As filed with the Securities and Exchange Commission on June 5, 1996
Registration No. 333-[_____]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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OHIO EDISON COMPANY
(Exact name of Registrant as specified in its charter)
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OHIO 34-0437786
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
76 SOUTH MAIN STREET, AKRON, OHIO 44308
(Address of principal executive offices)
Registrant's Telephone Number Including Area Code: (330) 384-5100
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N.C. ASHCOM, Secretary
76 South Main Street
Akron, Ohio 44308
(330) 384-5504
(Name, address and telephone number of agent for service)
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The Commission is requested to mail signed copies of all
orders, notices and communications to:
MICHAEL F. CUSICK VINCENT PAGANO, JR.
Winthrop, Stimson, Putnam & Roberts Simpson Thacher & Bartlett
One Battery Park Plaza 425 Lexington Avenue
New York, NY 10004-1490 New York, NY 10017-3954
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount being offering price aggregate registration
securities being registered registered per unit offering price<F1> fee
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<S> <C> <C> <C> <C>
Mortgage Bonds...................................... $50,000,000 100% $50,000,000 $17,242
====================================================================================================================================
<FN>
<F1> Estimated solely for the purpose of calculating the registration fee.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
Subject to Completion, Dated June 5, 1996
PROSPECTUS
$50,000,000
Ohio Edison Company
MORTGAGE BONDS
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Ohio Edison Company (the "Company") intends from time to time to offer
its mortgage bonds (the "New Bonds") in an aggregate principal amount not to
exceed $50,000,000, in amounts, at prices and on terms to be determined at the
time or times of sale. For each issue of New Bonds for which this Prospectus is
being delivered (the "Offered Bonds") there is an accompanying Prospectus
Supplement (the "Prospectus Supplement") that sets forth, as applicable, the
aggregate principal amount, maturity, rate and time of payment of interest,
purchase price, any terms for redemption and any other special terms of the
Offered Bonds.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------------
The Company may sell the New Bonds through underwriters, dealers or
agents, or directly to one or a limited number of purchasers. The initial public
offering price, if any, and the net proceeds to Ohio Edison Company from the
sale of any Offered Bonds, together with the names of any underwriters, dealers
or agents relating to such sale and any applicable commissions or discounts,
will be set forth in the applicable Prospectus Supplement.
June __, 1996
---------------------------
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
No person is authorized in connection with the offering made hereby to
give any information or to make any representation not contained or incorporated
by reference in this Prospectus or any Prospectus Supplement, and any
information or representation not contained or incorporated herein must not be
relied upon as having been authorized by Ohio Edison Company or any underwriter
or agent. This Prospectus or any Prospectus Supplement does not constitute an
offer to sell or a solicitation of an offer to buy by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus or any Prospectus
Supplement at any time nor any sale made hereunder shall, under any
circumstance, imply that the information herein or therein is correct as of any
date subsequent to the date hereof or thereof.
AVAILABLE INFORMATION
Ohio Edison Company (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is disclosed in proxy
statements distributed to stockholders of the Company and filed with the
Commission. Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, New York,
New York 10048. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such material may also be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, on which certain of the Company's securities are listed.
Information relating to the Depository Trust Company ("DTC") and DTC's
book-entry only system is based upon information furnished by DTC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the
Company with the Commission pursuant to the Exchange Act, are incorporated by
reference in this Prospectus and shall be deemed to be a part hereof:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the New Bonds hereunder shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of the filing of such documents (such
documents, and the documents enumerated above, being hereinafter referred to as
"Incorporated Documents"; provided, however, that all documents filed by the
Company pursuant to Section 13, 14 or 15 of the Exchange Act in each year during
which the offering made by this Prospectus is in effect prior to the filing with
the Commission of the Company's Annual Report on Form 10-K covering such year
shall not be incorporated by reference in this Prospectus or be a part hereof
from and after such filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
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<PAGE>
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the documents referred to above which have been or may be
incorporated by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Ohio Edison Company, Investor
Services, 76 South Main Street, Akron, Ohio 44308, telephone number
1-800-736-3402. The information relating to the Company contained in this
document does not purport to be comprehensive and should be read together with
the information contained in the Incorporated Documents.
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<PAGE>
SUMMARY INFORMATION
The following is qualified in its entirety by the information and
financial statements (including notes thereto) appearing elsewhere herein, in
documents incorporated herein by reference and in any Prospectus Supplement.
THE OFFERING
Securities
Mortgage bonds in an aggregate principal amount not to exceed
$50,000,000.
Redemption Provisions
To be determined at the time of sale of the Offered Bonds and set forth
in the related Prospectus Supplement.
Use of Proceeds
Proceeds are expected to be used for general corporate purposes. The
use of the proceeds from any particular Offered Bonds will be set forth in the
related Prospectus Supplement.
Priority and Security
The New Bonds will be secured primarily by the First Mortgage Bonds (as
defined herein) held by the New Mortgage Trustee (as defined herein) and by the
lien of the New Mortgage (as defined herein) on the Company's properties used in
the generation, production, transmission or distribution of electric energy.
Substantially all of such property, while subject to the lien of the New
Mortgage, will be also subject to the prior lien of the First Mortgage (as
defined herein) which is, in the opinion of the Company's counsel, a direct
first lien on substantially all of the Company's physical property and
franchises, subject only to excepted encumbrances as defined in the First
Mortgage.
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<PAGE>
<TABLE>
<CAPTION>
CERTAIN CONSOLIDATED FINANCIAL INFORMATION
(Thousands, except per share amounts, ratios and percentages)
Twelve Months
Year Ended December 31,<F1> Ended March
1991 1992 1993<F2> 1994 1995 31, 1996
---------- ---------- ---------- ---------- ---------- -------------
Income Summary: (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues....................... $2,358,946 $2,332,378 $2,369,940 $2,368,191 $2,465,846 $2,489,748
Net Income............................... $ 264,823 $ 276,986 $ 82,724 $ 303,531 $ 317,241 $ 319,055
Earnings on Common Stock................. $ 240,069 $ 253,060 $ 59,017 $ 281,852 $ 294,747 $ 298,795
Earnings per share of Common Stock....... $1.60 $1.70 $.39 $1.97 $2.05 $2.08
Ratio of Earnings to Fixed Charges<F3>... 1.95 2.01 1.12 2.24 2.32 2.34
March 31, 1996
----------------------
Outstanding Ratio
----------- -----
Capitalization Summary: (Unaudited)
<S> <C> <C>
Common Stockholders' Equity......................................................... $2,426,113 43.6%
Preferred Stock Not Subject to Mandatory Redemption................................. 211,870 3.8%
Preferred Stock Subject to Mandatory Redemption..................................... 40,000 0.7%
Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely
Company subordinated debentures................................................... 120,000 2.2%
Long-Term Debt<F4>................................................................... 2,759,970 49.7%
--------- -----
Total Capitalization................................................ $5,557,953 100.0%
=========== =====
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<FN>
<F1> Derived from audited financial information.
<F2> Includes net after tax charges of $218,377,000 ($1.43 per share) relating
primarily to the termination of Perry Unit 2, partially offset by the
cumulative effect of a change in accounting for unbilled revenues.
<F3> "Earnings" for purposes of these calculations have been computed by adding
to "income before extraordinary items" all taxes based on income or
profits, total interest charges and the estimated interest element of
rentals charged to income. "Fixed charges" include total interest charges,
the estimated interest element of rentals and subsidiaries' preferred stock
dividend requirements, determined on a "pre-income tax" basis (computed,
where applicable, at the effective income tax rates for the applicable
periods). These ratios exclude fixed charges applicable to the guarantee of
the debt of a coal supplier aggregating $13,298,000, $9,762,000,
$8,565,000, $7,424,000, $6,315,000 and $5,957,000 for each of the five
years in the period ended December 31, 1995 and the twelve months ended
March 31, 1996, respectively.
<F4> Excludes $302,707,000 of long-term debt due to be repaid or subject to put options within one year.
</FN>
</TABLE>
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<PAGE>
OHIO EDISON COMPANY
The Company was organized under the laws of the State of Ohio in 1930
and owns property and does business as an electric public utility in that state.
The Company also has ownership interests in certain facilities located in the
Commonwealth of Pennsylvania. The Company's principal executive offices are
located at 76 South Main Street, Akron, Ohio 44308, telephone number
1-800-736-3402.
The Company furnishes electric service to communities in a 7,500 square
mile area of central and northeastern Ohio. It also provides transmission
services and electric energy for resale to certain municipalities in the
Company's service area and transmission services to certain rural cooperatives.
The Company also engages in the sale, purchase and interchange of electric
energy with other electric companies. The area it serves has a population of
approximately 2,530,000.
The Company owns all of the outstanding common stock of Pennsylvania
Power Company ("Penn Power"), a Pennsylvania corporation, which furnishes
electric service to communities in a 1,500 square mile area of western
Pennsylvania. Penn Power also provides transmission services and electric energy
for resale to certain municipalities in Pennsylvania. The area served by Penn
Power has a population of approximately 342,000.
Sources of generation for the Company and Penn Power (the "Companies")
during the twelve months ended March 31, 1996 were 74.0% coal and 26.0% nuclear.
USE OF PROCEEDS
The Company proposes to use the proceeds from the sale of the New Bonds
for general corporate purposes. The specific uses to which the proceeds may be
applied will be set forth in the related Prospectus Supplement. Pending
application of the proceeds, the Company may make short-term cash investments.
FINANCING AND CONSTRUCTION PROGRAMS
The Companies' total construction costs, excluding nuclear fuel,
amounted to approximately $166,000,000 in 1995. Such costs included expenditures
for the betterment of existing facilities and for the construction of
transmission lines, distribution lines, substations and other additions. The
Companies currently forecast expenditures of approximately $650,000,000 for
property additions and improvements from 1996-2000, of which approximately
$160,000,000 is applicable to 1996. Various Federal, state and local authorities
regulate the Companies with regard to air and water quality and other
environmental matters. The Companies have estimated additional capital
expenditures for environmental compliance of approximately $17,000,000 for the
period 1996 through 2000, which is included in the construction forecast.
During the 1996-2000 period, maturities of, and sinking fund
requirements for, long-term debt and preferred stock will require expenditures
of approximately $1,300,000,000, of which approximately $264,000,000 is
applicable to 1996. In addition, the Companies optionally redeemed approximately
$105,000,000 of long-term debt through May 1, 1996.
Nuclear fuel purchases are financed through OES Fuel, Incorporated
("OES Fuel," a wholly owned subsidiary of the Company) commercial paper and
loans, both of which are supported by a $225,000,000 long-term bank credit
agreement. Investments for additional nuclear fuel during the 1996-2000 period
are estimated to be approximately $180,000,000, of which approximately
$29,000,000 applies to 1996. During the same periods, the Companies' nuclear
fuel investments are expected to be reduced by approximately $191,000,000 and
$39,000,000, respectively, as the nuclear fuel is consumed. Also, the Companies
have operating lease commitments of approximately $594,000,000 for the 1996-2000
period, of which approximately $108,000,000 relates to 1996. The Companies
recover the cost of nuclear fuel consumed and operating leases through their
electric rates.
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<PAGE>
Short-term borrowings of $119,008,000 at March 31, 1996, represented
debt of OES Capital, Incorporated ("OES Capital," a wholly owned subsidiary of
the Company), which is secured by customer accounts receivable. OES Capital can
borrow up to $120,000,000 under a receivables financing agreement at rates based
on certain bank commercial paper. The Companies also had $52,000,000 of unused
short-term bank lines of credit as of March 31, 1996. In addition, $50,000,000
was available through bank facilities that provide for borrowings on a
short-term basis at the banks' discretion. The Company had the capability to
borrow $135,000,000 as of March 31, 1996 through OES Fuel credit facilities.
Based on their present plans, the Companies could provide for their
cash requirements during the remainder of 1996 from the following sources: funds
to be received from operations; available cash and temporary cash investments
(approximately $30,000,000 as of March 31, 1996); the issuance of long-term debt
(for refunding purposes); and funds available under the short-term bank credit
arrangements.
For the period 1996-2000, external financings may be used to provide a
portion of the Companies' cash requirements. The extent and type of future
financings will depend on the need for external funds as well as market
conditions, the maintenance of an appropriate capital structure and the ability
of the Companies to comply with coverage requirements in order to issue first
mortgage bonds and preferred stock. The Companies will continue to monitor
financial market conditions and, where appropriate, may take advantage of
economic opportunities to refund debt and preferred stock to the extent that
their financial resources permit.
DESCRIPTION OF THE NEW BONDS
General
The New Bonds will be authenticated and delivered under a General
Mortgage Indenture and Deed of Trust, between the Company and The Bank of New
York (the "New Mortgage Trustee"), dated as of June 1, 1996. The New Mortgage
Trustee will act as indenture trustee for the purposes of the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Such General Mortgage and
Deed of Trust, as supplemented by various supplemental indentures, including one
or more supplemental indentures relating to the New Bonds, is hereinafter
referred to as the "New Mortgage." The summaries herein do not purport to be
complete and are subject to the detailed provisions of the New Mortgage.
Capitalized terms used herein which are not otherwise defined in this Prospectus
shall have the meanings ascribed thereto in the New Mortgage. Wherever
particular provisions of the New Mortgage or terms defined therein are referred
to, such provisions or definitions are incorporated by reference as a part of
the statements made herein and such statements are qualified in their entirety
by such reference. References to article and section numbers in this description
of the New Bonds, unless otherwise indicated, are references to article and
section numbers of the New Mortgage or the First Mortgage (as defined herein),
as the case may be.
The New Mortgage provides that additional bonds may be issued
thereunder on the basis of Pledged Bonds (as hereinafter defined), property
additions, retired bonds and cash. (See "Issuance of Additional Mortgage Bonds"
below.) The New Bonds and all other bonds heretofore or hereafter issued under
the New Mortgage are collectively referred to herein as the "Mortgage Bonds."
Reference is made to the Prospectus Supplement for a description of the
following terms of the series of New Bonds in respect of which this Prospectus
is being delivered (the "Offered Bonds"): (i) the title (series designation) of
the Offered Bonds; (ii) the limit, if any, upon the aggregate principal amount
of the Offered Bonds; (iii) the date or dates on which the principal of the
Offered Bonds, or any Tranche thereof, is payable; (iv) the rate or rates at
which the Offered Bonds, or any Tranche thereof, will bear interest, if any, the
date or dates from which such interest will accrue, the dates on which any such
interest will be payable ("Interest Payment Dates") and the regular record dates
for any interest payable on the Interest Payment Dates; (v) the basis on which
the Offered Bonds will be issued; (vi) the option, if any, of the Company to
redeem the Offered Bonds and the periods within which or the dates on which, the
prices at which and the terms and conditions upon which, the Offered Bonds, or
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<PAGE>
any Tranche thereof, may be redeemed, in whole or in part, upon the exercise of
such option; (vii) the obligation, if any, of the Company to redeem or purchase
the Offered Bonds pursuant to any sinking fund or analogous provisions or at the
option of the Holder and the periods within which or the dates on which, the
prices at which and the terms and conditions upon which the Offered Bonds, or
any Tranche thereof, will be redeemed, in whole or in part, pursuant to such
obligation; (viii) the denominations in which the Offered Bonds, or any Tranche
thereof, will be issuable; (ix) whether the Offered Bonds will be originally
issued in book-entry only form as discussed below under "Book-Entry Only
System"; and (x) any other terms of the Offered Bonds not inconsistent with the
provisions of the New Mortgage.
While the New Mortgage contains provisions for the maintenance of the
Mortgaged Property, it does not contain any provisions for a maintenance or
sinking fund and, except as may be provided in a Supplemental Indenture (and
described in the applicable Prospectus Supplement), there will be no provisions
for any such funds for the New Bonds.
Form and Exchange
New Bonds in definitive form will be issued only as registered bonds
without coupons in denominations of $1,000 or any multiple thereof authorized by
the Company. New Bonds will be exchangeable for a like aggregate principal
amount of New Bonds of the same series of other authorized denominations and
will be transferable at the office of the Company in New York, New York, without
service charge in either case other than for any taxes or other governmental
charge imposed in connection with such exchange or transfer. See "Transfer or
Exchange."
Redemption of the New Bonds
Any terms for the optional or mandatory redemption of any Offered Bonds
will be set forth in the applicable Prospectus Supplement. Except as shall
otherwise be provided in the applicable Prospectus Supplement with respect to
any Offered Bonds redeemable at the option of the Holder, New Bonds will be
redeemable only upon notice by mail not less than 30 days nor more than 180 days
prior to the date fixed for redemption, and, if less than all the New Bonds of a
series, or any Tranche thereof, are to be redeemed, the particular New Bonds to
be redeemed will be selected by such method as shall be provided for the
particular series or Tranche, or in the absence of any such provision, by such
method as the Bond Registrar deems fair and appropriate. (Sections 5.03 and
5.04.)
Any notice of redemption at the option of the Company may state that
such redemption shall be conditioned upon receipt by the New Mortgage Trustee or
Paying Agent, on or prior to the dated fixed for such redemption, of money
sufficient to pay the principal of and premium, if any, and interest, if any, on
such New Bonds and that if such money has not been so received, such notice will
be of no force and effect and the Company will not be required to redeem such
New Bonds. (Section 5.04.)
