection (e).
(g) A supplemental indenture providing for the
creation and issuance of the Additional Bonds and stating the
maximum principal amount thereof, and otherwise meeting the
requirements of Section 5.05.
The Certificates required by Subsections (c) and (d)
of this Section shall be Officer's Certificates.
Section 5.02. Additional Bonds for Refunding. The
Corporation may at any time and from time to time execute and
deliver to the Trustee for authentication Additional Bonds for
the purpose of refunding Bonds of any other series theretofore
issued and outstanding, but the aggregate principal amount of
such Additional Bonds shall not exceed the aggregate principal
amount of Bonds theretofore issued hereunder and acquired, paid,
or redeemed by the Corporation. The Additional Bonds so
delivered shall be authenticated and delivered by the Trustee
upon Corporation Order, dated as of the date of authentication
and delivery of Additional Bonds then being applied for,
accompanied by the following:
(a) A Board Resolution authorizing the issuance of a
specified principal amount of Additional Bonds of one or more
designated series.
(b) An Officer's Certificate dated the date of
authentication of Additional Bonds stating that (i) no Default or
Event of Default exists hereunder, (ii) all conditions precedent
set forth in this Indenture relating to the authentication and
delivery of such Additional Bonds have been complied with, and
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(iii) the Bonds, if any, delivered pursuant to Subsection (f) of
this Section do not include (1) any Bond that has been previously
made the basis or the authentication and delivery of Bonds under
this Section, (2) any Bond that has been surrendered upon any
exchange or transfer of any Bond, (3) any Bond in lieu of which
another Bond has been authenticated and delivered under Section
4.12, or (4) any Bond whose payment, redemption or other
retirement has been effected through the operation of any
sinking, amortization, improvement or other analogous fund.
(c) An Available Income Certificate meeting the
requirements of Subsection (c) of Section 5.01.
(d) An Opinion of Counsel, dated the date of
authentication and delivery of the Additional Bonds, covering the
matters set forth in Paragraphs (1), (2), (3) and (4) of
Subsection (e) of Section 5.01.
(e) Bonds theretofore authenticated and delivered
under this Indenture in an aggregate principal amount equal to
the aggregate principal amount of Additional Bonds whose
authentication and delivery are then applied for; provided,
however, that in lieu of delivering such Bonds to the Trustee,
the Corporation may deliver cash in an amount sufficient to
redeem certain specified Outstanding Bonds in an aggregate
principal amount equal to the aggregate principal amount of
Additional Bonds which are then requested to be authenticated and
delivered, provided that notice of such redemption has been duly
given pursuant to this Indenture or provision satisfactory to the
Trustee has been made for the giving of such notice.
(f) A supplemental indenture providing for the
creation and issuance of the Additional Bonds and stating the
maximum principal amount thereof and otherwise meeting the
requirements of Section 5.05.
All Bonds theretofore issued hereunder and received
by the Trustee pursuant to the provisions of this Section 5.02
shall be cancelled by the Trustee as provided in Article Fifteen
of this Indenture.
If the Bonds delivered to the Trustee or in respect
of the redemption of which cash has been deposited with the
Trustee pursuant to Subsection (f) of this Section bear interest
at a rate per annum equal to or more than that borne by the
Additional Bonds then to be authenticated by the Trustee or if
such Bonds shall have a final maturity not more than three years
from the date of the authentication and delivery of such
Additional Bonds, then the Certificates required by Subsection
(d) of this Section need not be furnished by the Corporation and
the Trustee shall authenticate such Additional Bonds upon receipt
of such other Certificates and the opinion required by this
Section.
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Section 5.03. Additional Bonds Against Deposit of
Cash. The Corporation may, at any time and from time to time
execute and deliver to the Trustee for authentication Additional
Bonds upon the deposit with the Trustee of an amount in cash
equal to the aggregate principal amount of Additional Bonds then
delivered. The Additional Bonds so delivered shall be
authenticated and delivered by the Trustee upon Corporation
Order, dated as of the date of authentication and delivery of
Additional Bonds then being applied for, accompanied by the
following:
(a) A Board Resolution authorizing the issuance of a
specified principal amount of Additional Bonds of one or more
designated series.
(b) An Officer's Certificate dated the date of
authentication of Additional Bonds stating that (i) no Default or
Event of Default exists hereunder and (ii) all conditions
precedent set forth in this Indenture relating to the
authentication and delivery of such Additional Bonds have been
complied with.
(c) An Available Income Certificate meeting the
requirements of Subsection (d) of Section 5.01.
(d) An Opinion of Counsel, dated the date of
authentication and delivery of the Additional Bonds, covering the
matters set forth in Paragraphs (1), (2), (3) and (4) of
Subsection (e) of Section 5.01.
(e) Cash in an amount equal to the aggregate
principal amount of Additional Bonds which are then requested to
be authenticated and delivered.
(f) A supplemental indenture providing for the
creation and issuance of the Additional Bonds and stating the
maximum principal amount thereof, and otherwise meeting the
requirements of Section 5.05.
Section 5.04. Withdrawal of Deposited Cash. Cash
deposited with the Trustee pursuant to Section 5.03 shall be held
by the Trustee as part of the Mortgaged Property, and the Trustee
shall deliver all or any part of such cash to the Corporation in
an amount equal to the principal amount of Bonds which could then
be authenticated by the Trustee pursuant to Section 5.01 upon
receipt by the Trustee of a Corporation Order, dated as of the
date of delivery of cash pursuant to this Section accompanied by
the following:
(a) A Board Resolution requesting the payment of a
specified amount of deposited cash.
(b) An Officer's Certificate dated the date of
withdrawal of such deposited cash stating that (i) no Default or
Event of Default exists hereunder, and (ii) all conditions
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precedent set forth in this Indenture relating to the withdrawal
of such deposited cash have been complied with.
(c) A Net Bondable Property Additions Certificate
meeting the requirements of Subsection (d) of Section 5.01 (with
such appropriate omissions and variations as are applicable to
deposited cash).
(d) An Opinion of Counsel, dated the date of
withdrawal of deposited cash, covering the matters set forth in
Subsection (e) of Section 5.01.
Section 5.05. Supplemental Indenture. Each
supplemental indenture required by Sections 5.01, 5.02 or 5.03
shall be properly executed on its behalf by the appropriate
officers of the Corporation, acceptable in form and content to
the Trustee, and shall subject to the lien of the Indenture all
property acquired by the Corporation after the date of the
Original Indenture, other than Excepted Property, not previously
described in any previously recorded supplemental indenture,
specifically describing all tracts of parcels of land included in
such property. Each such supplemental indenture shall be in such
form as to qualify it for recording in the jurisdictions in which
any property of the Corporation, other than Excepted Property, is
located; and it shall be so recorded.
ARTICLE SIX
Covenants of the Corporation
The Corporation hereby covenants and agrees for the benefit of
the holders of the Bonds and their successors in interest that,
so long as any Bonds remain Outstanding:
Section 6.01. Payment. The Corporation will duly
and punctually pay or cause to be paid the principal of (and
premium, if any) and interest on the Bonds at the times and
places and in the manner specified in the Bonds and herein.
Notwithstanding the above or any other provisions of this
Indenture or any Bond issued hereunder, the Corporation may enter
into an agreement with the holder of any Bond providing for the
payment to such holder, without presentation or surrender of such
Bond, of the principal of (and premium, if any) and interest on
such Bond or any part thereof at a place other than as designated
herein or in such Bond, and for the making of notation of
principal payments on such Bond by such holder prior to any
transfer, thereof. The Trustee is authorized to consent to any
such agreement and shall not be liable or responsible to any such
holder or to the Corporation for any act or omission on the part
of the Corporation or any holder of a Bond in connection with any
such agreement. The Corporation covenants to deposit with the
Trustee, at its principal office in Denver Colorado, or with a
Paying Agent other than the Trustee (or, if the Corporation is
acting as its own Paying Agent, segregate and hold in trust as
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provided in Section 6.14), an amount of money sufficient to make
such payment of principal (and premium, if any) and interest on
the Bonds, such deposit to be made with the Trustee not later
than one business day before the date such payment or payments
are due. All amounts so deposited shall be held in trust for the
accounts of the holders of the obligations due on such date and
shall be applied to the payment thereof.
Section 6.02. Taxes and Assessments. The
Corporation will duly and punctually pay and discharge, or cause
to be paid and discharged, all taxes, assessments and
governmental charges or levies imposed upon or assessed against
the Corporation, or upon any of the Mortgaged Property; provided,
however, that nothing herein contained shall require the
Corporation to pay any such tax, assessment, charge or levy so
long as the Corporation shall in good faith contest the validity
of the same by appropriate legal proceedings and stay any
execution thereof and so long as adequate reserves in respect
thereof have been established in accordance with generally
accepted accounting principles and the Corporation's title to and
right to use its property is not adversely affected thereby.
Section 6.03. Maintenance of Corporate Existence
and Rights; Compliance With Laws. Subject to the provisions of
Article Thirteen hereof, the Corporation will do or cause to be
done, at its own cost and expense, all things necessary to
preserve, extend and renew its corporate existence under the laws
of the State of Colorado, and its qualified status in any state
in which it may engage in business, and will use it best efforts
to preserve and renew all franchises, rights of way, easements,
permits and licenses now held by it or hereafter granted to or
conferred upon it; provided, however, that the Corporation shall
not be required to preserve any such franchise, right, easement,
permit or license if the Board of Directors shall determine that
such preservation is no longer desirable in the conduct of the
business of the Corporation and will comply with all valid laws,
ordinances, regulations and requirements applicable to it or its
property.
Section 6.04. Carry on Business and Maintain
Property. The Corporation will at all times endeavor to carry on
and conduct its business in an efficient manner and will cause
the Mortgaged Property (except such property as may be disposed
of or released from the lien hereof pursuant to Article Fourteen)
to be maintained and preserved and kept in good repair and
working order and will cause to be made all necessary repairs,
renewals, replacements, and substitutions, so that at all times
the efficiency of the Mortgaged Property shall be fully preserved
and maintained in accordance with the standards generally
accepted in the utility industry and by such regulatory
authorities then exercising jurisdiction over vhe Corporatkon.
Section 6.05. Insurance. The Corporation will
insure and keep insured in a reasonable amount with financially
sound and reputable insurance companies all property and
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equipment of a character usually insured by companies of
relatively the same size engaged in the same or a similar
business against liabilities or famages of tje kind customarily
insured against by such companies, provided that the Corporation
may at its election act as self-insurer, any such system of
self-insurance (including any appropriate reserve or reserves
therefor) to be upon such terms and conditions as may be
determined by the Board of Directors provided that the same
conforms to approved practices of similar companies maintaining
systems of self-insurance or to regulations of any regulatory
commission having jurisdiction over the Corporation.
All policies or other contracts for such insurance
upon any part of the Mortgaged Property shall provide that the
proceeds of such insurance (except in the case of any particular
casualty resulting in damage or destruction not exceeding
$100,000 in the aggregate) shall be payable to the Trustee to be
held and applied by the Trustee as a part of the Mortgaged
Property; provided, however, that, with respect to any part of
the Mortgaged Property that is subject to a prior lien or
Permitted Encumbrance, the loss under any such insurance policy
or contract may be payable also to the trustee, mortgagee or
other holder of such prior lien or Permitted Encumbrance, as its
interest may appear. At any time upon the request of the
Trustee, the Corporation will file with the Trustee an Officer's
Certificate containing a detailed list of the insurance in effect
upon the Mortgaged Property on a date therein specified (which
date shall be within 30 days of the filing of such certificate)
and stating the names of the insurers with which the outstanding
policies and other contracts, and specifying the property and
risks covered thereby, and stating that said insurance complies
with this Section.
Any appraisement or adjustment of any loss or damage
of or to any part of the Mortgaged Property and any settlement in
respect thereof which may be agreed upon between the Corporation
and any insurer, as evidenced by an Officer's Certificate, shall
be assented to and accepted by the Trustee.
All proceeds of any insurance on any part of the
Mortgaged Property not payable to the Trustee or the trustee,
mortgagee or other holder of a prior lien or Permitted
Encumbrance shall be applied by the Corporation to the repair,
restoration or replacement of the Mortgaged Property. All
proceeds of any insurance on any part of the Mortgaged Property
payable to the Trustee shall be deposited with the Trustee to be
held and paid over or applied by it as provided in Article
Seventeen.
The Corporation will maintain liability insurance
against claims for personal injury or death or property damages
suffered by members of the public or others in or about any
property or premises owned or occupied or used by it or occurring
by reason of its ownership, maintenance, use or operation of any
pipelines, compressing stations, plants, shops, machinery,
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automobiles, trucks or other vehicles, or airplanes or other
facilities, provided that the Corporation may at its election act
as a self-insurer, any such system of self-insurance (including
an appropriate reserve or reserves therefor) to be upon such
terms and conditions as may be determined by the Board of
Directors provided that the same conforms to approved practices
of similar companies maintaining systems of self-insurance or to
regulations of any regulatory commission having jurisdiction over
the Corporation; and the Corporation will maintain all such
workmen's compensation or similar insurance as may be required
under the laws of any jurisdiction in which it may be engaged in
business. All such liability and workmen's compensation and
similar insurance shall be maintained in such amounts as are
customarily carried by responsible persons engaged in the same or
similar business and shall be effected under a valid and
enforceable policy or policies issued by insurers of recognized
responsibility, except that the Corporation may effect workmen's
compensation or similar insurance in respect of operations in any
jurisdiction either through an insurance fund operated by such
jurisdiction or by causing to be maintained a system or systems
of self-insurance which is in accord with applicable Federal or
state laws.
Section 6.06. Restrictions on Encumbrances. The
Corporation will not create or suffer to exist any mortgage,
lien, security interest or encumbrance on any property or assets
(other than the lien of the Indenture), except:
(a) Permitted Encumbrances; and
(b) Any purchase money mortgage or security interest
created to secure part of the purchase price of any property or
of any mortgage on, or security interest in, any property
existing at the time of acquisition thereof, whether or not
assumed by the Corporation, provided that:
(1) such purchase money mortgage, mortgage or
security interest shall extend only to the property so acquired
and fixed improvements thereto;
(2) at the time of acquisition thereof and after
giving effect to the indebtedness secured by such outstanding
purchase money mortgage, mortgage or security interest the
aggregate principal amount of indebtedness secured by all such
outstanding purchase money mortgages, mortgages and security
interests shall not exceed 10% of the aggregate principal amount
of all Outstanding Bonds; and
(3) the principal amount of the indebtedness secured
by any such purchase money mortgage, mortgage or security
interest, together with all other indebtedness secured by a lien
on such property, shall not exceed 66-2/3% of the cost of or fair
value, whichever is less, of the property so acquired on the date
of acquisition thereof; provided, however, if the principal
amount of such indebtedness shall exceed 66-2/3% of the cost or
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fair value, whichever is less, of such property, then the
Corporation may acquire such property provided that the
Corporation shall within 15 days after such acquisition furnish
to the Trustee (i) a Net Bondable Property Additions Certificate
in the form prescribed by Subsection (e) of Section 5.01 which
shall certify Net Bondable Property Additions in an amount equal
to 150% of such excess indebtedness and such Net Bondable
Property Additions so certified shall thereafter constitute
Funded Property, and (ii) a certificate in the form prescribed by
Subsection (b) of Section 5.01, provided, however, that such
certificate shall refer only to Subsection (d) of Section 5.01
and that both the Net Bondable Property Additions Certificate and
the Certificate shall refer to the date of acquisition of such
property rather than the date of authentication and delivery of
Bonds.
Section 6.07. Records of Account and Certificate.
The Corporation will at all times keep proper books of record and
account and therein will make full, true and proper entries of
all dealings and transactions in relation to the property,
business and affairs of the Corporation; and such books shall at
all reasonable times be open to inspection by the Trustee and its
duly authorized agents. Such books of account shall at all times
conform strictly to the Accounting Requirements. On or before
April 30 of each year, the Corporation shall file with the
Trustee a balance sheet as of the end of the preceding calendar
year and a profit and loss statement for such year, together with
other related statements and appropriate notes, and such
statements shall be reviewed by independent certified public
accountants whose certificates shall accompany them and who,
together with the chief financial officer of the Corporation,
shall further certify that such statements have been prepared
strictly in accordance with the Accounting Requirements.
Section 6.08. Certificate as to Compliance. On or
before April 30, 1984, and on or before April 30 in each calendar
year thereafter, the Corporation will deliver to the Trustee (1)
an Officer's Certificate stating whether or not the Corporation
is in default in the payment of the principal or interest on the
Bonds or has knowledge of any Default, and, if so, specifying
each such Default of which the signers have knowledge, and (2) a
certificate of the firm of public accountants that prepared the
financial statements for the Corporation for the immediately
preceding fiscal year to the effect that such firm, in making the
examination in connection with its report on such financial
statements, has obtained no knowledge of any Default (or if
knowledge of Default has been obtained, specifying each such
Default), by the Corporation during such fiscal year in the
observance, performance, or fulfillment of any of the terms,
provisions, or conditions contained in this Indenture.
Section 6.09. Warranty of Title and Further
Assurances. The Corporation warrants that (a) the Corporation is
lawfully seized and possessed of all the Mortgaged Property
described or otherwise identified in the Granting Clauses hereof;
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the Corporation has satisfactory title to the rights-of-way,
leases, and servitudes described in said Granting Clauses,
sufficient for the possession, maintenance and operation of the
pipelines and related facilities described in said Granting
Clauses; the Corporation has validly obtained the franchises and
permits described in said Granting Clauses; and
(b) subject to Permitted Encumbrances, the Mortgaged
Property on the date hereof is free and clear of any deed of
trust, mortgage, lien, charge or encumbrance thereon or affecting
the title thereto except the lien of this Indenture.
The Corporation will from time to time execute,
acknowledge and deliver any and all such further assurances,
conveyances, mortgage, indentures supplemental hereto or
assignments of property hereafter acquired by the Corporation as
are required by the terms of this Indenture or as the Trustee may
reasonably require to subject the property which is intended to
be subject to the lien of this Indenture to the lien hereof.
Section 6.10. Paying Agents.
(a) Duties of Paying Agent. In the event that the
Corporation designates any Paying Agents hereunder, the
Corporation will cause each such Paying Agent 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 6.10, that such Paying Agent will:
(1) hold all sums by it as such agent for the
payment of the principal of (and premium, if any) or interest on
the Bonds in trust for the benefit of the persons entitled
thereto until such sums shall be paid to such persons or
otherwise disposed of as provided herein;
(2) give the Trustee notice of any failure by the
Corporation to make any payment of the principal of (and premium,
if any) or interest on the Bonds when the same shall be due and
payable; and
(3) at any time during the continuance of an Event
of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.
(b) Corporation as Paying Agent. If the Corporation
shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any) or
interest on the Bonds, segregate and hold in trust for the
benefit of the persons entitled thereto, a sum sufficient to pay
such principal (and premium, if any) or interest so becoming due
until such sums shall be paid to such persons or otherwise
disposed of as herein provided, and the Corporation will notify
the trustee of such action and of the payment of such funds or
any failure to take such action or make such payment.
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(c) Holding Sums in Trust. Anything in this Section
6.10 to the contrary notwithstanding, (i) the agreement to hold
sums in trust as provided in this Section 6.10 is subject to the
provisions of Section 6.01, and (ii) for the purposes of
obtaining the discharge and satisfaction of this Indenture or for
any other purpose, the Corporation may deliver, or by Corporation
Order may cause any such Paying Agent to deliver, to the Trustee
any sums so held in trust as aforesaid, such sums thereafter to
be held upon the same trusts as those upon which such sums were
held by the Corporation or such Paying Agent; and upon such
payment the party making such payment shall be discharged from
such trust.
Section 6.11. Payment of Certain Charges. In the
event of the failure of the Corporation in any respect to comply
with the covenants contained in Section 6.02, 6.04 or 6.05 hereof
or to keep the Mortgaged Property in repair and free of liens and
other charges, other than Permitted Encumbrances, the Trustee or
any Bondholder shall have the right (without prejudice to any
other rights arising by reason of such Default) to advance or
expend moneys for the purpose of performing such covenants on
behalf of the Corporation. The Corporation shall be immediately
notified of any such advance. All sums so advanced for any of
the aforesaid purposes shall at once be repayable by the
Corporation, shall bear interest at the current prime rate
announced by the Trustee until paid, and shall be secured hereby
having the benefit of the lien hereby created in priority to the
Bonds.
Section 6.12. Appointment of Successor Trustee.
The Corporation, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint a Trustee in the manner and
in conformity with the requirements specified in Section 9.10
hereof, so that there shall at all times be a Trustee hereunder.
Section 6.13. Transaction with Affiliates. Subject
to applicable regulatory requirements, the Corporation will not
enter into or be a party to, any transaction or arrangement with
any Affiliate (including without limitation, the purchase from,
sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course
of and pursuant to the reasonable requirements of the
Corporation's business and upon fair and reasonable terms no less
favorable to the Corporation than would obtain in a comparable
arm's length transaction with a Person other than an Affiliate.
Section 6.14. Inspection of Mortgaged Properties.
The Corporation will, subsequent to September 1, 1983, upon the
written request of the holders of not less than 25% of the
aggregate principal amount of Bonds then outstanding, which
request shall be delivered to the Trustee and the Corporation,
cause an inspection of the mortgaged Properties to be made by an
Engineer (hereinafter in this Section referred to as the
Inspecting Engineer) to be selected by the Corporation (and who
may be employed by or affiliated with the Corporation) for the
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purpose of determining the matters hereinafter provided to be set
forth in the report of the Inspecting Engineer, and that the
Corporation will grant such Inspecting Engineer access to the
properties, books and records of the Corporation for the purpose
of such inspection; but no such inspection shall be made within
three years from the date of filing with the Trustee of the
report of any such inspection previously made hereunder.
The Inspecting Engineer, within a reasonable time
from the date of his appointment, shall file with the Trustee,
the Corporation and the holders of the Bonds a written report
stating whether or not the Mortgaged Properties, as an operating
system or systems, have been maintained in good repair and
working order in accordance with the requirements of Section
6.04. If such report shall state that the Mortgaged Properties,
as an operating system or systems, have not been so maintained,
there shall be clearly stated in such report the character and
extent of the estimated cost of making good, and the time, if
longer than one year, reasonably required to make good, such
deficiency in maintenance.
The Corporation covenants and agrees with all
reasonable speed and diligence to do such maintenance work as may
be necessary to make good any deficiency in maintenance disclosed
by the report of the Inspecting Engineer.
All expenses, including (without limitation) the
reasonable compensation of the Inspecting Engineer which may be
incurred pursuant to the provisions of this Section, shall be
paid by the Corporation.
ARTICLE SEVEN
Bondholder's Lists and Reports by the
Corporation and the Trustee
[The provisions of Section 7.02, 7.04, and 7.06
shall be operative as parts of this Indenture only with respect
to the period after the date on which this Indenture is qualified
under the Trust Indenture Act and until such date shall not be
deemed a part hereof.]
Section 7.01. Corporation to Furnish Trustee and
Trustee to Preserve Lists of Bondholders.
(a) Duty to Furnish Lists. The Corporation
covenants and agrees that it will furnish or cause to be
furnished to the Trustee on July 1 of each year, beginning July
1, 1984, and at such other times as the Trustee may request in
writing within thirty days after receipt by the Corporation of
any such request, a list in such form as the Trustee may
reasonably require containing all information in the possession
or control of the Corporation as to the names and addresses of
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the holders of Bonds obtained since the date as of which the next
previous list, if any, was furnished, excluding from any such
list names and addresses received by the Trustee in its capacity
as Bond Registrar. Any such list must be dated as of a date not
more than fifteen days prior to the time such information is
furnished or caused to be furnished and need not include
information received after such date.
(b) Trustee's Duty to Preserve List of Bondholders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the holders of Bonds (1)
contained in the most recent list furnished to it as provided in
Subsection (a) of this Section 7.01 and (2) received by the
Trustee in its capacity as Bond Registrar. The Trustee may
destroy any list furnished to it as provided in Subsection (a) of
this Section 7.01 upon receipt of a new list so furnished.
Section 7.02. Transmittal of Information. If the
holders of not less than 15% in aggregate principal amount of the
Bonds then Outstanding hereunder (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a
Bond for a period of at least six months preceding the date of
such application, and such application states that the applicants
desire to communicate with other holders of Bonds with respect to
their rights under this Indenture or under the Bonds, and is
accompanied by a copy of the form of proxy or other communication
that such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application,
at its election, either:
(1) afford to such applicants access to the
information preserved at the time by the Trustee in accordance
with the provisions of Subsection (b) of Section 7.01, or
(2) inform such applicants as to the approximate
number of holders of Bonds whose names and addresses appear in
the information preserved at the time by the Trustee in
accordance with the provisions of Subsection (b) of Section 7.01,
and as to the approximate cost of mailing to such Bondholders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon
the written request of such applicants, mail to each Bondholder
whose name and address appears in the information preserved at
the time by the Trustee in accordance with the provisions of
Subsection (b) of Section 7.01, a copy of the form of proxy or
other communication that is specified in such request, with
reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of
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the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be
contrary to the best interests of the holders of the Bonds or
would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all
such Bondholders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise, the Trustee
shall be relieved of any obligation or duty to such applicants
respecting their application.
Section 7.03. Corporation's and Trustee's
Accountability for Disclosure. Each and every holder of the
Bonds, by receiving and holding the same, agrees with the
Corporation and the Trustee that neither the Corporation nor the
Trustee nor any Paying Agent shall be held accountable by reason
of the disclosure of any such information as to the names and
addresses of the Bondholders in accordance with the provisions of
Section 7.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a
request made under Section 6.02.
Section 7.04. Reports to be Filed With Trustee and
Commission. The Corporation covenants and agrees:
(a) To file with the Trustee within fifteen days
after the Corporation is required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules
and regulations prescribe) that the Corporation may be required
to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended; or, if
the Corporation is not then required to file information,
documents or reports pursuant to either of such section, then to
file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports as may be required pursuant to Section 13
of the Securities Exchange Act of 1934, as amended, in respect of
a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) To file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents
and reports with respect to compliance by the Corporation with
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the conditions and covenants provided or in this Indenture as may
be required from time to time by such rules and regulations; and
(c) To transmit to the holders of Bonds within
thirty days after the filing thereof with the Trustee, in the
manner and to the extent provided in Subsection (c) of Section
7.06 with respect to reports pursuant to Subsection (a) of
Section 7.06, such summaries of any information, documents,
opinions and reports required to be filed by the Corporation
pursuant to this Section 7.04 and Section 7.05 as may be required
by rules and regulations prescribed from time to time by the
Commission.
Section 7.05. Opinions of Counsel to be Filed With
Trustee. The Corporation covenants and agrees:
(a) To file with the Trustee, promptly after
execution and delivery of this Indenture, an opinion of Counsel
either stating that in the opinion of such counsel this Indenture
has been properly recorded and filed so as to make effective the
lien intended to be created hereby, and reciting the details of
such action, or stating that in the opinion of such counsel no
such action is necessary to make such lien effective; and
(b) To file with the Trustee on April 30 in each
year, beginning with the year 1984, an Opinion of Counsel, dated
as of April 30 of such year, either stating that in the opinion
of such counsel such action has been taken with respect to the
recording, filing, re-recording, and refiling of this Indenture
and of each supplemental indenture or other instrument of further
assurance, including, without limitation, financing statements,
as is necessary to maintain the lien of this Indenture, and
reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to maintain
such lien.
Section 7.06. Trustee's Report to Bondholders.
(a) The term "reporting date," as used in this
section, shall be May 15 in each year beginning with the year
1984. Within sixty days after the reporting date in each year,
so long as any of the Bonds are outstanding hereunder, the
Trustee shall transmit to the Bondholders, in the manner provided
in Subsection (c) of this Section 7.06, a brief report dated as
of such reporting date with respect to:
(1) its eligibility under Section 9.09, and its
qualifications under Section 9.08, if then operable, or in lieu
thereof, if to the best of its knowledge it has continued to be
eligible and qualified under such Sections, a written statement
to such effect;
(2) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding the
making thereof) made by the Trustee (as such) that remain unpaid
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on the reporting date, and for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Bonds
on any property or Funds held or collected by it as Trustee, if
such advances so remaining unpaid aggregate more than one-half of
one percent of the principal amount of the Bonds Outstanding on
the reporting date;
(3) the amount, interest rate, and maturity date of
all other indebtedness owing by the Corporation to the Trustee in
its individual capacity, on the reporting date, with a brief
description of any property held as collateral security thereof,
except any indebtedness based upon a creditor relationship
arising in any matter described in Subsections (b), (c), (d) or
(f) of Section 9.14;
(4) the property and funds, if any, physically in
the possession of the Trustee as such on the reporting date;
(5) any release, or release and substitution, of
property subject to the lien of this Indenture (and the
consideration therefor, if any) that the Trustee has not
previously reported; provided however, that, to the extent that
the aggregate value as shown by the release papers of all of such
released properties does not on the reporting date exceed 1% of
the principal amount of Bonds Outstanding on the reporting date,
the report need only indicate the number of such releases, the
total value of property released, the aggregate amount of cash
received and the aggregate value of property received in
substitution therefor, all as shown by the release papers.
(6) any additional issue of Bonds that the Trustee
has not previously reported; and
(7) any action taken by the Trustee in the
performance of its duties under this Indenture that it has not
previously reported and that in its opinion materially affects
the Bonds, except action in respect of a Default, notice of which
has been or is to be withheld by it in accordance with the
provisions of Section 8.09.
(b) the Trustee shall transmit to the Bondholders,
in the manner provided in Subsection (c) of this Section 7.06, a
brief report with respect to:
(1) the release, or release and substitution, of
property subject to the lien of this Indenture (and the
consideration therefor, if any) unless the fair value of such
property, as set forth in the certificate or opinion required by
Subsection (b) of Section 14.03, is less than 10% of the
principal amount of Bonds Outstanding at the time of such
release, or such release and substitution, such report to be so
transmitted within ninety days after such time; and
(2) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding the
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making thereof) made by the Trustee as such since the date of the
last report transmitted pursuant to the provisions of Subsection
(a) of this Section 7.06 (or if no such report has yet been so
transmitted, since the date of execution of this Indenture), for
the reimbursement of which it claims or may claim a lien or
charge prior to that of the Bonds on property or funds held or
collected by it as Trustee, and that it has not previously
reported pursuant to this subsection, such report to be
transmitted within ninety days after such time; provided,
however, that the Trustee shall not be required, but may elect,
to report such advances if such advances remaining unpaid at any
time aggregate 10% or less of the principal amount of Bonds
Outstanding at such time;
(c) Reports pursuant to this Section 7.06 shall be
transmitted by mail to all Bondholders as their names and
addresses appear in the Bond Register.
(d) A copy of each such report shall, at the time of
such transmission to Bondholders, be filed by the Trustee with
the Corporation, with each national securities exchange upon
which the Bonds are listed (if so listed) and also with the
Commission, if at the time required. The Corporation agrees to
notify the Trustee when and as the Bonds become listed on any
national securities exchange.
ARTICLE EIGHT
Remedies of the Trustee and
Bondholders on Event of Default
Section 8.01. Events of Default Defined;
Acceleration of Maturity; Rescission and Annulment. In case one
or more of the following events (herein called Events of Default)
shall have occurred and be continuing for any reason whatsoever
(as whether such occurrence shall be voluntary or involuntary or
come about or be effected by operation of law of otherwise), that
is to say:
(a) default in the payment of any installment of
interest upon any Bond, when the same shall become due and
payable, and continuance of such default for a period of five
days; or
(b) default in the payment of the principal of (and
premium, if any, on) any Bond as and when the same shall become
due and payable whether at maturity, upon redemption, by
declaration, or as otherwise herein provided; or
(c) default in the payment of any sinking fund
installment provided for in this Indenture or in any Bond as and
when the same shall become due and payable; or
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(d) default on the part of the Corporation in the
performance of any other of the covenants or agreements on the
part of the Corporation in any Bonds or in this Indenture
contained and continuance of such default for a period of thirty
days after the date on which written notice specifying such
default, stating that such notice is a Notice of Default
hereunder, and requiring the same to be remedied, shall have been
given to the Corporation by the Trustee, or to the Corporation
and the Trustee by the holders of at least 15% in principal
amount of the Bonds at the time Outstanding; or
(e) default on the part of the Corporation in the
payment of the principal of or interest on any indebtedness of
the Corporation for borrowed money as and when the same shall
become due and payable by the lapse of time, by declaration, or
call for redemption or otherwise, and such default shall continue
beyond the period of grace, if any, allowed with respect thereto;
or
(f) default on the part of the Corporation in the
performance of any of the covenants or agreements on the part of
the Corporation in any indenture, agreement or other instrument
under which any indebtedness of the Corporation for borrowed
money may be issued and such default or event shall continue for
a period of time sufficient to permit the acceleration of the
maturity of any indebtedness of the Corporation outstanding
thereunder and such indebtedness shall have been accelerated; or
(g) the entry of an order for relief or of a decree
or order by a court having jurisdiction in the premises (1)
adjudging the Corporation a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of the Corporation or any of the
indebtedness of the Corporation under the federal bankruptcy laws
or any other similar, applicable federal or state law, or (2)
appointing, on the ground of insolvency or bankruptcy, a
custodian, receiver, liquidator, trustee or assignee in
bankruptcy or insolvency of the Corporation or of any substantial
part of its property, or for the winding up or liquidation of its
affairs, and the continuance of such decree or order unvacated
and unstayed for a period of thirty days; or
(h) the Corporation shall apply for an order for
relief or shall institute proceedings to be adjudicated a
voluntary bankrupt or insolvent, or shall consent to the filing
of a bankruptcy proceeding or insolvency proceeding against it,
or shall file a petition or answer or consent seeking
reorganization under the federal bankruptcy laws or any other
similar applicable federal or state law, or shall consent to the
filing of any such petition, or shall consent to the appointment
on the ground of insolvency or bankruptcy of a custodian or
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of any substantial part of it property, or
shall make a general assignment for the benefit of creditors or
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shall admit in writing its inability to pay its debts generally
as they become due; or
(i) if final judgment for the payment of money in
excess of $5O,OOO shall be entered against the Corporation and
such judgment shall remain unsatisfied and the execution thereof
shall remain unstayed for a period of sixty days after the entry
of such judgment and receipt of actual notice thereof by the
Corporation, or such judgment shall remain unsatisfied for a
period of sixty days after termination of any stay of execution
thereon entered within such sixty day period;
then, and in each and every such case, the Trustee may, if it
shall have knowledge of an Event of Default, and if directed by
the holders of not less than 25% in aggregate principal amount of
the Bonds then Outstanding hereunder shall, declare the principal
of all the Bonds to be due and payable immediately, by notice in
writing to the Corporation and, upon any such declaration, the
same shall become and shall be immediately due and payable,
anything in this Indenture or in the Bonds contained to the
contrary notwithstanding. This provision, however, is subject to
the condition that if, at any time after the principal of the
Bonds shall have been so declared due and payable, but before any
foreclosure sale of the Mortgaged Property, or any part thereof,
shall have been made under this Article, or any judgment or
decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided,
1. The Corporation shall pay or shall deposit with
the Trustee a sum sufficient to pay:
a) All matured installments of interest upon all the
Bonds; and
(b) The principal of (and premium, if any, on) any
and all Bonds that shall have become due otherwise than
acceleration (with interest at the rate or rates expressed in the
Bonds to the date of such payment or deposit); and
(c) To the extent that payment of such interest is
enforceable under applicable law, and if provided for in any of
the Bonds, interest upon overdue installments of interest at the
rate or rates expressed in such Bonds to the date of such payment
or deposit; and
(d) The amount payable to the Trustee under Section
9.06; and
2. Any and all Events of Default, other than the
nonpayment of principal on Bonds that shall have become due
solely by such declaration of acceleration, shall have been
remedied or waived as provided in Section 8.08,
then and in the event the holders of a majority in aggregate
principal amount of the Bonds then Outstanding, by written notice
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to the Corporation and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereof.