Security
General. Except as discussed below, Mortgage Bonds now or hereafter
issued under the New Mortgage will be secured primarily by:
(a) bonds ("First Mortgage Bonds") issued under the Company's
Indenture dated August 1, 1930 (the "First Mortgage"), to The Bank of
New York (successor trustee to Bankers Trust Company), as trustee (the
"First Mortgage Trustee"), and delivered to the New Mortgage Trustee
under the New Mortgage, which First Mortgage Bonds will be secured,
equally and ratably with all other bonds issued under the First
Mortgage, by a valid first lien on substantially all of the Company's
physical property and franchises, subject only to excepted encumbrances
as defined in the First Mortgage (Article I, Section 2); and
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<PAGE>
(b) the lien of the New Mortgage on the Company's properties
used or to be used in or in connection with the generation, production,
transmission or distribution of electric energy, which lien is junior
to the lien of the First Mortgage.
The First Mortgage permits, with certain limitations, the
acquisition of property subject to prior liens and, under certain conditions,
permits the issuance of additional indebtedness under such prior liens to the
extent of 60% of net property additions made by the Company to the property
subject to such prior liens.
As discussed below under "Pledged Bonds," following a merger or
consolidation of another corporation into the Company, the Company could deliver
to the New Mortgage Trustee bonds issued under an existing mortgage on the
properties of such other corporation in lieu of or in addition to bonds issued
under the First Mortgage. In such event, the Mortgage Bonds would be secured,
additionally, by such bonds and by the lien of the New Mortgage on the
properties of such other corporation, which would be junior to the liens of such
existing mortgage and the First Mortgage. The First Mortgage and all such other
mortgages are hereinafter, collectively, called the "Class "A" Mortgages," and
all bonds issued under the Class "A" Mortgages and delivered to the New Mortgage
Trustee are hereinafter collectively called the "Pledged Bonds." If and when no
Class "A" Mortgages are in effect, the New Mortgage will constitute a first
mortgage lien on the Company's properties used or to be used in or in connection
with the generation, production, transmission or distribution of electric
energy.
Pledged Bonds. The Pledged Bonds will be issued and delivered to, and
registered in the name of, the New Mortgage Trustee or its nominee and will be
owned and held by the New Mortgage Trustee, subject to the provisions of the New
Mortgage, for the benefit of the Holders of all Mortgage Bonds Outstanding from
time to time, and the Company will have no interest in such Pledged Bonds.
Except as may be otherwise set forth in the supplemental indenture or board
resolution or officer's certificate pursuant to a supplemental indenture or a
board resolution pursuant to which any Mortgage Bonds are to be issued, Pledged
Bonds issued as the basis for the authentication and delivery of such Mortgage
Bonds (a) will mature on the same dates, and in the same principal amounts, as
such Mortgage Bonds, and (b) will contain, in addition to any mandatory
redemption provisions applicable to all Pledged Bonds Outstanding under the
related Class "A" Mortgage, mandatory redemption provisions correlative to
provisions for mandatory redemption, or for redemption at the option of the
Holder, of such Mortgage Bonds. Pledged Bonds issued as the basis for
authentication and delivery of a series or Tranche of Mortgage Bonds (x) may,
but need not, bear interest, any such interest to be payable at the same times
as interest on the Mortgage Bonds of such series or Tranche, and (y) may, but
need not, contain provisions for the redemption thereof at the option of the
Company, any such redemption to be made at a redemption price or prices not less
than the principal amount of such Pledged Bonds. (Sections 4.02 and 7.01.)
Any payment by the Company of principal of or premium or interest on
the Pledged Bonds held by the New Mortgage Trustee will be applied by the New
Mortgage Trustee to the payment of any principal, premium or interest, as the
case may be, in respect of the Mortgage Bonds which is then due, and, to the
extent of such application, the obligation of the Company under the New Mortgage
to make such payment in respect of the Mortgage Bonds will be deemed satisfied
and discharged. If, at the time of any such payment of principal of Pledged
Bonds, there shall be no principal then due in respect to the Mortgage Bonds,
the proceeds of such payment will be deemed to constitute Funded Cash and will
be held by the New Mortgage Trustee as part of the New Mortgaged Property, to be
withdrawn, used or applied as provided in the New Mortgage. If, at the time of
any such payment of premium or interest on Pledged Bonds, there shall be no
premium or interest, as the case may be, then due in respect of the Mortgage
Bonds, the proceeds of such payment will be remitted to the Company at its
request. Any payment by the Company of principal of or premium or interest on
Mortgage Bonds authenticated and delivered on the basis of the deposit with the
New Mortgage Trustee of Pledged Bonds (other than by application of the proceeds
in respect of such Pledged Bonds) will, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to make a payment
of principal, premium or interest, as the case may be, in respect of such
Pledged Bonds which is then due. (Section 7.02; and see "Withdrawal of Cash"
below.)
The New Mortgage Trustee may not sell, assign or otherwise transfer any
Pledged Bonds except to a successor trustee under the New Mortgage. (Section
7.04.) At the time any Mortgage Bonds of any series, or any Tranche thereof,
which have been authenticated and delivered upon the basis of Pledged Bonds
cease to be
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<PAGE>
Outstanding (other than as a result of the application of the proceeds of the
payment or redemption of such Pledged Bonds), the New Mortgage Trustee shall
surrender to or upon the order of the Company an equal principal amount of such
Pledged Bonds having the same Stated Maturity and mandatory redemption
provisions as such Mortgage Bonds. (Section 7.03.)
At the date of this Prospectus, the only Class "A" Mortgage is the
First Mortgage and the only Pledged Bonds issuable at this time are First
Mortgage Bonds issuable thereunder. The New Mortgage provides that in the event
of the merger or consolidation of another company with or into the Company, an
existing mortgage constituting a lien on properties of such other company prior
to the lien of the New Mortgage may be designated by the Company as an
additional Class "A" Mortgage. Bonds thereafter issued under such additional
mortgage would be Pledged Bonds and could provide the basis for the
authentication and delivery of Mortgage Bonds under the New Mortgage. (Section
7.06.) When no Pledged Bonds are Outstanding under a Class "A" Mortgage except
for Pledged Bonds held by the New Mortgage Trustee, then, at the request of the
Company and subject to satisfaction of certain conditions, the New Mortgage
Trustee will surrender such Pledged Bonds for cancellation, and the related
Class "A" Mortgage will be satisfied and discharged, the lien of such Class "A"
Mortgage on the Company's property will cease to exist and the priority of the
lien of the New Mortgage will be increased. (Section 7.07.)
The New Mortgage provides that, so long as any Mortgage Bonds are
Outstanding, the Company will not issue any additional bonds under any Class "A"
Mortgage except (i) to replace mutilated, destroyed, lost or stolen bonds issued
under such Class "A" Mortgage or (ii) Pledged Bonds issued to the New Mortgage
Trustee as the basis for the authentication and delivery of Mortgage Bonds.
First Mortgage Bonds may currently be issued under the First Mortgage on the
basis of property additions, retirements of bonds previously issued under the
First Mortgage and cash deposited with the First Mortgage Trustee. As of March
31, 1996, $1,276,225,000 of First Mortgage Bonds (other than Pledged Bonds) were
outstanding.
Lien of the New Mortgage. The properties of the Company used or to be
used in or in connection with the generation, production, transmission or
distribution of electric energy are subject to the lien of the New Mortgage.
Substantially all of such property, while subject to the lien of the New
Mortgage, will be also subject to the prior lien of the First Mortgage. The
Mortgage Bonds will have the benefit of the prior lien of the First Mortgage on
such property, and the benefit of the prior lien of any additional Class "A"
Mortgage on any property subject thereto, to the extent of the aggregate
principal amount of Pledged Bonds, issued under the respective Class "A"
Mortgages, held by the New Mortgage Trustee.
The lien of the New Mortgage is subject to Permitted Liens which
include tax liens and other governmental charges which are not delinquent and
which are being contested, construction and materialmen's liens, certain
judgment liens, easements, reservations and rights of others (including
governmental entities) in, and defects of title in, certain property of the
Company, certain leasehold interests, liens on the Company's pollution control
and sewage and solid waste facilities and certain other liens and encumbrances.
(Section 1.01.)
There are excepted from the lien of the New Mortgage, among other
things, cash and securities not paid to, deposited with or held by the New
Mortgage Trustee under the New Mortgage; contracts, leases and other agreements
of all kinds, contract rights, bills, notes and other instruments, accounts
receivable, claims, certain intellectual property rights and other general
intangibles; permits, licenses and franchises; automobiles, other vehicles,
movable equipment, aircraft and vessels; all goods, wares and merchandise held
for sale or lease in the ordinary course of business or for use by or for the
benefit of the Company; fuel, materials, supplies and other personal property
consumable in the operations of the Company's business; computers, machinery,
and equipment; coal, ore, gas, oil, minerals and timber mined or extracted from
the land; gas transmission lines connecting wells with main or branch trunk
lines or field gathering lines connecting wells with main or branch trunk lines;
electric energy, gas, steam, water and other products generated, produced or
purchased; leasehold interests; and all books and records. (Granting Clauses.)
The First Mortgage contains similar, but not identical, exceptions.
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Without the consent of the Holders, the Company and the New Mortgage
Trustee may enter into supplemental indentures to subject to the lien of the New
Mortgage additional property, whether or not used in the electric utility
business (including property which would otherwise be excepted from such lien).
(Section 14.01.) Such property, so long as the same would otherwise constitute
Property Additions (as described below), would thereupon constitute Property
Additions and be available as a basis for the issuance of Mortgage Bonds. (See
"Issuance of Additional Mortgage Bonds" below.)
The New Mortgage contains provisions subjecting after-acquired property
to the lien thereof, subject to the prior lien of the First Mortgage and any
other Class A Mortgage. These provisions are limited in the case of
consolidation or merger (whether or not the Company is the surviving
corporation) or sale of substantially all of the Company's assets. In the event
of consolidation or merger of the Company with or into another corporation and
such other corporation is the surviving corporation or the transfer of all the
mortgaged property as or substantially as an entirety, the New Mortgage will not
be required to be a lien upon any of the properties then owned or thereafter
acquired by the surviving corporation, except properties acquired from the
Company in or as a result of such transaction and improvements, extensions and
additions to such properties and renewals, replacements and substitutions of or
for any part or parts of such properties. In the event of a merger or
consolidation of a corporation with or into the Company and the Company is the
surviving corporation, unless a supplemental indenture to the New Mortgage shall
otherwise provide, the New Mortgage will not be required to be a lien upon any
of the properties acquired by the Company in or as result of such transaction or
any improvements, extensions or addition to such properties or any renewal
replacements or substitutions of or for any part or parts of such properties.
(Article Thirteen; and see "Consolidation, Merger, Conveyance, Transfer or
Lease" below.) In addition, after-acquired property may be subject to vendors'
liens, purchase money mortgages and other liens thereon at the time of
acquisition thereof, including the lien of any Class "A" Mortgage.
The New Mortgage provides that the New Mortgage Trustee will have a
lien, prior to the lien on behalf of the holders of Mortgage Bonds, upon
Mortgaged Property and any money collected by the New Mortgage Trustee as
proceeds of the Mortgaged Property, for the payment of its reasonable
compensation and expenses and for indemnity against certain liabilities.
(Section 11.07.)
Issuance of Additional Mortgage Bonds
The principal amount of Mortgage Bonds which may be issued under the
New Mortgage (Section 3.01) is not limited. Mortgage Bonds of any series may be
issued from time to time under Article Four of the New Mortgage on the basis of,
and in an aggregate principal amount not exceeding:
(1) the aggregate principal amount of Pledged Bonds issued
and delivered to the Trustee;
(2) 70% of the Cost or Fair Value to the Company (whichever
is less) of Property Additions (as described below) which do not
constitute Bonded Property Additions (being, generally, Property
Additions which have been made the basis of the authentication and
delivery of Mortgage Bonds, the release of mortgaged property or cash
withdrawals) after certain deductions and additions, primarily
including adjustments to offset property retirements;
(3) the aggregate principal amount of Retired Bonds (which
consist of Mortgage Bonds no longer Outstanding under the New Mortgage
(including Mortgage Bonds deposited under any sinking or analogous
funds) which have not been used for certain other purposes under the
New Mortgage and which are not to be paid, redeemed or otherwise
retired by the application of Funded Cash), but if Pledged Bonds have
been made the basis for the authentication and delivery of such Retired
Bonds, only if the related Class "A" Mortgage has been discharged: and
(4) an amount of cash deposited with the Trustee.
In general, the issuance of Mortgage Bonds is subject to Adjusted Net
Earnings of the Company for 12 consecutive months within the preceding 18 months
being at least two times the Annual Interest Requirements on all Mortgage Bonds
at the time Outstanding, Mortgage Bonds then applied for, all outstanding bonds
issued under a Class A Mortgage other than Pledged Bonds held by the New
Mortgage Trustee under the New Mortgage, and all other indebtedness (with
certain exceptions) secured by a lien prior to the lien of the New Mortgage,
except that no such net earnings requirement need be met if the additional
Mortgage Bonds to be issued are to have no Stated Interest Rate prior to
Maturity. The Company is not required to satisfy the net earnings requirement
prior to issuance of Mortgage Bonds as provided in (1) above if the Pledged
Bonds issued and delivered to the New Mortgage Trustee as the basis for such
issuance have been authenticated and delivered under the related Class "A"
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Mortgage on the basis of retired Class A Bonds. In addition, the Company is not
required to satisfy the net earnings requirement prior to issuance of Mortgage
Bonds as provided in (3) above unless (a) the Stated Maturity of the Retired
Bonds is a date less than five years after the date of the Company Order
requesting the authentication and delivery of such Mortgage Bonds and (b) the
maximum Stated Interest Rate, if any, on such Retired Bonds at the time of their
authentication and delivery is less than the maximum Stated Interest Rate, if
any, on such Mortgage Bonds to be in effect upon the initial authentication and
delivery of such Mortgage Bonds. In general, the interest requirement with
respect to variable interest rate indebtedness, if any, is determined with
reference to the rate or rates in effect on the date immediately preceding such
determination or the rate to be in effect upon initial authentication. (Section
1.03 and Article Four).
Adjusted Net Earnings are calculated before, among other things,
provisions for income taxes; depreciation or amortization of property; interest
on any indebtedness and amortization of debt discount and expense; any
non-recurring charge to income of whatever kind or nature (including without
limitation the recognition of expense or impairment due to the
non-recoverability of assets or expense), whether or not recorded as a
non-recurring item in the Company's books of account; and any refund of revenues
previously collected or accrued by the Company subject to possible refund. With
respect to Mortgage Bonds of a series subject to a Periodic Offering (such as a
medium-term note program), the New Mortgage Trustee may be entitled to receive a
certificate evidencing compliance with the net earnings requirements only once,
at or prior to the time of the first authentication and delivery of the Mortgage
Bonds of such series (unless the Company Order requesting the authentication and
delivery of such Mortgage Bonds is delivered on or after the date which is two
years after the most recent Net Earnings Certificate was delivered, in which
case an updated certificate would be required to be delivered). (Sections 1.03
and 4.01.)
Property Additions generally include any property which is owned by the
Company and is subject to the lien of the New Mortgage, except any property the
cost of acquisition or construction of which is properly chargeable to an
operating expense account of the Company. (Section 1.04.)
Unless otherwise provided in the applicable Prospectus Supplement, the
Company will issue the Mortgage Bonds on the basis of Pledged Bonds (i.e., First
Mortgage Bonds) issued under its First Mortgage.
Release of Property
The Company may obtain the release from the lien of the New Mortgage of
any Mortgaged Property if the Fair Value of all of the Mortgaged Property
(excluding the Mortgaged Property to be released but including any Mortgaged
Property to be acquired by the Company with the proceeds of, or otherwise in
connection with, such release) equals or exceeds an amount equal to
twenty-fourteenths (20/14ths) of the aggregate principal amount of Mortgage
Bonds Outstanding and bonds issued under Class "A" Mortgages outstanding (other
than Pledged Bonds).
The New Mortgage provides simplified procedures for the release of
property which has been released from the lien of a Class "A" Mortgage, minor
properties and property taken by eminent domain, and provides for dispositions
of certain obsolete property and grants or surrender of certain rights without
any release or consent by the New Mortgage Trustee.
If any property released from the lien of the New Mortgage continues to
be owned by the Company after such release, the New Mortgage will not become a
lien on any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property.
(Article Eight.)
Withdrawal of Cash
Subject to certain limitations, cash held by the New Trustee may (1) be
withdrawn by the Company (a) to the extent of the Cost or Fair Value to the
Company (whichever is less) of Unbonded Property Additions, after certain
deductions and additions primarily including adjustments to offset retirements,
or (b) in an amount equal to twenty-fourteenths (20/14ths) of the aggregate
principal amount of Mortgage Bonds that the Company would be entitled to issue
on the basis of Retired Bonds (with the entitlement to such issuance being
waived by operation of
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such withdrawal), or (c) in an amount equal to twenty-fourteenths (20/14ths) of
the aggregate principal amount of any Outstanding Mortgage Bonds delivered to
the New Trustee, or (2) upon the request of the Company, be applied to (a) the
purchase of Mortgage Bonds (at prices not exceeding twenty-fourteenths
(20/14ths) of the principal amount thereof) or (b) the redemption or payment at
Stated Maturity of Mortgage Bonds (with any Mortgage Bonds received by the New
Trustee pursuant to these provisions being canceled by the New Trustee) (Section
8.06); provided, however, that cash deposited with the New Mortgage Trustee as
the basis for the authentication and delivery of Mortgage Bonds, as well as cash
representing a payment of principal of Pledged Bonds, may only be withdrawn in
an amount equal to the aggregate principal amount of Mortgage Bonds the Company
would be entitled to issue on any basis (with the entitlement to such issuance
being waived by operation of such withdrawal), or may, upon the request of the
Company, be applied to the purchase, redemption or payment of Mortgage Bonds at
prices not exceeding, in the aggregate, the principal amount thereof (Sections
4.05 and 7.02).