Section 8.02. Covenant to Make Payments upon
Default. The Corporation covenants that if the principal and
interest on any Bond shall have become due and payable by reason
of the exercise by the Trustee of the right of acceleration as
stated in Section 8.01 hereof, then, upon demand of the Trustee,
the Corporation will promptly pay to the Trustee, for the benefit
of the holders of the Bonds, the whole amount that then shall
become due and payable on all such Bonds for principal (and
premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under
applicable law and if provided for in the Bonds) upon overdue
installments of interest at the rate or rates expressed in the
Bonds; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 9.06.
Section 8.03. Remedies in Case of Default. In case
the Corporation shall fail to comply with the provisions of
Section 8.02, the Trustee may and, if directed by the holders of
a majority in aggregate principal amount of the Bonds
Outstanding, shall
(a) take possession and charge of all the Mortgaged
Property, including the books, papers and accounts of the
Corporation, and likewise take possession of any and all Excepted
Property then on hand, and having and holding the same, may
operate and manage the same, and from time to time to make all
needful repairs and such extensions, additions and improvements
as to the Trustee shall seem wise; and may receive the rents,
revenues, issues, earnings, income and profits thereof, and out
of the same may pay all proper costs and expenses of so taking,
holding and managing the same, including reasonable compensation
to the Trustee, its agents and counsel, and any charges of the
Trustee hereunder, and any taxes and assessments and other
charges prior to the lien of this Indenture that the Trustee may
deem it wise to pay, and all expenses of such repairs,
extensions, additions and improvements, and to apply the
remainder of the moneys so received by the Trustee, first, to the
payment of the installments of interest that are due and unpaid,
in the order of their maturity, and next, if the principal of any
of the Bonds is due, to the payment of the principal and accrued
interest thereon at the same rate as is expressed in the Bonds
pro rata without any preference or priority whatever, except as
aforesaid; provided, however, that whenever all that is due upon
such Bonds and under any of the terms of this Indenture shall
have been paid and all Defaults made good, the Trustee shall
surrender possession to the Corporation, its successors or
assigns, but the same right of entry, however, shall exist upon
any subsequent Event of Default; or
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(b) by such officer or agent as it may appoint, with
or without entry, sell all the Mortgaged Property as an entirety,
or in such parcels as the holders of a majority in principal
amount of the Bonds Outstanding hereunder shall in writing
request, or in the absence of such request, as the Trustee may
determine, at the office of the Trustee in Denver, Colorado,
having first given written notice of such sale to the Corporation
by certified mail to the address specified in Section 20.05 at
least fourteen days before such sale and having given further
notice of such sale by publication, in an Authorized Newspaper,
of the time, place and terms of sale, once a week for four
successive weeks; the Trustee may from time to time adjourn such
sale in its discretion by announcement at the time and place
fixed for such sale without further notice; and upon such sale
the Trustee may make and deliver to the purchaser or purchasers
good and sufficient bills of sale, deeds, or other conveyances
for the same (for which purposes the Trustee is hereby
irrevocably appointed the true and lawful attorney of the
Corporation, in its name and stead, to make such conveyances),
which sale shall be a perpetual bar, both at law and in equity,
against the Corporation and all persons, firms and corporations
lawfully claiming or who may claim by, through or under it; or
(c) in its own name and as trustee of an express
trust proceed to protect and enforce its rights and the rights of
the holders of the Bonds under this Indenture by a suit or suits
in equity or at law for:
(1) collection of sums due and unpaid upon the
Bonds;
(2) the specific performance of any covenant or
agreement contained herein;
(3) the foreclosure of this Indenture; or
(4) the enforcement of any other appropriate legal
or equitable remedy (including the appointment of a
receiver) as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of
its rights and the rights of the holders of Bonds under
this Indenture;
and prosecute any such suit, action or proceeding to judgment or
final decree, and, thereupon, cause such judgment or final
decree to be enforced in the manner provided by law, including,
where authorized or permitted, the collection out of any
property, wherever situated, of the Corporation (or other obligor
upon the Bonds) of any moneys adjudged or decreed to be payable.
In case the Trustee shall have proceeded to enforce
any right under this Indenture and such proceedings shall have
been discontinued or abandoned because of any waiver, rescission
or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case
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the Corporation and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights,
remedies and powers of the Corporation and the Trustee shall
continue as though no such proceedings had been taken.
Upon any sale being made either under the power of
sale hereby given or under judgment or decree in any judicial
proceedings or foreclosure or otherwise for the enforcement of
this Indenture, the principal of all Bonds then Outstanding, if
not previously due, and the interest accrued thereon, shall at
once become and be immediately due and payable.
Section 8.04. Trustee's Powers. The Trustee shall
have all the powers, rights and privileges as may be required and
reasonably necessary to perform, accomplish and comply with the
duties, obligations and undertakings required or permitted by
this Indenture to be made, kept and performed by the Trustee.
Further, in case of any receivership, insolvency,
liquidation, bankruptcy, reorganization, readjustment,
arrangement, composition, or other similar judicial proceedings
affecting the Corporation, any other obligor on the Bonds, or the
creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that
may be permitted by the court and shall be entitled to file such
proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee
and the Bondholders allowed in any judicial proceeding relative
to the Corporation, or any other obligor on the Bonds, or it
creditors or its property, for the entire amount due and payable
by the Corporation or such other obligor under the Indenture at
the date of institution of such proceedings and for any
additional amount that may become due and payable by the
Corporation or such other obligor after such date, and to collect
and receive any moneys or other property payable or deliverable
on any such claim, and to distribute the same after the deduction
of the amount payable to the Trustee under Section 9.06; and any
receiver, assignee or trustee in bankruptcy, or reorganization is
hereby authorized by each of the Bondholders 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
Bondholders, to pay to the Trustee any amount due to it under
Section 9.06.
All rights of action and of asserting claims under
this Indenture, or under any of the Bonds, may be enforced by the
Trustee without the possession of any of the Bonds, or the
production thereof on any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the pro rata
benefit of the holders of the Bonds then Outstanding issued under
the terms of this Indenture and supplements thereto.
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In case of a Default or Event of Default hereunder,
the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Section 8.05. Application of Moneys by Trustee.
Any moneys collected by the Trustee pursuant to this Article
Eight shall be applied in the order following at the date or
dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal (or premium, if any) or
interest:
FIRST: To the payment of costs and expenses of
collection, and of all amounts payable to the trustee under
Section 9.06;
SECOND: In case the principal of any of the
Outstanding Bonds shall not have become due, to the payment of
interest thereon, in the order of maturity of the installments of
such interest, with interest (if such interest has been collected
by the Trustee) upon the overdue installments of interest at the
rate per annum expressed in the Bonds, such payments to be made
ratably to the persons entitled thereto, without discrimination
or preference;
THIRD: In case the principal of any of the
Outstanding Bonds shall have become due, by acceleration or
otherwise, to the payment of the whole amount then owing and
unpaid upon the Bonds for principal (and premium, if any) and
interest, with interest on the overdue principal (and premium, if
any) and (if such interest has been collected by the Trustee)
upon overdue installments of interest at the rate per annum
expressed in the Bonds; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid
upon the Bonds, then to the payment of such principal (and
premium, if any) and interest, without preference or priority of
principal (and premium, if any), over interest, or of interest
over principal (and premium, if any), or of any installment of
interest over any other installment of interest, or of any Bond
over any other Bond, ratably to the aggregate of such principal
(and premium, if any) and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to
the Corporation, its successor or assigns, or to whomsoever may
be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
Section 8.06. Limitation on Suits; Preservation of
Rights to Payment and to Sue.
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(a) No holder of any Bond shall have any right by
virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law
against the Corporation, upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for
any other remedy hereunder against the Corporation, unless
(1) such holder previously shall have given to the
Trustee written notice of Default and of the continuance of the
Event of Default therein specified, as hereinbefore provided;
(2) the holders of not less than 25% in principal
amount of the Bonds then outstanding shall have made written
request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder;
(3) the parties making such request shall have
offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby; and
(4) the Trustee for thirty days after its receipt of
such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding;
it being understood and intended, and being expressly covenanted
by the taker and holder of every Bond with every other taker and
holder and the Trustee that no one or more holders of Bonds shall
have any right in any manner whatever by virtue or by availing of
any provision of this Indenture to affect, disturb, or prejudice
the rights of the holders of any other Bonds, or to obtain or
seek to obtain priority over or preference to any other such
holder or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common
benefit of all holders of Bonds. For the protection and
enforcement of the provisions of this Section 8.06, each and
every Bondholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
(b) withstanding any other provisions of this
Indenture, however, the right of any holder of any Bond to
receive payment of the principal of (including any sinking fund
payment due thereon) and premium, if any, and interest on such
Bond, on or after the maturity date (or sinking fund payment
date) expressed in such Bond, or to institute suit for the
enforcement of any such payment on or after such dates, shall not
be impaired or affected without the consent of such holder.
Section 8.07. Remedies Cumulative. All powers and
remedies given by this Article Eighth to the Trustee or to the
Bondholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the holders of
the Bonds, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements
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contained in this Indenture, and no delay or omission of the
Trustee or any holder of any Bond to exercise any right or power
accruing upon any Default or Event of Default shall impair any
such right or power, or shall be construed to be a waiver of any
such Default or Event of Default or any acquiescence therein;
and, subject to the provision of Section 8.06, every power and
remedy given by this Article Eight or by law to the Trustee or to
the Bondholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Bondholders.
Section 8.08. Rights of Bondholders to Direct
Trustee; Waivers. The holders of a majority in aggregate
principal amount of the Bonds at the time Outstanding shall have
the right to direct the time, method and place of conducting any
proceeding or any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. The holders of a
majority in principal amount of the Bonds at the time Outstanding
may on behalf of the holders of all of the Bonds waive any
Default or Event of Default and its consequences, except a
Default in the payment of the principal of (including any sinking
fund payment), or premium or interest on, any of the Bonds as and
when the same shall become due by the terms of such Bonds, or a
call for redemption, which may be waived only by written consent
of each holder of any Bond so in Default. In the case of any
waiver accomplished pursuant to this Section 8.08, such Default
shall cease to exist and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose hereof, and
the Corporation, the Trustee and the holders of the Bonds shall
be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent
or other Default or impair any right consequent thereon.
Section 8.09. Notice by Trustee of Defaults. The
Trustee shall, within thirty days after the occurrence of an
Event of Default of which it shall have knowledge, give to the
Bondholders, in the manner provided in Subsection (c) of Section
7.06 (regardless of whether such Section is then in effect),
notice of all Defaults known to the Trustee, unless such Defaults
shall have been cured before the giving of such notice; provided,
that except in the case of default in the payment of the
principal of (or premium, if any), interest on or sinking fund
payment relative to any of the Bonds, the Trustee shall be
protected in withholding such notice if and so long as the
Trustee and the Board of Directors, the executive committee, or a
trust committee composed of directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such
notice is in the interest of the Bondholders.
Section 8.10. Costs of Suit. The Corporation, the
Trustee and each holder of any Bond, by his acceptance thereof,
agree that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in
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such suit of an undertaking to pay the cost of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provision of this Section 8.10 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Bondholder or group of Bondholders holding in the aggregate more
than 25% in principal amount of the Bonds Outstanding, or to any
suit instituted by any Bondholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on
any Bond, on or after the respective due dates expressed in such
Bond.
ARTICLE NINE
The Trustee
Section 9.01. Certain Duties and Responsibilities.
(a) except during the continuance of an Event of
Default of which the Trustee shall have knowledge,
(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee, and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or mpinions that by any
provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in its exercise thereof, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(1) This Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
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(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) The Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a
majority in principal amount of the Bonds at the time Outstanding
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this
Indenture; and
(4) Whether or not an Event of Default shall have
occurred, 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 ground for believing that the repayment
of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
Section 9.02. Certain Rights of the Trustee.
Subject to and except as otherwise provided in Section 9.01:
(a) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon, note or other
paper or document believed by it to been genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the
Corporation mentioned herein shall be sufficiently evidenced by a
Corporation Order or Corporation Request and any resolution of
the Board of Directors of the Corporation shall be sufficiently
evidence to the Trustee by a Board Resolution;
(c) The Trustee may consult with counsel and the
advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by ithereunder in good faith and in reliance
thereon;
(d) 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 Bondholders
pursuant to the provisions of this Indenture, unless such
Bondholders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that may
be incurred therein or thereby; subject to the provisions of
Section 9.01(c)(4), nothing herein contained shall, however,
relieve the Trustee of the obligation, upon the continuance of an
Event of Default, to exercise such of the rights and powers
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vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) The Trustee shall not be liable, in case of
entry by it upon the Mortgaged Property, for debts contracted or
liabilities or damages incurred in the management or operation
thereof; and
(g) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
Section 9.03. Trustee Not Responsible for Certain
Matters. The recitals contained herein and in the Bonds, except
the Trustee's certificates of authentication, shall be taken as
the statements of the Corporation, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of any Indenture supplemental hereto or of any Bond.
The Trustee shall not be accountable for the use of or
application by the Corporation of any Bonds or of the proceeds of
any Bonds or for the use or application of any Trust Moneys paid
over by the Trustee in accordance with any provision of this
Indenture, or for the use or application of any moneys received
by any Paying Agent other than the Trustee. The Trustee shall
not be deemed to have knowledge of any Default or Event of
Default unless and until a Responsible Officer shall have actual
knowledge thereof or the Trustee shall have received written
notice thereof from the holder of any Bond or the Corporation.
Section 9.04. Trustee's Relationship with
Corporation. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Bonds and, subject
to Section 9.08, 9.13 and 9.14, if operative, may otherwise deal
with the Corporation with the same rights it would have if it
were not the Trustee.
Section 9.05. Trust Moneys. Subject to the
provisions of Section 17.04, all Trust Moneys, as defined in
Section 17.01., shall, until applied as herein provided, be held
in trust by the Trustee for the purposes for which they were
received but 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 Trust Moneys except such as it may
agree with the Corporation to pay thereon. Except during the
continuance of an Event of Default, all Interest so agreed to be
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paid on any Trust Moneys shall be paid from time to time upon
Corporation Order.
Section 9.06. Trustee's Compensation. The
Corporation covenants and agrees to pay to the Trustee from time
to time reasonable compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by it hereunder,
and the Corporation will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the expenses and
disbursements of the Trustee's counsel and of all persons not
regularly in its employ) except any such expense, disbursement,
or advances as may arise from the Trustee's negligence or bad
faith. The Corporation also covenants to indemnify the Trustee
for, and to hold the Trustee harmless against, any loss,
liability or expense incurred without negligence or bad faith on
the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of
liability in connection with the performance of its duties or
exercise of its rights hereunder. The obligations of the
Corporation under this Section 9.06 to compensate the Trustee and
to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured under this Indenture by a lien prior to
that of the Bonds upon all property and funds held or collected
by the Trustee as such.
Section 9.07. Reliance on Officer's Certificates by
Trustee and Other Persons. Except as otherwise provided in
Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee. The agents
and representatives of the Trustee and any experts or counsel
whose opinions are required or permitted to be delivered to the
Trustee for any purpose hereunder shall likewise be fully
warranted in relying and acting upon the existence of any matters
proved or established by any such certificate delivered to any
such expert or counsel (unless other evidence in respect thereof
be herein specifically described).
Section 9.08. Conflicting Interests of Trustee.
[The provision of this Section 9.08 shall be
operative as a part of this Indenture only on and after the date
that this Indenture is qualified under the Trust Indenture Act,
and until such date shall not be deemed a part hereof.]
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(a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, it shall,
within ninety days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest
or resign in the manner and with the effect specified in Section
9.10.
(b) In the event that the Trustee shall fail to
comply with the provisions of Subsection (a) of this Section, the
Trustee shall, within ten days after the expiration of such
ninety day period, transmit notice of such failure to the
Bondholders in the manner and to the extent provided in
Subsection (c) of Section 7.06.
(c) For the purposes of this Section, the Trustee
shall be deemed to have a conflicting interest if:
(1) the Trustee is trustee under another indenture
under which any other securities, or certificates of interest or
participation in any other securities, of the corporation are
outstanding, unless such indenture is a collateral trust
indenture under which the only collateral
consist of Bonds issued under this Indenture; provided that there
shall be excluded from the operation of this paragraph any
indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of
the Corporation are outstanding, if the Corporation shall have
sustained the burden or proving, on application to the Commission
and after opportunity for hearing thereon, that trusteeship under
this Indenture and such other indenture or indentures is not so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under one
of the indentures;
(2) the Trustee, or any of its directors or
executive officers, is an obligor upon the Bonds or an
underwriter for the Corporation;
(3) the Trustee directly or indirectly controls or
is directly or indirectly controlled by or is under direct or
indirect common control with the Corporation or an underwriter
for the Corporation;
(4) the Trustee, or any of its directors or
executive officers, is a director, officer, partner, employee,
appointee or representative of the Corporation, or of an
underwriter (other than the Trustee itself) for the Corporation
who is currently engaged in the business of underwriting, except
that (A) one individual may be a director or an executive
officer, or both, of the Trustee and a director or an executive
officer, or both, of the Corporation, but may not be at the same
time an executive officer of both the Trustee and the
Corporation; and (B) if and so long as the number of directors of
the Trustee in office is more than nine (9), one (1) additional
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individual may be a director or an executive officer, or both, of
the Trustee and a director of the Corporation; and (C) the
Trustee may be designated by the Corporation or by an underwriter
for the Corporation to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity, or, subject to the
provisions of Paragraph (1) of this Subsection (c), to act as
trustee whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the
Trustee is beneficially owned either by the Corporation or by any
director, partner or executive officer thereof, or 20% or more of
such voting securities is beneficially owned, collectively, by
any two or more of such persons; or 10% or more of the voting
securities of the Trustee is beneficially owned either by an
underwriter for the Corporation or by any director, partner, or
executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation that is in default (as
hereinafter in this Subsection (c) defined), (A) 5% or more of
the voting securities or 10% or more of any other class of
security, of the Corporation, not including the Bonds Outstanding
and securities issued under any other indenture under which the
Trustee is also trustee, or (B) 10% or more of any class of
security of an underwriter for the Corporation;
(7) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation that is in default (as
hereinafter in this Subsection (c) defined), 5% or more of the
voting securities of any person who, to the knowledge of the
Trustee, owns 10% of more of the voting securities of, or
controls directly or indirectly or is under direct or indirect
common control with, the Corporation;
(8) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in default (as
hereinafter in this Subsection (c) defined, 10% or more of any
class of security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the
Corporation; or
(9) the Trustee owns on May 15, in any calendar
year, in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in
any other similar capacity, an aggregate of 25% or more of the
voting securities, or of any class of security, of any person,
the beneficial ownership of a specified percentage of which would
have constituted a conflicting interest under Paragraph (6), (7),
or (8) of this Subsection (c). As to any such securities of
which the Trustee acquired ownership through becoming executor,
administrator, or testamentary trustee of an estate that included
them, the provisions of the preceding sentence shall not apply,
for a period of two years from the date of such acquisition, to
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the extent that such securities included in such estate do not
exceed 25% of such voting securities or 25% of any such class of
security. Promptly after May 15, in each calendar year, the
Trustee shall make a check of its holdings of such securities in
any of the above-mentioned capacities as of May 15. If the
Corporation fails to make payment in full of principal of, or
premium, if any, or interest on any of the Bonds when and as the
same become due and payable, and such failure continues for five
days thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such five day
period, and after such date, notwithstanding the foregoing
provisions of this Paragraph (9), all such securities so held by
the Trustee, with sole or joint control over such securities
vested in it shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the
Trustee for the purposes of Paragraphs (6), (7) and (8) of this
Subsection (c).
The specification of percentages in Paragraphs (5)
to (9), inclusive, of this Subsection (c) shall not be construed
as indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of
Paragraph (3) or (7) of this Subsection (c).
For the purposes of Paragraphs (6), (7), (8) and (9)
of this Subsection (c) only
(A) the terms security and securities shall include
only such securities as are generally known as corporate
securities, but shall not include any note or other evidence of
indebtedness issued to evidence an obligation to repay moneys
lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any
such note or evidence of indebtedness;
(B) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued for
five days or more and shall not have been cured; and
(C) the Trustee shall not be deemed to be the owner
or holder of
(i) any security that it holds as collateral
security (as trustee or otherwise) for an obligation that is not
in default as defined in Subparagraph (B) above,
(ii) any security that it holds as collateral
security under this Indenture, irrespective of any default
hereunder, or
(iii) any security that it holds as agent for
collection, or as custodian, escrow agent, or depositary, or in
any similar representative capacity.
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Except as above provided, the word security or
securities as used in this Indenture shall mean any note, stock,
treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other
mineral rights, or, in general, any interest or instrument
commonly known as a security, or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term underwriter when used with reference to
the Corporation shall mean every person who, within three years
prior to the time as of which the determination is made, has
purchased from the Corporation with a view to, or has offered or
sold for the Corporation in connection with, the distribution of
any security of the Corporation outstanding at such time or has
participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation
in the direct or indirect underwriting of any such undertaking,
but such term shall not include a person whose interest is
limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission.
(2) The term director shall mean any director of a
corporation or any individual performing similar functions with
respect to any organization whether incorporated or
unincorporated.
(3) The term person shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization or a government
or political subdivision thereof. As used in this paragraph, the
term trust shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are evidenced by a
security.
(4) The term voting security shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any
security issued under or pursuant to any trust, agreement or
arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to
vote in the direction or management of the affairs of a person.
(5) The term Corporation shall mean any obligor
under the Bonds.
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(6) The term executive officer shall mean the
president, every vice-president, every trust officer, the
cashier, the secretary, and the treasurer of a corporation, and
any individual customarily performing similar functions with
respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the Board
of Directors unless he is also the chief executive officers.
(e) The percentages of voting securities and other
securities specified in this Section shall be calculated in
accordance with the following provisions:
(1) A specified percentage of the voting securities
of the Trustee, the Corporation or any other person referred to
in this Section (each of whom is referred to as a person in this
paragraph) mean such amount of the outstanding voting securities
of such person as entitles the holder or holders thereof to cast
such specified percentage of the aggregate votes that the holders
of all the outstanding voting securities of such person are
entitled to cast in the direction or management of the affairs of
such person.
(2) A specified percentage of a class of securities
of a person means such percentage of the aggregate amount of
securities of the class outstanding.
(3) The term amount, when used in regard to
securities, means the principal amount if relating to evidences
of indebtedness, the number of shares if relating to capital
shares, and the number of units if relating to any other kind of
security.
(4) For the purposes of this Section 9.08, the term
outstanding means issued and not held by or for the account of
the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(A) Securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(B) Securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not in
default as to principal or interest or otherwise;
(C) Securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise;
(D) Securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer shall
be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
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(5) A security shall be deemed to be of the same
class as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges; provided, however that, in the case of secured
evidences of indebtedness, all of which are issued under a single
indenture, differences in the interest rates or maturity dates of
various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided further
that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall
not be deemed sufficient to constitute them securities of
different classes, whether or not they are issued under a single
indenture.
Section 9.09. Corporate Trustee Required;
Eligibility. There shall at all times be a Trustee hereunder
that shall be a corporation organized and doing business under
the laws of the State of Colorado or of the United States of
America authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Twenty-
Five Million Dollars subject to supervision or examination by
federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 9.09, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately
in the manner and with the effect specified in Section 9.10.
Section 9.10. Resignation and Removal of Trustee;
Appointment of Successor.
(a) The Trustee, or any successor hereafter
appointed, may at any time resign by giving written notice
thereof to the Corporation and by publishing notice of such
resignation, which notice shall be published at least once in an
Authorized Newspaper. Upon receiving the notice resignation of
the Trustee, the Corporation shall promptly appoint a successor
trustee by a Board Resolution, in duplicate, one copy of which
shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no instrument of acceptance by a successor
Trustee shall have been delivered to the resigning Trustee within
thirty 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, or any
Bondholder who has been a bona fide holder of a Bond or Bonds for
at least six months may, subject to the provisions of Section
8.10, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor
Trustee. Such court may thereupon after such notice, if any, as
it may deem proper and prescribe, appoint a successor Trustee.
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(b) If at any time any of the following shall occur:
(1) the Trustee, after qualification of the
Indenvure under the Trust Indenture Act, shall fail to comply
with the provisions of Subsection (a) of Section 9.08 after
written request therefor by the Corporation or by any Bondholder
who has been a bona fide holder of a Bond or Bonds for at least
six months; or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.09 and shall fail to
resign after written request therefor by the Corporation or by
any such Bondholder; or,
(3) the Trustee shall become incapable of acting, or
shall be adjusted 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 it
property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Corporation may remove the Trustee
and appoint a successor Trustee by Corporation Order in
duplicate, one copy of which shall be delivered to the Trustee so
removed and one copy to the successor Trustee, or, subject to the
provisions of this Section 9.10, any Bondholder who has been a
bona fide holder of a Bond or Bonds 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 and the appointment of a successor Trustee. Such court
may thereupon after such notice, if any, as it may deem proper
remove the Trustee and appoint a successor Trustee.
(c) The holders of a majority in aggregate principal
amount of the Outstanding Bonds may at any time remove the
Trustee and appoint a successor Trustee.
(d) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Section shall
become effective until the acceptance of appointment by the
successor Trustee as provided in Section 9.11.
Section 9.11. Acceptance of Appointment by
Successor. Every Trustee appointed as provided in Section 9.10
shall execute, acknowledge and deliver to the Corporation and to
the retiring Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of to 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, duties and obligation
of the retiring Trustee hereunder, with like effect as if
originally named as Trustee herein; but, nevertheless, on the
written request of the Corporation or of the successor Trustee,
the retiring Trustee shall, upon payment of any amounts then due
it pursuant to any of the provisions hereof, execute and deliver
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an instrument transferring to such successor Trustee all the
estate, properties, rights, powers, and trust of the returning
Trustee and shall assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its liens, if any, provided
for in Sections 6.11 and 9.06 hereof. Upon request of any such
successor Trustee, the Corporation shall execute any and all
instruments in writing for more fully and certainly vesting in
and confirming to such successor Trustee all such estates,
properties, rights, powers and trusts.
No successor Trustee shall accept appointment as
provided in this Section 9.11 unless at the time of such
acceptance such successor Trustee shall be qualified under the
provisions of Section 9.08, to the extent operable, and eligible
under the provisions of Section 9.09.
Upon acceptance of appointment by a successor
Trustee as provided in this Section 9.11, the Corporation shall
publish notice of the succession of such Trustee hereunder at
least once in an Authorized Newspaper. If the Corporation fails
to publish such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall
cause such notice to be published at the expense of the
Corporation.
Section 9.12. Successor to Trustee. Any
corporation into which the Trustee may be merged or with which it
may be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
qualified under the provisions of Section 9.08, to the extent
operable, and eligible under the provisions of Section 9.09
without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In any such case such successor shall
forthwith make a report to Bondholders of the character required
by Paragraph (1) of Subsection (a) of Section 7.06, to extent
operable, in the manner provided in that Section.
Section 9.13. Trustee as Creditor of the
Corporation.
[The provisions of this Section 9.13 and Sections
9.14 and 9.15 shall be operative as a part of this Indenture only
with respect to the period after the date on which this Indenture
is qualified under the Trust Indenture Act, and until such date
shall not be deemed a part hereof.]
(a) Subject to the provisions of Section 9.14, if
the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Corporation within four
months prior to a default, as defined in Section 9.15, or
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subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the holders
of the Bonds and the holders of any indenture securities, as
defined in Section 9.15:
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect
of principal or interest, effected after the beginning of such
four month period and valid as against the Corporation and its
other creditor, except any such reduction resulting from the
receipt or disposition of any property described in Paragraph (2)
of this Subsection, or from the exercise of any right of set-off
that the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Corporation upon the date of
such default; and
(2) all property received by the Trustee in respect
of any claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the
beginning of such four month period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however,
to the rights, if any, of the Corporation and its other creditors
in such property or such proceeds.
(b) Nothing herein contained. however, shall affect
the right of the Trustee:
(1) to retain for its own account (a) payment made
on account of any such claim by any person (other than the
Corporation) who is liable thereon, (b) the proceeds of the bona
fide sale of any such claim by the Trustee to a third person, and
(c) distributions made in cash, securities or other property in
respect of claims filed against the Corporation in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
National Bankruptcy Act or applicable state law;
(2) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such four month
period.
(3) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property held
by it as security or any such claim, if such claim was created
after the beginning of such four month period and such property
was received as security therefor simultaneously with the
creation thereon, and if the Trustee shall sustain the burden of
proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as
defined in Section 9.15, would occur within four months; or
(4) to receive payment on any claim referred to in
Paragraph (2) or (3), against the release of any property held as
security for such claim as provided in such Paragraph (2) or (3),
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as the case may be, to the extent of the fair value of such
property.
For the purposes of Paragraph (2), (3) and (4),
property substituted after the beginning of such four month
period for property held as security at the time of such
substitution shall, to the extent of the fair value of the
property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for
the purpose of repaying or refunding any preexisting claim of the
Trustee as such creditor, such claim shall have the same status
as such preexisting claim.
(c) If the Trustee shall be required to account, the
funds and property held in such special account and the proceeds
thereof shall be apportioned among the Trustee, the Bondholders
and the holders of other indenture securities in such manner that
the Trustee, the Bondholders and the holders of other indenture
securities realize, as a result of payments form such special
account and payments of dividends on claims filed against the
Corporation in bankruptcy or receivership or in proceedings for
reorganization pursuant to the National Bankruptcy Act or
applicable state law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by the Trustee from the
Corporation of the funds and property in such special account and
before crediting to the respective claims of the Trustee, the
Bondholders and the holders of other indenture securities,
dividends on claims filed against the Corporation in bankruptcy
or receivership or in proceedings for reorganization pursuant to
the National Bankruptcy Act or applicable state law, but after
crediting thereon receipt on account of the indebtedness
represented by their respective claims from all sources other
than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect
to any claim, the term dividends shall include any distribution
with respect to any such claim, in bankruptcy or receivership or
in proceedings for reorganization pursuant to the National
Bankruptcy Act or applicable state law, whether such distribution
is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured
portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is
pending shall have jurisdiction (i) to apportion among the
Trustee, the Bondholders and the holders of other indenture
securities, in accordance with provisions of this paragraph, the
funds and property held in such special account and the proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in
part, to give to the provisions of this paragraph due
consideration in determining the fairness of the distributions to
be made to the Trustee, the Bondholders and the holders of other
indenture securities with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such
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special account or as security for any such claim, or to make a
specific allocation of such distributions as between the secured
and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after
the beginning of such four month period shall be subject to the
provisions of this Section 9.13 as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such four month period, it
shall be subject to the provisions of this Section 9.13 if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim
that would have given rise to the obligation to account, if such
Trustee had continued as trustee, occurred after the beginning of
such four month period; and
(ii) such receipt of property or reduction of claim
occurred within four months after such resignation or removal.
Section 9.14. Excluded Creditor Relationships.
There shall be excluded from the operation of Section 9.13 a
creditor relationship arising from:
(a) the ownership or acquisition of securities
issued under any indenture, or any security or securities having
a maturity of one year or more at the time of acquisition by the
Trustee:
(b) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this Indenture,
for the purpose of preserving any property that shall at any time
be subject to the lien of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice of
such advances and of the circumstances surrounding the making
thereof is given to the Bondholders at the time and in the manner
provided in this Indenture;
(c) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture, transfer
agent, registrar, custodian, paying agent, fiscal agent or
depositary, or other similar capacity;
(d) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction, as
defined in Section 9.15;
(e) the ownership of stock or of other securities of
a corporation organized under the provisions of Section 25(a) of
the Federal Reserve Act, as amended, that is directly or
indirectly a creditor of the Corporation; or
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(f) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations that fall within the classification of self-
liquidating paper as defined in Section 9.15.
Section 9.15. Particular Definitions.
Notwithstanding any definition contained elsewhere in this
Indenture, for the purposes of Sections 9.13 and 9.14:
(a) The terms default shall mean any failure to make
payment in full of the principal or interest upon any of the
Bonds or upon the other indenture securities when and as such
principal or interest becomes due and payable.
(b) The term other indenture securities shall mean
securities upon which the Corporation is an obligor outstanding
under any other indenture (i) under which the Trustee is also
trustee, (ii) that contains provisions substantially similar to
the provisions of Section 9.13, and (iii) under which a default
exists at the time of the apportionment of the funds and property
held in such special account.
(c) The term cash transaction shall mean any
transaction in which full payment for goods or securities sold is
made within seven days after delivery of the goods or securities
in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand.
(d) The term self-liquidating paper shall mean any
draft, bill of exchange, acceptance or obligation that is made,
drawn, negotiated or incurred by the Corporation for the purpose
of financing the purchase, processing, manufacture, shipment,
storage or sale of goods, wares or merchandise and that is
secured by documents evidencing title to, possession of, or a
lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the
creditor relationship with the Corporation arising from the
making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
(e) The term Corporation shall mean any obligor upon
the Bonds.