Consolidation, Merger, Conveyance, Transfer or Lease
The Company may not consolidate with or merge into any other
corporation or convey, transfer or lease the Mortgaged Property as or
substantially as an entirety to any person unless (a) such transaction is on
such terms as will fully preserve the lien and security of the New Mortgage and
the rights and powers of the New Mortgage Trustee and Holders, (b) the
corporation formed by such consolidation or into which the Company is merged or
the person which acquires by conveyance or transfer, or which leases, the
Mortgaged Property as or substantially as an entirety is a corporation organized
and existing under the laws of the United States of America or any state or
territory thereof or the District of Columbia, and such corporation executes and
delivers to the New Mortgage Trustee a supplemental indenture, which contains an
assumption by such corporation of the due and punctual payment of the principal
of and premium, if any, and interest, if any, on the Mortgage Bonds and the
performance of all of the covenants of the Company under the New Mortgage and
which contains a grant, conveyance, transfer and mortgage by the corporation
confirming the lien of the New Mortgage on the Mortgaged Property and subjecting
to such lien all property thereafter acquired by the corporation which shall
constitute an improvement, extension or addition to the Mortgaged Property or a
renewal, replacement or substitution of or for any part thereof, and, at the
election of the corporation, subjecting to the lien of the New Mortgage such
other property then owned or thereafter acquired by the corporation as the
corporation shall specify, and (c) in the case of a lease, such lease will be
made expressly subject to termination by the Company or the New Mortgage Trustee
at any time during the continuance of an Event of Default. (Section 13.01.)
Other than the security afforded by the lien of the First Mortgage and
the New Mortgage and the restrictions on the issuance of additional First
Mortgage Bonds and Mortgage Bonds, there are no provisions of the First Mortgage
or the New Mortgage which afford the holders of the Mortgage Bonds protection in
the event of a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction involving the Company. Neither the First Mortgage
nor the New Mortgage contain provisions requiring the repurchase of the Mortgage
Bonds upon a change in control of the Company.
Modification of New Mortgage
Without the consent of any Holders, the Company and the New Mortgage
Trustee may enter into one or more supplemental indentures for any of the
following purposes:
(a) to evidence the succession of another person to the
Company and the assumption by any such successor of the covenants of
the Company in the New Mortgage and in the Mortgage Bonds
("Consolidation, Merger, Conveyance, Transfer or Lease" above); or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit of the
Holders of, or to remain in effect only so long as there shall be
Outstanding, Mortgage Bonds of one or more specified series, or one or
more specified Tranches thereof, or to surrender any right or power
conferred upon the Company by the New Mortgage; or
(c) to correct or amplify the description of any property at
any time subject to the lien of the New Mortgage, or better to assure,
convey and confirm to the New Mortgage Trustee any property subject
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or required to be subjected to the lien of the New Mortgage, or to
subject to the lien of the New Mortgage additional property; or
(d) to convey, transfer and assign to the New Mortgage
Trustee and to subject to the lien of the New Mortgage with the same
force and effect as if included in the New Mortgage, property of
subsidiaries of the Company used or to be used for one or more purposes
which if owned by the Company would constitute property used or to be
used for one or more of the Primary Purposes of the Company's Business,
which property shall for all purposes of the New Mortgage be deemed to
be property of the Company, together with such other provisions as may
be appropriate to express the respective rights of the New Mortgage
Trustee and the Company in regard thereto; or
(e) to change or eliminate any provision of the New Mortgage
or to add any new provision to the New Mortgage, provided that if such
change, elimination or addition adversely affects the interests of the
Holders of the Mortgage Bonds of any series or Tranche in any material
respect, such change, elimination or addition will become effective
with respect to such series or Tranche only when no Mortgage Bond of
such series or Tranche remains outstanding under the New Mortgage; or
(f) to establish the form or terms of the Mortgage Bonds of
any series or Tranche as permitted by the New Mortgage; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and for
any and all other matters incidental thereto; or
(h) to evidence and provide for the acceptance of
appointment by a successor trustee or by a co-trustee or separate
trustee; or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series or Tranche of, the Mortgage Bonds;
or
(j) to change any place where (1) the principal of and
premium, if any, and interest, if any, on the Mortgage Bonds of any
series, or any Tranche thereof, will be payable, (2) any Mortgage Bonds
of any series, or any Tranche thereof, may be surrendered for
registration of transfer, (3) any Mortgage Bonds of any series, or any
Tranche thereof, may be surrendered for exchange, and (4) notices and
demands to or upon the Company in respect of the Mortgage Bonds of any
series, or any Tranche thereof, and the New Mortgage may be served; or
(k) to cure any ambiguity, to correct or supplement any
provision therein which may be defective or inconsistent with any other
provision therein, or to make any changes to the provisions thereof or
to add other provisions with respect to matters and questions arising
under the New Mortgage, so long as such other changes or additions do
not adversely affect the interests of the Holders of Mortgage Bonds of
any series or Tranche in any material respect; or
(l) to reflect changes in Generally Accepted Accounting
Principles; or
(m) to provide the terms and conditions of the exchange or
conversion, at the option of the holders of Mortgage Bonds of any
series, of the Mortgage Bonds of such series for or into Mortgage Bonds
of other series or stock or other securities of the Company or any
other corporation; or
(n) to change the words "Mortgage Bonds" to "First Mortgage
Bonds" in the descriptive title of all Outstanding Bonds at any time
after the discharge of the First Mortgage; or
(o) to comply with the rules or regulations of any national
securities exchange on which any of the Mortgage Bonds may be listed.
(Section 14.01.)
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Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the New Mortgage in such a way as to
require changes to the New Mortgage or the incorporation therein of additional
provisions or so as to permit changes to, or the elimination of, provisions
which, at the date of the New Mortgage or at any time thereafter, were required
by the Trust Indenture Act to be contained in the New Mortgage, the Company and
the New Mortgage Trustee may, without the consent of any Holders, enter into one
or more supplemental indentures to evidence or effect such amendment. (Section
14.01.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Mortgage Bonds of all series then
Outstanding, considered as one class, is required for the purpose of adding any
provisions to, or changing in any manner, or eliminating any of the provisions
of, the New Mortgage pursuant to one or more supplemental indentures; provided,
however, if less than all of the series of Mortgage Bonds Outstanding are
directly affected by a proposed supplemental indenture, then the consent only of
the Holders of a majority in aggregate principal amount of Outstanding Mortgage
Bonds of all series so directly affected, considered as one class, will be
required; and provided further that if the Mortgage Bonds of any series have
been issued in more than one Tranche and if the proposed supplemental indenture
directly affects the rights of the Holders of one or more, but less than all, of
such Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Mortgage Bonds of all Tranches so directly
affected, considered as one class, will be required; and provided further that
no such amendment or modification may, without the consent of each Holder of the
Outstanding New Mortgage of each series or Tranche directly affected thereby,
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Mortgage Bond, or reduce the principal amount
thereof or the rate of interest thereon (or the amount of any installment of
interest thereon) or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the amount of the
principal of a Discount Bond (i.e., Bond which by its terms pays less than the
principal amount thereof upon an acceleration of the maturity) that would be due
and payable upon a declaration of acceleration of maturity or change the coin or
currency (or other property) in which any Mortgage Bond or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the redemption date), (b) permit the
creation of any lien ranking prior to the lien of the New Mortgage with respect
to all or substantially all of the Mortgaged Property or terminate the lien of
the New Mortgage on all or substantially all of the Mortgaged Property, or
deprive such Holder of the benefit of the security of the lien of the New
Mortgage, (c) reduce the percentage in principal amount of the Outstanding
Mortgage Bonds of such series or Tranche, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holder of
which is required for any waiver of compliance with any provision of the New
Mortgage or any default thereunder and its consequences, or reduce the
requirements for quorum or voting, or (d) modify certain of the provisions of
the New Mortgage relating to supplemental indentures, waiver of certain
covenants and waivers of past defaults. A supplemental indenture which changes
or eliminates any covenant or other provision of the New Mortgage which has
expressly been included solely for the benefit of the Holders of, or which is to
remain in effect only so long as there shall be Outstanding Mortgage Bonds of
one or more specified series, or one or more Tranches thereof, or modifies the
rights of the Holders of Mortgage Bonds of such series or Tranches with respect
to such covenant or other provision, will be deemed not to affect the rights
under the New Mortgage of the Holders of the Mortgage Bonds of any other series
or Tranche. (Section 14.02.)
Waiver
The Holders of at least a majority in aggregate principal amount of all
Mortgage Bonds may waive the Company's obligations to comply with certain
covenants, including the Company's obligation to maintain its corporate
existence and properties, pay taxes and discharge liens, maintain certain
insurance and to make such recordings and filings as are necessary to protect
the security of the Holders and the rights of the New Mortgage Trustee, provided
that such waiver occurs before the time such compliance is required. The Holders
of at least a majority of the aggregate principal amount of Outstanding Mortgage
Bonds of all affected series or Tranches, considered as one class, may waive,
before the time for such compliance, compliance with the Company's obligation to
maintain an office or agency where the Mortgage Bonds of such series or Tranches
may be surrendered for payment, registration, transfer or exchange, and
compliance with any other covenant specified in a supplemental indenture
respecting such series or Tranches. (Section 6.09.)
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Events of Default
Each of the following events constitutes an Event of Default under the
New Mortgage:
(1) failure to pay interest on any Mortgage Bond within 60
days after the same becomes due;
(2) failure to pay principal or premium, if any, on any
Mortgage Bond within 15 days after its Maturity;
(3) failure to perform or breach of any covenant or warranty
of the Company in the New Mortgage (other than a covenant or a warranty
a default in the performance of which or breach of which is dealt with
elsewhere under this paragraph) for a period of 60 days after there has
been given to the Company by the New Mortgage Trustee, or to the
Company and the New Mortgage Trustee by the Holders of at least 50% in
principal amount of Outstanding Mortgage Bonds, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default," unless the New
Mortgage Trustee, or the New Mortgage Trustee and the Holders of a
principal amount of Mortgage Bonds not less than the principal amount
of Mortgage Bonds the Holders of which gave such notice, as the case
may be, agree in writing to an extension of such period prior to its
expiration; provided, however, that the New Mortgage Trustee, or the
New Mortgage Trustee and such Holders, as the case may be, will be
deemed to have agreed to an extension of such period if corrective
action has been initiated by the Company within such period and is
being diligently pursued;
(4) certain events relating to reorganization, bankruptcy
and insolvency of the Company and appointment of a receiver or trustee
for its property; or
(5) the occurrence of an Event of Default under any Class
"A" Mortgage such that the maturity of amounts due thereunder may be
accelerated; provided that the waiver or cure of any such Event of
Default and the rescission and annulment of the consequences thereof
shall constitute a waiver of the corresponding Event of Default under
the New Mortgage and a rescission and annulment of the consequences
thereof. (Section 10.01.)
Remedies
If an Event of Default occurs and is continuing, then the New Mortgage
Trustee or the Holders of not less than a majority in principal amount of
Mortgage Bonds then Outstanding may declare the principal amount (or if the
Mortgage Bonds are Discount Bonds, such portion of the principal amount as may
be provided for such Discount Bonds pursuant to the terms of the New Mortgage)
of all of the Mortgage Bonds together with premium, if any, and interest
accrued, if any, thereon to be immediately due and payable. At any time after
such declaration of the maturity of the Mortgage Bonds then Outstanding, but
before the sale of any of the Mortgaged Property and before a judgment or decree
for payment of money shall have been obtained by the New Mortgage Trustee as
provided in the New Mortgage, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed to have been
waived, and such declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if:
(a) the Company has paid or deposited with the New Mortgage
Trustee a sum sufficient to pay:
(1) all overdue interest, if any, on all Mortgage
Bonds then Outstanding;
(2) the principal of and premium, if any, on any
Mortgage Bonds then Outstanding which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Mortgage Bonds; and
(3) all amounts due to the New Mortgage Trustee as
compensation and reimbursement as provided in the New
Mortgage; and
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(b) any other Event or Events of Default other than the
non-payment of the principal of Mortgage Bonds which shall have become
due solely by such declaration of acceleration, shall have been cured
or waived as provided in the New Mortgage. (Sections 10.02 and 10.17.)
The New Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
New Mortgage Trustee has the power to take possession of, and to hold, operate
and manage, the Mortgaged Property, or with or without entry, sell the Mortgaged
Property. If the Mortgaged Property is sold, whether by the New Mortgage Trustee
or pursuant to judicial proceedings, the principal of the Outstanding Mortgage
Bonds, if not previously due, will become immediately due, together with
premium, if any, and any accrued interest. (Sections 10.03, 10.04 and 10.05.)
If an Event of Default occurs and is continuing, the Holders of a
majority in principal amount of the Mortgage Bonds then Outstanding will have
the right to direct the time, method and place of conducting any proceedings for
any remedy available to the New Mortgage Trustee or exercising any trust or
power conferred on the New Mortgage Trustee, provided that (a) such direction
does not conflict with any rule of law or with the New Mortgage, and could not
involve the New Mortgage Trustee in personal liability in circumstances where
indemnity would not, in the New Mortgage Trustee's sole discretion, be adequate,
(b) such direction is not unduly prejudicial to the rights of the nonassenting
Holders, and (c) the New Mortgage Trustee may take any other action deemed
proper by the New Mortgage Trustee which is not inconsistent with such
discretion. (Section 10.16.)
The New Mortgage provides that no Holder of any Mortgage Bond will have
any right to institute any proceeding, judicial or otherwise, with respect to
the New Mortgage, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (a) such Holder has previously given to the New
Mortgage Trustee written notice of a continuing Event of Default; (b) the
Holders of not less than a majority in aggregate principal amount of the
Mortgage Bonds then Outstanding have made written request to the New Mortgage
Trustee to institute proceedings in respect of such Event of Default and have
offered the New Mortgage Trustee reasonable indemnity against cost and
liabilities incurred in complying with such request; and (c) for 60 days after
receipt of such notice, the New Mortgage Trustee has failed to institute any
such proceeding and no direction inconsistent with such request has been given
to the New Mortgage Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of Mortgage Bonds then Outstanding.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of other
Holders. (Section 10.11.) Notwithstanding that the right of a Holder to
institute a proceeding with respect to the New Mortgage is subject to certain
conditions precedent, each Holder of a Mortgage Bond has the right, which is
absolute and unconditional, to receive payment of the principal of and premium,
if any, and interest, if any, on such Mortgage Bond when due and to institute
suit for the enforcement of any such payment, and such rights may not be
impaired without the consent of such Holder. (Section 10.12.) The New Mortgage
provides that the New Mortgage Trustee give the Holders notice of any default
under the New Mortgage to the extent required by the Trust Indenture Act, unless
such default shall have been cured or waived, except that no such notice to
Holders of a default of the character described in paragraph (3) under "Events
of Default" shall be given until at least 45 days after the occurrence thereof.
(Section 11.02.) The Trust Indenture Act currently permits the New Mortgage
Trustee to withhold notice of default (except for certain payment defaults) if
the New Mortgage Trustee in good faith determines the withholding of such notice
to be in the interests of the Holders.
As a condition precedent to certain actions by the New Mortgage Trustee
in the enforcement of the lien of the New Mortgage and institution of action on
the Mortgage Bonds, the New Mortgage Trustee may require adequate indemnity
against costs, expense and liabilities to be incurred in connection therewith.
(Sections 10.11 and 11.01.)
In addition to every other right and remedy provided in the New
Mortgage, the New Mortgage Trustee may exercise any right or remedy available to
the New Mortgage Trustee in its capacity as owner and holder of Pledged Bonds
which arises as a result of a default or Matured Event of Default under any
Class "A" Mortgage, whether or not an Event of Default under the New Mortgage
has then occurred and is continuing. (Section 10.20.)
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Defeasance
Any Mortgage Bond or Bonds, or any portion of the principal amount
thereof, will be deemed to have been paid for purposes of the New Mortgage, and
the entire indebtedness of the Company in respect thereof will be deemed to have
been satisfied and discharged, if there has been irrevocably deposited with the
New Mortgage Trustee, in trust: (a) money (including Funded Cash) in the amount
which will be sufficient, or (b) Eligible Obligations (as described below),
which do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will provide
monies which will be sufficient, or (c) a combination of (a) and (b) which will
be sufficient, to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Mortgage Bond or Bonds or
portions thereof. (Section 9.01.) For this purpose, Eligible Obligations include
direct obligations of, or obligations unconditionally guaranteed by, the United
States of America, entitled to the benefit of the full faith and credit thereof,
and certificates, depositary receipts or other instruments which evidence a
direct ownership interest in such obligations or in any specific interest or
principal payments due in respect thereof.
While there is no legal precedent directly on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related Mortgage Bonds
for an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such Mortgage Bonds would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Mortgage Bonds. Such Holders thereafter would be required to include
in income a share of the income, gain or loss of the trust. The amount so
required to be included in income could be different from the amount that would
be includible in the absence of such deposit. Prospective investors are urged to
consult their own tax advisors as to the specific consequences to them of such
deposit.
Resignation of the New Mortgage Trustee
The New Mortgage Trustee may resign at any time by giving written
notice thereof to the Company or may be removed at any time by Act of the
Holders of a majority in principal amount of Mortgage Bonds then Outstanding
delivered to the New Mortgage Trustee and the Company. No resignation or removal
of the New Mortgage Trustee and no appointment of a successor trustee will
become effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the New Mortgage. In addition, so long as no
Event of Default or event which, after notice or lapse of time, or both, would
become an Event of Default has occurred and is continuing, under certain
circumstances, if the Company has delivered to the New Mortgage Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the New
Mortgage, the New Mortgage Trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in accordance with
the New Mortgage.
(Section 11.10.)
Concerning the New Mortgage Trustee
The Bank of New York, the Trustee under the New Mortgage, has been a
regular depositary of funds of the Company. As trustee under both the New
Mortgage and the First Mortgage, The Bank of New York may have a conflicting
interest for purposes of the Trust Indenture Act if an Event of Default were to
occur under either Mortgage. In that case, the New Mortgage Trustee may be
required to eliminate such conflicting interest by resigning either as New
Mortgage Trustee or as First Mortgage Trustee. There are other instances under
the Trust Indenture Act which would require the resignation of the New Mortgage
Trustee, such as an affiliate of the New Mortgage Trustee acting as underwriter
with respect to any of the Mortgage Bonds.
The Company and certain of its subsidiaries maintain deposit accounts
and conduct other banking transactions with The Bank of New York in the ordinary
course of their businesses. The Bank of New York also acts as trustee under
certain indentures relating to borrowings by or for the benefit of the lessors
to finance their acquisition of the Company's interest in the Perry Nuclear
Power Plant and Beaver Valley Power Station in connection with the sale and
leaseback of certain undivided interests in those plants. Under the
sale/leaseback
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documents, the Company is ultimately responsible for the payment of this
indebtedness. The Bank of New York also acts as trustee under the trust
agreement, guarantee and indenture relating to a series of preferred securities
issued by a trust subsidiary of the Company.
Transfer or Exchange
The transfer of the Mortgage Bonds may be registered, and Mortgage
Bonds may be exchanged for other Mortgage Bonds of the same series and Tranche,
of authorized denominations and of like tenor and aggregate principal amount, at
the office of the Company, as Bond Registrar for the Mortgage Bonds, in New
York, New York. The Company may change the place for registration of transfer of
the Mortgage Bonds, may appoint one or more additional Bond Registrars
(including the Company) and may remove any Bond Registrar, all at its
discretion. (Section 6.02.) The applicable Prospectus Supplement will identify
any new place for registration of transfer and additional Bond Registrar
appointed, and will disclose the removal of any Bond Registrar effected, prior
to the date of such Prospectus Supplement. Except as otherwise provided in the
applicable Prospectus Supplement, no service charge will be made for any
transfer or exchange of the Mortgage Bonds, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of the
Mortgage Bonds. The Company will not be required to issue, and no Bond Registrar
will be required to register, the transfer of or to exchange (a) Mortgage Bonds
of any series (including the Mortgage Bonds) during a period of 15 days prior to
giving any notice of redemption, or (b) any Mortgage Bond selected for
redemption in whole or in part, except the unredeemed portion of any Mortgage
Bond being redeemed in part. (Section 3.05.)
BOOK-ENTRY ONLY SYSTEM
A particular series of Offered Bonds may be issued initially under a
book-entry only system, registered in the name of Cede & Co., as registered
bondholder and nominee for DTC. DTC will act as securities depository for such
Offered Bonds. Individual purchases of Book-Entry Interests (as defined herein)
in any Offered Bonds will be made in book-entry form. Purchasers of Book-Entry
Interests will not receive certificates representing their interests in such
Offered Bonds. So long as Cede & Co., as nominee of DTC, is the bondholder,
references herein to the bondholders or registered owners of Offered Bonds will
mean Cede & Co., rather than the owners of Book- Entry Interests in such Offered
Bonds.
DTC is a limited purpose trust company organized under the banking laws
of the State of New York and a "banking organization" within the meaning of that
law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act, as
amended. DTC holds securities deposited by its participants (the "DTC
Participants") and facilitates the settlement of securities transactions among
DTC Participants in such securities through electronic computerized book-entry
changes in accounts of the DTC Participants, thereby eliminating the need for
physical movement of securities certificates. Direct DTC Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom, together with the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. own DTC. Access to the DTC system is also available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a DTC Participant, either directly or
indirectly (the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests (as defined below) in
any Offered Bonds will not receive certificates. Each DTC Participant will
receive a credit balance in the records of DTC in the amount of such DTC
Participant's interest in such Offered Bonds, which will be confirmed in
accordance with DTC's standard procedures. The ownership interest of each actual
purchaser of a Book-Entry Interest in an Offered Bond (the "Book-Entry
Interests") will be recorded through the records of the DTC Participant or
through the records of the Indirect Participant. Owners of Book-Entry Interests
should receive from the DTC Participant or Indirect Participant a written
confirmation of their purchase providing details of the Book-Entry Interests
acquired. Transfers of Book-Entry Interests will be accomplished by book entries
made by the DTC Participants or Indirect Participants who act on behalf of the
owners of Book-Entry Interests. Owners of Book-Entry Interests will not receive
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certificates representing their ownership of Book-Entry Interests with respect
to any related Offered Bonds except as described below upon the resignation of
DTC.
Under the New Mortgage, payments made to DTC or its nominee with
respect to the Offered Bonds will satisfy the Company's obligations under the
New Mortgage to the extent of the payments so made. Owners of Book-Entry
Interests in the Offered Bonds will not be or be considered by the Company or
the New Mortgage Trustee to be, and will not have any rights as, holders of
Offered Bonds under the New Mortgage.
NEITHER THE COMPANY NOR THE NEW MORTGAGE TRUSTEE NOR ANY OF THEIR
AGENTS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT,
INDIRECT PARTICIPANT OR ANY OWNER OF A BOOK-ENTRY INTEREST OR ANY OTHER PERSON
NOT SHOWN ON THE REGISTRATION BOOKS OF THE NEW MORTGAGE TRUSTEE OR ANY BOND
REGISTRAR AS BEING A BONDHOLDER WITH RESPECT TO: (1) ANY OFFERED BONDS; (2) THE
ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT
PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT
PARTICIPANT OF ANY AMOUNT DUE TO ANY OWNER OF A BOOK-ENTRY INTEREST IN RESPECT
OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON ANY OFFERED BONDS; (4)
THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE
TO ANY OWNER OF A BOOK-ENTRY INTEREST WHICH IS REQUIRED OR PERMITTED UNDER THE
TERMS OF THE NEW MORTGAGE TO BE GIVEN TO BONDHOLDERS; (5) THE SELECTION OF THE
OWNERS OF A BOOK-ENTRY INTEREST TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL
REDEMPTION OF ANY OFFERED BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN
BY DTC OR ITS NOMINEE AS THE HOLDER OF ANY OFFERED BONDS.
Principal and redemption price of, and interest on, Offered Bonds
registered in the name of DTC or its nominee will be made to DTC or such
nominee, as registered owner of such Offered Bonds. DTC is responsible for
disbursing such payments to the appropriate DTC Participants and such DTC
Participants, and any Indirect Participants, are in turn responsible for
disbursing the same to the owners of Book-Entry Interests. Unless it has reason
to believe it will not receive payment, DTC's current practice is to credit the
accounts of the DTC Participants on a payment date in accordance with their
respective holdings shown on the records of DTC. Payments by DTC Participants
and Indirect Participants to owners of Book-Entry Interests will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such DTC Participant or
Indirect Participant and not of DTC, the Company or the New Mortgage Trustee,
subject to any statutory and regulatory requirements as may be in effect from
time to time.
DTC Participants and Indirect Participants carry the "position" of the
ultimate Book-Entry Interest owner on their records, and will be responsible for
providing information to the ultimate Book-Entry Interest owner as to the
Offered Bonds in which the Book-Entry Interest is held, debt service payments
received, and other information. Each person for whom a DTC Participant or
Indirect Participant acquires an interest in Offered Bonds, as nominee, may
desire to make arrangements with such DTC Participant or Indirect Participant to
receive a credit balance in the records of such DTC Participant or Indirect
Participant, to have all notices of redemption or other communications to or by
DTC which may affect such persons forwarded in writing by such DTC Participant
or Indirect Participant, and to have notification made of all debt service
payments.
Purchases, transfers and sales of Book-Entry Interests by the ultimate
Book-Entry Interest owners may be made through book entries made by DTC
Participants or Indirect Participants or others who act for the ultimate
Book-Entry Interest owner. The New Mortgage Trustee, the Company and the
underwriters have no role in those purchases, transfers or sales.
Owners of Book-Entry Interests may be charged a sum sufficient to cover
any tax, fee, or other governmental charge that may be imposed in relation to
any transfer or exchange of a Book-Entry Interest.
The Company, any Bond Registrar, any Paying Agent and the New Mortgage
Trustee will recognize and treat DTC (or any successor securities depository) or
its nominee as the holder of Offered Bonds registered in its name or the name of
its nominee for all
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purposes, including payment of debt service, notices, enforcement of remedies
and voting. Under DTC's current practice, a proxy will be given to the DTC
Participants holding Book-Entry Interests in Offered Bonds in connection with
any matter on which holders of such Offered Bonds are asked to vote or give
their consent. Crediting of debt service payments and transmittal of notices and
other communications by DTC to DTC Participants, by DTC Participants to Indirect
Participants and by DTC Participants and Indirect Participants to the ultimate
Book-Entry Interest owners are the responsibility of those persons and will be
handled by arrangements among them and are not the responsibility of the New
Mortgage Trustee, the Company or the underwriters involved in the sale of the
Offered Bonds.
The Company, any Bond Registrar or the New Mortgage Trustee, so long as
a book-entry system is used for any series of Offered Bonds, will send any
notice of redemption and any other notices required by the New Mortgage to be
sent to holders of such Offered Bonds only to DTC (or such successor securities
depository) or its nominee. Any failure of DTC to advise any DTC Participant, or
of any DTC Participant or Indirect Participant to notify the Book-Entry Interest
owner, of any such notice and its content or effect will not affect the validity
of the redemption of the Offered Bonds called for redemption, or any other
action premised on that notice. In the event of a call for redemption, the
Company's, any Bond Registrar's or the New Mortgage Trustee's notification to
DTC will initiate DTC's standard call process, and, in the event of a partial
call, its lottery process by which the call will be randomly allocated to DTC
Participants holding positions in the Offered Bonds to be redeemed. When DTC and
DTC Participants allocate the call for redemption, the owners of the Book-Entry
Interests that have been called should be notified by the broker or other person
responsible for maintaining the records of those interests and subsequently
credited by that person with the proceeds once such Offered Bonds are redeemed.
The Company, any paying Agent, the New Mortgage Trustee and any
underwriter or agent cannot and do not give any assurances that DTC, DTC
Participants or others will distribute debt service on Offered Bonds made to DTC
or its nominee as the registered owner, or any redemption or other notices, to
the Book-Entry Interest owners, or that they will do so on a timely basis, or
that DTC will serve and act in the manner described in this Prospectus.
The Company understands that the current "Rules" applicable to DTC are
on file with the Commission, and that the current "Procedures" of DTC to be
followed in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depository,
and a successor depository is not appointed by the Company within 90 days, the
Company will issue individual certificates to owners of Book-Entry Interests in
exchange for the Offered Bonds held by DTC or its nominee. In such instance, an
owner of a Book- Entry Interest will be entitled to physical delivery of
certificates equal in principal amount to such Book-Entry Interest and to have
such certificates registered in its name. Individual certificates of Offered
Bonds so issued will be issued in denominations of $1,000 or any multiple
thereof.
LEGAL OPINIONS
Anthony J. Alexander, Esq., Akron, Ohio, who is Senior Vice President
and General Counsel of the Company, has rendered an opinion to the Company as to
the legality of the Mortgage Bonds offered hereby. Mr. Alexander and Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza, New York, N.Y. 10004-1490,
also counsel for the Company, will render opinions to any underwriters or agents
as to the legality of any Offered Bonds. Simpson Thacher & Bartlett (a
partnership which includes professional corporations), 425 Lexington Avenue, New
York, N.Y. 10017-3954, will act as counsel for any underwriters or agents and
will render an opinion to them as to certain legal matters.
EXPERTS
The audited consolidated financial statements and related schedule
incorporated by reference or included in the Company's Annual Report on Form
10-K, incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
dated February 8, 1996 with
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respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports. Reference is made to said reports which include an explanatory
paragraph with respect to certain changes in accounting methods as discussed in
the Notes to the consolidated financial statements.
With respect to the unaudited interim consolidated financial
information for the quarter ended March 31, 1996 and 1995 incorporated by
reference herein, Arthur Andersen LLP has applied limited procedures in
accordance with professional standards for reviews of that information. However,
their separate report thereon states that they did not audit and they do not
express an opinion on that interim consolidated financial information.
Accordingly, the degree of reliance on their reports on that information should
be restricted in light of the limited nature of the review procedures applied.
In addition, the accountants are not subject to the liability provisions of
Section 11 of the Act for their report on the unaudited interim consolidated
financial information because that report is not a "report" or "part" of the
registration statement prepared or certified by the accountants within the
meaning of Sections 7 and 11 of the Act.
The statements as to matters of law and legal conclusions included in
the Company's Annual Report on Form 10-K and Form 10-Q Report incorporated
herein by reference, and such statements included herein, have been prepared
under the supervision of, and reviewed by, Anthony J. Alexander, Esq., Akron,
Ohio, who is Senior Vice President and General Counsel of the Company, and such
statements have been incorporated by reference or included herein upon his
authority as an expert.
PLAN OF DISTRIBUTION
The Company may sell the Mortgage Bonds (i) through underwriters or
dealers, (ii) directly to a limited number of institutional purchasers or to a
single purchaser, (iii) through agents or (iv) through any combination of the
above. An accompanying Prospectus Statement will set forth the terms of the
offering of the Offered Bonds, including the name or names of any underwriters,
the purchase price of the Offered Bonds and the net proceeds to the Company from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers.
If underwriters are used in the sale, the Mortgage Bonds will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Mortgage Bonds may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more underwriting firms. The underwriter or underwriters with respect to a
particular underwritten offering of Offered Bonds will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement, the several obligations of the underwriters to purchase
the Offered Bonds will be subject to certain conditions precedent and the
underwriters will be obligated to take and pay for all of the Offered Bonds if
any are taken.
The Mortgage Bonds may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Bonds will be named, and any commissions payable by
the Company to such agent will be set forth, in an accompanying Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or dealers to solicit offers by certain specified
institutions to purchase Mortgage Bonds from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject to those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
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Agents, dealers and underwriters may be entitled, under agreements
entered into with the Company, to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended.
The place and time of delivery for the Offered Bonds in respect of
which this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
Item 14. Other Expenses of Issuance and Distribution.
<S> <C>
Filing fees--Securities and Exchange Commission ................................................ $ 17,242
Printing and composition of registration statement, prospectus, etc. ........................... 80,000
Services of Trustee and its counsel ............................................................ 48,300
Services of Counsel - Winthrop, Stimson, Putnam & Roberts....................................... 75,000
Services of accountants--Arthur Andersen LLP. .................................................. 25,000
Blue Sky fees and expenses ..................................................................... 15,000
Rating fees:
Moody's Investors Service, Inc. ....................................................... 15,000
Standard & Poor's Corporation ......................................................... 10,000
Duff & Phelps.......................................................................... 10,000
Miscellaneous .................................................................................. 4,458
-------
Total............................................................................ $300,000
========
</TABLE>
All of the above amounts, other than the filing fees, are estimates.
Item 15. Indemnification of Directors and Officers.
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code
Annotated gives a corporation incorporated under the laws of Ohio power to
indemnify any person who is or has been a director, officer or employee of that
corporation, or of another corporation at the request of that corporation,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any threatened, pending or
completed action, suit or proceeding, criminal or civil, to which he is or may
be made a party because of being or having been such director, officer or
employee, provided that in connection therewith, such person is determined to
have acted in good faith in what he reasonably believed to be in or not opposed
to the best interest of the corporation of which he is a director, officer or
employee, without reasonable cause, in the case of a criminal matter, to believe
that his conduct was unlawful. The determination as to the conditions precedent
to the permitted indemnification of such person is made by the directors of the
indemnifying corporation acting at a meeting at which, for the purpose, any
director who is a party to or threatened with any such action, suit or
proceeding may not be counted in determining the existence of a quorum and may
not vote. If, because of the foregoing limitations, the directors are unable to
act in this regard, such determination may be made by the majority vote of the
corporation's voting shareholders (or without a meeting upon two-thirds written
consent of such shareholders), by judicial proceeding or by written opinion of
legal counsel not retained by the corporation or any person to be indemnified
during the five years preceding the date of determination.
Section 36 of The Company Company's Code of Regulations provides as
follows:
"The Corporation shall indemnify any person who is or was a
director, officer, employee or agent of the Corporation or any person
who is or has served at the request of the Corporation as a director,
officer, employee, agent or trustee of another corporation, joint
venture, trust or other enterprise (as his heirs, executors and
administrators) against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred
by him by reason of the fact that he is or was such director, officer,
employee, agent or trustee in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative to the full extent and according to the
procedures and requirements set forth in any applicable law as the same
may be in effect from time to time."
II-1
<PAGE>
The following resolution was adopted by the Board of Directors of the
Company on December 19, 1995:
"RESOLVED, FURTHER: That, in addition to and not in derogation
of any other indemnity that may be available, with respect to the
preparation and filing of registration statement or registration
statements with the Securities and Exchange Commission in connection
with the proposed issuance and sale of the long-term indebtedness, the
Equity Securities and/or preferred stock issued in connection with the
Company's issuance of any Preferred Stock Note authorized at this
meeting, this Company is hereby authorized and directed to indemnify
and save harmless each and every officer and employee of the Company
executing and preparing any such registration statement in its original
or amended form and every director of the Company who was a director
thereof at the time of the filing of any such registration statement in
its original or amended form, against any and all expenses reasonably
incurred by them or any of them in connection with any action, suit or
proceeding arising out of the preparation, filing or use of any such
registration statement or the related prospectus whether brought under
the Securities Act of 1933 as amended, or under any other applicable
law where such action, suit or proceeding is finally adjudicated in
favor of such director, officer or employee and the time to appeal has
expired;"
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated
provides that the indemnification thereby permitted shall not be exclusive of
any other rights that directors, officers or employees may have, including
rights under insurance purchased by the corporation. The Company has insurance
covering, subject to certain deductible provisions, its liabilities and expenses
which might arise in connection with its lawful indemnification of its directors
and officers for certain of their liabilities and expenses and also covering,
subject to certain deductible provisions, its officers against certain other
liabilities.