Section 9.16. Separator or Co-Trustee Powers. At
any time or times, for the purposes of conforming to any legal
requirements, restrictions or conditions in any state in which
any part of the Trust Estate may be located, the Corporation and
the Trustee shall have power to appoint, and, upon the request of
the Trustee, the Corporation shall for such purpose join with the
Trustee in the execution, delivery and performance of any
instruments and agreements necessary or proper to appoint,
another corporation or one or more persons, approved by the
Trustee, to act either as separate trustee or trustees or as co-
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trustee or co-trustees jointly with the Trustee of all or any
part of the Trust Estate.
Such separate trustee or trustees or co-trustee or
co-trustees shall have such powers and duties as shall be
conferred or imposed by the terms of its or their appointment;
but every such separate trustee or co-trustee shall, to the
extent permitted by law, be appointed subject to the following
provisions and conditions, namely:
(1) Bonds issued hereunder shall be authenticated
and delivered, and all powers, duties, obligations and rights
conferred upon the Trustee in respect of the custody of all
obligations and other securities and of all cash pledged or
deposited hereunder shall be exercised, solely by the Trustee or
its successor in the trust hereunder, and any moneys at any time
coming into the hands of any such separate trustee or trustees or
co-trustee or co-trustees shall be at once paid over to the
Trustee or its successor in the trust hereunder;
(2) No power shall be exercised hereunder by any
such separate trustee or trustees or co-trustee or co-trustees
except jointly or with the consent in writing of the Trustee or
its successor in the trust hereunder;
(3) The Corporation and the Trustee or its successor
in the trust hereunder, at any time by an instrument in writing
executed by them jointly, may remove any separate trustee or co-
trustee appointed under this Section 9.16, and may likewise and
in like manner appoint a successor to such separate trustee or
co-trustee so removed or who shall resign or become incapable of
acting, anything herein contained to the contrary
notwithstanding; and
(4) Any notice, request or other writing delivered
solely to the Trustee or its successor in the trust hereunder
shall be deemed to have to have been delivered to all of the
trustees as effectually as if delivered to each of them.
ARTICLE TEN
Concerning the Bondholders
Section 10.01. Evidence of Action. Any request,
demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by
Bondholders may be embodied in and evidenced by
(a) an instrument or any number of instruments of
similar tenor executed by such Bondholders in person or by agent
or proxy appointed in writing, or
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(b) the record of the holders of Bonds voting in
favor thereof at any meeting of Bondholders duly called and held
in accordance with the provision of Article Eleven, or
(c) a combination of such instrument or instruments
and any such record of such a meeting of Bondholders; and, except
as herein otherwise expressly provided, such action shall become
effective where such instrument or instruments or record, or
combination of both, are delivered to the Trustee, and, where
expressly required hereby, to the Corporation.
Section 10.02. Proof of Execution.
(a) Subject to the provisions of Section 9.01, proof
of the execution of any instrument by a Bondholder or his agent
or proxy and proof of the holding by any person of any of the
Bonds shall be sufficient if made in the following manner:
The fact and date of the execution by any such
person of any instrument may be proved by (1) the certificate of
any notary public, or other officer of any jurisdiction within
the United States of America authorized to take acknowledgments
of deeds to be recorded in such jurisdiction, that the person
executing such instrument acknowledged to him the execution
thereof, or (2) an affidavit of a witness to such execution sworn
to before any such notary or other such officer, or (3) the
guarantee of the signature of such person by any trust company,
commercial bank or member of a national stock exchange. Where
such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation,
association or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
The fact and date of the execution of any such
instrument and the amount and numbers or other designations of
Bonds held by the persons so executing such instrument may also
be proved in any other manner that the Trustee may deem
sufficient, and the Trustee may require such additional proof of
any matter referred to in this Section 10.02 as it shall deem
necessary.
(b) The ownership of any Bond shall be proved by the
Bond Register.
(c) The record of any Bondholders' meeting shall be
proved in the manner provided in Section 11.06.
Section 10.03. Effect of Actions by Holders of
Bonds. At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 10.01, of the taking of any
action by the holders of Bonds, any holder of a Bond or Bonds who
has consented to such action may, by filing written notice with
the Trustee, and upon proof of holding as provided in Section
10.02, revoke such action so far as concerns such Bond or Bonds.
Except as aforesaid, any such action taken by the holder of any
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Bond shall be conclusive and binding upon such holder and upon
all future holders and owners of the same Bond, and of any Bond
issued upon the transfer thereof or in exchange therefor or in
place thereof, in respect of anything done or suffered to be done
by the Trustee or the Corporation in reliance thereon, whether or
not any notation in regard thereto is made upon such Bond.
ARTICLE ELEVEN
Bondholders' Meetings
Section 11.01. Purposes. A meeting of Bondholders
may be called at any time and from time to time pursuant to the
provision of this Article Eleven for any of the following
purposes:
(a) To give any notice to the Corporation or to the
Trustee, or to give any directions to the Trustee, or to consent
to the waiving of any default hereunder and its consequences, or
to take any other action authorized to be taken by Bondholders
pursuant to any of the provisions of Article Ten;
(b) To remove the Trustee and appoint a successor
Trustee pursuant to the provisions of Article Nine;
(c) To consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 12.02; or
(d) To take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate
principal amount of the Bonds under any provision of this
Indenture or under applicable law.
zing the action proposed to be taken at such
meeting, shall be published by the Trustee at least once in an
Authorized Newspaper, the first publication to be not less than
twenty nor more than ninety days prior to the date fixed for the
meeting. In addition, the Trustee shall give written notice by
certified mail to the Corporation and to each Bondholder setting
forth the information above stated not less than twenty days nor
more than ninety days prior to the date fixed for the meeting and
addressed to the Bondholders at the addresses maintained by the
Trustee under Article Six hereof.
Section 11.03. Call of Meetings by Corporation or
Bondholders. In case at any time (i) the Corporation, pursuant
to a Board Resolution, or (ii) the holders of at least 10% in
aggregate principal amount of the Bonds Outstanding shall have
requested the Trustee to call a meeting of Bondholders, by
written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not
have made publication of the notice of such meeting within twenty
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days after receipt of such request, then the Corporation or the
holders of the Bonds in the amount above specified may determine
the time and the place for such meeting and may call such meeting
to take any action authorized in Section 11.01, by giving notice
thereof as provided in Section 11.02.
Section 11.04. Voting and Attending Meetings. To be
entitled to vote at any meeting of Bondholders, a person shall be
either a registered holder of one or more Bonds Outstanding, or a
person appointed by an instrument in writing as proxy or
attorney-in-fact by a registered holder of one or more Bonds
Outstanding. The only persons who shall be entitled to be
present or to speak at any meeting of Bondholders shall be the
persons entitled to vote at such meeting and their counsel,
representatives of the Trustee and its counsel and
representatives of the Corporation and its counsel.
Section 11.05. Conduct of Meetings. Notwithstanding
any other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting
of Bondholders, as follows (a) in regard to proof of the
appointment of proxies or attorneys-in-fact, and (b) in regard to
the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of
the right to vote, and (c) such other matters concerning the
conduct of the meeting as it deems appropriate. Except as
otherwise permitted or required by any such regulations, the
holding of Bonds shall be proved in the manner specified in
Subsection (b) of Section 9.02 and the appointment of any proxy
shall be proved in the manner specified in Subsection (a) of
Section 10.02.
The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting
shall have been called by the Corporation or by Bondholders as
provided in Section 11.03, in which case the party or parties
calling the meeting shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the holders of a majority in
principal amount of the Outstanding Bonds represented at the
meeting and entitled to vote.
At any meeting each Bondholder or proxy or attorney-
in-fact shall be entitled to one vote for each $1,000 principal
amount of Outstanding Bonds held by such Bondholder or by the
Bondholder for whom such proxy or attorney-in-fact is acting;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Bonds challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote other than by
virtue of Outstanding Bonds held by him on instruments in writing
as aforesaid duly designating him as the person to vote on behalf
of other Bondholders. Any meeting of Bondholders duly called
pursuant to the provision of Section 11.02 or 11.03 may be
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adjourned from time to time, and the meeting may be held as so
adjourned without further notice.
Section 11.06. Voting and Records. The vote upon
any resolution submitted to any meeting of Bondholders shall be
by written ballot on which shall be subscribed the signatures of
the holders of Bonds or of their proxies or attorneys-in-fact and
the serial number or numbers of the Bonds held or represented by
them. The permanent chairman of the meeting shall appoint two
inspectors of votes, who shall count all votes cast at the
meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports
in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Bondholders shall
be prepared by the secretary of the meeting, and there shall be
attached to such record the original reports of the inspectors of
votes on any vote taken at such meeting, setting forth a copy of
the notice of the meeting and showing that such notice was given
as provided in Section 11.02. The record shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be
delivered to the Corporation and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
Section 11.07. Effect of Call of Meeting. Nothing
in this Article Eleven contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of
Bondholders or any right expressly or impliedly conferred
hereunder to make such call, any hinderance or delay in exercise
of any right or rights conferred upon or reserved to the Trustee
or to the Bondholders under any of the provisions of this
Indenture or of the Bonds.
ARTICLE TWELVE
Supplemental Indentures
Section 12.01. Supplemental Indentures Without
Consent of Bondholders. In addition to any supplemental
indenture otherwise authorized by this Indenture, the
Corporation, when authorized by a Board Resolution, and the
Trustee from time to time and at any time, may, without the
consent of the holders of any Bond, enter into an indenture or
indentures supplemental hereto, in form satisfactory to the
Trustee, for one or more of the following purposes:
(a) to evidence the succession of another
corporation to the Corporation, or successive successions, and
the assumption by any such successor corporation of the
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covenants, agreements and obligations of the Corporation pursuant
to Article Thirteen hereof;
(b) to add to the covenants of the Corporation and
to the conditions, limitations and restrictions on the authorized
amount, terms or purposes of issue, authentication and delivery
of the Bonds or any series of Bonds, such further covenants,
restrictions, conditions or provisions for the protection of the
holders of the Bonds or any series of Bonds, or to surrender any
right or power herein conferred on the Corporation;
(c) to cure any ambiguity, to correct or supplement
any provision contained herein or in any supplemental indenture
that may be inconsistent with any other provision contained
herein or in any supplemental indenture or to make such other
provisions in regard to matters or questions arising under this
Indenture as shall not be inconsistent with the provisions of
this Indenture and shall not adversely affect the interests of
the holders of the Bonds;
(d) to provide for the creation of any series of
Bonds (other than Bonds of Series F and G, whose creation is
provided for in Article Two hereof), pursuant to the provisions
of Article Five hereof;
(e) to modify, eliminate or add to the provisions of
this Indenture to the extent necessary to permit any additional
series of Bonds to be issued as coupon Bonds;
(f) to modify, eliminate or add to the provisions of
this Indenture to the extent necessary to permit the appointment
of a separate or co-trustee pursuant to Section 9.16;
(g) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or
better to assure, convey and confirm unto the Trustee any
property subject or required to be subjected to the lien of this
Indenture; and
(h) to modify, eliminate or add to the provisions of
this Indenture to the extent necessary to effect the
qualification of this Indenture under the Trust Indenture Act as
that Act, or any similar federal statute enacted in lieu thereof,
is in effect at the time of the entering into any such
supplemental indenture.
The Trustee is hereby authorized to join with the
Corporation in the execution of any such supplemental indenture,
and to make any further appropriate agreements and stipulations
that may be herein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
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Section 12.02. Modification of Indenture. With the
consent (evidenced as provided in Section 10.01) of the holders
of not less than 66-2/3% in aggregate principal amount of all the
Bonds at the time Outstanding that are adversely affected by such
supplemental indenture, the Corporation, when authorized by a
Board Resolution, and the Trustee may, from time to time and at
any time, 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 any supplemental indenture or of modifying in any manner
the rights of the holders of the Bonds; except that no such
supplemental indenture shall, without the consent of the holder
of each Outstanding Bond adversely affected thereby, (i) extend
the stated maturity of the principal of, or any installment of
interest on, any Bond, or reduce the principal amount thereof or
the interest thereon or any premium payable upon the redemption
thereof, or extend the time or reduce the amount of any sinking
fund payment in respect thereof, or (ii) reduce either the
aforesaid percentage in principal amount of Bonds, the holders of
which are required to consent to any such supplemental indenture,
or the percentages specified in Section 8.08 or (iii) modify any
of the provisions of this Section 12.02 or Section 8.08, 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 Bond adversely affected
thereby. For purposes of amending, eliminating or otherwise
modifying any covenant or other provision of this Indenture or
any supplemental indenture which provision by its terms is
binding upon the Corporation only so long as such series of Bonds
or which by its terms is binding upon the Corporation only so
long as such series of Bonds shall be Outstanding, the holders of
any Series of Bonds not expressly entitled to the benefit of such
provision or covenant shall not be deemed to be adversely
affected by such modification.
Upon the request of the Corporation, accompanied by
c copy of a Board Resolution authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee
of evidence of the consent of Bondholders as aforesaid, the
Trustee shall join with the Corporation in the execution or such
supplemental indenture unless any such supplemental indenture
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion (but shall not be obligated to) enter into such
supplemental indenture; provided, however, that the Trustee shall
be so obligated with respect to a supplemental indenture entered
into under Subsections (a) or (h) of Section 12.01,
notwithstanding any such effect.
It shall not be necessary for the consent of the
Bondholders under this Section 12.02 to approve the particular
form or any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
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Section 12.03. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article Twelve, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Corporation,
and every holder of Bonds theretofore or thereafter authenticated
and delivered hereunder shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such
modification and amendments; and all the terms and conditions of
any such supplemental indenture shall band be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
Section 12.04. Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article Twelve
shall conform to the requirements of the Trust Indenture Act, as
in effect at the time of execution of such supplemental
indenture, if this Indenture shall then be qualified under that
Act.
Section 12.05 Notation of Changes on Bonds. Bonds
authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article
Twelve 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 Corporation or the Trustee
shall so determine, new Bonds so modified as to conform, in the
opinion of the Trustee and the Corporation's Board of Directors,
to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Corporation,
authenticated and delivered by the Trustee in exchange for the
Outstanding Bonds.
Section 12.06. Trustee's Reliance on Opinion of
Counsel. In executing any supplemental indenture permitted by
this Article Twelve, the Trustee shall be entitled to receive and
(subject to Section 9.01) shall be entitled to rely upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by, and
conforms to, the terms of this Article Twelve.
ARTICLE THIRTEEN
Consolidation, Merger, and Sale
Section 13.01. Consolidation, Mergers or Sales
Permitted on Certain Terms. So long as no Default or Event of
Default shall have occurred and be continuing, nothing contained
in this Indenture or in any of the Bonds shall prevent any
consolidation with or merger of the Corporation into any other
corporation or corporations (whether or not affiliated with the
Corporation), or successive consolidations or mergers in which
the Corporation or its successor or successors shall be a party
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or parties, and in which the Corporation shall not be the
surviving corporation, or shall prevent any sale, conveyance,
transfer or other disposition of the Mortgaged Property as an
entirety or substantially as an entirety, to any other
corporation (whether or not affiliated with the Corporation or
its successor or successors) organized under the laws of the
United States of America or any state thereof or the District of
Columbia and having not less than 75% of its gross assets located
in the United State of America, and lawfully entitled to acquire
and operate the same; provided, however, that, upon any such
consolidation, merger, sale, conveyance, transfer or other
disposition,
(a) The corporation formed by such consolidation, or
into which the Corporation shall have been merged, or the
corporation that acquires the Mortgaged Property, shall execute
and deliver to the Trustee, simultaneously with such merger,
consolidation or transfer, an indenture supplemental hereto in
form recordable and satisfactory to the Trustee, containing;
(1) an assumption by such successor corporation of
the due and punctual payment of the principal of (and premium, if
any) and interest on all the Bonds and the performance and
observance of every covenant and condition of this Indenture to
be performed or observed by the Corporation, and
(2) a grant, conveyance, transfer and mortgage of
the character described in Subsection (a) or (b) of Section
13.02.
(b) Immediately after giving effect to such
transaction, (i) no Default or Event of Default shall have
occurred and be continuing, (ii) the corporation formed by such
consolidation, or into which the Corporation shall have been
merged, or the corporation that acquires the Mortgaged Property,
shall be engaged in substantially the same business as the
Corporation.
(c) The Corporation shall have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance or transfer
and such supplemental indenture comply with this Article Thirteen
and that all conditions precedent herein provided for relating to
such transaction have been complied with, and, subject to the
provisions of Section 9.01 hereof, the Trustee shall be entitled
to rely upon such Officer's Certificate and Opinion of Counsel in
executing any such supplemental indenture.
Section 13.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any conveyance or transfer
of the Mortgaged Property substantially as an entirety in
accordance with Section 13.01, the successor corporation formed
by such consolidation or into which the Corporation is merged or
to which such conveyance or transfer is made, upon causing to be
recorded the supplemental indenture referred to in such Section
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13.01, shall succeed to, and be substituted for, and may exercise
every right and power of, the Corporation under this Indenture
with the same effect as if such successor corporation had been
named as the Corporation herein; subject, however, to the
following limitations and restrictions:
(a) If such supplemental indenture shall contain a
grant, conveyance, transfer and mortgage in terms sufficient to
include and subject to the lien of this Indenture all property
and franchises owned by such successor corporation at the time of
such consolidation, merger, conveyance, or transfer of that may
be thereafter acquired by such successor corporation (other than
Excepted Property), thereupon and thereafter such successor
corporation may cause to be executed, either in its own name or
in the name of Greeley Gas Company, and delivered to the Trustee
for authentication, any Bonds issuable hereunder; and upon the
order of such successor corporation, and subject to all the terms
of this Indenture, the Trustee shall authenticate and deliver any
Bonds that shall have been previously executed and delivered by
the Corporation to the Trustee for authentication, and any Bonds
that such successor corporation shall thereafter, in accordance
with this Indenture, cause to be executed and delivered to the
Trustee for such purpose. Such change in phraseology and form
(but not in substance) may be made in such Bonds as may be
appropriate in view of such consolidation or merger or conveyance
or transfer.
(b) If such supplemental indenture shall not contain
the grant, conveyance, transfer and mortgage described in the
preceding Subsection (a), then such successor corporation shall
not be entitled to procure the authentication and delivery of
Bonds under Article Five, and (notwithstanding the generality of
the Granting Clauses in the Indenture contained) this Indenture
shall not, by virtue of such consolidation, merger, conveyance or
transfer, or by virtue of said supplemental indenture, become a
lien upon any of the properties or franchises of such successor
corporation owned by it, immediately before such consolidation,
merger, conveyance or transfer (unless such successor
corporation, in its discretion, shall subject the same to the
lien hereof), but this Indenture shall become and be a lien upon
only the following properties and franchises acquired by such
successor corporation after the date of such consolidation,
merger, conveyance or transfer, to wit:
(1) all betterments, extensions, improvements,
additions, repairs, renewals, replacements, substitutions and
alterations to, upon, for and of the property or franchises, or
both, subject to the lien hereof, and all property constituting
appurtenances of the Mortgaged Property;
(2) all property acquired or constructed with the
proceeds of any insurance on any part of the Mortgaged Property
or with the proceeds of any part of the Mortgaged Property
released from the lien of this Indenture or a prior lien or
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disposed of free from any such lien, or taken by eminent domain,
or purchased by a public authority; and
(3) all property acquired in pursuance of the
covenants herein contained to maintain and preserve and keep the
Mortgaged Property in good condition, repair and working order,
or in pursuance of any other covenant or agreement herein
contained to be performed by the Corporation;
and in such event such supplemental indenture shall contain a
grant, conveyance, transfer and mortgage subjecting the property
described in the preceding Paragraphs (1) through (3), inclusive,
of this Subsection to the lien of this Indenture.
(c) No such conveyance or transfer of the Mortgaged
Property substantially as an entirety shall have the effect of
releasing the entity named as the Corporation in the first
paragraph of this instrument or any successor corporation that
shall theretofore have become such in the manner prescribed in
this Article from its liability as obligor and maker on any of
the Bonds.
ARTICLE FOURTEEN
Possession, Use and Release of Mortgaged Property
Section 14.01. Possession and Use of Mortgaged
Property. Unless an Event of Default shall have occurred and be
continuing, the Corporation shall be suffered and permitted to
possess, use and enjoy all the Mortgaged Property, to receive and
use the rents, issues, income and profits thereof and in ordinary
course of business to use and consume its materials and supplies
all as if this Indenture had not been made.
Section 14.02. Disposition of Mortgaged Property
Without Release. At any time and from time to time while in
possession of the Mortgaged Property and not in default
hereunder, the Corporation may without any release or consent by
the Trustee:
(a) Sell or otherwise dispose of free from the lien
of this Indenture any machinery, equipment, or other property
that has become worn out, obsolete, unserviceable, undesirable or
unnecessary for use in the conduct of its business upon replacing
the same with or substituting for the same new machinery,
equipment or other property not necessarily of the same character
but being of at least equal value and utility to the property so
disposed of, which new property shall without further action
become subject to the lien of this Indenture.
(b) Abandon any property the use of which is no
longer necessary or desirable in the proper conduct of the
business of the Corporation and the maintenance of its earnings,
provided that any required consent and approval of any
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governmental authority is first secured and a copy of any
required order or certificate for authority so to abandon such
property is filed with the Trustee;
(c) Surrender or assent to the modification of any
franchise, license, or permit which it may hold or under which it
may be operating, provided that the Corporation shall still have
the right, in the Opinion of Counsel, under the modified or some
other franchise, license or permit, or without any franchise,
license or permit, to conduct its business in the same or an
extended territory during the same or any extended or indefinite
period of time; and for the purpose of this subdivision, the
right of any municipality to terminate a permit, license or
franchise by purchase shall not be deemed to abridge its
duration;
(d) Surrender, assent to or procure a modification
of any contract, franchise, license or permit under which it is
operating that in the opinion of the Board of Directors is no
longer necessary or desirable in the conduct of the Corporation's
business and where the value and utility of the Mortgaged
Property will not thereby be substantially impaired; or
(e) Grant rights-of-way and easements over or in
respect of any Mortgaged Property, provided that such grant will
not, in the opinion of the Board of Directors, impair the
usefulness of such property in the conduct of the Corporation's
business, and will not be prejudicial to the interest of the
Bondholders.
The Trustee shall, from time to time, execute any
written instrument to confirm the propriety of any action taken
by the Corporation under this Section 14.02, upon receipt by the
Trustee of a Board Resolution requesting the same, together with
an Officer's Certificate stating that such action was duly taken
in conformity with a designated Paragraph of this Section 14.02
and an Opinion of Counsel stating that such action was duly taken
by the Corporation in conformity with such Paragraph and that the
execution of such written instrument is appropriate to confirm
the propriety of such action under this Section 14.02.
Section 14.03. Release of Mortgaged Property. The
Corporation shall have the right, at any time and from time to
time, to sell, exchange or otherwise dispose of any of the
Mortgaged Property constituting less than all or substantially
all of the Mortgaged Property (in addition to the property
referred to in Section 14.02) subject to the lien of this
Indenture, upon compliance with the requirements and conditions
of this Section 14.03, and the Trustee shall release the same
from the lien of this Indenture upon receipt by the Trustee or
Corporation Order, dated as of a date not more than ten days
prior to such release requesting such release and describing the
property to be so released, together with:
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(a) A Board Resolution requesting such release and
authorizing an application to the Trustee therefor;
(b) An Officer's Certificate, dated as of a date not
more than ten days prior to such release signed also by an
Engineer, or, if such property consists of securities, by an
Appraiser, in each case selected by the Board of Directors and
satisfactory to the Trustee, stating in substance as follows:
(1) that, in the opinion of the signers, such
release is in the best interest of the Corporation, the security
afforded by this Indenture will not be impaired by such release,
and the property to be released is not necessary for the
efficient operation of its remaining property that is used or
useful in connection with its business;
(2) either (i) that the Corporation has sold or
exchanged or otherwise disposed of, or has or intends to contract
to sell or exchange or otherwise dispose of, the property so to
be released for a consideration representing, in the opinion of
the signers, its full value to the Corporation, which
consideration may consist of any one or more of the following:
(a) cash, (b) obligations secured by a purchase money first lien
upon the property so to be released, but only in an amount not in
excess of two-thirds of the full value to the Corporation of such
property, and (c) any other property that, upon acquisition
thereof by the Corporation, would be subject to the lien of this
Indenture, free of any easements or other encumbrances except
such as do not materially impair the use of such property for the
purposes for which it was acquired, and subject to no lien other
than Permitted Encumbrances, all of such consideration to be
briefly described in the certificate, or (ii) that the property
so to be released has been or is to be disposed of without
consideration (or for consideration less than full value to the
Corporation), in which event such certificate shall state an
amount representing, in the opinion of the signers, its full
value to the Corporation, and the reason for its disposition at
less than full value;
(3) that, to the best of the knowledge and belief of
the signers, no Default or Event of Default has occurred and is
continuing;
(4) the then fair value to the Corporation, in the
opinion of the signers, of the property to be released; and
(5) that all conditions precedent herein provided
relating to the release of the property in question have been
complied with;
(c) In case (i) the fair value of the property to be
released and of all other property released from the lien of this
Indenture since the commencement of the then current calendar
year, as shown by certificates required by Subsection (b) of this
Section, is 10% or more of the aggregate principal amount of the
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Bonds Outstanding on the date of the Corporation Order, and (ii)
the fair value of the property to be so released, as shown by the
certificate filed pursuant to Subsection (b) of this Section, is
at least $100,000 and at least 1% of the aggregate principal
amount of the Bonds Outstanding, a certificate of an Independent
Engineer, or if such property consists of securities, a
certificate of an Independent Appraiser, stating:
(1) the then fair value, in the opinion of the
signer, of the property to be released and
(2) that such release, in the opinion of the signer,
will not impair the security under this Indenture in
contravention of it terms;
(d) Any cash or obligations received or to be
received as consideration for any property so to be released or,
if the property so to be released has been or is to be disposed
of without consideration (or for consideration less than full
value to the Corporation), cash sufficient to meet any deficiency
between the consideration delivered to the Trustee and the amount
representing the full value of the property to the Corporation
(or, if the property so to be released is subject to a lien prior
to the lien of this Indenture, a certificate of the trustee or
other holder of such prior lien that it has received such money
or obligations and has been irrevocably authorized by the
Corporation to pay over to the Trustee any balance of such money
or obligation, remaining after the discharge of such prior lien);
and, if any property other than cash or obligations is included
in the consideration for any property so to be released, such
instruments of conveyance, assignment and transfer, if any, as
may be necessary, in the Opinion of Counsel hereinafter referred
to, to subject to the lien of this Indenture all the right, title
and interest of the Corporation in and to such property;
(e) An Opinion of Counsel to the effect (i) that any
obligations included in the consideration for any property so to
be released are valid obligations and are effectively pledged
hereunder, (ii) that any purchase money lien securing such
obligation is sufficient to afford a valid first lien upon the
property to be released, (iii) in case the Trustee is requested
to release any franchise, license or permit, that such release
will not impair the then existing right of the Corporation to
operate any of its remaining property in it business, (iv) either
(x) that such instruments of conveyance, assignment and transfer
as have been or are then delivered to the Trustee are sufficient
to subject to the lien of this Indenture all the right, title and
interest of the Corporation in and to any property, other than
cash and obligations that may be included in the consideration
for the property so to be released, subject to no lien other than
Permitted Encumbrances or (y) that no instruments of conveyance,
assignment or transfer are necessary for such purpose, (v) that
the Corporation has corporate power to own all property included
in the consideration for such release, and (vi) in case any part
of the money or obligations referred to in Paragraph (d) of this
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Section 14.03 has been deposited with the trustee or other holder
of a prior lien, that such trustee or other holder (specifying
the trustee or other holder and the lien) is entitled to receive
the same; and
(f) Either (i) a certificate constituting evidence
of the authorization, approval or consent of any governmental
body or bodies at the time having jurisdiction in the premises to
the sale, exchange or other disposition of the property so to be
released, the consideration to be received therefor (if any) and
the acquisition of any property constituting any part of such
consideration, together with an Opinion of Counsel that the same
constitutes sufficient evidence thereof and that the
authorization, approval or consent of no other governmental body
is required, or (ii) an Opinion of Counsel that no authorization,
approval or consent of any governmental body is required.
Notwithstanding the foregoing provisions of this
Section 14.03, the Corporation shall have the right, at any time
and from time to time, so long as this Indenture is not qualified
under the Trust Indenture Act to sell, exchange or otherwise
dispose or any of its property (in addition to the property
referred to in Section 14.02) at any time subject to the lien
hereof, of an aggregate value not exceeding $100,000 in any one
calendar year, and the Trustee shall release the same from the
lien hereof upon receipt by the Trustee of:
(aa) A Board Resolution requesting such release and
authorizing an application to the Trustee therefor;
(bb) The proceeds received from the sale of such
property as provided in Paragraph (d) of this Section 14.03; and
(cc) An Officer's Certificate meeting the
requirements of Subsection (b) of this Section; provided such
certificate need not be signed by an Engineer.
Section 14.04. Eminent Domain and Other
Governmental Takings. Should less than substantially all the
Mortgaged Property be taken by eminent domain or be sold pursuant
to the exercise by the United States of America or any state,
municipality or other governmental authority of any right which
it may then have to purchase, or to designate a purchaser or to
order a sale of, all or any part of the Mortgaged Property, the
Corporation, forthwith upon receipt, shall deposit the award for
any property so taken or the proceeds of any such sale with the
Trustee, or, to the extent required in the Opinion of Counsel by
the terms of a prior lien or Permitted Encumbrance on all or any
part of any property so taken or purchased, with the trustee,
mortgagee or other holder of such prior lien or Permitted
Encumbrance. In the event of any such taking or sale, the
Trustee shall release the property so taken or purchased, but
only upon receipt by the Trustee of the following:
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(a) A Board Resolution requesting such release and
describing the property so to be released;
(b) An Officer's Certificate dated as of a date not
more than ten days prior to such release stating that such
property has been taken by eminent domain and the amount of the
award therefor, or that said property has been sold pursuant to a
right vested in the United States of America, or a state,
municipality or other governmental authority to purchase, or to
designate a purchaser, or order a sale of such property and the
amount of the proceeds of such sale, and that all conditions
precedent herein provided for relating to such release have been
complied with;
(c) The award for such property or the proceeds of
such sale; provided, however, that, in lieu of all or any part of
such award or proceeds, the Corporation shall have the right to
deliver to the Trustee a certificate of the trustee, mortgagee or
other holder of a prior lien or a Permitted Encumbrance on all or
any part of the property to be released, stating that such award
or proceeds, or a specified part thereof, has been deposited with
such trustee, mortgagee or other holder pursuant to the
requirements of such prior lien or Permitted Encumbrance, in
which case the balance of the award, if any, shall be delivered
to the Trustee; and
(d) An Opinion of Counsel stating
(1) that such property has been taken by eminent
domain, or has been sold pursuant to the exercise of a right
vested in the United States of America or a state, municipality
or other governmental authority to purchase, or to designate a
purchaser or order a sale of, such property;
(2) in the case of any such taking by eminent
domain; that the award for the property so taken has become final
or that an appeal from such award is not advisable in the
interests of the Corporation or the holders of the Bonds;
(3) in the case of any such sale, that the amount of
the proceeds of the property so sold is not less than the amount
to which the Corporation is legally entitled under the terms of
such right to purchase or designate a purchaser, or under the
order or orders directing such sale, as the case may be;
(4) in case, pursuant to Subsection (c) of this
Section, the award for such property or the proceeds of such
sale, or a specified portion thereof, shall be certified to have
been deposited with the trustee, mortgagee or other holder of a
prior lien or a Permitted Encumbrance, that the property to be
released, or a specified portion thereof, is or immediately
before such taking or purchase was subject to such prior lien or
Permitted Encumbrance, and that such deposit is required by such
prior lien or Permitted Encumbrance; and
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(5) that the instruments or the instruments and the
award or proceeds of such sale which have been or are therewith
delivered to and deposited with the Trustee conform to the
requirements of this Indenture and that, upon the basis of such
application, the Trustee is permitted by the terms of this
Indenture to execute and deliver the release requested, and that
all conditions precedent herein provided for relating to such
release have been complied with.
In any proceedings or the taking or purchase or sale
of any part of the Mortgaged Property, by eminent domain or by
virtue of any such right to purchase or designate a purchaser or
to order a sale, the Trustee may be represented by counsel who
may be counsel for the Corporation.
Section 14.05. Purchaser Protected. In no event
shall any purchaser or purchasers in good faith of any property
purported to be released hereunder be bound to ascertain the
authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the
application of any consideration given by such purchaser or other
transferee; nor shall any purchaser or other transferee of any
property or rights permitted by this Article Fourteen to be sold
be under obligation to ascertain or inquire into the authority of
the Corporation to make any such sale or other transfer.
Section 14.06. Powers Exercisable Notwithstanding
Event of Default. Subject to the provisions of Subsection (b) of
Section 9.01, the Trustee may in its discretion (but shall not be
bound to) execute any release or consent under the provisions of
this Article Fourteen notwithstanding that at the time any
Default or Event of Default shall have happened and be
continuing. The Officer's Certificate for such release or
consent shall, instead of stating that no Default or Event of
Default exists, specify each Default or Event of Default which
shall, to the knowledge of the signers, have happened and be
continuing.
Section 14.07. Powers Exercisable by Receiver or
Trustee. In case the Mortgaged Property shall be in the
possession of a receiver or trustee, lawfully appointed, the
powers conferred in this Article Fourteen upon the Corporation
with respect to the release, sale or other disposition of
property subject to the lien hereof may be exercised by such
receiver or trustee, and an instrument signed by such receiver or
trustee shall be deemed the equivalent of any similar instrument
of the Corporation or of any officer or officers thereof required
by the provision of this Article Fourteen; and if the Trustee
shall be in the possession of the Mortgaged Property under any
provision of this Indenture, then such powers may be exercised by
the Trustee.
ARTICLE FIFTEEN
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Redemption of Bonds
Section 15.01. Redemption Price and Manner of
Redemption. The redemption price and the terms, place and manner
of redemption of the Bonds shall be as stated in the respective
Bonds and shall also be governed by this Article Fifteen, except
as may otherwise be provided for the redemption of Bonds in
Section 2.04 hereof, with respect to Bonds of Series F and G, and
in any supplemental indenture creating any other series of Bonds,
with respect to such other series, and in any agreement filed
with the Trustee in accordance with the provisions of Section
6.01.
Section 15.02. Selection of Bonds to Be Redeemed.