Item 16. Exhibits.
Exhibit
Number
- -------
(1) - Form of Underwriting Agreement with respect to the New Bonds
(to be filed by amendment).
(4)(a) - Draft of the form of the New Bonds. The form of the New Bonds
is set forth in the form of Supplemental Indenture, Exhibit
(4)(c) hereto, to which reference is hereby made.
(4)(b) - Form of General Mortgage Indenture and Deed of Trust to be
dated as of June 1, 1996 between the Company and The Bank of
New York, as Trustee.
(4)(c) - Form of Supplemental Indenture for New Bonds (to be filed by
amendment).
(4)(d) - Indenture dated as of August 1, 1930 between the Company and
The Bank of New York (as successor to Bankers Trust Company),
as Trustee, as amended and supplemented by Supplemental
Indentures dated as of August 1, 1930, March 3, 1931, November
1, 1935, January 1, 1937, September 1, 1937, June 13, 1939,
August 1, 1974, July 1, 1976, December 1, 1976, and June 15,
1977 (which Indenture and Supplemental Indentures are hereby
incorporated by reference to the following filings in which
each has been respectively physically filed: Exhibits B-1,
B-1(a) and B-1(b) in Registration No. 2-1725; Exhibit B-4 in
Registration No. 2-2721; Exhibit B-5 in Registration No.
2-3402; Exhibit B-6 in Form 8-A, File No. 1-2578-B; Exhibit
7(a)-7 in Registration No. 2-5462; Exhibit 2(b) in Form 8-A
dated August 28, 1974, File No. 1-2578; Exhibit 2(b) in Form
8-A dated July 28, 1976, File No. 1-2578; Exhibit 2(b) in Form
8-A dated December 15, 1976, File No. 1-2578; and Exhibit 2(b)
in Form 8-A dated June 27, 1977, File No. 1-2578).
(4)(e) - Supplemental Indentures dated as of September 1, 1944, April
1, 1945, September 1, 1948, May 1, 1950, January 1, 1954, May
1, 1955, August 1, 1956, March 1, 1958, April 1, 1959, June 1,
1961, September 1, 1969, May 1, 1970, September 1, 1970, June
1, 1971, August 1, 1972, September 1, 1973, May 15,
II-2
<PAGE>
1978, February 1, 1980, April 15, 1980, June 15, 1980, October
1, 1981, October 15, 1981, February 15, 1982, July 1, 1982,
March 1, 1983, March 1, 1984, September 15, 1984, September
27, 1984, November 8, 1984, December 1, 1984, December 5,
1984, January 30, 1985, February 25, 1985, July 1, 1985,
October 1, 1985, January 15, 1986, May 20, 1986, June 3, 1986,
October 1, 1986, July 15, 1989, August 25, 1989, February 15,
1991, May 1, 1991, May 15, 1991, September 15, 1991, April 1,
1992, June 15, 1992, September 15, 1992, April 1, 1993, June
15, 1993, September 15, 1993, November 15, 1993, April 1,
1995, May 1, 1995 and July 1, 1995. (Physically filed and
designated in Registration No. 2-61146, as Exhibit 2(b)2, in
Registration No. 2-66957, as Exhibits (b)(4) and (b)(5), in
Registration No. 2-68023 as Exhibits (b)(4) and (b)(5), in
Registration No. 2-74059 as Exhibit (4)d, in Registration No.
2-75917 as Exhibits (4)e and (4)f, in Registration No. 2-89360
as Exhibits (4)(d), (4)(e) and (4)(f), in Registration No.
2-92918 as Exhibit (4)(d), in Registration No. 33-2576 as
Exhibits 4(d) and 4(e), in Registration No. 33-8791 as
Exhibits 4(d) and 4(e), in Registration No. 33-29827 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-34663 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-39713 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-45751 as
Exhibits 4(d) and 4(e), in Registration No. 33-48931 as
Exhibits (4)(d) and 4(e), in Registration No. 33-49413 as
Exhibit (4)(d), in Registration No. 33-51139 as Exhibit
(4)(d), in 1994 Form 10-K (File No. 1-2578) as Exhibit (4)(2)
and in 1995 Form 10-K (File No. 1-2578) as Exhibit (4)(2)).
(4)(f) - Form of Supplemental Indenture for Pledged Bonds (to be filed
by amendment).
(5) - Opinion of Counsel.
(12) - Computation of consolidated ratios of earnings to fixed
charges.
(15) - Letter of Arthur Andersen LLP regarding unaudited interim
financial information.
(23)(a) - Consent of Arthur Andersen LLP.
(23)(b) - Consent of Anthony J. Alexander, Esq. (contained in Exhibit 5
hereto).
(24) - Power of Attorney (set forth on the signature pages of the
Registration Statement).
(25) - Statement of Eligibility of Trustee.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "Act"); (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; (iii) to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement; provided, however, that (i) and (ii) do not apply if the
information required to be included in a post-effective amendment is contained
in periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), that are incorporated by reference in the
registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the 1934 Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(6) That for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(7) That for purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-4
<PAGE>
Each of the undersigned directors and officers of the Registrant,
individually as such director and/or officer, hereby makes, constitutes and
appoints H. P. Burg, N. C. Ashcom, J. H. Byington and M. F. Cusick, and each of
them severally, as his true and lawful attorney-in-fact and agent to execute in
his name, place and stead, in any and all capacities, and to file with the
Commission, this registration statement and any and all amendments, including
post-effective amendments, to this registration statement pursuant to the above
undertaking, which amendment may make such other changes in the registration
statement as the registrant deems appropriate.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in The City of Akron and State of Ohio on the 5th day of June, 1996.
OHIO EDISON COMPANY
By: /s/ W.R. HOLLAND
---------------------------
W.R. Holland
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Name Title Date
---- ----- ----
W.R. HOLLAND President and Chief Executive June 5, 1996
- ------------------------ Officer and Director (Principal
(W.R. Holland) Executive Officer)
H.P. BURG Senior Vice President and Director June 5, 1996
- ------------------------ (Principal Financial Officer and
(H.P. Burg) Principal Accounting Officer)
DONALD C. BLASIUS Director June 5, 1996
- ------------------------
(Donald C. Blasius)
ROBERT M. CARTER Director June 5, 1996
- ------------------------
(Robert M. Carter)
CAROL A. CARTWRIGHT Director June 5, 1996
- ------------------------
(Carol A. Cartwright)
R.L. LOUGHHEAD Director June 5, 1996
- ------------------------
(R.L. Loughhead)
RUSSELL W. MAIER Director June 5, 1996
- ------------------------
(Russell W. Maier)
<PAGE>
GLENN H. MEADOWS Director June 5, 1996
- ------------------------
(Glenn H. Meadows)
PAUL J. POWERS Director June 5, 1996
- ------------------------
(Paul J. Powers)
CHARLES W. RAINGER Director June 5, 1996
- ------------------------
(Charles W. Rainger)
GEORGE M. SMART Director June 5, 1996
- ------------------------
(George M. Smart)
JESSE T. WILLIAMS, SR. Director June 5, 1996
- ------------------------
(Jesse T. Williams, Sr.)
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
(1) - Form of Underwriting Agreement with respect to the New Bonds
(to be filed by amendment).
(4)(a) - Draft of the form of the New Bonds. The form of the New Bonds
is set forth in the form of Supplemental Indenture, Exhibit
(4)(c) hereto, to which reference is hereby made.
(4)(b) - Form of General Mortgage Indenture and Deed of Trust to be
dated as of June 1, 1996 between the Company and The Bank of
New York, as Trustee.
(4)(c) - Form of Supplemental Indenture for New Bonds (to be filed by
amendment).
(4)(d) - Indenture dated as of August 1, 1930 between the Company and
The Bank of New York (as successor to Bankers Trust Company),
as Trustee, as amended and supplemented by Supplemental
Indentures dated as of August 1, 1930, March 3, 1931, November
1, 1935, January 1, 1937, September 1, 1937, June 13, 1939,
August 1, 1974, July 1, 1976, December 1, 1976, and June 15,
1977 (which Indenture and Supplemental Indentures are hereby
incorporated by reference to the following filings in which
each has been respectively physically filed: Exhibits B-1,
B-1(a) and B-1(b) in Registration No. 2-1725; Exhibit B-4 in
Registration No. 2-2721; Exhibit B-5 in Registration No.
2-3402; Exhibit B-6 in Form 8-A, File No. 1-2578-B; Exhibit
7(a)-7 in Registration No. 2-5462; Exhibit 2(b) in Form 8-A
dated August 28, 1974, File No. 1-2578; Exhibit 2(b) in Form
8-A dated July 28, 1976, File No. 1-2578; Exhibit 2(b) in Form
8-A dated December 15, 1976, File No. 1-2578; and Exhibit 2(b)
in Form 8-A dated June 27, 1977, File No. 1-2578).
(4)(e) - Supplemental Indentures dated as of September 1, 1944, April
1, 1945, September 1, 1948, May 1, 1950, January 1, 1954, May
1, 1955, August 1, 1956, March 1, 1958, April 1, 1959, June 1,
1961, September 1, 1969, May 1, 1970, September 1, 1970, June
1, 1971, August 1, 1972, September 1, 1973, May 15, 1978,
February 1, 1980, April 15, 1980, June 15, 1980, October 1,
1981, October 15, 1981, February 15, 1982, July 1, 1982, March
1, 1983, March 1, 1984, September 15, 1984, September 27,
1984, November 8, 1984, December 1, 1984, December 5, 1984,
January 30, 1985, February 25, 1985, July 1, 1985, October 1,
1985, January 15, 1986, May 20, 1986, June 3, 1986, October 1,
1986, July 15, 1989, August 25, 1989, February 15, 1991, May
1, 1991, May 15, 1991, September 15, 1991, April 1, 1992, June
15, 1992, September 15, 1992, April 1, 1993, June 15, 1993,
September 15, 1993, November 15, 1993, April 1, 1995, May 1,
1995 and July 1, 1995. (Physically filed and designated in
Registration No. 2-61146, as Exhibit 2(b)2, in Registration
No. 2-66957, as Exhibits (b)(4) and (b)(5), in Registration
No. 2-68023 as Exhibits (b)(4) and (b)(5), in Registration No.
2-74059 as Exhibit (4)d, in Registration No. 2-75917 as
Exhibits (4)e and (4)f, in Registration No. 2-89360 as
Exhibits (4)(d), (4)(e) and (4)(f), in Registration No.
2-92918 as Exhibit (4)(d), in Registration No. 33-2576 as
Exhibits 4(d) and 4(e), in Registration No. 33-8791 as
Exhibits 4(d) and 4(e), in Registration No. 33-29827 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-34663 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-39713 as
Exhibits (4)(d) and (4)(e), in Registration No. 33-45751 as
Exhibits 4(d) and 4(e), in Registration No. 33-48931 as
Exhibits (4)(d) and 4(e), in Registration No. 33-49413 as
Exhibit (4)(d), in Registration No. 33-51139 as Exhibit
(4)(d), in 1994 Form 10-K (File No. 1-2578) as Exhibit (4)(2)
and in 1995 Form 10-K (File No. 1-2578) as Exhibit (4)(2)).
(4)(f) - Form of Supplemental Indenture for Pledged Bonds (to be filed
by amendment).
(5) - Opinion of Counsel.
<PAGE>
(12) - Computation of consolidated ratios of earnings to fixed
charges.
(15) - Letter of Arthur Andersen LLP regarding unaudited interim
financial information.
(23)(a) - Consent of Arthur Andersen LLP.
(23)(b) - Consent of Anthony J. Alexander, Esq. (contained in Exhibit 5
hereto).
(24) - Power of Attorney (set forth on the signature pages of the
Registration Statement).
(25) - Statement of Eligibility of Trustee.
<PAGE>
Exhibit (4)(b)
DRAFT 6/5/96
GENERAL MORTGAGE INDENTURE AND DEED OF TRUST, dated as of June
1, 1996, between OHIO EDISON COMPANY, a corporation of the State of Ohio, the
post office address of which is 76 South Main Street, Akron, Ohio 44308, and THE
BANK OF NEW YORK, a corporation organized and existing under the laws of the
State of New York, the post office address of which is 101 Barclay Street, New
York, New York 10286, as Trustee;
WITNESSETH:
WHEREAS, all capitalized terms used in this Indenture have the
respective meanings set forth in Article One; and
WHEREAS, the Company deems it necessary to borrow and,
pursuant to this Indenture, to issue Bonds for its corporate purposes from time
to time, and to mortgage and pledge the property hereinafter described to secure
payment of the Bonds; and
WHEREAS, all acts and things have been done and performed
which are necessary to make this Indenture, when duly executed and delivered, a
valid and binding mortgage and deed of trust for the security of all Bonds duly
issued hereunder and Outstanding from time to time; and the execution and
delivery of this Indenture have been in all respects duly authorized.
NOW, THEREFORE, to secure the payment of the principal of,
premium, if any, and interest, if any, on all Bonds issued and Outstanding under
this Indenture when payable in accordance with the provisions thereof and
hereof, and to secure the performance by the Company of, and its compliance
with, the covenants and conditions of this Indenture, and in consideration of
the premises and of One Dollar paid to the Company by the Trustee, the Company
hereby grants, bargains, sells, releases, conveys, assigns, transfers,
mortgages, pledges, sets over and confirms to The Bank of New York, as Trustee,
and grants to the Trustee a security interest in, the following:
GRANTING CLAUSE FIRST
All right, title and interest of the Company in and to
property (other than Excepted Property), real, personal and mixed and
wherever situated, in any case used or to be used in or in connection
with the Primary Purposes of the Company's Business (whether or not
such use is the sole use of such property), including without
limitation (a) all land and interests in land subject to the Lien of
and referenced in the 1930 Mortgage and in supplements thereto, which
land and interests in land are described in Exhibit A to this
Indenture, except land and interests in land which have been
specifically released from such Lien from time to time; (b) all other
lands, easements, servitudes and other rights and interests in or
relating to real property or the occupancy or use of the same; (c) all
plants, generators, turbines,
<PAGE>
engines, boilers, fuel handling and transportation facilities, air and
water pollution control and sewage and solid waste disposal facilities
and other machinery and facilities for the generation of electric
energy; (d) all switchyards, lines, towers, substations, transformers
and other machinery and facilities for the transmission of electric
energy; (e) all lines, poles, conduits, conductors, meters, regulators
and other machinery and facilities for the transmission or distribution
of electric energy; (f) all buildings, offices, warehouses and other
structures; and (g) all pipes, cables, insulators, ducts, tools,
equipment, apparatus and facilities and all other property, of whatever
kind and nature, ancillary to or otherwise used or to be used in
conjunction with any or all of the foregoing or otherwise, directly or
indirectly, in furtherance of the Primary Purposes of the Company's
Business;
GRANTING CLAUSE SECOND
Subject to the applicable exceptions permitted by Section
8.10, Section 13.03 and Section 13.05, all property (other than
Excepted Property) of the kind and nature described in Granting Clause
First which may be hereafter acquired by the Company, it being the
intention of the Company that all such property acquired by the Company
after the date of the execution and delivery of this Indenture shall be
as fully embraced within and subjected to the Lien hereof as if such
property were owned by the Company as of the date of the execution and
delivery of this Indenture;
GRANTING CLAUSE THIRD
Any Excepted Property, and any other property of the Company,
real, personal or mixed, not described in Granting Clause First or
Granting Clause Second, which may, from time to time after the date of
the execution and delivery of this Indenture, by delivery or by one or
more indentures supplemental hereto, be subjected to the Lien hereof by
the Company or by anyone in its behalf, the Trustee being hereby
authorized to receive the same at any time as additional security
hereunder; it being understood that any such subjection to the Lien
hereof of any Excepted Property or other property as additional
security may be made subject to such reservations, limitations or
conditions respecting the use and disposition of such property or the
proceeds thereof as shall be set forth in such instrument; and
GRANTING CLAUSE FOURTH
All other property of whatever kind and nature subjected or
intended to be subjected to the Lien of this Indenture by any of the
terms and provisions hereof;
-2-
<PAGE>
EXCEPTED PROPERTY
Expressly excepting and excluding, however, from the Lien and
operation of this Indenture the following property of the Company,
whether now owned or hereafter acquired (the "Excepted Property"):
(a) all cash on hand, in banks or in other financial
institutions with which the Company maintains deposits, shares
of stock, bonds, notes, evidences of indebtedness and other
securities not hereafter paid or delivered to, deposited with,
or held by, the Trustee hereunder or required so to be;
(b) all contracts, leases and other agreements of
whatsoever kind and nature (including pole attachment
agreements and joint pole agreements), contract rights, bills,
notes and other instruments, accounts receivable, claims,
credits, demands, judgments, choses in action, patents, patent
licenses and other patent rights, patent applications, trade
names, trademarks and other general intangibles;
(c) all permits, licenses, franchises (including
municipal franchises and other rights to use public ways) and
rights (however characterized) granted by any governmental
entity with respect to air, water or other types of pollution
or pollution credits;
(d) all motor vehicles, automobiles, buses, trucks,
truck cranes, tractors, trailers and similar vehicles, movable
equipment, all rolling stock, railcars, containers and other
railroad equipment, all vessels, boats, barges and other
marine equipment, all airplanes, airplane engines and flight
equipment, and all components, spare parts, accessories,
supplies and fuel used or to be used in connection with any of
the foregoing;
(e) all goods, wares, merchandise, equipment, spare
parts and tools held for sale or lease in the ordinary course
of business or for use or consumption in, or in the operation
of, any properties of, or for the benefit of, the Company, or
held in advance of use thereof for maintenance, replacement or
fixed capital purposes; all fuel, materials and supplies and
other personal property which are consumable (otherwise than
by ordinary wear and tear) in their use in or in connection
with the Primary Purposes of the Company's Business; all
nuclear fuel, whether or not in a form consumable in the
operation of the business of the Company, including separate
assemblies of nuclear fuel and components thereof in the forms
in which such assemblies and components exist at each stage of
the
-3-
<PAGE>
nuclear fuel cycle (that is, the process, whether physical or
chemical, by which the component parts of nuclear fuel are
processed, enriched, designed or fabricated into assemblies,
which, when loaded into a nuclear reactor, are intended to
produce heat through the fission or any other process and
thereafter are utilized, disengaged, cooled, stored or
reprocessed);
(f) all office furniture and office equipment; all
satellites and other equipment and materials used or to be
used in outer space; all business machines; all communications
equipment (including telephone equipment); all computer
equipment; all record production, storage and retrieval
equipment; and all components, spare parts, accessories,
programs (other than computer software) and supplies used or
to be used in connection with any of the foregoing;
(g) all crops, timber, sand, gravel, rocks, earth,
natural gas, coal, ore, uranium, gas, oil and other minerals
harvested, mined or extracted or otherwise separated from the
land, or lying or being upon, within or under any properties
of the Company, including the Mortgaged Property, all mineral
rights, leases and royalties and income therefrom, and all
rights to explore for minerals, and gas or oil wells or any
lease or real estate acquired for the purpose of obtaining gas
or oil rights;
(h) all electric energy, gas, steam, water, ice and
other products generated, manufactured, produced, provided or
purchased by the Company for sale, transmission or
distribution or used or to be used by the Company;
(i) all leasehold interests and leasehold
improvements;
(j) all property, real, personal and mixed,
which is:
(A) not specifically subjected
or required to be subjected to the Lien of
this Indenture by any express provision
hereof; and
(B) not used or to be used in
or in connection with the Primary Purposes
of the Company's Business;
(k) the Company's franchise to be a corporation;
and
(l) all books and records;
-4-
<PAGE>
it being understood that the Company may, however, pursuant to Granting Clause
Third, subject to the Lien of this Indenture any Excepted Property, whereupon
the same shall cease to be Excepted Property.