If less than all of the Bonds are to be redeemed, the Corporation
shall select the particular series of Bonds which are to be
redeemed, either in whole or in part, and the principal amount of
Bonds which are to be redeemed, by written notice mailed to the
Trustee at least twenty days in advance of the date fixed for the
mailing of the notice of the redemption.
If less than all of the Bonds of any series
Outstanding hereunder are to be redeemed, the particular Bonds to
be redeemed shall (except as may be otherwise provided in a
supplemental indenture creating any series of Bonds) be selected
not more than sixty days prior to the redemption date by the
Trustee from the Outstanding Bonds of such series not previously
called for redemption by prorating, as nearly as may be, the
principal amount of Bonds of such series to be redeemed among the
registered holder of Bonds of the series according to the
respective aggregate principal amounts of Bonds of such series
held by such holders; provided, however, that, if a written
consent of all the registered holders of Bonds of the series is
filed with the Trustee specifying some other method of selecting
the Bonds of such series to be redeemed, such selection shall be
made by the Trustee in accordance therewith; and provided further
that, if any series of Bonds shall have been sold by the
Corporation pursuant to a public offering registered under the
Securities Act of 1933, as amended, or any similar statute
enacted in substitution or replacement thereof, the Trustee shall
select by lot or in any other manner that it deems equitable the
Bonds of such series then to be redeemed. In any proration
pursuant to this Section, the Trustee may make such adjustments
as it shall deem proper and practicable to the end that the
principal amount of Bonds so redeemed shall be $1,000 or a
multiple thereof, by increasing or decreasing the amount which
would be allocable to any Bondholder on the basis of exact
proration by an amount not exceeding $1,000. The Trustee may in
its discretion determine the Bonds, if there are more than one,
registered in the name of any Bondholder that are to be redeemed,
in whole or in part.
Section 15.03. Notice of Redemption. In case the
Corporation shall desire to exercise such right to redeem all,
or, as the case may be, any part of the Bonds in accordance with
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the right reserved so to do, it shall give written notice of such
redemption to holders of the Bonds to be redeemed in whole or in
part as hereinafter in this Section 15.03 provided. Written
notice of such redemption shall also be given the Trustee and
shall be accompanied by an Officer's Certificate and, in the case
of redemption other than through an mandatory sinking fund, a
Board Resolution calling for redemption of the Bonds referred to
in such notice.
Notice of redemption to holders of Bonds to be
redeemed in whole or in part shall be given by sending, by
certified mail, a notice of such redemption not less than thirty
days and not more than sixty days before the date fixed for
redemption to such holders at their last addresses as they shall
appear upon the registration books. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give notice or any
defect in the notice to the holder of any Bonds designated for
redemption in whole or in part shall not affect the validity of
the proceedings for the redemption of any other Bonds.
Each such notice of redemption shall specify the
date fixed for redemption, the redemption price at which Bonds
are to be redeemed, and shall state that payment of the
redemption price of the Bonds to be redeemed will be made at the
corporate trust office of the Trustee upon presentation and
surrender of such Bonds, that interest accrued to the date fixed
for redemption will be paid as specified in said notice, and that
interest thereon will cease to accrue at the close of business on
the date fixed for redemption. If less than all the Bonds of a
series are to be redeemed, the notice which relates to each Bond
shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date,
upon surrender of such Bond, a new Bond in principal amount equal
to the unredeemed portion thereof will be issued or, at the
option of the holder, such Bond may be presented for notation
thereon of the payment, as of the redemption date, of the
redeemed portion of the principal thereof.
Section 15.04. Payment of Redemption Price. If the
giving of notice of redemption shall have been completed as above
provided, the Bonds or portions of Bonds specified in such notice
shall become due and payable on the date and at the place stated
in such notice at the applicable redemption price, together with
interest accrued to the date fixed for redemption. In such case
and if moneys in the necessary amount to pay such Bonds or
portions of Bonds at the redemption price, together with interest
thereon to the date fixed for redemption, shall prior to the date
fixed for redemption have been deposited in trust with the
Trustee or with any Paying Agent (other than the Corporation) or
have been set aside and segregated in trust by the Corporation
(if the Corporation shall act as its own Paying Agent), interest
on such Bonds or portions of Bonds shall cease to accrue on and
after the date fixed or redemption. Interest on Bonds or
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portions of Bonds called for redemption as aforesaid shall cease
to accrue on and after the date fixed for redemption, in any
event, irrespective of whether or not any such deposit in trust
or setting aside and segregation in trust shall have been made,
except with respect to any Bond or portion thereof so called for
redemption on which the Corporation shall default in the payment
of the redemption price, together with interest accrued thereon
to the date fixed for redemption. On presentation and surrender
of such Bonds on or after the date fixed for redemption at the
place of payment specified in the notice, such Bonds shall be
paid and redeemed at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption.
Upon presentation of any Bond which is redeemed in
part only, the Corporation shall execute and the Trustee shall
authenticate and deliver to the holder thereof, at the expense of
the Corporation, a new Bond or Bonds in principal amount equal to
the unredeemed portion of the Bond so presented or, at the option
of the holder, the same may be presented for notation thereon of
the payment, as of the date fixed for redemption, of the redeemed
portion of the principal thereof.
Section 15.05. Notation on Bond for Partial
Redemption. Notwithstanding the provisions of Section 15.03 and
15.04, in the event of the payment of a portion of any Bond, the
Trustee, in lieu of requiring the presentation of such Bond to be
partially paid and redeemed and noting such payment thereon, may
in its letter transmitting such payment to any such Bondholder
instruct such holder to endorse such payment on such Bond,
provided that the Corporation or the Trustee shall have first
obtained a written undertaking from such Bondholder that such
holder will not sell, transfer or otherwise dispose of any Bond
so partially paid without first presenting such Bond to the
Trustee in exchange for a new Bond or Bonds of aggregate
principal amount equal to the unpaid portion thereof.
Section 15.06. Cancellation of Bonds. All Bonds
redeemed and paid under this Article Fifteen shall, except as
provided in Section 15.05, be cancelled by the Trustee and a
certificate as to such cancellation shall be delivered by the
Trustee to the Corporation.
ARTICLE SIXTEEN
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 16.01. Satisfaction and Discharge of
Indenture. If at any time:
(a) either:
(i) there shall have been cancelled by the Trustee
or delivered to the Trustee for cancellation all Bonds
theretofore authenticated and delivered (other than any Bonds are
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that are asserted to have been destroyed, lost or stolen and that
shall have been replaced as provided in Section 4.12, or paid, or
Bonds for whose payment money has theretofore been deposited in
trust with the Trustee or segregated and held in trust by the
Corporation, and thereafter repaid to the Corporation or
discharged from such trust as provided by Section 16.04), or
(ii) all such Bonds not theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and
payable within one year, or have been or are to be called for
redemption within on year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the
Corporation has deposited or caused to be deposited with the
Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all such Bonds not theretofore
cancelled by the Trustee or delivered to the Trustee for
cancellation; and
(b) the Corporation has paid or caused to be paid
all other sums payable hereunder by the Corporation; and
(c) the Corporation has delivered to the Trustee an
Officer's Certificate stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of
this Indenture have been complied with; and
(d) the Corporation has delivered an Opinion of
Counsel stating that the documents and other items that have been
or are therewith delivered to the Trustee conform to the
requirements of this Indenture, and that, upon the basis of the
Corporation Request and the accompanying documents and items
specified in this Section, all conditions precedent provided for
herein relating to the satisfaction and discharge of this
Indenture have been complied with,
then, upon Corporation Request authorized by Board Resolution,
this Indenture and the lien, rights and interests hereby created
shall cease to be of further effect, and the Trustee, at the cost
and expense of the Corporation, shall execute and deliver proper
instruments acknowledging satisfaction of and discharging this
Indenture. Such instruments shall be in form satisfactory for
recording as a release of mortgage with the appropriate recording
office. Forthwith upon such execution and delivery the estate,
right, title and interest of the Trustee in and to all
securities, cash (except cash deposited pursuant to this Section)
and other personal property held by it as part of the Mortgaged
Property shall cease to be of further effect and the Trustee
shall transfer, deliver and pay the same to the Corporation.
Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Corporation to the Trustee
under Section 9.06 shall survive.
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Section 16.02. Funds Deposited for Payment of
Bonds. All moneys deposited with the Trustee pursuant to Section
16.01 shall be held in trust and shall be available for immediate
payment, either directly or through any Paying Agent (including
the Corporation acting as its own Paying Agent), to the holders
of the particular Bonds for the payment or redemption of which
such moneys have been deposited with the Trustee.
Section 16.03. Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of
this Indenture shall, upon demand of the Corporation, be paid to
the Trustee and thereupon such Paying Agent shall be released
from all further liability with respect to such moneys.
Section 16.04. Moneys Held by Trustee. Any moneys
deposited with any Paying Agent or the Trustee or then held by
the Corporation in trust for the payment of the principal of (and
premium, if any) or interest on any Bond that are not applied but
remain unclaimed by the holder of such Bond for six years after
the date upon which the principal of (and premium, if any) or
interest on such Bond shall have respectively become due and
payable shall be repaid to the Corporation on Corporation
Request, or (if then held by the Corporation) shall be discharged
from such trust; and thereupon such Paying Agent and Trustee
shall be released from all further liability with respect to such
moneys, and the holder of such Bond entitled to receive such
payment shall thereafter look only to the Corporation for the
payment thereof; nevertheless, any such Paying Agent or the
Trustee, before being required to make any such repayment, may at
the expense of the Corporation either mail to each Bondholder
affected, at the address shown in the Bond Register, or cause to
be published once a week for two successive weeks (in each case
on any regular business day) in an Authorized Newspaper a notice
that such moneys have not been so applied and that after a date
named therein any unclaimed balance of said moneys then remaining
will be returned to the Corporation.
ARTICLE SEVENTEEN
Application, Investment and
Withdrawal of Trust Moneys
Section 17.01. Trust Moneys Defined. All moneys
received by the Trustee
(a) upon the release of property from the lien of
this Indenture, including the principal of all purchase money
obligations, or
(b) as compensation for, or proceeds of sale of, any
part of the Mortgaged Property taken by eminent domain or
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purchased by, or sold pursuant to an order of, a governmental
authority or otherwise disposed of, or
(c) as proceeds of insurance upon any part of the
Mortgaged Property, or
(d) elsewhere in this Indenture provided to be held
and applied under this Article, or required to be paid to the
Trustee and whose disposition is not elsewhere herein otherwise
specifically provided for,
(all such moneys being herein sometimes called Trust Moneys),
shall be held by the Trustee as a part of the Mortgaged Property
and upon any sale of the Mortgaged Property, or any part thereof,
under Article Seven, said Trust Moneys shall be applied in
accordance with Section 8.05; but, before any such sale, all or
any part of the Trust Moneys may be withdrawn, and shall be paid
or applied by the Trustee, from time to time provided in Section
17.02 through 17.06, inclusive and Section 17.09.
Section 17.02. Withdrawal on Basis of Bondable
Property. Subject to the provisions of Sections 17.04 and 17.08,
Trust Moneys may be withdrawn by the Corporation and shall be
paid by the Trustee upon Corporation Order, in an amount equal to
the amount of Net Bondable Property Additions stated in the Net
Bondable Property Additions Certificate required by Subsection
(c) of this Section at any time and from time to time, upon
receipt by the Trustee of a Corporation Order, dated as of a date
not more than ten days prior to such withdrawal, together with
the following:
a) A Board Resolution requesting the withdrawal and
payment of a specified amount of Trust Moneys and designating the
source thereof.
(b) An Officer's Certificate dated not more than ten
days before the date of the application for the withdrawal and
payment of such Trust Moneys, stating
(1) that no Default or Event of Default exists
hereunder;
(2) that no part of such Trust Moneys has been, or
is required to be, set aside under Section 17.08; and
(3) that all conditions precedent herein provided
for relating to such withdrawal and payment have been complied
with.
(c) A Net Bondable Property Additions Certificate in
the form prescribed by Subsection (d) of Section 5.01 (with such
variations and omissions as are appropriate for the withdrawal of
Trust Moneys rather than the authentication and delivery of
Additional Bonds).
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(d) An Opinion of Counsel, dated the date of
withdrawal and payment of such Trust Moneys, covering the matters
set forth in Subsection (e) of Section 5.01 (with such variations
and omissions as are appropriate for the withdrawal of Trust
Moneys rather than the authentication and delivery of Additional
Bonds).
Wherever in this Indenture provision is made for the
deposit of moneys with the Trustee that are Trust Moneys as
provided in Section 17.01, such moneys need not actually be
deposited if and to the extent that the Corporation shall at the
time furnish to the Trustee evidence of its right to obtain the
withdrawal of such Trust Moneys pursuant to this Section. In
such event, however, such Trust Moneys shall, for the purposes of
any references in this Indenture to moneys deposited with or
received by the Trustee or withdrawn, be deemed to have been
actually deposited with the Trustee and released and paid by it
pursuant to this Section.
Section 17.03. Payment of Outstanding Bonds. Trust
Moneys may be applied by the Trustee at any time and from time to
time to the payment of the principal of Outstanding Bonds hereby
secured, either at their stated maturity or upon redemption, as
the Corporation shall determine and request in accordance with
Article Fifteen of this Indenture. If any Trust Moneys
aggregating in excess of $25,000 shall have been on deposit with
the Trustee for a period of one year and shall not have been
withdrawn by the Corporation pursuant to Section 17.02 hereof,
the Corporation shall direct the Trustee to apply all such Trust
Moneys pro rata to the redemption of Outstanding Bonds then
subject to redemption and, upon the failure of the Corporation to
give such direction, the Trustee shall apply such Trustee Moneys
pro rata to the redemption of Outstanding Bonds then subject to
redemption and selected by it following the procedure established
by Article Fifteen of this Indenture at the then applicable
redemption price for all such Bonds redeemed pursuant to this
Section, or if no such price shall be specified then at the
highest voluntary redemption price then applicable to such Bonds.
Section 17.04. Withdrawal of Insurance Proceeds.
To the extent that any Trust Moneys are proceeds of insurance
upon any part of the Mortgaged Property, they may be withdrawn by
the Corporation and shall be paid by the Trustee upon Corporation
Order dated not more than ten days prior to such proposed
withdrawal, to reimburse the Corporation for expenditures made to
repair, restore or replace the property destroyed or damaged,
upon the receipt by the Trustee of the following:
(a) An Officer's Certificate, dated not more than
ten days before the date of application for the withdrawal and
payment of such Trust Moneys, stating as follows:
(1) That expenditures have been made in a specified
amount for the purpose of making certain repairs, restorations
and replacement of the Mortgaged Property, which shall be briefly
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described, and stating the fair value thereof to the Corporation
at the date of the acquisition thereof by the Corporation; except
that it shall not be necessary under this Paragraph to state the
fair value of any of such repairs, restorations or replacements
that are separately described pursuant to Paragraph (4) of this
Subsection and whose fair value is stated in the Independent
Engineer's Certificate under the following Subsection (b) of this
Section.
(2) That no part of such expenditures, in any
previous or then pending application, has been or is being made
the basis for the withdrawal of any Trust Moneys pursuant to this
Section.
(3) That there is no outstanding indebtedness known,
after due inquiry, to the Corporation, for the purchase price or
construction of such repairs, restorations or replacements, or
for labor, wages, materials or supplies in connection with the
making thereof, that, if unpaid, might become the basis of
mechanics', laborers', materialmen's, statutory or other similar
lien, upon such repairs, restorations or replacements, or any
part thereof, that might, in the opinion of the signers of such
Certificate, materially impair the security afforded by said
repairs, restorations or replacements.
(4) Whether any part of such repairs, restorations
or replacement has, within six months before the date of
acquisition thereof by the Corporation, been used or operated by
others than the Corporation, in a business similar to that in
which such property has been or is to be used or operated by the
Corporation, and whether the fair value to the Corporation, at
the date of such acquisition, of such part of such repairs,
restorations or replacements is at least $100,000 and at least 1%
of the aggregate principal amount of Bonds at the time
Outstanding; and, if all of such facts are present, such part of
said repairs, restorations or replacements shall be separately
described, and it shall be stated that an Independent Engineer's
Certificate as to the fair value to the Corporation of such
separately described repairs, restorations or replacements will
be furnished under the following Subsection (b) of this Section.
(5) That no Default or Event of Default exists
hereunder.
(6) That no part of such Trust Moneys has been, or
is required to be, set aside under Section 17.08.
(7) That all conditions precedent herein provided
for relating to such withdrawal and payment have been compiled
with.
(b) In case any part of such repairs, restorations
or replacements is separately described pursuant to the foregoing
Paragraph (4) of Subsection (a) of this Section, an Independent
Engineer's Certificate stating the fair value to the Corporation,
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in such Engineer's opinion of such separately described repairs,
restorations or replacements at the date of the acquisition
thereof by the Corporation.
(c) An Opinion of Counsel dated not more than ten
days prior to such proposed withdrawal stating:
(1) that the instruments that have been or are
therewith delivered to the Trustee conform to the requirements of
this Indenture, and that, upon the basis of such Corporation
Order and the accompanying documents specified in this Section,
all conditions precedent herein provided or relating to such
withdrawal and payment have been complied with, and the Trust
Moneys whose withdrawal is then requested may be lawfully paid
over under this Section;
(2) that the Corporation has acquired title to said
repairs, restorations and replacements, and that the same and
every part thereof are free and clear of all mortgages, liens,
charges or encumbrances prior to the lien of this Indenture,
except (i) Permitted Encumbrances, (ii) easements and other
similar encumbrances that, in the opinion of such counsel, do not
materially impair the use of such repairs, restorations or
replacements in the operation of the business of the Corporation,
and (iii) any other prior liens, charges or encumbrances to which
the property so destroyed or damaged shall have been subject at
the time of such destruction or damage; and
(3) that all of the Corporation's right, title and
interest in and to said repairs, restorations or replacements, or
combination thereof, are then subject to the lien of this
Indenture.
Upon compliance with the foregoing provisions of
this Section the Trustee shall pay on Corporation Order an amount
of Trust Moneys of the character aforesaid equal to the amount of
the expenditures stated in the Officer's Certificate required by
Paragraph (1) of Subsection (a) of this Section, or the fair
value to the Corporation of such repairs, restorations and
replacements stated in such Officer's Certificate (and in such
Independent Engineer's Certificate, if required by Subsection (b)
of this Section) whichever is less.
Section 17.05. Powers Exercisable Notwithstanding
Event of Default. In case Default or Event of Default shall have
occurred and shall not have been cured, the Corporation, while in
possession of the Mortgaged Property (other than cash, securities
and other personal property held by, or required to be deposited
or pledged with, the Trustee hereunder or with the trustee,
mortgagee or other holder of a prior lien or Permitted
Encumbrance) may do any of the things enumerated in Section 17.02
to 17.04, inclusive, if the Trustee in its discretion, or the
holders of a majority in principal amount of the Bonds then
Outstanding, by appropriate action of such Bondholders, shall
consent to such action, in which event any Certificate filed
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under any of such Sections shall omit the statement to the effect
that no Default or Event of Default has occurred. This Section
shall not apply, however, during the continuance of an Event of
Default of the type specified in Subsections (a), (b) or (c) of
Section 8.01.
Section 17.06. Powers Exercisable by Trustee or
Receiver. In case the Mortgaged Property (other than cash,
securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or with the
trustee, mortgagee or other holder of a prior lien or Permitted
Encumbrance) shall be in the possession of a receiver or trustee
lawfully appointed, the powers hereinbefore in this Article
conferred upon the Corporation with respect to the withdrawal or
application of Trust Moneys may be exercised by such receiver or
trustee (subject to Section 17.05), in which case a written
request or order signed by such receiver or trustee shall be
deemed the equivalent of any Board Resolution or Corporation
Request or Order required by this Article, and a certificate
signed by such receiver or trustee shall be deemed the equivalent
of any Officer's Certificate required by this Indenture. If the
Trustee shall be in possession of the Mortgaged Property under
Section 8.03, such powers may be exercised by the Trustee in its
discretion.
Section 17.07. Disposition of Bonds Retired. All
Bonds received by the trustee and on the basis of which Trust
Moneys are paid over or for whose payment or redemption Trust
Moneys are applied under this Article shall be cancelled by the
Trustee as provided in Article Fifteen this Indenture.
Section 17.08. Condemnation of All Mortgaged
Property. In the event that all or substantially all of the
Mortgaged Property (other than any cash, securities and other
personal property held by, or required to be deposited or pledged
with, the Trustee hereunder or with the trustee, mortgagee or
other holder of a prior lien or Permitted Encumbrance) shall be
taken by eminent domain, the Corporation shall be deemed to have
elected, and shall be entitled, by virtue of this Section, to
redeem all the Bonds hereby secured of all series on a date
determined by the Trustee in its discretion to be the earliest
practical redemption date after receipt by the Trustee of all
cash that the Trustee is entitled to receive on account of such
taking. The redemption price of Bonds redeemed under this
Section shall be the principal amount thereof plus the unmatured
interest accrued thereon to the date fixed for redemption,
without premium. Notice of such redemption shall be given by the
Corporation or by the Trustee in the name of the Corporation. If
the cash so received by the Trustee, together with all other cash
then held by the Trustee as a part of the Mortgaged Property, is
not sufficient to pay the redemption price of all the Bonds
hereby secured and to pay all amount payable to the Trustee under
this Indenture (including fees and expenses incurred and to be
incurred by the Trustee in connection with such redemption), the
Corporation will, within ten days after receipt by the Trustee of
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all cash that the Trustee is entitled to receive as aforesaid on
account of such taking, deposit with the Trustee for such purpose
cash in an amount sufficient to make up such deficiency. To the
extent that any or all such cash shall be required for the
purpose of redeeming Bonds under this Section, the Trustee shall
apply the same for such purpose, and the balance, if any, after
payment of all amount payable to the Trustee, shall be paid upon
Corporation Order.
If the Corporation fails to deposit with the Trustee
the cash necessary to make good such deficiency, the money
received by the Trustee from such taking and all other cash then
held by the Trustee as a part of the Mortgaged Property shall be
set aside and thereafter no part of the cash so set aside may be
withdrawn or paid over under Section 17.02 to 17.06, inclusive,
but shall be applicable only to the purposes specified in, and in
accordance with, Section 8.05, as if all Outstanding Bonds were
then due and payable.
Section 17.09. Investment of Trust Moneys. All or
any part of any Trust Moneys held by the Trustee hereunder
(except such as may be held for account of any particular Bonds)
shall from time to time at the written request of the
Corporation, signed by the Treasurer or an Assistant Treasurer of
the Corporation, be invested or reinvested by the Trustee in any
Bonds or other obligations of the United States of America
designated by the Corporation, which as to principal and interest
constitute direct obligations of the United States of America and
will mature or become payable at the election of the holder
within one year after acquisition by the Trustee. Until one or
more of the Events of Default specified in Section 8.01 shall
happen and be continuing, any interest or increment on such
investments (in excess of any accrued interest paid at the time
of purchase) which may be received by the Trustee shall be
forthwith paid to the Corporation. Such investments shall be
held by the Trustee as a part of the trust estate, subject to the
same provisions hereof as the cash used by it to purchase such
investments; but upon a like request of the Corporation, the
Trustee shall sell all or any designated part of the same and the
proceeds of such sale shall be held by the Trustee subject to the
same provisions hereof as the cash used by it to purchase the
investments so sold. If under the provisions of this Indenture
any Trust Moneys held by the Trustee and so invested or
reinvested shall be required to be applied to the redemption of
Bonds, the Trustee shall forthwith sell such investments in an
amount equivalent to the Trust Moneys so to be applied. In case
the net proceeds (exclusive of interest) realized upon any such
sale shall amount to less than the amount invested by the Trustee
in the purchase of the investments so sold (after appropriate
adjustment on account of any accrued interest paid at the time of
purchase), the Trustee shall within five days after such sale
notify the Corporation in writing thereof and within five days
thereafter the Corporation shall pay to the Trustee the amount of
the difference between such purchase price and the amount so
realized, and the amount so paid shall be held by the Trustee in
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like manner and subject to the same conditions as the proceeds
realized upon such sale.
Whenever application is made by the Corporation
under any provision of this Indenture to withdraw all or any part
of the Trust Moneys deposited or held by the Trustee, the
Corporation shall accept investments held by the Trustee as a
part of the Mortgaged Property pursuant to this Section 17.09 to
the extent that such investments shall be tendered to it by the
Trustee in lieu of such cash; and such investments shall be
accepted in lieu of such cash at the net cost thereof (exclusive
of accrued interest) to the trust estate.
The Trustee shall not be liable or responsible for
any loss resulting from any investment or reinvestment pursuant
to this Section 17.09.
ARTICLE EIGHTEEN
Immunity of Incorporators, Stockholders,
Officers, and Directors
No recourse under or upon any obligation, covenant
or agreement of this Indenture, or of any Bond or for any claim
based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past
present, or future, of the Corporation or of any predecessor or
successor corporation, either directly or through the Corporation
or any such predecessor or successor corporation, whether by
virtue of any constitution, statute, or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, stockholders, officers, or
directors of the Corporation or of any predecessor or successor
corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture
or in any other Bonds or implied therefrom; and that any and all
such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, every such
incorporator, stockholder, officer or director, because of the
creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Bonds or implied therefrom, is
hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the
issuance of such Bonds. Notwithstanding any language of this
Article Eighteen, or of any other provision of this Indenture or
of the Bonds to the contrary, no such waiver, release, or
exemption from individual liability of any incorporator,
stockholder, officer or director, past present or future, of the
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corporation, or of any predecessor or successor corporation,
shall apply with respect to any claim based on fraud,
misrepresentation or gross negligence.
ARTICLE NINETEEN
Definition
Section 19.01. General. For all purposes of this
Indenture (except as in this Indenture otherwise expressly
provided or unless the context otherwise requires) the terms
defined in this Article Nineteen shall have the respective
meanings specified in this Section 19.01 and in Section 19.02.
All references in this instrument to designated
Articles, Sections or other subdivisions are to the designated
Articles, Section and other subdivisions of this instrument as
originally executed. 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 subdivision.
All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, as amended, either
directly or by reference therein to the Securities Act of 1933,
as amended, shall have the meanings assigned to such terms
therein.
Section 19.02. Specific Definitions.
(a) Accounting Requirements means generally accepted
accounting principles consistently applied or such other system
of accounts prescribed by the Colorado Public Utilities
Commission or the Corporation Commission of the State of Kansas
(to the extent each such Commission has jurisdiction over the
Corporation) at the time in effect or any substitute system of
account prescribed by any successor commission or commissions
empowered to regulate the rates and charges of the Corporation
for the transmission and distribution of natural gas.
(b) Affiliate means a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Corporation.
The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
stock or otherwise.
(c) Appraiser means a Person engaged in the business
of appraising real or personal property whether or not employed
by or in an way affiliated with the Corporation.
(d) Authorized Newspaper means The Wall Street
Journal (all United States editions) or if the Wall Street
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Journal ceases publication, any newspaper printed in the English
language, nationally known in the United States, and customarily
published on each business day of the year, whether or not such
newspaper is published on Saturdays, Sundays and legal holidays.
(e) Board of Directors means the Board of Directors
of the Corporation.
(f) Board Resolution means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Corporation to have been duly adopted by the Board of Directors
and to be in full force and effect, and delivered to the trustee.
(g) Bond or Bonds means any Bond or Bonds that may
be issued and delivered under this Indenture and supplements
hereto.
(h) Bondholder or holder of Bonds, or other similar
term, when used with respect to any Bond, means the person in
whose name such Bond is registered in the Bond Register.
(i) Bond Register and Bond Registrar shall have the
respective meanings stated in Section 4.09. The term Bond
Registrar shall include any co-registrar of the Bonds named
pursuant to such Section and the term Bond Register shall
include any duplicate kept by such co-registrar as required by
such Section.
(j) Commission means the Securities and Exchange
Commission, as from time to time constituted, or if at any time
hereafter such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act of 1939,
then the body performing such duties on such date.
(k) Corporation means Greeley Gas Company, a
Colorado corporation, and, subject to the provisions of Article
Thirteen shall also include its successors and assigns.
(l) Corporation Order and Corporation Request mean,
respectively, any written order or request signed in the name of
the Corporation by its President or a Vice President and by its
Secretary or an Assistant Secretary or its Treasurer or an
Assistant Treasurer or its Controller or an Assistant Controller.
(m) Default means any event or condition, the
occurrence of which would, with the lapse of time or the giving
of notice, or both, constitute an Event of Default as defined in
Section 8.01.
(n) Engineer means any Person engaged in the
engineering profession whether or not employed by, or in any way
affiliated with, the Corporation.
(o) Event of Default has the meaning stated in
Section 8.01.
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(p) Funded Property shall mean (i) all property
owned by the Corporation on June 30, 1983 and (ii) all Property
Additions which shall have been made the basis for the
authentication and delivery of Bonds or the withdrawal of cash or
the release of property or cash or the acquisition of property
pursuant to Section 6.06(b)(3) hereof.
(q) Income Available for Charges for any period
shall mean the Net Income for such period plus, to the extent
deducted in computing Net Income, an amount equal to the
aggregate or such period of (1) Interest Charges, and (2) taxes
on income or measured by income. If the net non-operating
revenues included in the foregoing calculation of Net Income for
the purpose of this definition of Income Available for Interest
Charges shall exceed 10% of the Net Income as so calculated, then
there shall be deducted from such Net Income a sufficient part of
such non-operating revenues so that the remaining non-operating
revenues included in the result figure shall not exceed 10% of
such resultant figure, and such resultant figure shall be deemed
to be the Income Available for Interest Charges of the
Corporation.
(r) Indenture shall mean the Original Indenture and
all supplemental indentures.
(s) Independent when used with respect to any
specified Person means such a Person, who, or firm or corporation
that, (1) is in fact independent, (2) does not have any direct
financial interest or any material indirect financial interest in
the Corporation or in any other obligor upon the Bonds or in any
Affiliate or the Corporation or of such other obligor, and (3) is
not connected with the Corporation or such other obligor or any
Affiliate of the Corporation or of such other obligor, as an
officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. Whenever it is
herein provided that the opinion or certificate of any
Independent Person shall be furnished to the Trustee, such Person
shall be appointed by a Corporation Order and approved by the
Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read this definition
and that the signer is Independent within the meaning hereof.
(t) Mortgaged Property means all property and
rights subject to the lien of the Indenture.
(u) Net Bondable Property Additions shall mean the
amount obtained by deducting from Property Additions an amount
equal to the sum of Funded Property plus Net Retirements computed
as set forth in the Net Bondable Property Additions Certificate
provided for in Section 5.01.
(v) Net Income shall mean net income of the
Corporation after all taxes based on income, determined in
accordance with generally accepted accounting principles. In
making computation, however, there shall be excluded (i) any gain
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or loss or other addition or deduction arising by reason of the
issue, purchase, sale, conversion or retirement by the
Corporation of any its securities, or arising by reason of any
purchase, sale write-up, write-down, increase or decrease in book
value or other transaction or change in respect of capital
assets, tangible or intangible (and the deduction for income
taxes shall be adjusted by giving effect to any change in the
amount thereof resulting from the elimination of any of the
capital transactions or changes referred to above), (ii) proceeds
derived from life insurance and (iii) losses sustained from, and
proceeds derived from insurance in connection with, the damage to
or destruction of real estate.
(w) Officer's Certificate shall mean a certificate
signed by the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary of the Corporation.
(x) Opinion of Counsel shall mean an opinion in
writing signed by legal counsel, who must be satisfactory to the
Trustee, and who may be of counsel for the Corporation.
(y) Outstanding when used with respect to Bonds
means, as of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture, except:
(1) Bonds theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation and
those portions of the principal of Bonds that have
been paid;
(2) Bonds for whose payment or redemption money
in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent in
trust for the holders of such Bonds; provided that,
if such Bonds 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; and
(3) Bonds alleged to have been destroyed, lost
or stolen that have been replaced as provided in
Section 4.12;
provided, however, that in determining whether the holders of the
requisite principal amount of Bonds Outstanding have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds owned by the Corporation or any other
obligor upon the Bonds or any Affiliate of the Corporation or
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 or waiver, only Bonds
that the Trustee knows to be owned shall be disregarded. Bonds
so owned that have been pledged in good faith may be regarded as
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Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Bonds
and that the pledgee is not the Corporation or any other obligor
upon the Bonds or any affiliate of the Corporation or such other
obligor.
(z) Paying Agent means any Person authorized by
Board Resolution to pay the principal of (and premium, if any) or
interest on any Bonds on behalf of the Corporation.
(aa) Permitted Encumbrance means any of the
following:
(1) The lien of the Indenture.
(2) Liens for taxes and assessments for the
then current year and taxes and assessments not due
or payable.
(3) Defects in the title to lands traversed by
easements or rights-of-way, or liens on such lands
securing indebtedness issued by others than the
Corporation, not assumed by the Corporation and on
which the Corporation does not customarily pay
interest, provided, in any of the above cases, that,
in the opinion of counsel for the Corporation, the
power under eminent domain or similar statutes is
available to the Corporation to condemn or acquire
easements or rights-of-way sufficient for its
purposes over the land traversed by such easements
or rights-of-way or over other lands adjacent
thereto.
(4) Liens of judgments (i) the execution of
which has been stayed, or (ii) with respect to which
the time for appeal shall not have expired, or (iii)
that shall be in the course of appeal, or (iv) the
payment of which, in the opinion of counsel, has
been adequately secured otherwise than by such
liens, or (v) that do not aggregate more than
$50,000.
(5) Undetermined liens or charges incidental to
construction so long as the Corporation has no
actual notice that any action has been taken in or
before any court to perfect such liens and changes.
(6) Rights reserved to or vested in any
municipality or public authority by the terms of any
franchise, grant, license or permit or by a
provision of law to purchase or recapture or to
designate a purchaser of any property of the
Corporation.
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(7) Easements or reservations in any property
of the Corporation for the purpose of roads,
railroads, pipe, sewer, ditches (irrigation or
otherwise), telephone, telegraph, electric and power
lines and other like purposes that do not impair the
use of such property in the operation of the
business of the Corporation.
(8) Rights reserved to or vested in any
municipality or public authority to use or control
or regulate any property of the Corporation,
including zoning laws and ordinances.
(9) If the Corporation shall have acquired any
property subject to terms, conditions, agreements,
leases, covenants, exceptions, restrictions or
reservations (including but not limited to oil, gas,
coal or other mineral interests and the leasing or
assignment thereof) that do not secure any
obligation and that do not materially impair the use
of such property in the operation of the business of
the Corporation, any such term, condition,
agreement, lease, covenant, exception, restriction
or reservation.