TO HAVE AND TO HOLD all such properties, rights and interests
in property granted, bargained, sold, warranted, released, conveyed, assigned,
transferred, mortgaged, pledged, set over and confirmed or in which a security
interest has been granted by the Company in this Indenture or intended or agreed
to be so granted, together with all the appurtenances thereto, unto the Trustee
and its successors and assigns forever.
SUBJECT, HOWEVER, to Permitted Liens and to Liens which have
been granted by the Company to other Persons prior to the date of the execution
and delivery of this Indenture (including, but not limited to, the Lien of the
1930 Mortgage), and subject also, as to any property hereafter acquired by the
Company, to vendors' Liens, purchase money mortgages and other Liens thereon at
the time of the acquisition thereof (including, but not limited to, the Lien of
any Class "A" Mortgage), it being understood that with respect to any of such
property which is now or hereafter becomes subject to the Lien of any Class "A"
Mortgage, the Lien of this Indenture shall at all times be junior and
subordinate to the Lien of such Class "A" Mortgage;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
benefit and security of all present and future Holders of the Bonds, and to
secure the payment of the principal of, premium, if any, and interest, if any,
on the Bonds issued and Outstanding under this Indenture when payable in
accordance with the provisions thereof and hereof, and to secure the performance
by the Company, of, and its compliance with, the covenants and conditions of
this Indenture without any preference, priority or distinction of any one Bond
over any other Bond by reason of priority in the time of issue or negotiation
thereof or otherwise;
PROVIDED, HOWEVER, and these presents are made upon the
condition, that if the Company shall pay or cause to be paid the principal of,
premium, if any, and interest, if any, on the Bonds at the times and in the
manner therein and herein provided, or shall provide, in the manner permitted
hereby, for the payment thereof, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by it and perform all of the covenants
and comply with all of the conditions of this Indenture, then this Indenture and
the estate and rights hereby granted shall cease, terminate and be void; and
IT IS HEREBY COVENANTED AND AGREED, by and between the Company
and the Trustee, that all Bonds are to be authenticated, delivered and issued,
and that all Mortgaged Property is to be held, subject to the further covenants,
conditions, uses and trusts hereinafter set forth, and the Company, for itself
and its
-5-
<PAGE>
successors and assigns, does hereby covenant and agree to and with the Trustee
and its successors in trust, for the benefit of all Holders of the Bonds, as
follows:
-6-
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. General Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all terms used herein (and which are not specifically
defined herein) which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them
therein;
(c) all terms used herein (and which are not specifically
defined herein) which are defined in the Uniform Commercial Code (as in
effect in the relevant jurisdiction) have the meanings assigned to them
therein;
(d) the word "or" is not exclusive;
(e) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with Generally
Accepted Accounting Principles; and
(f) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Bond, has the
meaning specified in Section 1.07(a).
"Adjusted Net Earnings" means the amount calculated in
accordance with Section 1.03(a); provided, however, that if any of the property
of the Company owned by it at the time of the making of any Net Earnings
Certificate (a) shall have been acquired during or after any period for which
Adjusted Net Earnings of the Company are to be computed, (b) shall not have been
acquired in exchange or substitution for property the net earnings of which have
been included in the Adjusted Net Earnings of the Company, and (c) had been
operated as a separate unit and items of revenue and expense attributable
thereto are readily ascertainable, then the net earnings of such property
(computed in the manner provided for the computation of the Adjusted Net
Earnings of the Company) during such period or such part of such period as shall
have preceded the acquisition thereof, to the extent that the same have not
otherwise been included in the Adjusted Net Earnings of the Company, shall be so
included.
-7-
<PAGE>
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; "Affiliated" has a meaning
correlative to the foregoing. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct
generally the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Interest Requirements" means the amount calculated in
accordance with Section 1.03(b).
"Appraiser" means a Person engaged in the business of
appraising property or competent to determine the Fair Value or fair market
value of the particular property in question, and who or which, unless required
to be Independent, may be employed by or Affiliated with the Company.
"Appraiser's Certificate" means a certificate signed by an
Appraiser; any Appraiser's Certificate which is relied upon by an Independent
Engineer, for purposes of an Independent Engineer's Certificate, shall be signed
by an Independent Appraiser.
"Authenticating Agent" means any Person (which may include the
Company or an Affiliate of the Company) authorized by the Trustee to act on
behalf of the Trustee to authenticate one or more series of Bonds.
"Authorized Executive Officer" means the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President (whether
or not his or her title includes a modifier such as "Executive", "Senior" or the
like), the Treasurer, the Secretary or any other officer of the Company
designated in an Officer's Certificate delivered to the Trustee to be an
Authorized Executive Officer.
"Authorized Publication" means a newspaper or financial
journal of general circulation, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays; or, in the alternative, shall mean such form of communication as
may have come into general use for the dissemination of information of similar
import. In the event that successive weekly publications in an Authorized
Publication are required hereunder they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and in the same or in
different Authorized Publications. In case, by reason of the suspension of
publication of any Authorized Publication, or by reason of any other cause, it
shall be impractical without extraordinary expense to make publication of any
notice in an Authorized Publication as required by this Indenture, then such
method of
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publication or notification as shall be made with the approval of the Trustee
shall be deemed the equivalent of the required publication of such notice in an
Authorized Publication.
"Authorized Purposes" means the authentication and delivery of
Bonds, the release of property or the withdrawal of cash under any of the
provisions of this Indenture.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by
the Corporate Secretary (or Secretary) or an Assistant Corporate Secretary (or
Assistant Secretary) of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Bonded" has the meaning specified in Section 1.02(a).
"Bond Register" and "Bond Registrar" have the respective
meanings specified in Section 3.05(a).
"Bonds" means any bonds authenticated and delivered
under this Indenture.
"Business Day", when used with respect to a Place of Payment
or any other particular location specified in the Bonds or this Indenture, means
any day, other than a Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other location are
generally authorized or required by law, regulation or executive order to remain
closed, except as may be otherwise specified as contemplated by Section 3.01.
"Class "A" Bonds" means bonds or other obligations now or
hereafter issued and Outstanding under the 1930 Mortgage or any other Class "A"
Mortgage.
"Class "A" Mortgage" means, collectively, the 1930 Mortgage
and each other mortgage or deed of trust or similar indenture entered into by
any corporation that is subsequently merged into or consolidated with the
Company and hereafter designated an additional Class "A" Mortgage in an
indenture supplemental hereto executed and delivered in accordance with Section
7.06.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
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Indenture Act, then the body (if any) performing such duties at such time.
"Company" means Ohio Edison Company, a corporation of the
State of Ohio, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Order" or "Company Request" means a written order or
request signed in the name of the Company by an Authorized Executive Officer and
delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, New York, New York 10286 Attention: Corporate Trust
Administration.
"Cost" with respect to Property Additions has the meaning
specified in Section 1.04(c).
"Customary Exceptions" means, with respect to any Opinion of
Counsel required to be delivered hereunder, such exceptions to opinions as are
customarily expressed in opinions of counsel rendered in connection with similar
transactions at the time such Opinion of Counsel is to be delivered and, in any
event, shall include exceptions based upon limitations imposed by (a)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws relating to or affecting mortgagees' and other creditors' rights, (b)
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing and (c) laws affecting remedies for the enforcement of
security interests.
"Defaulted Interest" has the meaning specified in Section
3.07(b).
"Discount Bond" means any Bond which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Eligible Obligations" means:
(a) with respect to Bonds denominated in Dollars,
Government Obligations; or
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(b) with respect to Bonds denominated in a currency other
than Dollars or in a composite currency, such other obligations or
instruments as shall be specified with respect to such Bonds, as
contemplated by Section 3.01.
"Engineer" means a Person engaged in the engineering
profession or otherwise qualified to pass on engineering matters (including,
without limitation, a Person licensed as a professional engineer, whether or not
then engaged in the engineering profession) or a Person engaged in the business
of appraising property or otherwise competent to determine the value of the
particular property in question, who, in each case, unless required to be
Independent, may be employed by or Affiliated with the Company.
"Engineer's Certificate" means a certificate signed by an
Authorized Executive Officer and by an Engineer; provided, however, that, in
connection with the release of any property from the Lien of this Indenture, the
Engineer's Certificate as to the Fair Value of such property, and as to the
nonimpairment by reason of such release of the security of this Indenture in
contravention of the provisions hereof, shall be made by an Independent Engineer
if the Fair Value of such property and of all other property released since the
commencement of the then current calendar year, as set forth in the certificates
required by this Indenture, is ten percent (10%) or more of the sum of (a) the
principal amount of the Bonds at the time Outstanding, and (b) the principal
amount of the Class "A" Bonds at the time Outstanding other than Pledged Bonds;
but such a certificate of an Independent Engineer shall not be required in the
case of any release of property, if the Fair Value thereof as set forth in the
certificates required by this Indenture is less than Twenty- five Thousand
Dollars ($25,000) or less than one percent (1%) of the sum of (i) the principal
amount of the Bonds at the time Outstanding, and (ii) the principal amount of
the Class "A" Bonds at the time Outstanding other than Pledged Bonds.
"Event of Default" has the meaning specified in Section 10.01.
"Excepted Property" has the meaning specified in the "Excepted
Property" clause set forth above.
"Fair Value" when applied to property means its value as
determined without deduction for any Prior Liens upon such property and without
deduction to reflect that such property may be of value only to the Company or
another operator of the Mortgaged Property as a whole, which value may be
determined without physical inspection by use of accounting and engineering
records and other data maintained by, or available to, the Company.
"Funded Cash" has the meaning specified in Section 1.02(b).
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"Generally Accepted Accounting Principles" means, with respect
to any computation required or permitted under this Indenture, such accounting
principles as are generally accepted in the United States at the date of such
computation or, at the option of the Company from time to time, at the date of
the execution and delivery of this Indenture or any Class "A" Mortgage which
then remains in effect; provided, however, that in determining generally
accepted accounting principles applicable to the Company for purposes of making
any computation required or permitted hereunder, the Company may, but shall not
be required to, reflect any accounting pronouncement, order, rule or regulation
of any accounting standard setting body, administrative agency, regulatory
authority or other governmental body having jurisdiction over the Company.
"Governmental Authority" means the government of the United
States or any state or territory thereof or of the District of Columbia or of
any county, municipality or other political subdivision of any thereof, or any
department, agency, authority or other instrumentality of any of the foregoing.
"Government Obligations" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States of America, and which are entitled to the benefit of the full
faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in obligations
described in clause (a) above or in any specific interest or principal
payments due in respect thereof; provided, however, that the custodian
of such obligations or specific interest or principal payments shall be
a bank or trust company subject to federal or state supervision or
examination with a combined capital and surplus of at least
$50,000,000; and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to the
holders of such certificates, depositary receipts or other instruments
the full amount received by such custodian in respect of such
obligations or specific payments and shall not be permitted to make any
deduction therefrom.
"Holder" means a Person in whose name a Bond is registered in
the Bond Register.
"Indenture" means this instrument as originally executed, and
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including the terms of particular series of Bonds established as contemplated by
Section 3.01.
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"Independent", when applied to any Person, means such a Person
who (a) does not have any direct material financial interest in the Company or
in any other obligor upon the Bonds or in any Affiliate of the Company or of
such other obligor, (b) is not connected with the Company or such other obligor
as an officer, employee, promoter, underwriter, trustee, partner, director or
any Person performing similar functions, and (c) who is selected by an
Authorized Officer of the Company.
"Independent Engineer's Certificate" means a certificate
signed by an Independent Engineer.
"Interest Payment Date", when used with respect to any Bond,
means the Stated Maturity of an installment of interest on such Bond.
"Investment Securities" means any of the following obligations
or securities on which neither the Company nor an Affiliate thereof is the
obligor: (a) Government Obligations; (b) interest bearing deposit accounts
(which may be represented by certificates of deposit) in national or state banks
(which may include the Trustee or any Paying Agent) having a combined capital
and surplus of not less than Ten Million Dollars ($10,000,000), or savings and
loan associations having total assets of not less than Forty Million Dollars
($40,000,000); (c) bankers' acceptances drawn on and accepted by commercial
banks (which may include the Trustee or any Paying Agent) having a combined
capital and surplus of not less than Ten Million Dollars ($10,000,000); (d)
direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, any state or territory of the United States of
America or the District of Columbia, or any political subdivision of any of the
foregoing, which are rated in any of the three highest rating categories
(without regard to modifiers) by a nationally recognized statistical rating
organization; (e) bonds or other obligations of any agency or instrumentality of
the United States of America; (f) commercial or finance company paper which is
rated in any of the two highest rating categories (without regard to modifiers)
by a nationally recognized statistical rating organization; (g) corporate debt
securities rated in any of the three highest rating categories (without regard
to modifiers) by a nationally recognized statistical rating organization; (h)
repurchase agreements with banking or financial institutions having a combined
capital and surplus of not less than Ten Million Dollars ($10,000,000) (which
may include the Trustee or any Paying Agent) with respect to any of the
foregoing obligations or securities; (i) securities issued by any regulated
investment company (including any investment company for which the Trustee is
the advisor), as defined in Section 851 of the Internal Revenue Code of 1986, as
amended, or any successor section of such Code or successor federal statute,
provided that the portfolio of such investment company is limited to obligations
that are bonds, notes, certificates of indebtedness, treasury bills or other
securities now or hereafter issued, which
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are guaranteed as to principal and interest by the full faith and credit of the
United States of America, which portfolio may include repurchase agreements
which are fully collateralized by any of the foregoing obligations; and (j) any
other obligations or securities which may lawfully and prudently be purchased by
the Trustee.
"Lien" means any mortgage, pledge, security interest,
encumbrance, easement, lease, reservation, restriction, servitude, charge or
similar right or lien of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any filing of, or agreement to give, any financing statement under the
Uniform Commercial Code of any jurisdiction, and any uninsured defect or
irregularity in record title.
"Matured Event of Default", when used with respect to any
Class "A" Mortgage, means the occurrence of any default or any other event under
such Class "A" Mortgage, and the expiration of the applicable grace period, if
any, specified in such Class "A" Mortgage, if the effect of such default or
other event is to accelerate, or to permit the acceleration of, the maturity of
any amount due under such Class "A" Mortgage.
"Maturity", when used with respect to any Bond, means the date
on which the principal of such Bond or an installment of principal becomes due
and payable as provided in such Bond or in this Indenture, whether at the Stated
Maturity, by declaration of acceleration, upon call for redemption or otherwise.
"Mortgaged Property" means as of any particular time all
property which at said time is subject, or is intended by the terms of this
Indenture to be subject, to the Lien of this Indenture.
"Net Earnings Certificate" has the meaning specified in
Section 1.03.
"1930 Mortgage" means the Indenture dated August 1, 1930 from
the Company to Bankers Trust Company, as from time to time amended and
supplemented
"Officer's Certificate" means a certificate signed by an
Authorized Executive Officer.
"Opinion of Counsel" means a written opinion of counsel, who
may be employed by or Affiliated with the Company or be counsel to the Company.
"Outstanding", when used:
(a) with respect to Bonds, means, as of the date of
determination, all Bonds theretofore authenticated and delivered under
this Indenture, except:
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(i) Bonds theretofore paid, retired, redeemed,
discharged or canceled, or delivered to the Trustee for
cancellation;
(ii) Bonds deemed to have been paid in accordance
with Section 9.01;
(iii) Bonds deposited with or held in pledge by the
Trustee under any of the provisions of this Indenture,
including any so held under any sinking, improvement,
maintenance, replacement or analogous fund; and
(iv) Bonds which have been paid pursuant to Section
3.06 or in exchange for or in lieu of which other Bonds have
been authenticated and delivered pursuant to this Indenture,
other than any such Bonds in respect of which there shall have
been presented to the Trustee proof satisfactory to it and the
Company that such Bonds are held by a bona fide purchaser in
whose hands such Bonds are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of
the requisite principal amount of the Bonds Outstanding under this
Indenture, or the Outstanding Bonds of any series or Tranche, have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder or whether or not a quorum is present at a meeting of
Holders of Bonds:
(x) Bonds owned by the Company or any other
obligor upon the Bonds or any Affiliate of the Company or of
such other obligor (unless the Company, such Affiliate or such
obligor owns all Bonds Outstanding under this Indenture, or
all Outstanding Bonds of each such series and each such
Tranche, as the case may be, determined without regard to this
clause (x)) shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only
Bonds which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Bonds so owned which have
been pledged in good faith may be regarded as Outstanding if
it is established to the reasonable satisfaction of the
Trustee that the pledgee, and not the Company or any such
other obligor or Affiliate of either thereof, has the right so
to act with respect to such Bonds and that the pledgee is not
the Company or any other obligor upon the Bonds or any
Affiliate of the Company or of such other obligor; and
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(y) the principal amount of a Discount Bond that
shall be deemed to be Outstanding for such purposes shall be
the amount of the principal thereof that would be due and
payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 10.02(a); and
(b) with respect to Class "A" Bonds, has the meaning
specified in the related Class "A" Mortgage; provided, however, that in
determining whether the Pledged Bonds constitute a majority in
aggregate principal amount of the Class "A" Bonds Outstanding under a
Class "A" Mortgage for purposes of Section 7.05(b), Class "A" Bonds
issued after the date of this Indenture (other than Pledged Bonds or
Class "A" Bonds issued to replace any mutilated, lost, destroyed or
stolen Class "A" Bonds issued prior to the date of this Indenture or to
effect exchanges and transfers of Class "A" Bonds issued prior to the
date of this Indenture) shall be disregarded and deemed not to be
Outstanding.
"Paying Agent" means any Person, including the Company or an
Affiliate of the Company, authorized by the Company to pay the principal of and
premium, if any, or interest, if any, on any Bonds on behalf of the Company.
"Periodic Offering" means an offering of Bonds of a series
from time to time any or all of the specific terms of which Bonds, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents at or about
the time of the issuance of such Bonds.
"Permitted Liens" means, at any time, any of the following:
(a) the Lien of this Indenture and all Liens and
encumbrances junior thereto;
(b) Liens for taxes, assessments and other governmental
charges or requirements not delinquent or which are currently being
contested in good faith by appropriate proceedings;
(c) mechanics', workmen's, repairmen's, materialmen's,
warehousemen's and carriers' Liens, Liens or privileges of any
employees of the Company for salary or wages earned, but not yet
payable, and other Liens, including without limitation Liens for
worker's compensation awards, arising in the ordinary course of
business for charges or requirements which are not delinquent or which
are being contested in good faith and by appropriate proceedings;
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(d) any attachment, judgment and other similar Lien
arising in connection with court proceedings (i) in an amount not in
excess of the greater of Five Million Dollars ($5,000,000) or three
percent (3%) of the principal amount of the sum of (x) the principal
amount of Bonds Outstanding at the time such attachment, judgment or
Lien arises, and (y) the principal amount of the Class "A" Bonds
Outstanding at the time such attachment, judgment or Lien arises, other
than Pledged Bonds, or (ii) with respect to which the Company shall (A)
in good faith be prosecuting an appeal or other proceeding for review
and with respect to which the Company shall have secured a stay of
execution pending such appeal or other proceeding, or (B) have the
right to prosecute an appeal or other proceeding for review;
(e) easements, leases, reservations or other rights of
others in, on or over, and laws, regulations and restrictions
affecting, and defects and irregularities in record title to, the
Mortgaged Property or any part thereof; provided, however, that such
easements, leases, reservations, rights, laws, regulations,
restrictions, defects and irregularities do not in the aggregate
materially impair the use by the Company of the Mortgaged Property
considered as a whole for the purposes for which it is held by the
Company;
(f) any defects or irregularities in title to any
rights-of-way or to any real estate used or to be used primarily for
right-of-way purposes or held under lease, easement, license or similar
right; provided, however, that (i) the Company shall have obtained from
the apparent owner of the lands or estates therein covered by any such
right-of-way a sufficient right, by the terms of the instrument
granting such right-of-way, lease, easement, license or similar right,
to the use thereof for the purpose for which the Company acquired the
same, (ii) the Company has power under eminent domain, or similar
statutes, to remove such defects or irregularities, or (iii) such
defects or irregularities may be otherwise remedied without undue
effort or expense;
(g) Liens securing indebtedness neither created, assumed
nor guaranteed by the Company, nor on account of which it customarily
pays interest, upon property of the Company, existing at the date of
the execution and delivery of this Indenture, or, as to property
hereafter acquired, at the time of the acquisition thereof by the
Company;
(h) leases existing at the date of the execution and
delivery of this Indenture affecting property owned by the Company at
said date and renewals and extensions thereof and leases for a term of
not more than fifteen (15) years (including extensions or renewals at
the option of the
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tenant) affecting property acquired by the Company after said date;
(i) any Lien vested in any lessor, licensor or permitter
for rent to become due or for other obligations or acts to be
performed, the payment of which rent or the performance of which other
obligations or acts is required under leases, subleases, licenses or
permits, so long as the payment of such rent or the performance of such
other obligations or acts is not delinquent or is being contested in
good faith and by appropriate proceedings;
(j) any controls, restrictions, obligations, duties or
other burdens imposed by any federal, state, municipal or other law, or
by any rule, regulation or order of any Governmental Authority, upon
any property of the Company or the operation or use thereof or upon the
Company with respect to any of its property or the operation or use
thereof or with respect to any franchise, grant, license, permit or
public purpose requirement, or any rights reserved to or otherwise
vested in any Governmental Authority to impose any such controls,
restrictions, obligations, duties or other burdens;
(k) Liens granted on air or water pollution control,
sewage or solid waste disposal, or other similar facilities of the
Company in connection with the issuance of pollution control revenue
bonds, in connection with financing the cost of, or the construction or
acquisition of, such facilities;
(l) any right which any Governmental Authority may have
by virtue of any franchise, license, contract or statute to purchase,
or designate a purchaser of or order the sale of, any property of the
Company upon payment of cash or reasonable compensation therefor or to
terminate any franchise, license or other rights or to regulate the
property and business of the Company;
(m) any Liens which have been bonded for the full amount
in dispute or for the payment of which other adequate security
arrangements have been made;
(n) party-wall agreements and agreements for and
obligations relating to the joint or common use of property owned
solely by the Company or owned by the Company in common or jointly with
one or more parties;
(o) Liens securing indebtedness incurred by a Person,
other than the Company, which indebtedness has been neither assumed nor
guaranteed by the Company nor on which it customarily pays interest,
existing on property which the Company owns jointly or in common with
such Person or such Person and others, if there is a bar against
partition of such property, which would preclude the sale of such
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property by such other Person or the holder of such Lien without the
consent of the Company;
(p) Liens in favor of a government or governmental entity
securing (i) payments pursuant to a statute (other than taxes and
assessments), or (ii) indebtedness incurred to finance all or part of
the purchase price or Cost of construction of the property subject to
such Lien;
(q) any other Liens or encumbrances of whatever nature or
kind which do not, individually or in the aggregate, materially impair
the Lien of this Indenture or the security afforded thereby for the
benefit of the Bondholders, as evidenced by an Opinion of Counsel to
such effect;
(r) any trustee's Lien hereunder; and
(s) Prepaid Liens.
"Person" means any individual, corporation, association,
partnership, joint venture, trust or unincorporated organization or any
Governmental Authority.
"Place of Payment" when used with respect to the Bonds of any
series, or any Tranche thereof, means the place or places, specified as
contemplated by Section 3.01, at which, subject to Section 6.02, principal of
and premium, if any, and interest, if any, on the Bonds of such series or
Tranche are payable upon presentation.
"Pledged Bonds" means Class "A" Bonds issued and delivered to,
and held by, the Trustee hereunder.
"Predecessor Bond" of any particular Bond means every previous
Bond evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for the purposes of this definition, any Bond
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Bond shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Bond.
"Prepaid Lien" means any Lien securing indebtedness for the
payment of which money in the necessary amount (taking into consideration the
amount of income reasonably projected to be earned on such amount) shall have
been irrevocably deposited in trust with the trustee or other holder of such
Lien; provided, however, that if such indebtedness is to be redeemed or
otherwise prepaid prior to the stated maturity thereof, any notice requisite to
such redemption or prepayment shall have been given in accordance with the
mortgage or other instrument creating such Lien or irrevocable instructions to
give such notice shall have been given to such trustee or other holder.
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"Primary Purposes of the Company's Business" means the
generation, production, transmission or distribution of electric energy.
"Prior Lien" means each Class "A" Mortgage and any other
mortgage, lien, charge, encumbrance, security interest on or in, or pledge of,
any Mortgaged Property existing both at and immediately prior to the time of the
acquisition by the Company of such Mortgaged Property, or created as a purchase
money mortgage on such Mortgaged Property at the time of, or in connection with,
its acquisition by the Company, in each case ranking prior to or on a parity
with the Lien of this Indenture.
"Property Additions" has the meaning specified in Section
1.04(a).
"Redemption Date", when used with respect to any Bond to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Bond to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Bonds of any series means the date specified for that
purpose as contemplated by Section 3.01.
"Required Currency" has the meaning specified in Section 3.11.
"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Retired Bonds" means any Bonds authenticated and delivered
under this Indenture which (a) no longer remain Outstanding by reason of the
applicability of subclause (i) or (ii) of clause (a) in the definition of
"Outstanding", (b) have not been made the basis under any of the provisions of
the Indenture of one or more Authorized Purposes, and (c) have not been, and are
not to be, paid, redeemed, purchased or otherwise retired by the application
thereto of Funded Cash.
"Special Record Date" for the payment of any Defaulted
Interest on the Bonds of any series means a date fixed by the Trustee pursuant
to Section 3.07.
"Stated Interest Rate" means a rate more than zero at which an
obligation by its terms is stated to bear simple interest, which rate may be a
variable rate. Any calculation or other determination to be made under this
Indenture by reference to the Stated Interest Rate on a Bond shall be made
without regard to the effective interest cost to the Company of such Bond
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and without regard to the Stated Interest Rate on, or the effective cost to the
Company of, any other obligation for which such Bond is pledged or otherwise
delivered as security.
"Stated Maturity", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means the date on
which the principal of such obligation or such installment of principal (whether
as a result of scheduled amortization or otherwise) or interest is due and
payable (without regard to any provisions for redemption, prepayment,
acceleration, purchase or extension).
"Successor Corporation" has the meaning set forth in Section
13.01(b).
"Tranche" means those Bonds of a series which, as among
themselves, have identical terms and the same original date of issuance but
which, as to other Bonds of the same series, differ as to one or more terms or
have a different original date of issuance.
"Trust Indenture Act" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in force at such time.
"Trustee" means The Bank of New York, a corporation organized
and existing under the laws of the State of New York, until a successor Trustee
shall have become such with respect to one or more series of Bonds pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Bonds of any
series shall mean the Trustee with respect to Bonds of that series.
"Unbonded" as applied to Bonds (including Retired Bonds),
Class "A" Bonds or Property Additions means that such Bonds, Class "A" Bonds or
Property Additions are not Bonded.
"United States" means the United States of America, its
territories, its possessions and other areas subject to its political
jurisdiction.
Section 1.02. Bonded; Funded Cash.
(a) "Bonded" as applied to Bonds (including Retired
Bonds), Class "A" Bonds or Property Additions means that such Bonds,
Class "A" Bonds or Property Additions are within one or more of the
following classes:
(i) the aggregate amount of Property Additions
which have been used as a basis for the authentication and
delivery of Bonds pursuant to Section 4.03 or the
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withdrawal of cash pursuant to Section 4.05(c) or Section
8.06(a)(i);
(ii) Bonds which have been used as a basis for the
authentication and delivery of Bonds pursuant to Section 4.04
or the withdrawal of cash pursuant to Section 4.05(c) or
Section 8.06(a)(ii), and Bonds paid, purchased or redeemed
with money used or applied by the Trustee pursuant to Section
8.06(a)(v);
(iii) Bonds, Class "A" Bonds and Property Additions
which have been used as the basis of the release of property
from the Lien of this Indenture;
(iv) Bonds, Class "A" Bonds and Property Additions
which have been allocated or used as a basis for any credit
against the requirements of any sinking, improvement,
maintenance, replacement or analogous fund for any series or
Tranche of Bonds; provided, however, that any such Bonds,
Class "A" Bonds or Property Additions so allocated or used
shall be reinstated as Unbonded when all of the Bonds of the
series or Tranche of Bonds in connection with such fund was
established are retired;
(v) Class "A" Bonds which (x) have been used as a
basis for the authentication and delivery of Bonds pursuant to
Section 4.02 or (y) can not currently be used as a basis for
the issuance of Class "A" Bonds under a Class "A" Mortgage;
and
(vi) the aggregate amount of Property Additions
designated in an Engineer's Certificate delivered to the
Trustee pursuant to clause (iii) of Section 7.07(a) to be
deemed to have been made the basis of the authentication and
delivery of Bonds then Outstanding.
(b) "Funded Cash" means:
(i) cash, held by the Trustee hereunder, to the
extent that it represents the proceeds of insurance on, or
cash deposited in connection with the release of, property, or
the proceeds of the release of obligations secured by a
purchase money mortgage which obligations have been delivered
to the Trustee pursuant to Article Eight and used as a credit
in any application for the release of property hereunder, or
the proceeds of payment to the Trustee on account of the
principal of obligations secured by a purchase money mortgage
which obligations have been delivered to it pursuant to
Article Eight and used as a credit in any application for the
release of property hereunder, all subject, however, to the
provisions of Section 8.06(c);
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(ii) any cash deposited with the Trustee under
Section 4.05; and
(iii) any cash received by the Trustee from the
payment of the principal of Pledged Bonds.
Section 1.03. Net Earnings Certificate; Adjusted Net
Earnings; Annual Interest Requirements.
A "Net Earnings Certificate" means a certificate signed by an
Authorized Executive Officer and an accountant (who may be employed by or
Affiliated with the Company), stating:
(a) the "Adjusted Net Earnings" of the Company for a
period of twelve (12) consecutive calendar months within the eighteen
(18) calendar months immediately preceding the first day of the month
in which the Company Order requesting the authentication and delivery
under this Indenture of Bonds is delivered to the Trustee, specifying:
(i) its operating revenues (which may include
revenues of the Company subject when collected or accrued to
possible refund at a future date);
(ii) its operating expenses, excluding (A) expenses
for taxes on income or profits and other taxes measured by, or
dependent on, net income, (B) provisions for reserves for
renewals, replacements, depreciation, depletion or retirement
of property (or any expenditures therefor), or provisions for
amortization of property, (C) expenses or provisions for
interest on any indebtedness of the Company, for the
amortization of debt discount, premium, expense or loss on
reacquired debt, for any maintenance and replacement,
improvement or sinking fund or other device for the retirement
of any indebtedness, or for other amortization, (D) expenses
or provisions for any non-recurring charge to income or to
retained earnings of whatever kind or nature (including
without limitation the recognition of expense or impairment
due to the non-recoverability of assets or expense), whether
or not recorded as a non-recurring charge in the Company's
books of account, and (E) provisions for any refund of
revenues previously collected or accrued by the Company
subject to possible refund;
(iii) the amount remaining after deducting the
amount required to be stated in such certificate by clause
(ii) above from the amount required to be stated therein by
clause (i) above;
(iv) its other income, net of related expenses
(excluding expenses or provisions for any non-recurring charge
to the income of retained earnings of the entity
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which is the source of such other income of whatever kind or
nature (including without limitation the recognition of
expense or impairment due to the non- recoverability of assets
or expense), whether or not recorded and a non-recurring
charge in such entity's books of account), which other income
may include any portion of the allowance for funds used during
construction and other deferred costs (or any analogous
amounts) which is not included in "other income" (or any
analogous item) in the Company's books of account; and
(v) the Adjusted Net Earnings of the Company for
such period of twelve (12) consecutive calendar months (being
the sum of the amounts required to be stated in such
certificate by clauses (iii) and (iv) above); and
(b) the "Annual Interest Requirements", being the
interest requirements for one year, at the respective Stated Interest
Rates, if any, borne prior to Maturity, upon:
(i) all Bonds Outstanding hereunder at the date of
such certificate, except any for the payment or redemption of
which the Bonds applied for are to be issued; provided,
however, that, if Outstanding Bonds of any series bear
interest at a variable rate or rates, then the interest
requirement on the Bonds of such series shall be determined by
reference to the rate or rates in effect on the day
immediately preceding the date of such certificate;
(ii) all Bonds then applied for in pending
applications for the original issuance of Bonds, including the
application in connection with which such certificate is made;
provided, however, that if Bonds of any series are to bear
interest at a variable rate or rates, then the interest
requirement on the Bonds of such series shall be determined by
reference to the rate or rates to be in effect at the time of
the initial authentication and delivery of such Bonds; and
provided, further, that the determination of the interest
requirement on Bonds of a series subject to a Periodic
Offering shall be further subject to the provisions of clause
(iv) of Section 4.01(a);
(iii) all Class "A" Bonds Outstanding under Class
"A" Mortgages at the date of such certificate, except any
Pledged Bonds and except any for the payment or redemption of
which the Bonds applied for are to be issued; provided,
however, that, if the Outstanding Class "A" Bonds of any
series bear interest at a variable rate or rates, then the
interest requirement on the Class "A" Bonds of such series
shall be determined by reference to the rate or rates in
effect
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on the day immediately preceding the date of such
certificate; and
(iv) the principal amount of all other indebtedness
(except (A) Pledged Bonds, (B) indebtedness of the Company the
repayment of which supports or is supported by other
indebtedness included in Annual Interest Requirements pursuant
to one of the other clauses of this definition, (C)
indebtedness for the payment of which the Bonds applied for
are to be issued, and (D) indebtedness secured by a Prepaid
Lien prior to the Lien of this Indenture upon property subject
to the Lien of this Indenture), outstanding on the date of
such certificate and secured by a Lien on a parity with or
prior to the Lien of this Indenture upon property subject to
the Lien of this Indenture, if such indebtedness has been
issued, assumed or guaranteed by the Company or if the Company
customarily pays the interest upon the principal thereof;
provided, however, that if any such indebtedness bears
interest at a variable rate or rates, then the interest
requirement on such indebtedness shall be determined by
reference to the rate or rates in effect on the day
immediately preceding the date of such certificate.