(10) Liens, the validity of which is being
contested or disputed in good faith by the
Corporation and in respect of which the Corporation
has set aside adequate reserves.
(11) Any liens in respect of which cash
sufficient to pay or redeem all obligations secured
thereby shall be held in trust for the purpose by
the Trustee.
(12) Any landlord's liens, liens for workmen's
compensation awards and other statutory liens.
(13) Irregularities or deficiencies in the
record evidence of title to real property that (i)
in the opinion of counsel for the Corporation are
inconsequential or (ii) exist with respect to real
property of which the Corporation has been in
possession for a sufficient period of time to have
acquired title thereto by adverse possession under
applicable law.
In determining, for the purpose of any opinion to be
delivered under this Indenture, whether any of the encumbrances
referred to in Paragraphs (7) and (9) above impair the use of the
property subject thereto in the operation of the business of the
Corporation, counsel giving such opinion may relay on an
Officer's Certificate.
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Any cash deposited with the Trustee in accordance
with Paragraph (11) above shall be held by the Trustee and
applied by it to the discharge of the lien in respect of which it
was deposited when and if such lien shall have been finally
determined by a court of competent jurisdiction or when so
directed by the Corporation prior to such adjudication. Any cash
so deposited remaining after the discharge of such lien shall be
returned to the Corporation. The Trustee may rely upon an
Opinion of Counsel as to any such adjudication and as to the
discharge of such lien.
Any cash deposited with the Trustee pursuant to this
Paragraph (aa) held at the date of discharge of this Indenture
shall be repaid to the Corporation upon Corporation Order.
(bb) Person shall mean an individual, partnership,
corporation, trust or unincorporated organization, and a
governmental or agency or political subdivision thereof.
(cc) Property Additions shall mean all property
properly chargeable to plant account, of the character described
in the Granting clauses hereof, excluding property excepted from
the lien of the Indenture, constructed or acquired by the
Corporation after June 30, 1983, and used or useful in the
business of selling, transmitting and distributing natural gas
and free from all liens or encumbrances other than Permitted
Encumbrances, and the term Property Additions shall include all
property of the character hereinabove in this paragraph (cc)
described in process of construction to the extent that the
Corporation has incurred a liability therefor, and proper charges
for overhead in accordance with Accounting Requirements.
(dd) Pro Forma Interest Charges shall mean as of the
date of any determination thereof Interest Charges on all Bonds
to be outstanding, after giving effect to the issuance of any
Bonds then proposed to be issued.
(ee) Responsible Officer, when used with respect to
the Trustee, shall mean any Trust Department Vice President or
any officer in the Corporate Trust Department.
(ff) Retirements shall mean (1) all Mortgaged
Property which shall have been released from the lien of this
Indenture, (2) all Mortgaged Property which shall have been worn-
out, retired or abandoned or which has otherwise permanently
ceased to be used or useful in the gas transmission and
distribution business of the Corporation and (3) all Mortgaged
Property which has been destroyed.
The amount of Retirements shown in any Net Bondable
Property Additions Certificate shall be computed as follows:
A. As to any part of Mortgaged Property existing on
June 30, 1983, the amount at which such property was carried on
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the books of the Corporation on such date, estimated, if
necessary, as to particular property; and
B. As to Property Additions, the cost to the
Corporation or the fair value thereof (whichever is less), as
certified to the Trustee at the time said Property Additions
became Mortgaged Property, estimated, if necessary, as to
particular property, or, if not so certified, then the cost of
such Property Additions.
No reduction in book values of property recorded in
the Corporation's plant or property account nor the transfer of
any amount appearing in any such account to intangible or
adjustment accounts, required or arising from any
reclassification required to be made by any regulatory body, or
otherwise, nor the elimination of any amount so transferred,
otherwise than in connection with the actual retirement of
physical property, shall be taken into account in determining the
amount of retirements.
(gg) Retirements Credits shall mean the following
credits, which may be applied against Retirements: (1) the amount
of cash or other consideration received by the Trustee in
connection with the release of any Funded Property and (2) the
amount of insurance money paid to the Trustee on account of the
destruction of any Funded Property; but in each case only to the
extent that the same have not previously been used as a
Retirements Credit.
(hh) Trustee means Central Bank of Denver, until a
successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter Trustee
shall mean such successor Trustee.
(ii) Trust Indenture Act shall mean the Trust
Indenture Act of 1939 as in force at the date of execution of
this Indenture, or, if this Indenture is first qualified under
the Trust Indenture Act after such date of execution, as in force
at the date of such qualification.
(jj) Trust Moneys has the meaning stated in Section
17.01.
ARTICLE TWENTY
Miscellaneous Provisions
Section 20.01 Certain Assignments of Bonds. In the
event that a holder of a Bond of any series shall assign such
Bond without transferring ownership thereof on the Bond Register
in accordance with Section 4.10 hereof, this Indenture shall
secure payment of such Bond for the benefit of such registered
holder, equally and ratably with all present and future holders
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of Bonds issued hereunder, and not for the benefit of any such
assignee.
Section 20.02 Successors and Assigns. All the
covenants and agreements in this Indenture contained by or in
behalf of the Corporation shall bind its successors and assigns,
whether so expressed or not.
Section 20.03. Board and Other Action. Any act or
proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee, or
officer of the Corporation shall and may be done and performed
with like force and effect by the corresponding board, committee,
or officer of any corporation that shall at the time be the
lawful sole successor of the Corporation.
Section 20.04. Surrender of Powers. The
Corporation by Board Resolution may surrender any of the powers
reserved to the Corporation and thereupon such power so
surrendered shall terminate both as to the Corporation and as to
any successor corporation.
Section 20.05. Service of Notices. Any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by any
Bondholder to or on the Corporation shall be sufficiently given
if mailed, first-class postage prepaid, addressed (until another
address is filed in writing by the Corporation with the Trustee),
as follows: Greeley Gas Company, Suite 400, 1500 Grant Street,
Denver, Colorado 80203, Attention: President. Any notice,
election, request or demand by the Corporation or any Bondholder
to or upon the Trustee, shall be sufficiently given or made, for
all purposes, if given or made in writing at the principal
office of the Trustee, addressed as follows: Central Bank of
Denver, 1515 Arapahoe Street, P.O. Box 5548 T.A., Denver,
Colorado 80292, or to such other address as at the time may be
the principal office of the Trustee.
Section 20.06. Colorado Law Applicable. This
Seventh Supplemental Indenture and each Bond shall be governed by
and construed in accordance with the laws of the State of
Colorado.
Section 20.07. Certificates to Trustee. Upon any
application or demand by the Corporation to the Trustee to take
any action under any of the provisions of this Indenture, the
Corporation shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such
counsel, based on such application and the accompanying documents
and other items required by this Indenture, all such conditions
precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such
documents is specifically required by any provision of this
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Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this
Indenture including certificates of any Engineer or Appraiser,
and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include: (1) a
statement that each person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon which
the statement or opinions contained in such certificate or
opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion whether
such covenant or condition has been complied with; and (4) a
statement whether, in the opinion of such person, such condition
or covenant has been complied with.
Section 20.08. Payments Coming Due on Saturday,
Sunday or Legal Holiday. In any case where the date of maturity
of interest or principal of the Bonds or the date of redemption
of any Bond shall be a Saturday or a Sunday or a legal holiday in
Denver, Colorado, or a day on which banking institutions in such
city are authorized by law to close, then payment of interest or
principal (and premium, if any) may be made in such city on the
next succeeding day not a Saturday, Sunday or a legal holiday or
a date on which banking institutions are authorized by law to
close, with the same force and effect as if made on the nominal
date of maturity or redemption, and no interest shall accrue for
the period after such nominal date.
Section 20.09. Trust Indenture Act. If and to the
extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture that
is required to be included in this Indenture by any of Sections
310 through 317, inclusive, of the Trust Indenture Act, such
required provision shall control.
Section 20.10. Publication of Notice. If for any
reason it shall be impossible to make publication of any notice
required by this Indenture in an Authorized Newspaper as herein
provided, then such publication or other notice in lieu thereof
as shall be made with the approval of the Trustee shall
constitute a sufficient publication of such notice.
Section 20.11. Counterparts. This Seventh
Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
Section 20.12. Effect of Headings and Table of
Contents. The Article, Section and Subsection headings contained
in this Indenture and the Table of Contents are for convenience
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only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
Section 20.13. Acceptance of Trust by Trustee. The
Trustee hereby accepts the trust in this Seventh Supplemental
Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
Section 20.14. Separability of Provisions. In case
any one or more of the provisions contained in this Seventh
Supplemental Indenture or if the Bonds shall for any reason be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions hereof
and thereof shall not in any way be affected or impaired in any
way.
IN WITNESS WHEREOF, Greeley Gas Company has caused
this Indenture to be signed in its corporate name by its
President or a Vice-President and its corporate seal to be
hereunto affixed and attested by its Assistant Secretary, and
Central Bank of Denver, as Trustee, has caused this Seventh
Supplemental Indenture to be signed in its corporate name by its
Trust Officer and its corporate seal to be hereunto affixed and
attested by its Cashier as of the day and year first above
written.
GREELEY GAS COMPANY
(Corporate Seal) By /s/ Lee E. Schlessman
----------------------------
President
ATTEST:
/s/ Velma A. Wellman
- - ----------------------
Assistant Secretary
Witnesses:
/s/ Janis D. Rhode
- - -----------------------
/s/ Marla S. Petrini
- - -----------------------
CENTRAL BANK OF DENVER
Trustee
(Corporate Seal) By /s/ Daniel A. Rich
--------------------
Trust Officer
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ATTEST:
/s/ Emily L . Fohn
- - -----------------------
Assistant Secretary
Witnesses:
/s/ S. A. Hawkins
- - -----------------------
/s/ M. Margaret Walker
- - -----------------------
STATE OF COLORADO )
) SS.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me
this 13th day of October, 1983, by Lee E. Schlessman as
President, and Velma A. Wellman, as Assistant Secretary, of
Greeley Gas Company, a corporation.
Witness my hand and official seal.
My commission expires: March 21, 1987
/s/ Brenda K. Johnson
-----------------
Notary Public
STATE OF COLORADO )
) SS.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me
this 14 day of October, 1983, by Daniel A. Rich as Trust Officer,
and Emily L. Fohn, as Assistant Secretary, of Central Bank of
Denver.
Witness my hand and official seal.
My commission expires: 1-4-84
/s/ Kathleen M. Narey
-----------------
Notary Public
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EXHIBIT A
[FORM OF BOND]
GREELEY GAS COMPANY
First Mortgage Bond, % Series due
No. $_______
FOR VALUE RECEIVED, GREELEY GAS COMPANY, a
corporation organized and existing under the laws of the State of
Colorado (hereinafter called the Corporation, which term shall
include any successor corporation as defined in the Indenture
hereinafter referred to), hereby promises to pay to
or registered assigns,
on the ___ day of ___ , ___
the sum of ___
Dollars
($ ) in coin or currency of the United States of America that
at the time of payment is legal tender for the payment of public
and private debts, and to pay to the registered owner hereof
interest thereon from the date hereof, at the rate of ___ per
cent (___%) per annum, in like coin or currency, payable
semiannually on ___ and ___ in each year, until the principal
hereof shall be paid. Payments of both principal and interest
are to be made at the principal office of the Trustee in Denver,
Colorado.
This Bond is one of an authorized issue of Bonds of
the Corporation known as its First Mortgage Bonds, not limited in
aggregate principal amount except as provided in the Indenture
hereinafter mentioned, all issued and to be issued in one or more
series under and equally and ratably secured (except as any
sinking, amortization, improvement, renewal or other analogous
fund, established in accordance with the provisions of the
Indenture hereinafter referred to, may afford additional security
for the Bonds of any particular series) by an Indenture of
Mortgage and Deed of Trust (hereinafter called the Original
Indenture) executed by the Corporation to The Central Bank and
Trust Company (now named Central Bank of Denver), Denver,
Colorado (herein called the Trustee) dated March 1, 1957, as
supplemented and amended by seven Supplemental Indentures, (the
Original Indenture, as so supplemented and amended, is
hereinafter referred to as the Indenture) to which Indenture
reference is hereby made for a description of the property
mortgaged and pledged, the nature and extent of the security, the
terms and conditions upon which the Bonds are and are to be
secured and the rights of the holders or registered owners
thereof and of the Trustee in respect of such security. As
provided in the Indenture, such Bonds may be issued in series,
A-1<PAGE>
for various principal sums, may bear different dates and mature
at different times, may bear interest at different rates and may
otherwise vary as in the Indenture provided or permitted.
This Bond is one of the Bonds described in the
Indenture and designated therein as the First Mortgage Bonds,
___% Series ___ due ___ (hereinafter referred to as the Series
___ Bonds). [The Series ___ Bonds are _____ to the benefits of,
and are subject to redemption by operation of, the sinking fund
for the Series ___ Bonds (hereinafter called the Sinking Fund)
provided for in the Indenture and pursuant to which the
Corporation is obligated to retire on ___ of each year, beginning
___, 19___, $ ___ aggregate principal amount of Series ___ Bonds
at 100% of the principal amount thereof, plus accrued interest.
[Provisions for double sinking fund payments, if any]]
Subject to the provisions of the Indenture, all
Series ___ Bonds (other than those redeemed for the Sinking Fund
above referred to) are subject to redemption at the option of the
Corporation, as a whole or in part at any time or from time to
time [on or after ___, 19___] at the following percentages of the
principal amount thereof:
If redeemed during the
12-month Period ending The redemption price is
- - -------------------------- -----------------------
together in any case with interest accrued thereon
to the date of redemption [prohibitions, if any, on refunding].
If this Bond is called for redemption and payment duly provided,
this Bond shall cease to bear interest from and after the date
fixed for such redemption.
Upon any partial redemption of this Bond, at the
option of the registered holder hereof this Bond may be either
(a) surrendered to the Trustee in exchange or one or more new
Series ___ Bonds, of authorized denominations, registered in the
name of such holder, in an aggregate principal amount equal to
the principal amount remaining unpaid upon this Bond, or (b)
submitted to the Trustee for notation hereon of the payment of
the portion of the principal hereof paid upon such redemption.
As provided in the Indenture, (a) if and to the
extent authorized by the consent (evidenced as provided in the
Indenture) of the holders of not less than 66-2/3% in aggregate
principal amount of all Bonds then Outstanding that are adversely
affected thereby, such changes in, additions to or eliminations
from the Indenture as such holders and the Corporation may deem
necessary or advisable may be made by supplemental indenture;
provided that no such change shall be made without the consent of
the holder of each outstanding bond that is adversely affected
that would (i) extend the stated maturity of the principal of, or
A-2<PAGE>
any installment of interest on, any Bond, or (ii) reduce the
principal amount thereof or the interest thereon or any premium
payable upon the redemption thereof, or (iii) extend the time or
reduce the amount of any sinking fund payment in respect thereof,
or (iv) reduce the percentage of the principal amount of Bonds
the consent of the holders of which is required for the
authorization of any such change, addition or elimination, or (v)
modify certain other provisions of the Indenture.
In case an Event of Default (as defined in the
Indenture) shall occur and be continuing, the principal of all
the Bonds outstanding may be declared and may become due and
payable in the manner and with the effect provided in the
Indenture.
This Bond is a registered Bond without coupons and
is transferable by the registered holder thereof in person or by
the duly authorized attorney of such holder on the Bond Register
to be kept for the purpose at the principal office of the Trustee
as Bond Registrar and transfer agent for the Bonds, in Denver,
Colorado. Upon surrender of this Bond accompanied by written
instruments of transfer in form approved by the Trustee, duly
executed by the registered holder in person or by such attorney,
and upon cancellation hereof, one or more new Bonds of the same
series and maturity, in authorized denominations, in an aggregate
principal amount equal to the principal amount remaining unpaid
upon this Bond, shall be issued to the transferee in exchange
herefor, as provided in the Indenture. The Corporation and the
Trustee may deem and treat the person in whose name this Bond is
registered on the Bond Register as the absolute owner hereof
(whether or not this Bond shall be overdue) for the purpose or
receiving payment hereon, and on account hereof and for all other
purposes.
No recourse shall be had for the payment of the
principal of or interest on this Bond, or in respect of this Bond
or the Indenture, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Corporation
or of any predecessor or successor corporation, either directly
or through the Corporation, by virtue of any constitution,
statute or rule of law or by enforcement of any assessment or
penalty or otherwise, any and all such liability of
incorporators, stockholders, officers and directors being
released by the holder hereof by the acceptance of this Bond and
being likewise waived and released by the terms of the Indenture.
This Bond shall not be valid or become obligatory
for any purpose until the certificate endorsed hereon shall be
signed by the Trustee under the Indenture.
IN WITNESS WHEREOF, GREELEY GAS COMPANY has caused
these presents to be signed in its name by its President or a
Vice President, and its corporate seal to be affixed hereto and
attested by its Secretary or an Assistant Secretary.
A-3<PAGE>
Dated: GREELEY GAS COMPANY
By
------------------------
President
Attest:
- - ---------------------
Secretary
[TRUSTEE'S CERTIFICATE TO BE ENDORSED ON ALL BONDS]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series
designated herein, described in the within-mentioned Indenture.
CENTRAL BANK OF DENVER,
as Trustee
By
----------------------------
Authorized Officer
A-4<PAGE>
EXHIBIT B
GREELEY GAS COMPANY
AVAILABLE INCOME CERTIFICATE
The undersigned officers of Greeley Gas Company (the
Corporation) hereby certify to Central Bank of Denver, as Trustee
under the Corporation's Indenture of Mortgage and Deed of Trust,
dated as of March 1, 1957 as supplemented and amended by a
Seventh Supplemental Indenture, that each of the undersigned (i)
have reviewed Subsection (c) of Section 5.01 of the Seventh
Supplemental Indenture, (ii) has examined the books of account of
the Corporation and made inquiries of officers or employees of
the Corporation directly responsible for maintaining such
accounts, (iii) is of the opinion that such examination is
sufficient to enable him to make this certificate, and (iv) is of
the opinion that the requirements of Subsection (c) of such
Section 5.01 have been complied with, as is reflected in the
following computation, which is true and correct:
1. The Corporation's Net Income for the twelve consecutive
months ended ___, 19 . . . . . . . . . . . . . . . . $
2. The Corporation's Interest Charges for the 12-month
period referred to in paragraph I above . . . . . . . $
3. The Federal and state taxes on income or measured by
income of the Corporation for the 12-month period
referred to in paragraph I above . . . . . . . . . . $
Then Determine Income Available for Interest Charges by
adding 1, 2 and 3 above to produce 4:
4. Income Available for Interest Charges . . . . . . . . $
5. The interest requirements on Bonds for the 12-month
period immediately succeeding the date hereof less
interest requirements on indebtedness to be retired
from the proceeds of the Additional Bonds now applied
for . . . . . . . . . . . . . . . . . . . . . . . . . $
Which is the Amount of Pro Forma Interest Charges:
6. The amount shown in 4 above exceed two times the amount
shown in 5 above and the amount of such excess is . . $
The undersigned further certify that the terms used herein
that are defined in the Seventh Supplemental Indenture are used
herein as defined herein.
Dated:
B-1<PAGE>
------------------------------
President (or Vice President)
------------------------------
Treasurer (or other appropriate
officer)
B-2<PAGE>
Schedule 1 to
EXHIBIT B
GREELEY GAS COMPANY
STATEMENT OF NET INCOME AVAILABLE
FOR INTEREST CHARGES
For Twelve Month Period Ended ___, 19___
Total Operating Revenues . . . . . . . . . . . . . . . . . . . $
Operating Expenses:
Operating Expenses . . . . . . . . . . . . . . . . . . . . $
Maintenance . . . . . . . . . . . . . . . . . . . . . . . $
Depreciation & Amortization . . . . . . . . . . . . . . . $
Other . . . . . . . . . . . . . . . . . . . . . . . . . . $
Taxes, Other than Income . . . . . . . . . . . . . . . . . $
Total Operating Expenses and Taxes, Other than
Income Taxes . . . . . . . . . . . . . . . . . . . . $
Net Operating Income Before Income Taxes . . . . . . . . . $
Allowance for Funds Used During Construction . . . . . . . $
Miscellaneous Income (Charges) . . . . . . . . . . . . . . $
Net Income Available for Interest Charges . . . . . . . . $
Interest Charges . . . . . . . . . . . . . . . . . . . . . . . $
Federal and State Income Taxes . . . . . . . . . . . . . . . . $
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . $
B-3<PAGE>
EXHIBIT C
GREELEY GAS COMPANY
BONDABLE ADDITIONS CERTIFICATE (NO. ___)
The undersigned officers of Greeley Gas Company (the
Corporation) hereby certify to Central Bank of Denver, as Trustee
under the Corporation's Indenture of Mortgage and Deed of Trust,
dated as of March 1, 1957, as supplemented and amended by a
Seventh Supplemental Indenture (the Original Indenture, as so
supplemented and amended, is hereinafter referred to as the
Indenture), that each of the undersigned (i) have reviewed
Subsection (d) of Section 5.01 of the Seventh Supplemental
Indenture, (ii) has examined the books of account of the
Corporation and made inquiries of officers or employees of the
Corporation directly responsible for maintaining such accounts,
(iii) is of the opinion that such examination is sufficient to
enable him to make this certificate and (iv) is of the opinion
that the Requirements of Subsection (d) of such Section 5.01 have
been complied with, as is reflected in the following computation,
which is true and correct:
1. The balance of Bondable Additions remaining after the
action applied for in the next preceding Bondable
Additions Certificate
(Certificate No. ) . . . . . . . . . . . . . . . . . $
Then take the new gross Property Additions as shown in 2
below:
2. Amount of Property Additions now certified, being ($
___,) the Amount of Property Additions in the period
from ___ through the date hereof, as described in
Schedule I attached hereto (none of which has been
certified in any previous Bondable Additions
Certificate) (plus $ ___, being the excess of credits
against Retirements carried forward from Certificate
No. ___) . . . . . . . . . . . . . . . . . . . . . . $
Then determine the deductions for Retirements by deducting 4
below from 3 below to produce 5:
3. The aggregate amount of all Retirements from ___
through the date hereof . . . . . . . . . . . . . . . $
4. The sum of the credits against Retirements: . . . . . $
(Specify)
5. The net amount of Retirements to deducted . . . . . . $
Then determine the Bondable Additions now being certified by
deducting 5 from 2 to produce 6:
C-1<PAGE>
6. Bondable Additions now being certified . . . . . . . $
Then add 1 and 6 to produce 7:
7. Total Bondable Additions available for the action
applied for . . . . . . . . . . . . . . . . . . . . . $
8. Amount of Bondable Additions now being used: 150% of
principal amount of Additional Bonds now being applied
for . . . . . . . . . . . . . . . . . . . . . . . . . $
Or 150% of amount of cash deposited pursuant to Section
5.03 to be withdrawn . . . . . . . . . . . . . . . . $
Deduct 8 from 7 to produce 9:
9. Balance of Bondable Additions to remain after the
action applied for . . . . . . . . . . . . . . . . . $
The undersigned further certify that (i) the Property Additions
described herein are Property Additions as defined in the Seventh
Supplemental Indenture, (ii) no portion of the Property Additions included
in the above computation is Excepted Property or is subject to any lien or
encumbrance other than Permitted Encumbrances and (iii) the terms used
herein that are defined in the Indenture are used herein as defined
therein.
Dated:
-----------------------------
President (or Vice President)
-----------------------------
Treasurer
(or other appropriate officer)
C-2<PAGE>
CONFORMED COPY
GREELEY GAS COMPANY
TO
CENTRAL BANK DENVER, NATIONAL ASSOCIATION
(Formerly The Central Bank and Trust Company)
TRUSTEE
NINTH SUPPLEMENTAL INDENTURE
Dated as of April 1, 1991
Supplementing and Amending Indenture of Mortgage and
Deed of Trust dated as of March l, 1957 and creating
First Mortgage Bonds, 9.40% Series J, Due May 1, 2021<PAGE>
TABLE OF CONTENTS
Section Heading Page
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Assumption of Indenture Obligations;
Mortgage of Property
Section 1.01 . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO
Series J Bonds and Provisions Applicable Thereto
Section 2.01. Series J Bonds . . . . . . . . . . . . . . . . 2
Section 2.02. Place and Form of Payment on
Series J Bonds . . . . . . . . . . . . . . 4
Section 2.03. Form of Bonds . . . . . . . . . . . . . . . . . 4
Section 2.04. Authentication of Series J Bonds . . . . . . . 4
ARTICLE THREE
Miscellaneous Provisions
Section 3.01. Consolidation, Merger or Sale . . . . . . . . . 4
Section 3.02. Counterparts . . . . . . . . . . . . . . . . . 4
Section 3.03. Defined Terms . . . . . . . . . . . . . . . . . 4
Section 3.04. Effect of Headings and Table of Contents . . . 4
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Attachments:
Exhibit A - Form of Series J Bond
Schedule 1- Property Description
-i-<PAGE>
This is a NINTH SUPPLEMENTAL INDENTURE, dated as of
April 1, 1991, between GREELEY GAS COMPANY, a corporation organi-
zed and existing under the laws of the State of Delaware (the
"Corporation") having its principal place of business in Denver,
Colorado, party of the first part, and CENTRAL BANK DENVER,
NATIONAL ASSOCIATION (formerly named The Central Bank and Trust
Company), organized and existing under the laws of the United
States (the "Trustee"), as Trustee, party of the second part.
R E C I T A L S
The background of this Ninth Supplemental Indenture is:
A. Greeley Gas Company, a Colorado corporation
("GGC") heretofore executed and delivered to the Trustee its
Indenture of Mortgage and Deed of Trust dated as of March 1, 1957
(the "Original Indenture") to secure the payment of the principal
of, premium, if any, and interest on, all Bonds at any time
issued and outstanding thereunder, and to establish and declare
the terms and conditions upon which Bonds are to be issued and
secured thereunder.
B. GGC thereafter executed and delivered to the
Trustee eight Supplemental Indentures respectively dated as of
November 1, 1957, October 1, 1959, March 1, 1961, June 1, 1965,
March 1, 1973, March 2, 1973, October 1, 1983 and October 1, 1985
(the Original Indenture and all Supplemental Indentures being
hereinafter sometimes collectively referred to as the "Inden-
ture"), for the various purposes of creating and authorizing
additional series of Bonds to be secured by the Indenture, con-
veying to the Trustee certain additional property, amending the
Original Indenture and correcting the description of certain
property.
C. Effective October 9, 1990 GGC and Standard Gas
Supply Corporation, a Colorado corporation, merged into the
Corporation (the "Merger") and as the survivor of the Merger the
Corporation (i) succeeded to all rights, privileges, powers and
franchises of GGC including all property, real, personal and
mixed owned by GGC and (ii) assumed all debts of GGC including
but not limited to all obligations of GGC under the Indenture.
D. The Corporation proposes (1) to create and issue
an additional series of bonds to be designated "First Mortgage
Bonds, 9.40% Series J, due May 1, 2021", limited in aggregate
principal amount to $17,000,000 (the "Series J Bonds"), and (2)
to apply the proceeds from the sale of the Series J Bonds to
retire $7,250,000 of long term debt, reduce short-term debt,
finance current construction projects and for general corporate
purposes.
E. All acts and things necessary to make the Series
J Bonds, when executed by the Company and authenticated and
delivered by the Trustee, the valid, binding and legal obliga-
tions of the Corporation, and to constitute these presents a
valid indenture and agreement according to its terms, have been
done and performed, and the execution of this Ninth Supplemental<PAGE>
Indenture and the issue of the Series J Bonds in all respects
been duly authorized, and the Corporation, in the exercise of the
legal right and power vested in it, executes this Ninth Supple-
mental Indenture.
NOW, THEREFORE, in consideration of the premises and
of the sum of One Dollar to the Corporation duly paid by the
Trustee at or before the ensiling and delivery hereof and for
other good and valuable considerations, the receipt whereof is
hereby acknowledged, the Corporation hereby covenants to and with
the Trustee and its successors in the trusts under the Indenture,
for the equal and pro rata benefit of all present and future
holders of all Bonds issued and to be issued under the Indenture,
without any preference, priority or distinction whatsoever, as
follows:
ARTICLE ONE
Assumption of Indenture Obligations; Mortgage of Property
Section 1.01.
Effective October 9, 1990 the Corporation, as succes-
sor to GGC, assumes the due and punctual payment of the principal
of (and premium, if any) and interest on all the Bonds and the
performance of every covenant and condition of the Indenture to
be performed or observed by the Corporation. The Corporation in
order to better secure the principal of and interest (and pre-
mium, if any) on all Bonds of the Corporation at any time out-
standing under the Indenture according to their tenor and effect
and the performance of and compliance with the covenants and
conditions in the Indenture contained, does hereby mortgage,
assign, grant, bargain, sell and convey unto the Trustee, and to
its successors in said trust, forever, all of the property,
rights and franchises now or hereafter acquired or constructed by
the Corporation including, without limitation, the properties
described in Schedule 1 attached hereto and made a part hereof,
except property of the character specifically excepted from the
lien of the Original Indenture. In trust, nevertheless, for the
same purposes and upon the same conditions as are set forth in
the Original Indenture.
ARTICLE TWO
Series J Bonds and Provisions Applicable Thereto
Section 2.01. Series J Bonds.
(a) There is hereby created under the Indenture a
series of Bonds entitled First Mortgage Bonds, 9.40% Series J,
due May l, 2021 (the "Series J Bonds"). The aggregate principal
amount of Series J Bonds that may be issued shall be limited to
$17,000,000, exclusive of Series J Bonds issued in exchange or
-2-<PAGE>
substitution for other Series J Bonds. The Series J Bonds shall
be registered Bonds without coupons numbered RJ-1 and upward.
The Series J Bonds shall be dated and shall bear
interest as provided in Section 4.08 of the Indenture, except
that the Series J Bonds issued before November 1, 1991 (the first
interest payment date for the Series J Bonds) shall be dated as
of and shall bear interest from the date of initial issuance
thereof. The Series J Bonds shall be due May 1, 2021 and shall
bear interest on their unpaid principal amounts from their dates
until due and payable at the rate of 9.40% per annum (computed on
the basis of a 360-day year of twelve 30-day months) payable
semi-annually on May 1 and November 1 in each year, and at the
rate of 10.40% per annum on any overdue principal, premium, if
any, and (to the extent legally enforceable) on any overdue
installment of interest.
(b) The Series J Bonds shall be redeemable at the
option of the Corporation at any time, either as a whole or in
part in multiples of $1,000 at a redemption price equal to 100%
of the principal amount of the Bonds being redeemed plus interest
accrued thereon to the date of redemption, plus a premium equal
to the Make-Whole Premium, defined below, which shall be deter-
mined three (3) business days prior to the date of such redemp-
tion. The Corporation will furnish notice to the Trustee and each
holder of the Series J Bonds (by telecopy or other same-day
written communication confirmed by the recipient, on a date at
least two (2) business days prior to the date fixed for redemp-
tion of the Series J Bonds) of the premium, if applicable to such
redemption and the calculations, in reasonable detail, used to
determine the amount of any such premium.
"Make-Whole Premium" shall mean, in connection with
any redemption, the excess, if any, of (i) the aggregate present
value as of the date of such redemption of each dollar of princi-
pal being redeemed and the amount of interest (exclusive of
interest accrued to the date of redemption) that would have been
payable in respect of such dollar if such redemption had not been
made, determined by discounting such amounts at the Reinvestment
Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstand-
ing Series J Bonds being redeemed. If the Reinvestment Rate is
equal to or higher than 9.40% the Make-Whole Premium shall be
zero.
"Reinvestment Rate" shall mean the sum of (i) 0.50%
plus (ii) the arithmetic mean of the yields under the respective
headings "This Week" and "Last Week" published in the Statistical
Release under the caption "Treasury Constant Maturities" for the
maturity corresponding to the remaining term of the Series J
Bonds (rounded to the nearest month). If no maturity exactly
corresponds to such remaining term of the Series J Bonds, yields
for the two published maturities most closely corresponding to
such remaining term of the Series J Bonds shall be calculated
pursuant to the immediately preceding sentence and the Reinvest-
-3-<PAGE>
ment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant
periods to the nearest month. For the purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published
prior to the date of determination of the premium hereunder shall
be used.
"Statistical Release" shall mean the statistical
release designated "H.15(519)" or any successor publication which
is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. Government Securities
adjusted to constant maturities or, if such statistical release
is not published at the time of any determination hereunder, then
such other reasonably comparable index which shall be designated
by the holders of sixty-six and two-thirds per cent (66-2/3%) in
aggregate principal amount of the outstanding Series J Bonds.
(c) There shall be no sinking fund for the Series J
Bonds.
Section 2.02. Place and Form of Payment on Series J Bonds.
The principal of and premium (if any) and interest on
Series J Bonds (subject to any agreement entered into pursuant to
Section 6.01 of the Indenture) shall be payable at the operations
center of the Trustee at First Trust, N.A., St. Paul, Minnesota,
in coin or currency of the United States of America that at the
time of such payment is legal tender for the payment of public
and private debts.
Section 2.03. Forms of Bonds
The Series J Bonds shall be substantially in the form
attached hereto as Exhibit A.
Section 2.04. Authentication of Series J Bonds
After the execution and delivery of this Ninth Supple-
mental Indenture, the Corporation may execute and deliver to the
Trustee, and the Trustee shall authenticate and deliver as di-
rected by Corporation Order, Series J Bonds in aggregate princi-
pal amount not exceeding $17,000,000, in accordance with the
provisions of Article Three hereof.
ARTICLE THREE
Miscellaneous Provisions
Section 3.01. Consolidation, Merger or Sale.
The Corporation covenants that so long as any Series J
Bonds remain outstanding it will not without the consent of the
holders of all the Series J Bonds consolidate or merge with, or
sell all or substantially all of its assets to, any corporation
-4-<PAGE>
unless the surviving corporation after such consolidation or
merger, or the corporation to which all such assets are sold,
will have immediately thereafter a net worth not less than the
net worth of the Corporation immediately prior to such transac-
tion. Net worth means total assets less total liabilities.
Section 3.02. Counterparts.
This Ninth Supplemental Indenture may be executed in
any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the
same instrument.
Section 3.03. Defined Terms.
The capitalized terms used herein which are defined in
the Indenture have the meaning therein set forth.
Section 3.04. Effect of Headings and Table of Contents.
The Article, Section and Subsection headings contained
in this Ninth Supplemental Indenture and the Table of Contents
are for convenience only and shall not be deemed to affect the
meaning or construction of any of the provisions hereof.
-5-<PAGE>
EXHIBIT A
[FORM OF SERIES J BOND]
GREELEY GAS COMPANY
First Mortgage Bond, 9.40% Series J, due May 1, 2021
No. $________
FOR VALUE RECEIVED, GREELEY GAS COMPANY, a corporation
organized and existing under the laws of the State of Delaware
(hereinafter called the Corporation, which term shall include any
successor corporation as defined in the Indenture hereinafter
referred to), hereby promises to pay to
or registered assigns,
on the first day of May, 2021
the sum of
Dollars ($ )
in coin or currency of the United States of America that at the
time of payment is legal tender for the payment of public and
private debts, and to pay to the registered owner hereof interest
thereon from the date hereof, at the rate of 9.40% per annum, in
like coin or currency, payable semi-annually on May 1 and Novem-
ber 1 in each year, until the principal hereof shall be due and
payable and at the rate of 10.40% per annum on any overdue prin-
cipal, premium, if any, and (to the extent legally enforceable)
on any overdue installment of interest. Payments of both princi-
pal, premium, if any, and interest are to be made at the opera-
tions office of the Trustee at First Trust, N.A., St. Paul,
Minnesota except as otherwise provided in an agreement which is
executed pursuant to Section 6.01 of the Indenture.
This Bond is one of an authorized issue of Bonds of
the Corporation known as its First Mortgage Bonds, not limited in
aggregate principal amount except as provided in the Indenture
hereinafter mentioned, all issued and to be issued in one or more
series under and equally and ratably secured (except as any
sinking, amortization, improvement, renewal or other analogous
fund, established in accordance with the provisions of the Inden-
ture hereinafter referred to, may afford additional security for
the Bonds of any particular series) by an Indenture of Mortgage
and Deed of Trust (hereinafter called the Original Indenture)
executed by the Corporation to The Central Bank and Trust Company
(now named Central Bank Denver, National Association), Denver,
Colorado (herein called the Trustee) dated March 1, 1957, as
supplemented and amended by nine Supplemental Indentures, (the
Original Indenture, as so supplemented and amended, is hereinaf-
ter referred to as the Indenture) to which Indenture reference is
hereby made for a description of the property mortgaged and<PAGE>
pledged, the nature and extent of the security, the terms and
conditions upon which the Bonds are and are to be secured and the
rights of the holders or registered owners thereof and of the
Trustee in respect of such security. As provided in the Inden-
ture, such Bonds may be issued in series, for various principal
sums, may bear different dates and mature at different times, may
bear interest at different rates and may otherwise vary as in the
Indenture provided or permitted.
This Bond is one of the Bonds described in the Inden-
ture and designated therein as the First Mortgage Bonds, 9.40%
Series J due May 1, 2021 (hereinafter referred to as the Series J
Bonds). The Series J Bonds shall be redeemable at the _________
of the Corporation at any time either as a whole or in part as
multiples of $1,000 at a redemption price equal to 100% of the
principal amount of the Bonds being redeemed plus interest ac-
crued thereon to the date of redemption, plus a premium equal to
the Make-Whole Premium, which shall be determined three (3)
business days prior to the date of such redemption.
Upon any partial redemption of this Bond, at the
option of the registered holder hereof this Bond may be either
(a) surrendered to the Trustee in exchange for one or more new
Series J Bonds, of authorized denominations, registered in the
name of such holder, in an aggregate principal amount equal to
the principal amount remaining unpaid upon this Bond, or (b)
submitted to the Trustee for notation hereon of the payment of
the portion of the principal hereof paid upon such redemption.
As provided in the Indenture, (a) if and to the extent
authorized by the consent (evidenced as provided in the Inden-
ture) of the holders of not less than 66-2/3% in aggregate prin-
cipal amount of all Bonds then Outstanding that are adversely
affected thereby, such changes in, additions to or eliminations
from the Indenture as such holders and the Corporation may deem
necessary or advisable may be made by supplemental indenture;
provided that no such change shall be made without the consent of
the holder of each outstanding bond that is adversely affected
that would (i) extend the stated maturity of the principal of, or
any installment of interest on, any Bond, or (ii) reduce the
percentage of the principal amount of Bonds the consent of the
holders of which is required for the authorization of any such
change, addition or elimination, or (iii) modify certain other
provisions of the Indenture.
In case an Event of Default (as defined in the Inden-
ture) shall occur and be continuing, the principal of all the
Bonds outstanding may be declared and may become due and payable
in the manner and with the effect provided in the Indenture.
This Bond is a registered Bond without coupons and is
transferable by the registered holder thereof in person or by the
duly authorized attorney of such holder on the Bond Register to
be kept for the purpose at the principal office of the Trustee as
Bond Registrar and transfer agent for the Bonds, in Denver,
A-2<PAGE>
Colorado. Upon surrender of this Bond accompanied by written
instruments of transfer in form approved by the Trustee, duly
executed by the registered holder in person or by such attorney,
and upon cancellation hereof, one or more new Bonds of the same
series and maturity, in authorized denominations, in an aggregate
principal amount equal to the principal amount remaining unpaid
upon this Bond, shall be issued to the transferee in exchange
herefor, as provided in the Indenture. The Corporation and the
Trustee may deem and treat the person in whose name the Bond is
registered on the Bond Register as the absolute owner hereof
(whether or not this Bond shall be overdue) for the purpose or
receiving payment hereon, and on account hereof and for all other
purposes.
No recourse shall be had for the payment of the prin-
cipal of or interest on this Bond, or in respect of this Bond or
the Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Corporation or
of any predecessor or successor corporation, either directly or
through the Corporation, by virtue of any constitution, statute
or rule of law or by enforcement of any assessment or penalty or
otherwise, any and all such liability of incorporators, stock-
holders, officers and directors being released by the holder
hereof by the acceptance of this Bond and being likewise waived
and released by the terms of the Indenture.
This Bond shall not be valid or become obligatory for
any purpose until the certificate endorsed hereon shall be signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, GREELEY GAS COMPANY has caused
these presents to be signed in its name by its President or a
Vice President, and its corporate seal to be affixed hereto and
attested by its Secretary or an Assistant Secretary.
Dated:
GREELEY GAS COMPANY
By ____________________________
________ President
Attest:
_________________________
________ Secretary
A-3<PAGE>
[TRUSTEE'S CERTIFICATE TO BE ENDORSED ON ALL BONDS]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated
herein, described in the within-mentioned Indenture.
CENTRAL BANK DENVER,
NATIONAL ASSOCIATION,
as Trustee
By ____________________________
Authorized Representative
A-4<PAGE>
CONFORMED COPY
GREELEY GAS COMPANY
BOND PURCHASE AGREEMENT
Dated as of April 1, 1991
Re: $17,000,000 First Mortgage Bonds, 9.40% Series J,
Due May 1, 2021<PAGE>
TABLE OF CONTENTS
Section Heading Page
1. Description of Bonds . . . . . . . . . . . . . . . . . . 1
2. Sale of Bonds; Closing . . . . . . . . . . . . . . . . . 1
3. Representations . . . . . . . . . . . . . . . . . . . . 2
3.1. Representations of the Company . . . . . . . . . . . 2
3.2. Representation of the Purchaser . . . . . . . . . . . 2
4. Closing Conditions . . . . . . . . . . . . . . . . . . . 2
4.1. Closing Certificate . . . . . . . . . . . . . . . . . 2
4 2. Opinions . . . . . . . . . . . . . . . . . . . . . . 2
4 3. Commission Authorization . . . . . . . . . . . . . . 3
4.4. Proceedings, Instruments, etc . . . . . . . . . . . . 3
5. Expenses and Taxes . . . . . . . . . . . . . . . . . . . 3
6. Financial Statements, etc . . . . . . . . . . . . . . . 3
6.1. Quarterly Statements . . . . . . . . . . . . . . . . 3
6.2. Annual Statements . . . . . . . . . . . . . . . . . . 3
6.3. Officer's Certificate . . . . . . . . . . . . . . . . 3
6.4. Accountant's Certificate . . . . . . . . . . . . . . 4
6.5. SEC and Other Reports . . . . . . . . . . . . . . . . 4
6.6. Audit Reports . . . . . . . . . . . . . . . . . . . . 4
6.7. Notice of Default . . . . . . . . . . . . . . . . . . 4
6.8. Requested Information . . . . . . . . . . . . . . . . 4
7. Inspection Rights . . . . . . . . . . . . . . . . . . . 4
8. Exchange of Bonds . . . . . . . . . . . . . . . . . . . 5
9. Loss, Theft, Etc., of Bonds . . . . . . . . . . . . . . 5
10. Direct Payment . . . . . . . . . . . . . . . . . . . . . 5
11. Survival of Provisions, Successors . . . . . . . . . . . 5
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . 5
13. Counterparts . . . . . . . . . . . . . . . . . . . . . . 5
14. Law Governing . . . . . . . . . . . . . . . . . . . . . 6
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-i-<PAGE>
ATTACHMENTS
Schedule 1
Exhibit A - Ninth Supplemental Indenture
Exhibit B - Closing Certificate
Exhibit C - Legal Opinions
-ii-<PAGE>
GREELEY GAS COMPANY
1301 Pennsylvania Street, Suite 800
Denver, Colorado 80203-5015
BOND PURCHASE AGREEMENT
Re: $17,000,000 First Mortgage Bonds, 9.40% Series J,
Due May 1, 2021
Dated
April 1, 1991
First Colony Life
Insurance Company
700 Main Street
Lynchburg, VA 24504
Attention: Mr J. Alden Butler
Gentlemen:
GREELEY GAS COMPANY, a Delaware corporation (the
"Company"), agrees with you as follows:
1. Description of Bonds. The Company will autho-
rize and create one issue of its First Mortgage Bonds designated
as 9.40% Series J, due May 1, 2021, in the principal amount of
$17,000,000 (the "Bonds"). The Bonds will be issued under and
secured by an Indenture of Mortgage and Deed of Trust dated as of
March 1, 1957 (the "Original Indenture"), from the Company to The
Central Bank and Trust Company (now Central Bank Denver, National
Association), as Trustee (the "Trustee"), as heretofore supple-
mented and amended by eight supplemental indentures, and as to be
further supplemented and amended by a Ninth Supplemental Inden-
ture (the "Ninth Supplemental Indenture") which will be substan-
tially in the form of the draft thereof attached hereto as Ex-
hibit A, with such changes therein, if any, as shall be approved
by you and by the Company. The Original Indenture as so amended
and supplemented is herein called the "Indenture". The Bonds
will be dated the date of delivery and will have the terms and
provisions specified in the Ninth Supplemental Indenture.
2. Sale of Bonds; Closing. Subject to the terms
and conditions and upon the basis of the representations herein
set forth, the Company hereby agrees to sell to you and you
hereby agree to purchase from the Company, Bonds of the Series J
in the principal amount set opposite your name in Schedule 1
hereto, at a price equal to the principal amount thereof. Payment
shall be made by wire transfer of Federal Funds, or other funds
current and immediately available, for credit to the Company's
account as directed by the Company.
Delivery of the Bonds will be made on June 14,
1991 or such later date (not later than June 30, 1991) as is<PAGE>
mutually agreeable (the date of delivery being herein called the
"Closing Date"). The Bonds will be delivered at the office of
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603. The Bonds will be delivered to you in the form of one
fully registered Bond of the Series J being purchased by you and
registered in your name or the name of such nominee as you may
designate.
3. Representations.
3.1. Representations of the Company. The Company
represents and warrants that all representations set forth in the
form of certificate annexed herein as Exhibit B are true and
correct as of the date hereof and are hereby incorporated herein
by reference with the same force and effect as though herein set
forth in full.
3.2. Representation of the Purchaser. You repre-
sent that you are purchasing the Bonds for investment and not
with a view to the resale or distribution thereof, and that you
have no present intention of selling, negotiating or otherwise
disposing of the Bonds, provided that the disposition of your
property shall at all times be and remain within your control.
You further represent either (i) that you are
acquiring the Bonds for your own account and with your general
corporate assets and not with the assets of any separate account
in which any employee benefit plan has any interest, or (ii) that
no part of the funds to be used by you to acquire such Bonds
constitutes assets allocated to any separate account maintained
by you such that the application of such funds constitutes a
prohibited transaction under Section 406(a) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). As
used in this Section, the terms "separate account" and "employee
benefit plan" shall have the respective meanings assigned to them
in ERISA.
4. Closing Conditions. Your obligation to pur-
chase and pay for the Bonds as herein contemplated shall be
subject to the performance by the Company of its agreements
hereunder which by the terms hereof are to be performed at or
prior to the time of delivery of the Bonds and to the following
additional conditions precedent to be satisfied on or before the
Closing Date.
4.1. Closing Certificate. You shall receive from
the Company a certificate, dated the Closing Date, duly autho-
rized, executed and delivered by the Company, substantially in
the form of the certificate annexed hereto and marked Exhibit B,
the truth and accuracy of which shall be conditions precedent to
your obligations hereunder.
4.2. Opinions. You shall receive from Chapman
and Cutler, your special counsel in connection with this transac-
tion, and from William F. Skewes, counsel for the Company, their
-2-<PAGE>
respective opinions, dated the Closing Date, in form and sub-
stance satisfactory to you and covering the matters set forth in
Exhibit C hereto.
4.3. Commission Authorization. The Colorado
Public Utilities Commission, the Kansas Corporation Commission
and the Missouri Public Service Commission shall each have en-
tered an appropriate order authorizing the sale of the Bonds as
herein contemplated and each such order shall have become final
and unappealable.
4.4. Proceedings, Instruments, etc. All proceed-
ings to be taken in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to you and your special coun-
sel; and you shall receive copies of all documents which you may
reasonably request in connection with said transactions and all
corporate proceedings in connection therewith, in form and sub-
stance satisfactory to you and your special counsel.
5. Expenses and Taxes. The Company agrees,
whether or not any of the Bonds shall be issued and sold pursuant
hereto, to bear all expenses in connection with the authoriza-
tion, preparation, issuance, sale and delivery to you at your
home office or such other place as you may designate of the
Bonds, including, without limitation, the cost of document prepa-
ration, all issuance taxes and other taxes and fees payable in
connection with such transactions and the charges and disburse-
ments of your special counsel for their services in connection
with the subject matter of this Agreement.
6. Financial Statements, etc. The Company
agrees that, so long as you shall hold any of the Bonds, it will
deliver to you:
6.1. Quarterly Statements. As soon as available
and in any event within 45 days after the end of each quarterly
period, except the last, of each fiscal year of the Company, a
balance sheet of the Company as at the end of such period and
statements of income of the Company for the period beginning on
the first day of such fiscal year and ending on the date of such
balance sheet, in each case setting forth in comparative form the
corresponding figures for the corresponding period of the preced-
ing fiscal year, all in reasonable detail and certified, subject
to year-end audit adjustments, and certified by the principal
financial officer of the Company as complete and correct in all
material respects.
6.2. Annual Statements. Within 120 days after
the end of each fiscal year, a copy of its balance sheet as at
the end of such year and of its income and cash flow statements
for such year, together with comparable figures for the preceding
fiscal year, in reasonable detail, certified and accompanied by a
report thereon by Ernst & Young or other independent certified
public accountants of recognized national standing selected by
-3-<PAGE>
the Company and satisfactory to you to the effect that the finan-
cial statements have been prepared in accordance with generally
accepted accounting principles consistently applied and present
fairly, in all material respects, the financial condition of the
Company and the result of its operations and its cash flows for
the fiscal year then ended.
6.3. Officer's Certificates. Within the periods
provided in Sections 6.1 and 6.2, a certificate signed by an
authorized financial officer of the Company stating that based
upon such examination or investigation as the officer signing
such certificate shall have deemed necessary to enable such
officer to render an informed opinion in respect thereof, in such
officer's opinion, no Event of Default (as described in the
Indenture) or event which would so become an Event of Default
with the lapse of time or the giving of notice, or both, existed
at any time during such fiscal year, except for Events of Default
or Defaults, if any, described in such certificate in reasonable
detail, with a statement of the Company's action with respect
thereto taken or proposed.
6.4. Accountant's Certificate. Within the period
provided in section 6.2 above, the written statement of such
accountants that in making the examination necessary to their
certification of such audit report they have obtained no knowl-
edge of any Event of Default, or event which with the lapse of
time or giving of notice, or both, would become an Event of
Default set forth in the Indenture, or if such accountants shall
have obtained knowledge of any such Event of Default or event
which would so become an Event of Default, they shall disclose in
such statement the Default or Defaults and the nature thereof.
6.5. SEC and Other Reports. As soon as avail-
able, any proxy statements, financial statements and reports that
the Company sends or makes available generally to its stockhold-
ers and copies, if any, of all regular and periodic reports and
of all registration statements which the Company files with the
Securities and Exchange Commission or with any securities ex-
change and copies of any orders in any proceedings to which the
Company is a party, issued by any governmental agency, Federal or
state, which would have a material adverse affect on the business
of the Company.
6.6. Audit Reports. Promptly upon receipt there-
of, copies of all detailed reports, if any, submitted to the
Company by independent public accountants in connection with each
annual or interim audit by such accountants of the books of the
Company.
6.7. Notice of Default. Promptly after any
officer of the Company obtains knowledge of any Event of Default
under the Indenture, written notice describing such Event of
Default in reasonable detail, with a statement of the Company's
action with respect thereto, taken or proposed.
-4-<PAGE>
6.8. Requested Information. Such additional
information as you may reasonably request concerning the Company.
7. Inspection Rights. The Company agrees that
so long as you shall hold any of the Bonds, you may from time to
time, at your own expense, visit any of the offices and proper-
ties of the Company and discuss in reasonable detail the affairs,
finances and accounts of the Company with the officers of the
Company. The Company further agrees that, so long as you shall
hold any of the Bonds, all books, documents and vouchers relating
to the business and affairs of the Company shall at all times be
open to the inspection of such accountant or other agent (who may
make copies of any or all such records) as shall from time to
time be designated and compensated by you.
8. Exchange of Bonds. The Company agrees that,
within reasonable time, not exceeding 90 days, after you shall
have made written request therefor of the Company, it will de-
liver to you at the office of the Trustee, in exchange for any or
all of the Bonds delivered to you at the closing definitive
registered Bonds without coupons in such authorized denominations
as you shall request. The Company shall bear all expenses (in-
cluding any documentary or other similar taxes but excluding any
transfer or other similar taxes) and shall make no charge in
connection with the preparation, issue and delivery to you of the
Bonds to be delivered to you upon such exchange. The Company will
pay the charges for shipping to and from your office set forth
above, or such other place as you shall designate, the Bonds
issued upon any aforesaid exchange.
9. Loss, Theft, Etc., of Bonds. In the event of
mutilation of any Bond owned by you, upon surrender and cancella-
tion of such Bond, the Company will deliver a new Bond, of like
tenor, in lieu of such mutilated Bond. If you are the owner of
any lost, stolen or destroyed Bond, then the affidavit of your
President or a Vice President, setting forth the fact of loss,
theft or destruction and of your ownership of the Bond at the
time of such loss, theft or destruction shall be accepted by the
Company as satisfactory evidence thereof and no indemnity shall
be required as a condition to execution and delivery of a new
Bond other than your written agreement to indemnify the Company
and the Trustee under the Indenture. No charge will be made to
you for the delivery of a new Bond pursuant to this paragraph.
10. Direct Payment. The Company agrees that it
will pay to you at the address and in the manner specified for
payments in Schedule 1 hereto or such other place as you may
designate all partial payments of principal and all payments of
interest on the Bonds owned by you without any presentation or
surrender thereof at the office of the Trustee. You agree that
you will not sell, transfer or otherwise dispose of any Bond
unless prior to delivery thereof such Bond shall have been pre-
sented to the Trustee either (a) for notation thereon of the
portion of the principal amount thereof which has been paid, or
(b) in exchange for a new Bond or Bonds of the same Series in
-5-<PAGE>
aggregate principal amount equal to the unpaid portion of the
Bonds presented to the Trustee.
11. Survival of Provisions, Successors. The
Company agrees that all of its covenants, agreements, representa-
tions and warranties made herein and in any and all certificates
delivered pursuant hereto shall survive the delivery to you of
the Bonds and the provisions of this Agreement shall bind and
shall inure to the benefit of the parties hereto and their suc-
cessors and assigns.
12. Notices. All communications provided for
hereunder shall be in writing, mailed or delivered, postage
prepaid, at the respective addresses appearing on the first page
of this Agreement, or to such other address as you or the Company
may designate to the other in writing.
13. Counterparts. This Agreement may be simulta-
neously executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but such
counterparts together shall constitute but one and the same
instrument.
14. Law Governing. This Agreement shall be gov-
erned by the laws of the State of Colorado.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed copy of this Agreement, whereupon it shall become a
binding agreement between us.
GREELEY GAS COMPANY
By /s/ David L. Meyer
----------------------------
Vice President
----------
The foregoing is hereby confirmed and accepted as
of the date first above written.
FIRST COLONY LIFE
INSURANCE COMPANY
By /s/ J. Alden Butler
----------------------------
Senior Vice President
-6-<PAGE>
The agreements set forth in Sections 9 and 10 of
this Agreement are satisfactory to the undersigned in form and
substance.
CENTRAL BANK DENVER,
NATIONAL ASSOCIATION
as Trustee
By /s/ Kenneth B. Buckius
----------------------------
Trust Officer
-7-<PAGE>
Principal
Amount of Bonds
Name and Address of Purchasers to be Purchased
- - ------------------------------ ---------------
FIRST COLONY LIFE INSURANCE $17,000,000
COMPANY
700 Main Street
Lynchburg, Virginia 24504
Attention: Mr. J. Alden Butler
Payments
All payments on or in respect of the Bonds
to be by bank wire transfer of Federal or
other immediately available funds (identi-
fying each payment as "Greeley Gas Company
First Mortgage Bonds 9.40% Series J, due
2021, principal or interest") to:
Crestar Bank
Richmond, Virginia
ABA #0510-0002-0
Attention: Barbara Crossman
Institutional Custody
for credit to First Colony
Life Insurance Company's
Account No. 10765400
Notices
All notices and communications, including
notices with respect to payments and writ-
ten confirmation of each such payment, to
be addressed as first provided above.
Name of Nominee in which Bonds are to be
issued: None.
SCHEDULE 1
(to Bond Purchase Agreement)<PAGE>
EXHIBIT B
GREELEY GAS COMPANY
CLOSING CERTIFICATE
First Colony Life Insurance Company
700 Main Street
Box 1280
Lynchburg, VA 24504
Gentlemen:
This Certificate is delivered to you responsive to the re-
quirements of the Bond Purchase Agreement (the "Agreement"), dated as of
April 1, 1991, between you and the undersigned, GREELEY GAS COMPANY, a
Delaware corporation (the "Company"), relative to your purchase this date
from the Company of its First Mortgage Bonds of the Series J in the amount
set forth in Schedule 1 to the Agreement (the "Bonds"), and this Certificate
is delivered to you simultaneously with and as an inducement to your purchase
of such Bonds from the Company.
The Company hereby represents and warrants to you as follows:
1. Organization. The Company is a corporation duly incorpo-
rated and validly existing and in good standing under the laws of the State
of Delaware, is duly qualified and in good standing as a foreign corporation
in the States of Colorado, Kansas and Missouri and has the corporate power to
own its property and to carry on its business as now being conducted and as
proposed to be conducted. The properties now owned and the business now
transacted by the Company do not require it to be qualified as a foreign
corporation in any states other than Colorado, Kansas and Missouri. The
Company has no subsidiaries.
2. Business and Property. You have heretofore been fur-
nished with a copy of the Private Placement Memorandum dated February, 1991
(the "Memorandum"), prepared by Smith Barney, Harris Upham & Co. Incorporated
which generally sets forth the business conducted and proposed to be con-
ducted by the Company.
3. Financial Statements. The Company has heretofore deliv-
ered to you copies of the balance sheets of the Company as of December 31 for
each of the years 1985 through 1990 and the related statements of income and
retained earnings and cash flows (or changes in financial position) for the
fiscal years ended on said dates certified (i) in the case of such balance
sheets as of dates prior to 1989 and such statements for fiscal years ended
prior to 1989, by Arthur Young & Co., independent certified public accoun-
tants and (ii) in the case of such balance sheets as of dates subsequent to
1988 and such statements for fiscal years subsequent to 1988 by Ernst &
Young, independent certified public accountants. The Company has also hereto-
fore delivered to you the unaudited balance sheets of the Company as of March
31, 1991 and the unaudited statements of income and retained earnings and
cash flows for the three month period ended on said date prepared by the
Company. The financial statements referred to above (including any related
schedules and notes) fairly present the financial condition of the Company at
the respective dates of such balance sheets and the results of its operations
throughout the respective periods involved and were prepared in accordance<PAGE>
with generally accepted accounting principles consistently followed through-
out the periods involved.
Since December 31, 1990 there has been no change in the
financial condition of the Company from that set forth in the balance sheet
as at December 31, 1990, other than changes in the ordinary course of busi-
ness, and no such changes individually or in the aggregate have been materi-
ally adverse changes; and since December 31, 1990, neither the business nor
the properties of the Company have been materially and adversely affected in
any way as the result of any fire, explosion, windstorm, drought, accident,
strike, lockout, flood, earthquake, embargo, riot, government action or act
of God or of the public enemy.
4. Title to Properties; Lien of Indenture. The Company has
good and marketable title to all properties described in the granting clauses
of the Indenture other than than properties released from the lien thereof
pursuant to the terms thereof. The Company owns interests in real property
only in the states of Colorado and Kansas. There are no liens, charges or
encumbrances on any of the properties or assets of the Company except the
lien of the Company's Indenture (as defined in the Agreement) and encum-
brances permitted thereby. The property described in said Indenture will be
all of the property owned by the Company as of the Closing Date.
5. Regulatory Approval. The issuance and sale of the Bonds
by the Company and the consummation of the transactions contemplated by the
Agreement do not require the authorization, approval or consent of any
governmental body, commission, board or agency other than the authorization
of the Colorado Public Utilities Commission, the Kansas Corporation Commis-
sion and the Missouri Public Service Commission, which authorizations have
been obtained.
6. Franchises, etc. The Company holds such valid and
subsisting certificates of convenience and necessity, grant, franchises,
licenses, permits and easements, free from unduly burdensome restrictions, as
are necessary to enable it to carry on the business now being conducted by
it.
7. Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Company, threatened, against or affecting
the Company at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which, in the opinion of the Company,
involves the possibility of any judgment or liability that may result in any
material adverse change in the business, properties or assets or in the
condition, financial or otherwise, of the Company.
8. Burdensome Agreements. The Company is not a party to any
contract, agreement, judgment, decree or order, or subject to any charter,
by-laws or other like corporate restriction which materially adversely
affects, or in the future may (so far as the Company can now foresee) materi-
ally adversely affect, its business, properties or assets, or its condition,
financial or otherwise, nor is it a party to any material management contract
providing for special bonus or profit sharing arrangements.
B-2<PAGE>
9. Conformity with Law and Other Agreements. The execution
and delivery of the Agreement, the Ninth Supplemental Indenture and the Bonds
and the performance of and compliance with all of the terms and provisions
thereof will not violate any provision of law or of the charter or by-laws of
the Company and will not conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company pursuant to the terms of any charter,
by-law, indenture, mortgage, deed of trust, agreement, instrument, judgment,
decree or order to which the Company is subject. The Company is not in
violation of any term of its charter or by-laws, or of any term of any
agreement, instrument, judgment, decree, order, statute, rule or regulation
applicable to it, the violation of which would materially adversely affect
the business, operations, properties or financial position of the Company.
10. Taxes. All tax returns required to be filed by the
Company have been filed and all taxes, assessments, fees and other governmen-
tal charges upon the Company or upon any of its properties or assets which
are due and payable have been paid. No controversy in respect of additional
taxes is pending or, to the knowledge of the Company, threatened, that would
have a materially adverse effect upon the Company if adversely determined.
The provision for taxes on the books of the Company is, in the opinion of the
Company, adequate for all open years and for its current fiscal period.
11. Holding Company Act Status. The Company is not a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate"
of a "holding company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
12. Defaults. There is no event of default or event which
with the giving of notice and/or the lapse of time would constitute an event
of default under any indenture (including the Indenture), mortgage, deed of
trust, agreement or instrument to which the Company is a party.
13. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the Bonds
or any similar security or has solicited or will solicit an offer to acquire
the Bonds or any similar security from or has otherwise approached or negoti-
ated or will approach or negotiate in respect of the Bonds or any similar
security with any person other than the Purchaser and not more than 45 other
institutional investors, each of whom was offered a portion of the Bonds at
private sale for investment. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Bonds or any similar
security or has solicited or will solicit an offer to acquire the Bonds or
any similar security from any person so as to bring the issuance and sale of
the Bonds within the provisions of Section 5 of the Securities Act of 1933,
as amended.
14. ERISA. The consummation of the transactions provided for
in the Agreements and compliance by the Company with the provisions thereof
and the Bonds issued thereunder will not involve any prohibited transaction
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended. Each "pension plan", as such term is defined in ERISA, established
or maintained by the Company (a "Plan") complies in all material respects
B-3<PAGE>
with all applicable statutes and governmental rules and regulations, and (a)
no "reportable event", as such term is defined in ERISA, has occurred and is
continuing with respect to any Plan, (b) the Company has not withdrawn from
any Plan or instituted steps to do so, and (c) no steps have been instituted
to terminate any Plan. No condition exists or event or transaction has
occurred in connection with any Plan which could result in the incurrence by
the Company of any material liability, fine or penalty. No Plan maintained by
the Company, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans allocable to such vested
benefits. The Company has no contingent liability with respect to any
post-retirement "welfare benefit plan" (as such term is defined in ERISA)
except as has been disclosed to you.
15. Disclosure. Neither the financial statements heretofore
furnished to you in connection with the issuance of the Bonds nor any
certificate or statement furnished to you by or on behalf of the Company in
connection with the transaction contemplated by the Agreement contain any
untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements contained therein or herein not
misleading. To the best of the knowledge of the Company, there is no fact
which materially adversely affects or in the future may (so far as the
Company can now foresee) materially adversely affect the business or pros-
pects or condition (financial or otherwise) of the Company or any of its
respective properties or assets which has not been set forth herein or in a
certificate or statement furnished to you by the Company.
16. Use of Proceeds, Acquisition. The proceeds from the sale
of the Bonds will be used to retire $7,250,000 of long term debt, reduce
short-term debt, finance current construction projects and for general
corporate purposes.
17. Compliance with Environmental Laws. The Company is not
in violation of any applicable Federal, state, or local laws, statutes,
rules, regulations or ordinances relating to public health, safety or the
environment, including, without limitation, relating to releases, discharges,
emissions or disposals to air, water, land or ground water, to the withdrawal
or use of ground water, to the use, handling or disposal of polychlorinated
biphenyls, asbestos or urea formaldehyde, to the treatment, storage, disposal
or management of hazardous substances (including, without limitation,
petroleum, crude oil or any fraction thereof, or other hydrocarbons),
pollutants or contaminants, to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances which violation could have a
material adverse effect on the business, prospects, profits, properties or
condition (financial or otherwise) of the Company. The Company does not know
of any liability or class of liability of the Company under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. Section 9601 et seq.), or the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).
Dated:
GREELEY GAS COMPANY
B-4<PAGE>
By ___________________________
_______ President
B-5<PAGE>
EXHIBIT C
LEGAL OPINIONS
A. The opinion of Chapman and Cutler, special counsel for
the purchaser, shall be to the effect that:
1. The Company is a corporation duly incorporated and
validly existing and in good standing under the laws of the State of
Delaware, is duly qualified and in good standing as a foreign corporation
under the laws of the State of Colorado, is duly qualified and in good
standing as a foreign corporation under the laws of the State of Kansas, is
duly qualified and in good standing as a foreign corporation under the laws
of the State of Missouri, and has adequate corporate power and authority to
carry on its business as now conducted.
2. The Agreement has been duly authorized by the Company
and duly executed and delivered by an authorized officer of the Company and
constitutes the valid and binding obligations of the Company, enforceable
in accordance with their terms, except to the extent enforceability is
limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.
3. The Indenture has been duly authorized by the Company
and duly executed and delivered by authorized officers of the Company,
creates a valid lien upon the interest of the Company in all real and
personal property therein described as intended to be covered thereby, and
is a valid and legally binding instrument of the Company enforceable in
accordance with its terms except as they may be limited by the laws of the
States of Colorado, Kansas and Missouri, wherein the property subject to
the lien thereof is located, with respect to or affecting the remedies to
enforce the security provided by the Indenture, which laws do not, in the
opinion of such counsel, make inadequate the remedies necessary for the
realization of the benefits of such security, or by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally.
4. The Bonds have been duly authorized by the Company,
have been duly executed and delivered by authorized officers of the Company
and duly authenticated by the Trustee, and have been duly issued, and
(subject to the qualifications expressed in paragraph 2 above), are legally
valid and binding obligations of the Company, enforceable in accordance
with their terms, and are entitled to the benefits and security afforded by
the Indenture.
5. The issue and sale of the Bonds and the execution and
delivery of the Ninth Supplemental Indenture have, to the extent required
by law, been duly authorized by separate orders of the Colorado Public
Utilities Commission, the Kansas Corporation Commission and the Missouri
Public Service Commission and each such order is not subject to any appeal
or modification which would affect the validity or terms of the Bonds. No
other approval or consent of any governmental authority is required for the
issuance and sale of the Bonds as contemplated by the Agreement and the
execution and delivery of the Ninth Supplemental Indenture.<PAGE>
6. The offering, sale and delivery of the Bonds under the
circumstances contemplated by the Agreement constitute an exempted
transaction which does not require registration under the Securities Act of
1933, or qualification of the Indenture under the Trust Indenture Act of
1939.
7. The legal opinion of William F. Skewes, counsel for the
Company, delivered pursuant to the Agreement is satisfactory in scope and
form and in our opinion you are justified in relying thereon.
The opinion of such counsel shall also cover such other
matters incident to the transactions contemplated by this Agreement as you
may request.
In giving the foregoing opinions Chapman and Cutler may
rely on the opinion of William F. Skewes, as to the authorization,
execution and validity of the Original Indenture and the first six
supplemental indentures, the title of the Company to its properties, the
recording of the Indenture, the lien created thereby and matters of the
laws of the States of Colorado, Kansas and Missouri.
B. The opinion of Wllliam F. Skewes, counsel for the
Company, shall cover the matters set forth in paragraphs 1 through 6 above
and shall be to the further effect that:
(i) The Company has good and marketable fee title to all of
the real property described in the Indenture and now owned by the Company,
subject to no lien prior to, or on a parity with, the lien of the Indenture
except as otherwise expressly stated therein, and except permitted
encumbrances as defined in the Indenture, mechanics', materialmen's or
other statutory liens not of record when the Ninth Supplemental Indenture
was recorded, rights of parties in possession not shown of record and
matters which would be revealed by a current survey; and the Company has
acquired all other property in a manner consistent with the practices
generally employed in the industry and has title or other possessory rights
thereto sufficient for the ownership, maintenance and operation of its
public utility systems.
(ii) The Indenture has been duly recorded as a mortgage of
real property and filed by way of financing statements as a security
interest in personal property in the proper offices in the States of
Colorado, Kansas and Missouri in which the Company owns property described
in the Indenture, and the Indenture constitutes a valid, direct first
mortgage lien upon the real property described therein and now owned by the
Company and a valid, direct perfected security interest upon all other
properties owned or held by the Company which are described or referred to
therein as being subject to the lien thereof, subject to permitted
encumbrances and the other matters to which the Indenture permits title to
be subject, mechanics', materialmen's or other statutory liens not of
record, rights of parties in possession not shown of record, and matters
which would be revealed by a current survey; the descriptions contained in
the granting clauses of the Indenture of the real property are in all
respects sufficient descriptions of such property to subject such property
to the direct and valid first lien of the Indenture and for all the
purposes of the Indenture.
C-2<PAGE>
(iii) All fees and taxes payable in connection with the
execution, delivery, filing or recordation of the Ninth Supplemental
Indenture and filing of related financing statements or the execution,
authentication, issue or delivery of the Bonds have been paid.
(iv) The franchises, licenses, permits and certificates of
convenience and necessity held by the Company are validly held by the
Company in all material respects and give to the Company all necessary
authority for the operation and maintenance of its systems and of its
business and property.
In rendering his opinion Company counsel may, to the extent
that he considers advisable and proper (and state in his opinion), rely on
the opinions of other Colorado, Kansas and Missouri counsel delivered in
connection with previous bond issues by the Company, upon searches for
Uniform Commercial Code filings and upon certificates of officers of the
Company with respect to titles to property, the recording and lien of the
Indenture and the adoption and validity of local franchises, and upon the
opinion of Kansas and Missouri counsel as to all matters of Kansas and
Missouri law, provided (i) copies of such opinions and certificates are
supplied to the purchaser and (ii) such Kansas and Missouri counsel shall
be acceptable to the purchasers and its special counsel.
C-3<PAGE>
ATMOS ENERGY CORPORATION
To
COLORADO NATIONAL BANK
(Formerly Central Bank Denver, N.A.)
TRUSTEE
TENTH SUPPLEMENTAL INDENTURE
Dated as of December 1, 1993
Supplementing and Amending Indenture of Mortgage and
Deed of Trust dated as of March 1, 1957<PAGE>
TABLE OF CONTENTS
SECTION HEADING PAGE
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE SUBSTITUTION OF SUCCESSOR CORPORATION . . . 2
Section 1.01. Assumption of Indenture Obligations . . . 2
Section 1.02. Mortgage of Property . . . . . . . . . . . 2
ARTICLE TWO AMENDMENTS TO ARTICLES SIX, SEVEN
AND EIGHT . . . . . . . . . . . . . . . . . 3
Section 2.01. Amendments to Article Six . . . . . . . . 3
Section 2.02. Amendments to Article Seven . . . . . . . 7
Section 2.03. Amendments to Article Eight . . . . . . . 8
ARTICLE THREE MISCELLANEOUS AMENDMENTS TO THE SEVENTH
SUPPLEMENTAL INDENTURE . . . . . . . . . . . 9
Section 3.01. Amendments to Other Articles
and Exhibit A . . . . . . . . . . . . . . 9
ARTICLE FOUR MISCELLANEOUS PROVISIONS . . . . . . . . . 11
Section 4.01. Counterparts . . . . . . . . . . . . . . 11
Section 4.02 Defined Terms . . . . . . . . . . . . . 11
Section 4.03. Headings for Convenience . . . . . . . . 11
Signature Page . . . . . . . . . . . . . . . . . . . . . . . 12
ATTACHMENT:
Schedule 1 - Property Description
-i-<PAGE>
This is a TENTH SUPPLEMENTAL INDENTURE, dated as of
December 1, 1993 (the "Tenth Supplemental Indenture"), between
ATMOS ENERGY CORPORATION, a corporation organized and existing
under the laws of the State of Texas (the "Corporation"), having
its principal place of business in Dallas, Texas, party of the
first part, and COLORADO NATIONAL BANK (formerly named Central
Bank Denver, N.A.), organized and existing under the laws of the
United States (the "Trustee"), as Trustee, party of the second
part.
R E C I T A L S :
The background of this Tenth Supplemental Indenture is:
A. Greeley Gas Company, a Delaware corporation, formerly
and successor by merger to Greeley Gas Company, a Colorado
corporation ("Greeley"), heretofore executed and delivered to the
Trustee its Indenture of Mortgage and Deed of Trust dated as of
March 1, 1957 (the "Original Indenture") to secure the payment of
the principal of, premium, if any, and interest on, all Bonds at
any time issued and outstanding thereunder and to establish and
declare the terms and conditions upon which Bonds are to be
issued and secured thereunder.
B. Greeley thereafter executed and delivered to the
Trustee nine Supplemental Indentures respectively dated as of
November 1, 1957, October 1, 1959, March 1, 1961, June 1, 1965,
March 1, 1973, March 2, 1973, October 1, 1983, October 1, 1985
and April 1, 1991 (the Original Indenture and all Supplemental
Indentures, including this Tenth Supplemental Indenture, being
hereinafter sometimes collectively referred to as the "Inden-
ture"), for the various purposes of creating and authorizing
additional series of Bonds to be secured by the Indenture,
conveying to the Trustee certain additional property amending the
Original Indenture and correcting the description of certain
property.
C. Pursuant to an Agreement and Plan of Reorganization
dated July 2, 1993 among the Corporation, Greeley and Greeley Gas
Acquisition Corporation, a Colorado Corporation (the "Acquisition
Corp.") which is a wholly owned subsidiary of the Corporation,
Greeley will be merged into Acquisition Corp. with Acquisition
Corp. as the surviving corporation (the "Greeley Merger") and
immediately upon consummation of the Greeley Merger, Acquisition
Corp. will be merged into the Corporation with the Corporation as
the surviving corporation (the "Acquisition Corp. Merger", the
Greeley Merger and the Acquisition Corp. Merger shall be some-
times hereinafter referred to collectively as the "Merger").
Effective the date of the consummation of the Merger (the "Merger
Date"), the Corporation as the survivor of the Merger proposes,
pursuant to the Indenture, (i) to execute and deliver a Supple-
mental Indenture in order to succeed to all rights, privileges,
powers and franchises of Greeley including all property, real,
personal and mixed owned by Greeley which is subject to the lien
of the Indenture and (ii) to assume all debts, liabilities and
obligations of Greeley under the Indenture.<PAGE>
D. In addition the Corporation proposes (1) to amend the
Seventh Supplemental Indenture dated as of October 1, 1983 (the
"Seventh Supplemental Indenture"), as hereinafter set forth and
(2) to make certain corrections to the Seventh Supplemental
Indenture as hereinafter set forth.
E. The Corporation has obtained and filed with the
Trustee the written consent of the holders of the requisite
percentage of outstanding Bonds to the amendment herein con-
tained. All acts and things necessary to constitute these
presents a valid indenture and agreement according to its terms,
have been done and performed, and the execution of this Tenth
Supplemental Indenture has in all respects been duly authorized
and the Corporation in the exercise of the legal right and power
vested in it executes this Tenth Supplemental Indenture.
NOW, THEREFORE, in consideration of the premises and of
the sum of One Dollar to the Corporation duly paid by the Trustee
at or before the ensealing and delivery hereof and for other good
and valuable considerations, the receipt whereof is hereby
acknowledged, the Corporation hereby covenants to and with the
Trustee and its successors in the trusts under the Indenture for
the equal and pro rata benefit of all present and future holders
of all Bonds issued and to be issued under the Indenture without
any preference, priority or distinction whatsoever, as follows:
ARTICLE ONE
SUBSTITUTION OF SUCCESSOR CORPORATION
Section 1.01. Assumption of Indenture Obligations.
Effective the Merger Date, the Corporation, as successor to
Greeley, assumes the due and punctual payment of the principal of
(and premium if any) and interest on all the Bonds and the
performance of every covenant and condition of the Indenture to
be performed or observed by the Corporation.
Section 1.02. Mortgage of Property. The Corporation in
order to better secure the principal of and interest (and
premium, if any) on all Bonds of the Corporation at any time
outstanding under the Indenture according to their tenor and
effect and the performance of and compliance with the covenants
and conditions in the Indenture contained, does hereby mortgage,
assign, grant, bargain, sell and convey unto the Trustee, and to
its successors in said trust, forever, all of the property rights
and franchises owned by Greeley immediately prior to the Merger
which is subject to the lien of the Indenture including the
properties described in Schedule 1 attached hereto and made a
part hereof (the "Mortgaged Property") and no other property
rights or franchises now owned or hereafter acquired by the
Corporation, provided that the Corporation does hereby mortgage
assign, grant, bargain, sell and convey unto the Trustee and its
successors the following properties acquired by the Corporation
on or after the Merger Date to wit:
-2-<PAGE>
(1) all betterments, extensions, improvements, addi-
tions, repairs, renewals, replacements, substitutions and
alterations to, upon, for and of the property or fran-
chises, or both, subject to the lien of the Indenture, and
all property constituting appurtenances of the Mortgaged
Property;
(2) all property acquired or constructed with the
proceeds of any insurance on any part of the Mortgaged
Property or with the proceeds of any part of the Mortgaged
Property released from the lien of the Indenture or a
prior lien or disposed of free from any such lien, or
taken by eminent domain, or purchased by a public author-
ity; and
(3) all property acquired in pursuance of the cove-
nants herein contained to maintain and preserve and keep
the Mortgaged Property in good condition, repair and
working order, or in pursuance of any other covenant or
agreement herein contained to be performed by the Corpora-
tion;
in trust, nevertheless for the same purposes and upon the same
conditions as are set forth in the Original Indenture, any such
acquired property which is described in clauses (1), (2) and (3)
of this Section 1.03 becoming Mortgaged Property upon being so
acquired.
ARTICLE TWO
AMENDMENTS TO ARTICLES SIX, SEVEN AND EIGHT
Section 2.01. Amendments to Article Six. Sections 6.01
through 6.08, inclusive, and 6.13 are hereby restated in their
entirety to read as follows:
Section 6.01. Payment. The Corporation will duly and
punctually pay or cause to be paid the principal of (and
premium, if any) and interest on the Bonds at the times
and places and in the manner specified in the Bonds and
herein. Notwithstanding the above or any other provisions
of this Indenture or any Bond issued hereunder, the Corpo-
ration may enter into an agreement with the holder of any
Bond providing for the payment to such holder, without
presentation or surrender of such Bond of the principal of
(and premium, if any) and interest on such Bond or any
part thereof at a place other than as designated herein or
in such Bond and for the making of notation of principal
payments on such Bond by such holder prior to any trans-
fer, thereof. The Trustee is authorized to consent to any
such agreement and shall not be liable or responsible to
any such holder or to the Corporation for any act or
omission on the part of the Corporation or any holder of a
Bond in connection with any such agreement. The Corpora-
tion covenants to deposit with the Trustee, at its princi-
-3-<PAGE>
pal office, or with a Paying Agent other than the Trustee
(or, if the Corporation is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 6.10),
an amount of money sufficient to make such payment of
principal (and premium, if any) and interest on the Bonds,
such deposit to be made with the Trustee or such Paying
Agent, as the case may be, not later than one business day
before the date such payment or payments are due. All
amounts so deposited shall be held in trust for the ac-
counts of the holders of the obligations due on such date
and shall be applied to the payment thereof. The Corpora-
tion designates itself as Paying Agent effective upon the
Merger Date.
Section 6.02. Taxes and Assessments. The Corporation
will duly and punctually pay and discharge, or cause to be
paid and discharged, all taxes, assessments and governmen-
tal charges or levies imposed upon or assessed against the
Corporation with respect to its business operations in the
states of Colorado, Kansas or Missouri, or upon any of the
Mortgaged Property, provided however, that nothing herein
contained shall require the Corporation to pay any such
tax, assessment, charge or levy so long as the Corporation
shall in good faith contest the validity of the same by
appropriate legal proceedings and stay any execution
thereof and so long as adequate reserves in respect there-
of have been established in accordance with generally
accepted accounting principles and the Corporation's title
to and right to use its property is not adversely affected
thereby.
Section 6.03. Maintenance of Corporate Existence and
Rights; Compliance with Laws. Subject to the provisions of
Article Thirteen hereof, the Corporation will do or cause
to be done, at its own cost and expense, all things neces-
sary to preserve, extend and renew its corporate existence
under the laws of the state of its incorporation and its
qualified status in the states of Colorado, Kansas and
Missouri, and will use its best efforts to preserve and
renew all franchises, rights of way, easements, permits
and licenses now held by it or hereafter granted to or
conferred upon it with respect to its business operations
in the states of Colorado, Kansas or Missouri, provided,
however that the Corporation shall not be required to
preserve any such franchise, right, easement, permit or
license if the Board of Directors shall determine that
such preservation is no longer desirable in the conduct of
the business of the Corporation and will comply with all
valid laws, ordinances, regulations and requirements
applicable to it or its property.
Section 6.04. Carry on Business and Maintain Property.
The Corporation will at all times endeavor to carry on and
conduct its business operations in the states of Colorado,
Kansas and Missouri in an efficient manner and will cause
-4-<PAGE>
the Mortgaged Property (except such property as may be
disposed of or released from the lien hereof pursuant to
Article Fourteen) to be maintained and preserved and kept
in good repair and working order and will cause to be made
all necessary repairs, renewals, replacements, and substi-
tutions so that at all times the efficiency of the Mort-
gaged Property shall fully be preserved and maintained in
accordance with the standards generally accepted in the
utility industry and by such regulatory authorities then
exercising jurisdiction over the Corporation in the states
of Colorado, Kansas or Missouri.
Section 6.05. Insurance. The Corporation will insure
and keep insured in a reasonable amount with financially
sound and reputable insurance companies all property and
equipment of a character usually insured by companies of
relatively the same size engaged in the same or a similar
business against liabilities or damages of the kind cus-
tomarily insured against by such companies provided that
the Corporation may at its election act as self-insurer
any such system of self-insurance (including any appropri-
ate reserve or reserves therefor) to be upon such terms
and conditions as may be determined by the Board of Direc-
tors provided that the same conforms to approved practices
of similar companies maintaining systems of self-insurance
or to regulations of any regulatory commission having
jurisdiction over the Corporation in the states of Colo-
rado, Kansas and Missouri.
All policies or other contracts for such insurance
upon any part of the Mortgaged Property shall provide that
the proceeds of such insurance (except in the case of any
particular casualty resulting in damage or destruction not
exceeding $200,000 in the aggregate) shall be payable to
the Trustee to be held and applied by the Trustee as a
part of the Mortgaged Property; provided, however, that,
with respect to any part of the Mortgaged Property that is
subject to a prior lien or Permitted Encumbrance, the loss
under any such insurance policy or contract may be payable
also to the trustee, mortgagee or other holder of such
prior lien or Permitted Encumbrance, as its interest may
appear. At any time upon the request of the Trustee the
Corporation will file with the Trustee an Officer's Cer-
tificate containing a detailed list of the insurance in
effect upon the Mortgaged Property on a date therein
specified (which date shall be within 30 days of the
filing of such certificate) and stating the names of the
insurers with which the outstanding policies and other
contracts, and specifying the property and risks covered
thereby and stating that said insurance complies with this
Section.
Any appraisement or adjustment of any loss or damage
of or to any part of the Mortgaged Property and any set-
tlement in respect thereof which may be agreed upon be-
-5-<PAGE>
tween the Corporation and any insurer, as evidenced by an
Officer's Certificate, shall be assented to and accepted
by the Trustee.
All proceeds of any insurance on any part of the
Mortgaged Property not payable to the Trustee or the
trustee, mortgagee or other holder of a prior lien or
Permitted Encumbrance shall be applied by the Corporation
to the repair, restoration or replacement of the Mortgaged
Property. All proceeds of any insurance on any part of
the Mortgaged Property payable to the Trustee shall be
deposited with the Trustee to be held and paid over or
applied by it as provided in Article Seventeen.
The Corporation will maintain liability insurance
against claims for personal injury or death or property
damages suffered by members of the public or others in or
about any property or premises owned or occupied or used
by it in its business operations in the states of Colo-
rado, Kansas and Missouri or occurring by reason of its
ownership, maintenance, use or operation in the states of
Colorado, Kansas and Missouri of any pipelines, compress-
ing stations, plants, shops, machinery, automobiles,
trucks or other vehicles, or airplanes or other facili-
ties, provided that the Corporation may at its election
act as a self-insurer, any such system of self-insurance
(including an appropriate reserve or reserves therefor) to
be upon such terms and conditions as may be determined by
the Board of Directors provided that the same conforms to
approved practices of similar companies maintaining sys-
tems of self-insurance or to regulations of any regulatory
commission having jurisdiction over the Corporation; and
the Corporation will maintain all such workmen's compensa-
tion or similar insurance as may be required under the
laws of Colorado, Kansas or Missouri, as the case may be.
All such liability and workmen's compensation and similar
insurance shall be maintained in such amounts as are
customarily carried by responsible persons engaged in the
same or similar business and shall be effected under a
valid and enforceable policy or policies issued by insur-
ers of recognized responsibility except that the Corpora-
tion may effect workmen's compensation or similar insur-
ance in respect of operations in the states of Colorado,
Kansas or Missouri, as the case may be, either through an
insurance fund operated by such state or by causing to be
maintained a system or systems of self-insurance which is
in accord with applicable Federal or state laws.
Section 6.06. Restrictions on Encumbrances. The Corpo-
ration will not create or suffer to exist any mortgage
lien security interest or encumbrance on any Mortgaged
Property (other than the lien of the Indenture), except:
(a) Permitted Encumbrances; and
-6-<PAGE>
(b) Any purchase money mortgage or security inter-
est created to secure part of the purchase price of
any property or of any mortgage on, or security inter-
est in any property existing at the time of acquisi-
tion thereof, whether or not assumed by the Corpora-
tion, provided that:
(1) such purchase money mortgage, mortgage or
security interest shall extend only to the prop-
erty so acquired and fixed improvements thereto;
(2) at the time of acquisition thereof and
after giving effect to the indebtedness secured by
such outstanding purchase money mortgage, mortgage
or security interest the aggregate principal
amount of indebtedness secured by all such out-
standing purchase money mortgages, mortgages and
security interests shall not exceed 10% of the
aggregate principal amount of all Outstanding
Bonds; and
(3) the principal amount of the indebtedness
secured by any such purchase money mortgage,
mortgage or security interest together with all
other indebtedness secured by a lien on such
property, shall not exceed 66-2/3% of the cost or
fair value whichever is less of the property so
acquired on the date of acquisition thereof;
provided, however, if the principal amount of such
indebtedness shall exceed 66-2/3% of the cost or
fair value, whichever is less of such property,
then the Corporation may acquire such property
provided that the Corporation shall within 15 days
after such acquisition furnish to the Trustee (i)
a Net Bondable Property Additions Certificate in
the form prescribed by Subsection (e) of Section
5.01 which shall certify Net Bondable Property
Additions in an amount equal to 150% of such
excess indebtedness and such Net Bondable Property
Additions so certified shall thereafter constitute
Funded Property, and (ii) a certificate in the
form prescribed by Subsection (b) of Section 5.01,
provided, however that such certificate shall
refer only to Subsection (d) of Section 5.01 and
that both the Net Bondable Property Additions
Certificate and the Certificate shall refer to the
date of acquisition of such property rather than
the date of authentication and delivery of Bonds.
Section 6.07. Records of Account and Certificate. The
Corporation will at all times keep proper books of record
and account and therein will make full true and proper
entries of all dealings and transactions in relation to
the Mortgaged Property and the business operations of the
Corporation in the states of Colorado, Kansas and
-7-<PAGE>
Missouri; and such books shall at all reasonable times be
open to inspection by the Trustee and its duly authorized
agents. Such books of account shall at all times conform
strictly to the Accounting Requirements. On or before
January 31 of each fiscal year of the Corporation the
Corporation shall file with the Trustee a balance sheet as
of the end of the preceding fiscal year and a profit and
loss statement for such fiscal year together with other
related statements and appropriate notes, and such
statements shall be reviewed by independent certified
public accountants whose certificate shall accompany them
and who, together with the chief financial officer of the
Corporation shall further certify that such statements
have been prepared strictly in accordance with the
Accounting Requirements.
Section 6.08. Certificate as to Compliance. On or
before April 30, 1994, and on or before January 31 in each
calendar year following 1994, the Corporation will deliver
to the Trustee (1) an Officer's Certificate stating
whether or not the Corporation is in default in the
payment of the principal or interest on the Bonds or has
knowledge of any Default and, if so, specifying each such
Default of which the signers have knowledge, and (2) a
certificate of the firm of public accountants that
prepared the financial statements for the Corporation for
the immediately preceding fiscal year to the effect that
such firm, in making the examination in connection with
its report on such financial statements has obtained no
knowledge of any Default (or if knowledge of Default has
been obtained, specifying each such Default), by the
Corporation during such fiscal year in the observance,
performance or fulfillment of any of the terms, provisions
or conditions contained in this Indenture.
Section 6.13. Transactions with Affiliates. Subject to
applicable regulatory requirements, the Corporation will
not, in connection with its business operations in the
states of Colorado, Kansas or Missouri, enter into or be a
party to, any transaction or arrangement with any
Affiliate (including, without limitation, the purchase
from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except
in the ordinary course of and pursuant to the reasonable
requirements of the Corporation's business and upon fair
and reasonable terms no less favorable to the Corporation
than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate.
Section 2.02. Amendments to Article Seven. Section 7.05
is hereby restated to read as follows:
Section 7.05. Opinions of Counsel to Be Filed with
Trustee. The Corporation covenants and agrees:
-8-<PAGE>
(a) To file with the Trustee, promptly after
execution and delivery of this Indenture, an Opinion of
Counsel either stating that in the opinion of such
counsel this Indenture has been properly recorded and
filed so as to make effective the lien intended to be
created hereby, and reciting the details of such
action, or stating that in the opinion of such counsel
no such action is necessary to make such lien
effective; and
(b) To file with the Trustee on or within the 10
day period immediately preceding April 30, 1994 and
thereafter on or within the 10 day period immediately
preceding January 31 in each year, beginning with the
year 1995, an Opinion of Counsel, dated as of the date
of such filing with the Trustee, either stating that in
the opinion of such counsel such action has been taken
with respect to the recording, filing, re-recording,
and refiling of this Indenture and of each supplemental
indenture or other instrument of further assurance,
including, without limitation, financing statements, as
is necessary to maintain the lien of this Indenture,
and reciting the details of such action, or stating
that in the opinion of such counsel no such action is
necessary to maintain such lien, and in providing such
opinion, the counsel rendering such opinion may rely
(i) as to liens upon and/or title to property and the
status of appropriate Uniform Commercial Code filings,
upon title searches and/or title reports of title
companies or abstract companies which are dated not
earlier than 90 days prior to the issuance of such
opinion and upon opinions of local counsel of current
date delivered for such purpose, and (ii) as to
litigation, if any, which may result in liens upon
and/or may impair title to property, upon Officer
Certificates addressed to such counsel and dated not
earlier than five days prior to the date of such
opinion stating whether any such litigation exists and,
if so, a description of the same and the expectations
of the Corporation with respect thereto.
Section 2.03. Amendments to Article Eight. Subsections (e),
(f) and (i) of Section 8.01 are hereby restated, respectively, to
read as follows:
(e) default on the part of the Corporation or any
Subsidiary in the payment of the principal of or
interest on any indebtedness of the Corporation or any
Subsidiary for borrowed money (other than the Bonds) in
the aggregate principal amount of $1,000,000 or more as
and when the same shall become due and payable, by the
lapse of time, by declaration, or call for redemption
or otherwise, and such default shall continue beyond
the period of grace, if any, allowed with respect
thereto; or
-9-<PAGE>
(f) default on the part of the Corporation or any
Subsidiary in the performance of any of the covenants
or agreements on the part of the Corporation or any
Subsidiary in any indenture, agreement or other
instrument under which any indebtedness of the
Corporation or any Subsidiary for borrowed money (other
than the Bonds) in the aggregate principal amount of
$1,000,000 or more may be issued and such default or
event shall continue for a period of time sufficient to
permit the acceleration of the maturity of any such
indebtedness outstanding thereunder; or
(i) if final judgment or judgments, for the
payment of money in excess of $2,000,000 shall be
outstanding against the Corporation or any Subsidiary
or against any property or assets of either and any one
of such judgments shall remain unpaid, unvacated,
unbounded, or unstated by appeal or otherwise for a
period of thirty days from the date of its entry;
ARTICLE THREE
MISCELLANEOUS AMENDMENTS TO THE SEVENTH SUPPLEMENTAL INDENTURE
Section 3.01. Amendments to Other Articles and Exhibit A.
The Seventh Supplemental Indenture is hereby further amended as
follows:
(a) The first sentence of Section 9.09 is hereby restated to
read as follows:
There shall at all times be a Trustee hereunder that
shall be a corporation organized and doing business under
the laws of any State or of the United States of America
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
Fifty Million Dollars subject tosupervision or examination
by federal or state authority.
(b) In Section 9.10, the second sentence of Subsection (a)
is hereby changed by adding "of such" after "notice" and the word
"adjusted" in Paragraph (3) of Subsection (b) is hereby changed
to read "adjudged".
(c) In Section 9.11, the word "returning" in the first
sentence of the first paragraph is hereby changed to read
"retiring".
(d) In Subsection (c) of Section 14.03 and in the last
paragraph of Section 14.03, the figure "$100,000" is hereby
changed to read "$200,000".
(e) The reference in Section 17.01 to "Article Seven" is
hereby changed to "Article Eight".
-10-<PAGE>
(f) In the lead-off provisions of Section 17.02, the word
"New" is hereby changed to the word "Net".
(g) In Subsection (c) of Section 17.02, the reference to
"Subsection (e)" is hereby changed to "Subsection (d)" and in
Subsection (d) of Section 17.02 the reference to "Subsection (f)"
is hereby changed to "Subsection (e)."
(h) Subsection (a) of Section 19.02 is hereby restated to
read as follows:
(a) Accounting Requirements means generally accepted
accounting principles consistently applied or such other
system of accounts prescribed by the Colorado Public
Utilities Commission, the Corporation Commission of the
State of Kansas or any other commissions of other states in
which the Corporation shall operate its properties (to the
extent each such Commission has jurisdiction over the
Corporation) at the time in effect or any substitute system
of accounts prescribed by any successor commission or
commissions empowered to regulate the rates and charges of
the Corporation for the transmission and distribution of
natural gas.
(i) Subsection (k) of Section 19.02 is restated to read as
follows:
Corporation means (i) until the Merger, Greeley Gas
Company, a Delaware corporation (successor to Greeley Gas
Company, a Colorado corporation), and (ii) upon and after
the Merger, Atmos Energy Corporation, a Texas corporation,
and, subject to the provisions of Article Thirteen, shall
also include its successors and assigns.
(j) Subsection (m) of Section 19.02 is revised by
substituting the word "or" for the word "of" where it first
appears in Subsection (m).
(k) Subsection (q) of Section 19.02 is revised by
substituting the word "resultant" for the word "result" where it
appears in the second sentence of Subsection (q).
(1) The figure "$50,000" which appears in clause (v) of paragraph (4) of
Subsection (aa) of Section 19.02 is hereby changed to "$200,000".
(m) Subsection (hh) of Section 19.02 is hereby restated to read as
follows:
Trustee means Colorado National Bank, until a successor Trustee shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean such successor trustee.
(n) The following new Subsections (kk), (11), (mm), (nn) and (oo) are
added to Section 19.02 following Subsection (jj):
-11-<PAGE>
(kk) Merger shall have the meaning set forth in Recital C to the
Tenth Supplemental Indenture.
(11) Merger Date shall mean the date of the consummation of the
Merger.
(mm) Shareholders' Equity shall mean the sum (determined in
accordance with generally accepted accounting principles) of the
Corporation's (i) common stock, (ii) preferred stock, (iii) retained
earnings, (iv) capital surplus, and (v) paid-in capital.
(nn) Subsidiary shall mean each corporation, trust, partnership or
association, 50% or more of the voting securities of which are owned by
the Corporation, directly or through another such corporation, trust,
partnership or association.
(oo) Wholly-owned Subsidiary shall mean any Subsidiary, 100% of the
voting securities of which are owned directly or indirectly by the
Corporation.
(o) Section 20.05 is hereby restated to read as follows:
Section 20.05. Service of Notices. Any notice or demand that by any
provision of this Indenture is required or permitted to be given or
served by the Trustee or by any Bondholder to or on the Corporation
shall be sufficiently given if mailed, first-class postage prepaid, or
delivered by overnight courier, addressed (until another address is
filed in writing by the Corporation with the Trustee) as follows: Atmos
Energy Corporation, 1800 Three Lincoln Centre, 5430 LBJ Freeway, Dallas,
Texas 75240, Attention: Chief Financial Officer. Any notice, election,
request or demand by the Corporation or any Bondholder to or upon the
Trustee, shall be sufficiently given or made, for all purposes, if given
or made in writing at the principal office of the Trustee, addressed as
follows: Colorado National Bank, 1515 Arapahoe Street, Denver, Colorado
80217, or to such other address as at the time may be the principal
office of the Trustee.
(p) Exhibit A to the Seventh Supplemental Indenture shall be amended for
any Bonds issued after the Merger to reflect the new name of the Corporation
and the new name of the Trustee.
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01. Counterparts. This Tenth Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.
Section 4.02 Defined Terms. The capitalized terms used herein which are
defined in the Indenture have the meaning therein set forth.
Section 4.03. Headings for Convenience. The Article, Section and
Subsection headings contained in this Tenth Supplemental Indenture and the
-12-<PAGE>
Table of Contents are for convenience only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, Atmos Energy Corporation has caused this Tenth
Supplemental Indenture to be signed in its corporate name by its President or
a Vice President and its corporate seal to be hereunto affixed and attested
by its Secretary or Assistant Secretary, and Colorado National Bank, as
Trustee, has caused this Tenth Supplemental Indenture to be signed in its
corporate name by its Trust Officer and its corporate seal to be hereunto
affixed and attested by its Cashier as of the day and year first above
written.
ATMOS ENERGY CORPORATION
(CORPORATE SEAL) By /s/ James F. Purser
----------------------------
Exec. Vice President
ATTEST: ----------
/s/ Don E. James
- - --------------------------
Secretary
-------
Witnesses:
/s/ Glen Blanscet
- - --------------------------
/s/ Shirley A. Morgan
- - --------------------------
-13-<PAGE>
COLORADO NATIONAL BANK, as Trustee
(CORPORATE SEAL) By /s/ Adam M. Dalmy
----------------------------
Trust Officer
ATTEST:
/s/ Will S. Johnson
- - --------------------------
Assistant Secretary
Witnesses:
/s/ Anne Kolnes
- - --------------------------
/s/ Claudia R. Barns
- - --------------------------
STATE OF TEXAS )
-----------) SS.
COUNTY OF DALLAS )
----------
The foregoing instrument was acknowledged before me this 17th day of
December, 1993, by James F. Purser as Exec. Vice President, and Don E.
James, as Secretary, of Atmos Energy Corporation, a corporation.
Witness my hand and official seal.
My commission expires 8/20/97
/s/ Shirley Strother
-------------------------------
Notary Public
STATE OF COLORADO )
)SS.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 20th day of
December, by Adam M. Dalmy, as Trust Officer, and Will Johnson, as Assistant
Secretary, of Colorado National Bank.
Witness my hand and official seal.
My commission expires: 7-13-96
/s/ Marlene Fortune
-------------------------------
Notary Public
-14-<PAGE>
PROPERTY DESCRIPTION
Bent County, Colorado:
A parcel of land located in the SE 1/4 SE 1/4 SE 1/4 of Section 8, Township
22 South, Range 48, West of the 6th P.M., Bent County, Colorado, and more
particularly described as follows:
Commencing at the SE corner of Section 8, which is a Recovered Aluminum Cap
by P. & S.S. Inc., thence S. 89 38'52"W., a distance of 267.72 feet to a
Point; thence N. 00 26'25"W., a distance of 33.64 feet to a Number Four Rebar
with an Aluminum Cap marked R.L.S. 11380, which is on the North Rights-of-Way
line of Colorado Highway Number 196, and is the POINT OF BEGINNING; thence S.
89 33'42"W., along the North Rights-of-way line of said Highway a distance
of 327.71 feet to a Number Four Rebar with an Aluminum Cap; thence
N.00 18'19"W., a distance of 306.55 feet to a Number Four Rebar with an
Aluminum Cap; thence N. 89 48' l5"E., a distance of 326.99 feet to a Number
Four Rebar with an Aluminum Cap; thence S.00 26'25"E., a distance of 305.17
feet to a Number Four Rebar with an Aluminum Cap, which is on the North
Rights-of-Way line of Colorado Highway Number 196, and the POINT OF
BEGINNING.
Marion County, Kansas:
Lots 318, 320, and 322, Main Street, Florence, Kansas.
SCHEDULE I
(to Tenth Supplemental Indenture)
-15-<PAGE>
ATMOS ENERGY CORPORATION
FIRST AMENDMENT TO BOND PURCHASE
AGREEMENT DATED AS OF APRIL 1, 1991
Re: $17,000,000 First Mortgage Bonds, 9.40% Series J,
Due May 1, 2021
First Colony Life Insurance Company
700 Main Street Dated as of
Lynchburg, Virginia 24504 December 1, 1993
Gentlemen:
Reference is made to the Bond Purchase Agreement dated as of April 1, 1991
(the "Bond Purchase Agreement") between you and Greeley Gas Company, a
Delaware corporation, formerly and successor by merger to Greeley Gas
Company, a Colorado corporation ("Greeley") pursuant to which you purchased
the above referenced Bonds issued by Greeley (the "Bonds"), pursuant to the
Indenture of Mortgage and Deed of Trust dated as of March 1, 1957, as
supplemented from time to time (the "Indenture"). In accordance with
Agreement and Plan of Reorganization dated July 2, 1993 among Greeley,
Greeley Gas Acquisition Corporation (the "Acquisition Corp.") and the
undersigned, Atmos Energy Corporation (the "Company"), Greeley will be merged
into Acquisition Corp., with Acquisition Corp. as the surviving corporation
(the "Greeley Merger") and immediately upon consummation of the Greeley
Merger, Acquisition Corp. will be merged into the Company with the Company as
the surviving corporation (the "Acquisition Corp. Merger", the Greeley Merger
and the Acquisition Corp. Merger being collectively, the "Merger"). As a
condition precedent to the consummation of the Merger, you and the Company
agree as follows:
ARTICLE I
AMENDMENTS
A. Sections 6.1 through 6.8 of the Bond Purchase Agreement are deleted
and the following new Sections 6.1 through 6.7 are inserted in lieu thereof:
6.1. Quarterly Statements. As soon as available, but no later than
65 days following the end of such fiscal quarter of the Company (except
the last such quarter in any fiscal year), copies of the consolidated
(and, if available or with respect to Subsidiaries that are not wholly
owned by the Company, consolidating) balance sheet as of the close of
such quarter and the consolidated (and, if available or with respect to
Subsidiaries that are not wholly owned by the Company, consolidating)
statements of income and retained earnings and cash flow of the Company
and the Subsidiaries for the portion of such fiscal year ending on the
close of such quarter, each setting forth in comparable form the figures
for the same period of the immediately preceding fiscal year, all in
-16-<PAGE>
reasonable detail and certified by the chief financial officer of the
Company as having been prepared in accordance with generally accepted
accounting principles consistently applied (other than changes in which
the Company's independent public accountant concurs) and fairly
reflecting the financial conditions of the Company and the Subsidiaries,
but subject to the normal year-end adjustments;
6.2. Annual Statements. As soon as available, but no later than 100
days following the end of each fiscal year of the Company, copies of the
consolidated (and, if available or with respect to Subsidiaries that are
not wholly owned by the Company, consolidating) balance sheet as of the
end of such fiscal year and the consolidated (and, if available or with
respect to Subsidiaries that are not wholly owned by the Company,
consolidating) statements of income and retained earnings and cash flow
of the Company and the Subsidiaries for such fiscal year, each setting
forth in comparable form the figure for the immediately preceding fiscal
year, all in reasonable detail and accompanied by an opinion of a
nationally recognized firm of independent public accountants to the
effect that such statements have been prepared in accordance with
generally accepted accounting principles consistently applied (other
than changes in which such firm concurs) and fairly present the
financial condition of the Company and the Subsidiaries, and the
examination of the books and records of the Company and the Subsidiaries
has been made in accordance with generally accepted auditing standards,
including, without limitation, customary tests and other auditing
procedures.
6.3. Accountants' Statements. Simultaneously with the delivery of
each set of statements referred to in Section 6.2 above, a statement of
the firm of independent public accountants which reports such statements
to the effect that nothing has come to their attention to cause them to
believe that there existed on the date of such statements any Event of
Default under the Indenture or if they obtain knowledge of any such
Event of Default, they shall disclose in such statement the nature
thereof.
6.4. Officers' Certificates. Together with each report delivered
pursuant to Sections 6.1 and 6.2 above, (i) a certificate from the
president or a vice president of the Company to the effect that no
condition or event exists that constitutes, or with lapse of time or the
taking of any action or both would constitute, an Event of Default under
the Indenture, except for such Events of Default described in such
certificate in reasonable detail, with a statement of the Company's
action with respect thereto taken or proposed.
6.5. SEC and Other Reports. Promptly upon their becoming available,
a copy of any report, proxy statement, or other filing made by the
Company or any Subsidiary with the Securities and Exchange Commission,
any state securities agency, or any national stock exchange or quotation
service.
6.6. Notice of Default. Immediately upon an officer of the Company
obtaining knowledge of the occurrence of any Event of Default under the
Indenture or condition or event which with the passing of time or the
giving of notice or both would become an Event of Default under the
-17-<PAGE>
Indenture, written notice of such Event of Default, condition or event
identifying the same with particularity.
6.7. Requested Information. Promptly following a request, any other
data or information regarding the financial position or business of the
Company or any Subsidiary you reasonably may request.
B. Section 7 of the Bond Purchase Agreement is restated to read as
follows:
7. Inspection Rights. The Company shall permit you or any other
Person designated by you, during normal business hours and upon
reasonable notice, to visit and inspect any of the offices or properties
of the Company or any Subsidiaries, to examine any of their books of
account, and to discuss the financial condition, operations, or business
of the Company or any Subsidiary with, and to be advised as to the same
by the Company's or any Subsidiary's officers and employees, and the
Company's or any Subsidiary's independent public accountants, all at
such reasonable intervals as you may desire; and, by its execution
hereof, the Company, for itself and the Subsidiaries, hereby consents to
such discussions. You and the Company shall each be responsible for the
payment of your own respective expenses incident to the matters referred
to in the preceding sentence. Upon and after the occurrence of an Event
of Default under the Indenture, you or any other Person designated by
you may, in addition to the foregoing, and at the Company's expense
(including without limitation, travel expenses) conduct such visits and
inspections without any requirement of prior notice and, at the
Company's expense, make copies of and take extracts from such books of
account.
ARTICLE II
MISCELLANEOUS
This Amendment may be executed in any number of counterparts each of
which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument.
Capitalized terms which are not otherwise defined herein shall have the
meaning set forth in the Indenture.
This Amendment shall be governed by and construed in accordance with
Colorado law.
If the foregoing is acceptable to you, kindly note your acceptance in
the space provided below and thereupon the Agreement shall be amended as
set forth above, but all other terms and provisions of the Agreement and
the Bonds shall remain unchanged and are in all respects ratified,
confirmed and approved.
Dated as of December 1, 1993.
ATMOS ENERGY CORPORATION
By /s/ James F. Purser
---------------------------------
Its Executive Vice President and CFO
Accepted and agreed to as of the date and year aforesaid.
FIRST COLONY LIFE INSURANCE COMPANY
By /s/ J. Alden Butler
---------------------------------
Its Senior Vice President
-18- <PAGE>
EXHIBIT 15
----------
August 11, 1994
Board of Directors
Atmos Energy Corporation
We are aware of the incorporation by reference in the Registra-
tion Statements (Form S-8 No. 2-89113, Form S-3 No. 33-58220, and
Form S-3 No. 33-70212) of Atmos Energy Corporation of our report
dated August 5, 1994, relating to the unaudited condensed consol-
idated interim financial statements of Atmos Energy Corporation
which is included in its Form 10-Q for the quarter ended June 30,
1994.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report
is not a part of the registration statement prepared or certified
by accountants within the meaning of Section 7 or 11 of the
Securities Act of 1933.
ERNST & YOUNG LLP
Dallas, Texas<PAGE>
EXHIBIT 3
---------
BYLAWS
OF
ATMOS ENERGY CORPORATION
-------------------------
(Amended and restated as of May 11, 1994)
----- *** -----
ARTICLE I
OFFICES
1.01 Registered Office. The registered office shall be
located in the City of Dallas, County of Dallas, State of Texas.
1.02 Other Offices. The corporation also may have offices
at such other places both within and without the State of Texas
as the Board of Directors may from time to time determine or as
the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.01 Place of Meetings. All meetings of shareholders for
the election of directors or for any other proper purposes shall
be held at such place within or without the State of Texas as the
Board of Directors may from time to time designate, as stated in
the notice of such meeting or a duly executed waiver of notice
thereof.
2.02 Annual Meeting. An annual meeting of shareholders
shall be held at 11:00 a.m. on the second Wednesday of February
of each year commencing in 1989, unless such day is a legal
holiday, in which case such meeting shall be held at the
specified time on the next full business day thereafter which is
not a legal holiday. At such meeting the shareholders entitled<PAGE>
to vote thereat shall elect a Board of Directors and may transact
such other business as may properly be brought before the
meeting.
2.03 Special Meetings. Special meetings of shareholders
may be called by the Chairman of the Board of Directors, the
President, a majority of the Board of Directors, or as otherwise
provided in the Articles of Incorporation or the Texas Business
Corporation Act.
2.04 Notice of Annual or of Special Meeting. Written or
printed notice stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the
meeting, either personally or by mail, by or at the direction of
the Chairman of the Board, President, Secretary, or the officer
or person calling the meeting to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall
be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the corporation, with postage
thereon prepaid.
2.05 Notice of Shareholder Proposals. At any annual
meeting, only such business shall be conducted as shall have been
brought before the annual meeting by or at the direction of the
Board of Directors or by any shareholder who complies with the
procedures set forth in this Section 2.05.
Except as otherwise provided by the Articles of
Incorporation, the only business which shall be conducted at any
2<PAGE>
annual meeting of the shareholders shall (i) have been specified
in the written notice of the meeting (or any supplement thereto)
given as provided in Section 2.04 of the Bylaws, (ii) be brought
before the meeting at the direction of the Board of Directors or
the Chairman of the meeting or (iii) have been specified in a
written notice (a "Shareholder Meeting Notice") given to the
corporation, in accordance with all of the following
requirements, by or on behalf of any shareholder who shall have
been a shareholder of record on the record date for such meeting
and who shall continue to be entitled to vote thereat. Each
Shareholder Meeting Notice must be delivered or mailed by first
class United States mail, postage prepaid, to and received by,
the Secretary of the corporation, at the principal executive
offices of the corporation, not less than 50 days nor more than
75 days prior to the annual meeting; provided, however, that if
less than 65 days' notice or prior public disclosure of the date
of the annual meeting is given or made to shareholders, notice by
the shareholder to be timely must be received by the Secretary of
the corporation not later than the close of business on the tenth
day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made.
Each Shareholder Meeting Notice shall set forth: (i) a
description of each item of business proposed to be brought
before the meeting; (ii) the name and address of the shareholder
proposing to bring such item of business before the meeting;
(iii) the class and number of shares of stock held of record,
owned beneficially and represented by proxy by such shareholder
as of the record date for the meeting (if such date shall then
3<PAGE>
have been made publicly available) and as of the date of such
Shareholder Meeting Notice; and (iv) all other information which
would be required to be included in a proxy statement filed with
the Securities and Exchange Commission if, with respect to any
such item of business, such shareholder were a participant in a
solicitation subject to Section 14 of the Securities Exchange Act
of 1934. No business shall be brought before any meeting of
shareholders of the corporation otherwise than as provided in
this paragraph or the Articles of Incorporation.
2.06 Business at Special Meeting. The business transacted
at any special meeting of shareholders shall be limited to the
purposes stated in the notice thereof.
2.07 Quorum of Shareholders. Unless otherwise provided in
the Articles of Incorporation, the holders of a majority of the
shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If, however, a
quorum shall not be present or represented at any meeting of the
shareholders, the shareholders present in person or represented
by proxy shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
2.08 Act of Shareholders' Meeting. The vote of the holders
of a majority of the shares entitled to vote and thus represented
at a meeting at which a quorum is present shall be the act of the
4<PAGE>
shareholders' meeting, unless the vote of a greater number is
required by law, the Articles of Incorporation, or these Bylaws.
2.09 Voting of Shares. Each outstanding share, regardless
of class, shall be entitled to one vote on each matter submitted
to a vote at a meeting of shareholders, except to the extent that
the voting rights of the shares of any class are limited or
denied by the Articles of Incorporation or are otherwise provided
by law. Cumulative voting in the election of directors or
otherwise is expressly prohibited by the Articles of
Incorporation. At each election for directors, every shareholder
entitled to vote at such election shall have the right to vote,
in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose
election he has the right to vote.
2.10 Proxies. At any meeting of the shareholders, each
shareholder having the right to vote shall be entitled to vote
either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Any such
proxy shall be delivered to the secretary of such meeting at or
prior to the time designated by the chairman of the meeting or in
the order of business for so delivering such proxies. No proxy
shall be valid after eleven (11) months from the date of its
execution unless otherwise provided in the proxy. Each proxy
shall be revocable unless expressly provided therein to be
irrevocable and unless otherwise made irrevocable by law. Unless
required by statute or determined by the chairman of the meeting
to be advisable, the vote on any question need not be by ballot.
On a vote by ballot, each ballot shall be signed by the
5<PAGE>
shareholder voting or by such shareholder's proxy, if there be
such proxy.
2.11 Voting List. The officer or agent having charge of
the stock transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders,
a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical
order, with the address of and number of shares held by each
shareholder, which list, for a period of ten (10) days prior to
such meeting, shall be kept on file at the registered office of
the corporation and shall be subject to the inspection by any
shareholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or
to vote at any such meeting of shareholders.
2.12 Order of Business. The order of business of each
meeting of the shareholders of the corporation shall be
determined by the chairman of the meeting. The chairman of the
meeting shall have the right and authority to prescribe such
rules, regulations, and procedures and to do all such acts and
things as are necessary or desirable for the conduct of the
meeting, including, without limitation, the establishment of the
procedures for the dismissal of business not properly presented,
maintenance of order and safety, limitations on the time allotted
to questions or comments on the affairs of the corporation,
6<PAGE>
restrictions on entry to such meetings after the time prescribed
for commencement thereof, and the opening and closing of the
voting polls.
2.13 Action by Written Consent Without a Meeting. Any
action required or permitted by law, the Articles of
Incorporation or these Bylaws to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, is signed by all of
the shareholders entitled to vote with respect to the subject
matter thereof. Such consent shall have the same force and
effect as a unanimous vote of shareholders.
ARTICLE III
BOARD OF DIRECTORS
3.01 Powers. The business and affairs of the corporation
shall be managed by its Board of Directors which may exercise all
such powers of the corporation and do all such lawful acts and
things as are not by law, the Articles of Incorporation or these
Bylaws directed or required to be exercised and done by the
shareholders.
3.02 Number of Directors. The number of directors of the
corporation constituting the Board of Directors shall be not less
than three (3) nor more than fifteen (15). The first Board of
Directors shall consist of three (3) directors; thereafter, the
number of directors shall be determined in accordance with these
Bylaws by resolution of the Board of Directors or of the
shareholders, but no decrease shall have the effect of shortening
the term of any incumbent director.
7<PAGE>
3.03 Election and Term. The directors shall be divided
into three classes, designated Class I, Class II and Class III.
Each class shall consist, as nearly as may be possible, of one-
third of the total number of directors constituting the entire
Board of Directors. At the 1989 annual meeting of shareholders,
Class I directors shall be elected for a one-year term, Class II
directors for a two-year term and Class III directors for a
three-year term. At each succeeding annual meeting of
shareholders beginning in 1990, successors to the class of
directors whose term expires at that annual meeting shall be
elected for a three-year term. Directors shall be elected by a
majority vote of the outstanding shares entitled to vote thereon.
If the number of directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a
vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of
that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which
his term expires and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
3.04 Nominations of Directors. Nominations for election to
the Board of Directors of the corporation at a meeting of
shareholders may be made by the Board of Directors, or by any
shareholder of the corporation entitled to vote for the election
8<PAGE>
of directors at such meeting. Such nominations, other than those
made by the Board of Directors, shall be made by notice in
writing delivered or mailed by first class United States mail,
postage prepaid, to and received by the Secretary of the
corporation, at the principal executive offices of the
corporation, not less than 50 days nor more than 75 days prior to
any meeting of shareholders called for the election of directors;
provided, however, that if less than 65 days' notice or prior
public disclosure of the date of the meeting is given or made to
shareholders, such nomination shall have been received by the
Secretary of the corporation not later than the close of business
on the tenth day following the day on which the notice of meeting
was mailed or such public disclosure was made. Such notice shall
set forth: (i) the name and address of the shareholder who
intends to make the nomination and of the person or persons to be
nominated; (ii) the class and number of shares of stock held of
record, owned beneficially and represented by proxy by such
shareholder as of the record date for the meeting (if such date
shall then have been made publicly available) and of the date of
such notice; (iii) a representation that the shareholder is a
holder of record of stock of the corporation entitled to vote at
such meeting and that the shareholder intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (iv) a description of all arrangements
or understandings between such shareholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by
such shareholder; (v) such other information regarding each
9<PAGE>
nominee proposed by such shareholder as would be required to be
disclosed in solicitations for proxies for election of directors
pursuant to the proxy rules of the Securities and Exchange
Commission; and (vi) the consent of each nominee to serve as a
director of the corporation if so elected. The presiding officer
of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
3.05 Vacancies. Any vacancy occurring in the Board of
Directors may be filled by the affirmative vote of a majority of
the remaining directors although less than a quorum of the Board
of Directors. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any
directorship to be filled by reason of an increase in the number
of directors may be filled by election at an annual meeting or
special meeting of shareholders called for that purpose or may be
filled by the board of directors for a term of office continuing
only until the next election of one or more directors by the
shareholders; provided, however, that the board of directors may
not fill more than two such directorships during the period
between any two successive annual meetings of shareholders.
3.06 Resignation and Removal. Any director may resign at
any time upon giving written notice to the corporation. No
director shall be removed during his term of office except for
cause and by the affirmative vote of the holders of seventy-five
percent (75%) of the shares then entitled to vote at an election
of directors. If the shareholders of this corporation are then
entitled to cumulative voting in the election of directors and if
less than the entire Board is to be removed, no one of the
10<PAGE>
directors may be removed if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an
election of the entire Board of Directors, or if there be classes
of directors, at an election of the class of directors of which
he is a part.
3.07 Compensation of Directors. As specifically prescribed
from time to time by resolution of the Board of Directors, the
directors of the corporation may be paid their expenses of
attendance at each meeting of the Board and may be paid a fixed
sum for attendance at each meeting of the Board or a stated
salary in their capacity as directors. This provision shall not
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for
attending committee meetings.
ARTICLE IV
MEETINGS OF THE BOARD
4.01 First Meeting. The first meeting of each newly
elected Board of Directors shall be held without further notice
immediately following and at the same place as the annual meeting
of shareholders unless, by unanimous consent of the directors
then elected and serving, such time or place shall be changed.
At such meeting, the Board of Directors shall elect one of its
members to be Chairman of the Board, who shall preside at all
meetings of the shareholders and the Board of Directors and
perform such other duties as the Board of Directors shall
11<PAGE>
prescribe and who shall serve as an ex-officio member of all
committees of the Board.
4.02 Regular Meeting. Regular meetings of the Board of
Directors may be held with or without notice at such time and at
such place either within or without the State of Texas as from
time to time shall be prescribed by resolution of the Board of
Directors.
4.03 Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board of Directors
or the President, and shall be called by the Chairman of the
Board of Directors, the President or the Secretary on the written
request of two directors. Written notice of special meetings of
the Board of Directors shall be given to each director at least
two (2) days before the date of the meeting.
4.04 Business at Regular or Special Meeting. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
4.05 Quorum of Directors. A majority of the Board of
Directors shall constitute a quorum for the transaction of
business, unless a greater number is required by law or the
Articles of Incorporation. If a quorum shall not be present at
any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice
other than announcement of the meeting, until a quorum shall be
present.
4.06 Act of Directors' Meeting. The act of a majority of
the directors present at a meeting at which a quorum is present
12<PAGE>
shall be the act of the Board of Directors unless the act of a
greater number is required by law, the Articles of Incorporation,
or these Bylaws.
4.07 Action by Written Consent Without a Meeting. Any
action required or permitted by law, the Articles of
Incorporation or these Bylaws to be taken at a meeting of the
Board of Directors or any committee thereof may be taken without
a meeting if a consent in writing, setting forth the action so
taken, is signed by all members of the Board of Directors or
committee, as the case may be. Such consent shall have the same
force and effect as a unanimous vote at such meeting.
ARTICLE V
COMMITTEES
The Board of Directors, by resolution adopted by a majority
of the full Board of Directors, may designate from among its
members an executive committee and one or more other committees,
each of which shall be comprised of one or more members and, to
the extent provided in such resolution or in the Articles of
Incorporation or in these Bylaws, shall have and may exercise all
of the authority of the Board of Directors, except that no such
committee shall have the authority of the Board of Directors in
reference to amending the Articles of Incorporation, approving a
plan of merger or consolidation, recommending to the shareholders
the sale, lease, or exchange of all or substantially all of the
property and assets of the corporation otherwise than in the
usual and regular course of its business, recommending to the
shareholders a voluntary dissolution of the corporation or a
13<PAGE>
revocation thereof, amending, altering, or repealing the Bylaws
of the corporation or adopting new Bylaws for the corporation,
filling vacancies in the Board of Directors or any such
committee, electing or removing officers, members of the Board of
directors or members of any such committee, fixing the
compensation of any member of such committee, or altering or
repealing any resolution of the Board of Directors which by its
terms provides that it shall not be so amendable or repealable.
No such committee shall have the power or authority to declare a
dividend or to authorize the issuance of shares of the
corporation. Vacancies in the membership of the committee shall
be filled by the Board of Directors at a regular or special
meeting of the Board. The executive committee shall keep regular
minutes of its proceedings and report the same to the Board when
required. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed
upon it or him by law.
ARTICLE VI
NOTICES
6.01 Methods of Giving Notice. Whenever any notice is
required to be given to any shareholder or director under the
provisions of any statute, the Articles of Incorporation or these
Bylaws, it shall be given in writing and delivered personally or
mailed to such shareholder or director at such address as appears
on the books of the corporation, and such notice shall be deemed
to be given at the time when the same shall be deposited in the
14<PAGE>
United States mail with sufficient postage thereon prepaid.
Notice to directors may also be given by telegram or electronic
communication, and notice given by such means shall be deemed
given at the time it is delivered to the telegraph office or
transmitted by means of electronic communication.
6.02 Waiver of Notice. Whenever any notice is required to
be given to any shareholder or director under the provisions of
any law, the Articles of Incorporation or these Bylaws, a waiver
thereof in writing signed by the person or persons entitled to
said notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
6.03 Attendance as Waiver. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
ARTICLE VII
ACTION WITHOUT A MEETING BY USE OF
CONFERENCE TELEPHONE
OR SIMILAR COMMUNICATIONS EQUIPMENT
Subject to the provisions requiring or permitting notice of
meeting, unless otherwise restricted by the Articles of
Incorporation or these Bylaws, shareholders, members of the Board
of Directors or members of any committee designated by such Board
may participate in and hold a meeting of such shareholders, Board
or committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
15<PAGE>
participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction
of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE VIII
OFFICERS
8.01 Executive Officers. The officers of the corporation
shall consist of a President, one or more Vice Presidents, a
Secretary, and a Treasurer, and may also include the Chairman of
the Board if so designated as an officer by the Board of
Directors and such other officers as are provided for in Section
8.03 of this Article. Any Vice President of the corporation may,
by the addition of a number or a word or words before or after
the title "Vice President", be designated "Senior Executive",
"Executive", "Senior", "Trust", "Second" or "Assistant" Vice
President. Each officer of the corporation shall be elected by
the Board of Directors as provided in Section 8.02 of this
Article. Any two or more offices may be held by the same person.
8.02 Election and Qualification. The Board of Directors,
at its first meeting after each annual meeting of shareholders,
shall choose a President, one or more Vice Presidents, a
Secretary, and a Treasurer, none of whom need be a member of the
Board. The Board also may elect one or more Assistant
Secretaries and Assistant Treasurers.
16<PAGE>
8.03 Other Officers and Agents. The Board of Directors may
elect or appoint such other officers, assistant officers and
agents as may be necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board.
8.04 Salaries. The salaries of all officers and agents of
the corporation shall be fixed by resolution of the Board of
Directors.
8.05 Term, Removal and Vacancies. Each officer of the
corporation shall hold office until his successor is chosen and
qualified or until his death, resignation or removal. Any
officer may resign at any time upon giving written notice to the
corporation. Any officer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by
the Board of Directors whenever in its judgment the best interest
of the corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or
agent or member of a committee shall not of itself create
contract rights. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise shall be
filled by the Board of Directors.
8.06 Chief Executive Officer. The Board of Directors shall
designate whether the Chairman of the Board or the President
shall be the chief executive officer of the corporation. The
chief executive officer shall have all of the powers and duties
as usually pertain to such position, including the power to make
and sign contracts and agreements in the name of and on behalf of
17<PAGE>
the corporation and all other powers and duties granted by these
Bylaws to the President of the corporation. In the event the
Chairman of the Board is designated the chief executive officer
of the corporation, the Chairman of the Board shall have
supervisory powers over the President, all other officers of the
corporation, and the business activities of the corporation.
8.07 President. The President shall be the chief operating
officer of the corporation and shall have such powers and duties
as usually pertain to such office, except as the same may be
modified by the Board of Directors. The President shall have
general powers of oversight, supervision and management of the
business and affairs of the corporation, shall see that all
orders and resolutions of the Board of Directors are carried into
effect, and shall have the power to make and sign contracts and
agreements in the name and on behalf of the corporation and to do
or perform all other acts incident to the office of President or
that are authorized or required by law. The President shall
preside at meetings of the shareholders in the absence of the
Chairman of the Board. If the President is also a member of the
Board, he shall be ex-officio a member of all committees of the
Board and shall preside, in the absence of the Chairman of the
Board, at meetings of the Board.
8.08 Vice President. Unless otherwise determined by the
Board of Directors, one of the Vice Presidents shall, in the
absence or disability of the President, perform the duties and
exercise the powers of the President. The various Vice
Presidents shall perform such other duties and have such other
powers as the Board of Directors shall prescribe.
18<PAGE>
8.09 Secretary. The Secretary shall attend all meetings of
the Board of Directors and of the shareholders, record all the
proceedings of the meetings of the Board of Directors and of the
shareholders in a book to be kept for that purpose and shall
perform like duties for the standing committees when required.
He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings as may be prescribed by the
Board of Directors, Chairman of the Board, or the President. He
shall keep in safe custody the seal of the corporation, and, when
authorized by the Board of Directors, affix the same to any
instrument requiring it, and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or
an Assistant Secretary.
8.10 Assistant Secretaries. An Assistant Secretary, unless
otherwise determined by the Board of Directors, shall, in the
absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary. They shall perform such
other duties and have such other powers as the Board of Directors
may from time to time prescribe.
8.11 Treasurer. The Treasurer shall have the custody of
the corporate funds and securities, shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. He
shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board (if
19<PAGE>
he is the chief executive officer), President, and the Board of
Directors at its regular meetings, or when the Board of Directors
so requires, an account of all his transactions as Treasurer, and
of the financial condition of the corporation.
8.12 Assistant Treasurers. An Assistant Treasurer, unless
otherwise determined by the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer. They shall perform such
other duties and have such other powers as the Board of Directors
from time to time may prescribe.
8.13 Officer's Bond. If required by the Board of
Directors, any officer so required shall give the corporation a
bond (which shall be renewed as the Board may require) in such
sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties
of his office and for the restoration to the corporation, in
case of his death, resignation, retirement or removal from
office, of any and all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the corporation.
ARTICLE IX
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Subject to any limitation which may be contained in the
Articles of Incorporation, the corporation shall indemnify, to
the fullest extent permitted by law, any person who was, is, or
is threatened to be made a named defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding,
20<PAGE>
whether civil, criminal, administrative, arbitrative, or
investigative, any appeal in such action, suit, or proceeding,
and any inquiry or investigation that could lead to such an
action, suit or proceeding, by reason of the fact that such
person is or was a director or officer of the corporation, or,
while such person was a director of the corporation, is or was
serving at the request of the corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or
other enterprise, against judgments, penalties (including excise
and similar taxes), fines, settlements, and reasonable expenses
(including attorney's fees) actually incurred by such person in
connection with such action, suit, or proceeding. In addition to
the foregoing, the corporation shall, upon request of any such
person described above and to the fullest extent permitted by
law, pay or reimburse the reasonable expenses incurred by such
person in any action, suit, or proceeding described above in
advance of the final disposition of such action, suit, or
proceeding.
ARTICLE X
CERTIFICATES FOR SHARES
10.01 Certificates Representing Shares. The corporation
shall deliver certificates representing all shares to which
shareholders are entitled. Such certificates shall be numbered
and shall be entered in the books of the corporation as they are
issued, and shall be signed by the Chairman of the Board,
21<PAGE>
President, or a Vice President, and the Secretary or an Assistant
Secretary of the corporation, and may be sealed with the seal of
the corporation or a facsimile thereof. The signatures of the
Chairman of the Board, President, or Vice President, and the
Secretary or Assistant Secretary, upon a certificate may be
facsimiles, if the certificate is countersigned by a transfer
agent or registered by a registrar, either of which is other than
the corporation itself or an employee of the corporation. In
case any officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by
the corporation with the same effect as if he were such officer
at the date of its issuance. If the corporation is authorized to
issue shares of more than one class, each certificate
representing shares issued by such corporation (1) shall
conspicuously set forth on the face or back of the certificate a
full statement of (a) all of the designations, preferences,
limitations and relative rights of the shares of each class
authorized to be issued and, (b) if the corporation is authorized
to issue shares of any preferred or special class in series, the
variations in the relative rights and preferences of the shares
of each such series to the extent the same have been fixed and
determined and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent
series; or (2) shall conspicuously state on the face or back of
the certificate that (a) such a statement is set forth in the
Articles of Incorporation on file in the office of the Secretary
of State of Texas and (b) the corporation will furnish a copy of
22<PAGE>
such statement to the record holder of the certificate without
charge on written request to the corporation at its principal
place of business or registered office. If the corporation has
by its Articles of Incorporation limited or denied the preemptive
right of shareholders to acquire unissued or treasury shares of
the corporation, each certificate representing shares issued by
such corporation (1) shall conspicuously set forth on the face or
back of the certificate a full statement of the limitation or
denial of preemptive rights contained in the Articles of
Incorporation, or (2) shall conspicuously state on the face or
back of the certificate that (a) such a statement is set forth in
the Articles of Incorporation on file in the office of the
Secretary of State of Texas and (b) the corporation will furnish
a copy of such statement to the record holder of the certificate
without charge on request to the corporation at its principal
place of business or registered office. Each certificate
representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Texas,
the name of the person to whom issued, the number and class of
shares and the designation of the series, if any, which such
certificate represents and the par value of each share
represented by such certificate or a statement that the shares
are without par value. No certificate shall be issued for any
share until the consideration therefor, fixed as provided by law,
has been fully paid.
10.02 Restriction on Transfer of Shares. If any
restriction on the transfer, or registration of the transfer, of
shares shall be imposed or agreed to by the corporation, as
23<PAGE>
permitted by law, the Articles of Incorporation or these Bylaws,
each certificate representing shares so restricted (1) shall
conspicuously set forth a full or summary statement of the
restrictions on the face of the certificate, or (2) shall set
forth such statement on the back of the certificate and
conspicuously refer to the same on the face of the certificate,
or (3) shall conspicuously state on the face or back of the
certificate that such a restriction exists pursuant to a
specified document and (a) that the corporation will furnish to
the record holder of the certificate without charge upon written
request to the corporation at its principal place of business or
registered office a copy of the specified document, or (b) if
such document is one required or permitted to be and has been
filed under applicable law, that such specified document is on
file in the Office of the Secretary of State of Texas and
contains a full statement of such restrictions. Unless such
document was on file in the Office of the Secretary of State of
Texas at the time of the request, if the corporation fails within
a reasonable time to furnish the record holder of a certificate,
upon such request and without charge, a copy of the specified
document, the corporation shall not be permitted thereafter to
enforce its rights under the restriction imposed on the shares
represented by such certificate. Any restriction on the
transfer, or registration of transfer, of shares of the
corporation, if reasonable and noted conspicuously on the
certificates representing such shares, may be enforced against
the holder of the restricted shares or any successor or
transferee of the holder, including an executor, administrator,
24<PAGE>
trustee, guardian, or other fiduciary entrusted with like
responsibility for the person or estate of the holder. Unless
noted conspicuously on the certificates representing such shares,
a restriction, even though otherwise enforceable, is ineffective
except against a person with actual knowledge of the restriction.
10.03 Transfer of Shares. Upon surrender to the
corporation or the transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate, and
record the transaction upon its books.
10.04 Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore
issued by the corporation alleged to have been lost, stolen or
destroyed upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors, in its discretion and as a
condition precedent to the issuance thereof, may require the
owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation
a bond in such sum as it may direct as indemnity against any
claim that may be made against the corporation with respect to
the certificate alleged to have been lost, stolen or destroyed.
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10.05 Closing of Transfer Books and Fixing Record Date.
For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period but not to
exceed, in any case, sixty (60) days. If the stock transfer
books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date
in any case to be not more than sixty (60) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action requiring such determination
of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section 10.05,
such determination shall apply to any adjournment thereof, except
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where the determination has been made through the closing of
stock transfer books and the stated period of closing has
expired.
10.06 Registered Shareholders. The corporation shall be
entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of the State of Texas
ARTICLE XI
GENERAL PROVISIONS
11.01 Dividends. The Board of Directors from time to time
may declare, and the corporation may pay, dividends on its
outstanding shares in cash, in property, or in its own shares,
except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the
declaration or payment thereof would be contrary to any
restrictions contained in the Articles of Incorporation. Such
dividends may be declared at any regular or special meeting of
the Board, and the declaration and payment shall be subject to
all applicable provisions of law, the Articles of Incorporation
and these Bylaws.
11.02 Reserves. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time, in
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their absolute discretion, deem proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other
purpose as the directors shall deem conducive to the interest of
the corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created.
11.03 Reports. The Board of Directors shall, when
requested by the holders of at least a majority of the
outstanding shares of the corporation, present full and clear
written reports, not more often than quarterly, of the amount of
business and the financial condition of the corporation.
11.04 Checks. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or
such other person or persons as the Board of Directors from time
to time may designate.
11.05 Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
11.06 Seal. The corporation may have a corporate seal and,
if the Board of Directors adopts a corporate seal, the corporate
seal shall have inscribed thereon the name of the corporation and
may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
ARTICLE XII
AMENDMENTS
The initial Bylaws of the corporation shall be adopted by
the Board of Directors. The power to alter, amend, or repeal the
Bylaws or adopt new Bylaws, subject to repeal or change by action
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of the shareholders, is vested in the Board of Directors. Thus,
these Bylaws may be altered, amended, or repealed or new Bylaws
may be adopted at any regular or special meeting of the Board of
Directors by the affirmative vote of a majority of the Board of
Directors, subject to repeal or change at any regular or special
meeting of shareholders at which a quorum is present or
represented by the affirmative vote of seventy-five (75%) of the
shares entitled to vote at such meeting and present or
represented thereat provided notice of the proposed repeal or
change is contained in the notice of such meeting of
shareholders. The Bylaws may contain any provision for the
regulation and management of the affairs of the corporation not
inconsistent with law or the Articles of Incorporation.
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