In any case where a Net Earnings Certificate is required as a
condition precedent to the authentication and delivery of Bonds, such
certificate shall be accompanied by a certificate signed by an Independent
public accountant if the aggregate principal amount of Bonds then applied for
plus the aggregate principal amount of Bonds authenticated and delivered
hereunder since the commencement of the then current calendar year (other than
those with respect to which a Net Earnings Certificate is not required, or with
respect to which a Net Earnings Certificate accompanied by a certificate signed
by an Independent public accountant has previously been furnished to the
Trustee) is ten percent (10%) or more of the sum of (a) the principal amount of
the Bonds at the time Outstanding, and (b) the principal amount of the Class "A"
Bonds at the time Outstanding other than Pledged Bonds, which certificate shall
provide that such Independent public accountant has reviewed the Net Earnings
Certificate and that such Independent public accountant has no knowledge that
any statements in such Net Earnings Certificate are not true; but no such
certificate need be signed by an Independent public accountant, as to dates or
periods not covered by annual reports required to be filed by the Company, with
respect to conditions precedent which depend upon a state of facts as of a date
or dates or for a period or periods different from that required to be covered
by such annual reports.
Section 1.04. Property Additions; Cost.
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(a) "Property Additions" means, as of any particular
time, any item, unit or element of property which at such time is owned
by the Company and is subject to the Lien of this Indenture. Property
Additions:
(i) need not consist of a specific or completed
development, plant, betterment, addition, extension,
improvement or enlargement, but may include construction work
in progress and property in the process of purchase insofar as
the Company shall have acquired legal title to such property,
and may include the following:
(A) fractional and other undivided
interests of the Company in property owned jointly or
in common with other Persons, whether or not there
are with respect to such property, other agreements
or obligations on the part of the Company, if there
is a bar against partition of such property which
would preclude the sale of such property by any or
all of such other Persons or the holder or holders of
any Lien or Liens on the interest of any of such
other Persons in such property, without the consent
of the Company;
(B) engineering, economic, environmental,
financial, geological and legal or other surveys,
data processing equipment and software, preliminary
to or associated with the acquisition or construction
of property included or intended to be included in
the Mortgaged Property, provided that any such
property is not Excepted Property or, if it is
Excepted Property, such property has been subjected
to the Lien and operation of this Indenture as
provided in Granting Clause Third;
(C) paving, grading and other improvements
to, under or upon highways, bridges, parks or other
public property of analogous character required for
or in connection with the installation or repair of
overhead, surface or underground facilities and paid
for and used or to be used by the Company,
notwithstanding that the Company may not hold legal
title thereto;
(D) property located over, on or under
property owned by other Persons, including
governmental or municipal agencies, bodies or
subdivisions, under permits, licenses, easements,
franchises and other similar privileges, if the
Company shall have the right to remove the same;
(E) intangible property (including any
acquisition premium paid in connection with the
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acquisition of any property), regardless of whether
the Cost thereof is permitted to be recorded in the
plant account of the Company or is permitted to be
recovered by the Company through the rates that it
charges its customers; and
(ii) may include renewals, replacements and
substitution of property not excluded from the definition of
"Property Additions"; but
(iii) shall not include:
(A) Excepted Property (other than Excepted
Property which has been subjected to the Lien and
operation of this Indenture as provided in Granting
Clause Third); or
(B) any property the cost of acquisition
or construction of which is properly chargeable to an
operating expense account of the Company.
(b) When any Property Additions are certified to the
Trustee as the basis of any Authorized Purpose (except as otherwise
provided in Section 8.06):
(i) there shall be deducted from the Cost or Fair
Value thereof to the Company, as the case may be (as of the
date so certified), an amount (which amount shall not be less
than zero) equal to the Cost (or as to Property Additions of
which the Fair Value to the Company at the time the same
became Property Additions was less than the Cost as determined
pursuant to subsection (c) of this Section, then such Fair
Value in lieu of Cost) of all Property Additions retired on
and after the date of this Indenture (other than the Property
Additions, if any, in connection with the application for
release of which such certificate is filed), minus the
aggregate Cost of all Property Additions acquired or
constructed by the Company which are included in the Mortgaged
Property after the date of this Indenture; and
(ii) there may, at the option of the Company, be
added to the Cost of Property Additions acquired or
constructed by the Company which are included in the Mortgaged
Property after the date of this Indenture, the sum of:
(A) the principal amount of any
obligations secured by a purchase money mortgage and
any cash (other than proceeds of such purchase money
obligations), not already included in such Cost,
received by the Trustee representing the proceeds
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of insurance on, or of the release or other
disposition of, Property Additions retired; and
(B) the principal amount of any Bond or
Bonds, or portion of such principal amount, not
already included in such Cost, the right to the
authentication and delivery of which under the
provisions of Section 4.04 and subclause (B) of
clause (iii) of Section 8.05(a) shall at any time
theretofore have been waived as the basis of the
release of Property Additions retired.
(c) The term "Cost" with respect to Property Additions
made the basis for one or more Authorized Purposes shall mean the sum
of (i) any cash or its equivalent forming a part of such Cost, plus all
costs and allowances for funds used during the construction thereof and
other deferred costs relating to such construction, but only to the
extent of the greater of the amount permitted by Generally Accepted
Accounting Principles or the amount permitted by accounting regulations
or orders issued by any governmental regulatory commission, (ii) an
amount equivalent to the fair market value in cash (as of the date of
delivery) of any securities or other property delivered in payment
therefor or for the acquisition thereof, (iii) the principal amount of
any obligations secured by a Prior Lien (other than a Class "A"
Mortgage) upon such Property Additions outstanding at the time of the
acquisition of such Property Additions, and (iv) the principal amount
of any other indebtedness incurred or assumed as all or part of the
Cost to the Company of such Property Additions; provided, however,
that, notwithstanding any other provision of this Indenture, in any
case where Property Additions shall have been acquired (otherwise than
by construction) by the Company without any consideration consisting of
cash, securities or other property or the incurring or assumption of
indebtedness, no determination of Cost shall be required, and wherever
in this Indenture provision is made for Cost or Fair Value, the Cost,
in such case, shall mean an amount equal to the greater of (x) the Fair
Value thereof, or (y) the book value of such acquired Property
Additions at the time of the acquisition thereof.
(d) If any Property Additions are shown by the Engineer's
Certificate provided for in clause (ii) of Section 4.03(b) to include
property which has been used or operated by others than the Company in
a business similar to that in which it has been or is to be used or
operated by the Company, the Cost thereof may include the amount of
cash or the value of any portion of the securities paid or delivered
for any goodwill or going concern value rights simultaneously acquired
for which no separate or distinct consideration shall have been paid or
apportioned, and in such case the term Property Additions as defined
herein may include such goodwill and going concern value rights,
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regardless of whether such Cost is permitted to be recorded in the
plant account of the Company or is permitted to be recovered by the
Company through the rates that it charges its customers.
(e) For the purposes of the deductions required by this
Section, the Cost or the Fair Value to the Company of Property
Additions retired shall be the Cost or the Fair Value thereof to the
Company at the time such property became Property Additions.
(f) All Property Additions which shall be retired,
abandoned, destroyed, released or otherwise disposed of (including
damaged or destroyed Property Additions (or portions thereof) for which
the Company shall have received proceeds pursuant to Section 6.07(b)
but with respect to which the Company shall have elected not to rebuild
or repair) shall for the purpose of this Section 1.04 be deemed
Property Additions retired and for other purposes of this Indenture
shall thereupon cease to be Property Additions, but may at any time
thereafter again become Property Additions as provided in this
Indenture. Neither any reduction in the Cost or book value of property
recorded in the plant account of the Company, nor the transfer of any
amount appearing in such account to intangible or adjustment accounts,
otherwise than in connection with actual retirements of physical
property abandoned, destroyed, released or disposed of, and otherwise
than in connection with the removal of such property in its entirety
from the plant account, shall be deemed to constitute a retirement of
Property Additions.
Section 1.05. Compliance Certificates and Opinions.
(a) Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the
Company shall, if requested by the Trustee, furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have
been complied with, it being understood that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to
such particular application or request, no additional certificate or
opinion need be furnished.
(b) Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
shall include:
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(i) a statement that each individual or counsel
signing such certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the opinion of each such
individual or counsel, he or she has made such examination or
investigation as is necessary to enable him or her to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such individual or counsel, such condition or covenant
has been complied with.
(c) Any Opinion of Counsel provided for herein may be
based, insofar as it relates to factual matters, upon statements made
by the Company in documents filed with any governmental regulatory
commission or upon a certificate or opinion of, or representations by,
an officer or officers of the Company, unless, in the case of such a
certificate or opinion, such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous. If, in
order to render any Opinion of Counsel provided for herein, the signer
thereof shall deem it necessary that additional facts or matters be
stated in any Engineer's Certificate provided for herein, then such
Engineer's Certificate may state all such additional facts or matters
as the signer of such Opinion of Counsel may request. In addition, in
giving any Opinion of Counsel provided for herein, counsel may rely
upon (i) prior opinions of counsel for the Company, (ii) opinions of
special counsel for the Company and its subsidiaries, (iii) opinions of
in-house counsel for any of the Company's divisions or subsidiaries,
and (iv) title insurance policies, title insurance commitments and
reports, lien search certificates and other similar evidences of the
existence of liens on property.
Section 1.06. Form of Documents Delivered to Trustee.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give
an opinion
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with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
(b) Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to the
matters upon which his or her certificate or opinion is based are
erroneous.
(c) Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need
not, be consolidated and form one instrument.
Section 1.07. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by this
Indenture to be made, given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor
signed by such Holders in person or by an agent duly appointed in
writing or, alternatively, may be embodied in and evidenced by the
record of Holders voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders duly
called and held in accordance with the provisions of Article Fifteen,
or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding
by any Person of a Bond, shall be sufficient for any purpose of this
Indenture and (subject to Section 11.01) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall be proved in the
manner provided in Section 15.06.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate
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of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof or may
be proved in any other manner which the Trustee and the Company deem
sufficient. Where such execution is by a signer acting in a capacity
other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his or her
authority.
(c) The principal amount (except as otherwise
contemplated in clause (y) of the proviso to clause (a) of the
definition of "Outstanding") and serial numbers of Bonds held by any
Person, and the date of holding the same, shall be proved by the Bond
Register.
(d) Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of a Holder shall bind
every future Holder of the same Bond and the Holder of every Bond
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Bond.
(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite percentage
of principal amount of Bonds for the action contemplated by such
instruments, any such instrument executed and delivered by or on behalf
of the Holder may be revoked with respect to any or all of such Bonds
by written notice by such Holder or any subsequent Holder, proven in
the manner in which such instrument was proven.
(f) Bonds of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any action taken by such Act of Holders. If the Company
shall so determine, new Bonds of any series, or any Tranche thereof, so
modified as to conform, in the opinion of the Trustee and the Company,
to such action may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Bonds of such series or Tranche.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by Company Order, fix in
advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If
such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other
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Act may be given before or after such record date, but only the Holders
of record at the close of business on the record date shall be deemed
to be Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Bonds have authorized or agreed
or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding
Bonds shall be computed as of the record date.
Section 1.08. Notices, Etc. to Trustee and Company.
(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made, given or furnished
to, or filed with, the Trustee by any Holder or by the Company, or the
Company by the Trustee or by any Holder, shall be sufficient for every
purpose hereunder (unless otherwise expressly provided herein) if the
same shall be in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by telecopy
or other direct written electronic means, or transmitted by registered
or certified mail or reputable overnight courier, charges prepaid to
the applicable address set opposite such party's name below or to such
other address as either party hereto may from time to time designate:
If to the Trustee, to:
The Bank of New York
101 Barclay Street - 21 West
New York, New York 10286
Attention: Corporate Trust Administration
If to the Company, to:
Ohio Edison Company
76 South Main Street
Akron, Ohio 44308
Attention: Corporate Secretary
(b) Any communication contemplated herein shall be deemed
to have been made, given, furnished and filed if personally delivered,
on the date of delivery, if transmitted by telecopy or other direct
written electronic means, on the date of transmission, and if
transmitted by registered or certified mail or reputable overnight
courier, on the date of receipt.
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Section 1.09. Notice to Holders of Bonds; Waiver.
(a) Except as otherwise expressly provided herein, where
this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given, and shall be deemed given, to Holders if
in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in
the Bond Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to
give such notice to Holders by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
(c) Any notice required by this Indenture may be waived
in writing by the Person entitled to receive such notice, either before
or after the event otherwise to be specified therein, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance
upon such waiver.
Section 1.10. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or
conflicts with any duties under any required provision of the Trust Indenture
Act imposed hereon by Section 318(c) thereof, or any successor section of such
Act, such required provision shall control.
Section 1.11. Effect of Headings and Table of Contents.
The Article and Section headings in this Indenture and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
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Section 1.12. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.13. Separability Clause.
In case any provision in this Indenture or the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.14. Benefits of Indenture.
Nothing in this Indenture or the Bonds, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 1.15. Governing Law.
This Indenture and the Bonds shall be governed by and
construed in accordance with the laws of the State of Ohio, except (a) to the
extent that the law of any other jurisdiction shall be mandatorily applicable,
(b) to the extent that perfection and the effect of perfection of the Lien of
this Indenture may be governed by the laws of states other than the State of
Ohio as provided by law, and (c) that the rights, duties, obligations,
privileges and immunities of the Trustee shall be governed by the laws of the
State of New York, in the case of The Bank of New York, and of the jurisdiction
in which the Corporate Trust Office of the Trustee is located in all other
cases.
Section 1.16. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Bond shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Bonds other than a provision in Bonds of any series, or any Tranche thereof, or
in the indenture supplemental hereto which establishes the terms of such Bonds
or Tranche, which specifically states that such provision shall apply in lieu of
this Section) payment of interest or principal and premium, if any, need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, and, if such payment
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is made or duly provided for on such Business Day, no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such Business Day.
Section 1.17. Investment of Cash Held by Trustee.
Any cash held by the Trustee or any Paying Agent under any
provision of this Indenture shall, except as otherwise provided in Article Nine,
at the request of the Company evidenced by Company Order, be invested or
reinvested in Investment Securities designated by the Company, and any interest
on such Investment Securities shall be promptly paid over to the Company as
received free and clear of the Lien of this Indenture or any Lien arising by or
through the Trustee; provided, however, that following the occurrence and during
the continuance of an Event of Default, the Trustee shall not pay such interest
over to the Company, but shall instead hold such interest as part of the
Mortgaged Property. Such Investment Securities shall be held subject to the same
provisions hereof as the cash used to purchase the same, but upon a like request
of the Company shall be sold, in whole or in designated part, and the proceeds
of such sale shall be held subject to the same provisions hereof as the cash
used to purchase the Investment Securities so sold. If such sale shall produce a
net sum less than the cost of the Investment Securities so sold, the Company
shall pay to the Trustee or any such Paying Agent, as the case may be, such
amount in cash as, together with the net proceeds from such sale, shall equal
the cost of the Investment Securities so sold, and if such sale shall produce a
net sum greater than the cost of the Investment Securities so sold, the Trustee
or any such Paying Agent, as the case may be, shall promptly pay over to the
Company an amount in cash equal to such excess, free and clear of any Lien.
Section 1.18. Approval of Signers.
The acceptance by the Trustee of any document, the signer of
which is required by some provision hereof to be approved by the Trustee, shall
be sufficient evidence of its approval of the signer within the meaning of this
Indenture.
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ARTICLE TWO
BOND FORMS
Section 2.01. Forms Generally.
(a) The definitive Bonds of each series shall be in
substantially the form or forms thereof established in the indenture
supplemental hereto establishing such series, or in a Board Resolution
establishing such series, or in an Officer's Certificate pursuant to a
supplemental indenture or Board Resolution, in each case with such
appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules
of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Bonds, as evidenced by their
execution of the Bonds. If the form or forms of Bonds of any series are
established in a Board Resolution or in an Officer's Certificate
pursuant to a Board Resolution, such Board Resolution and Officer's
Certificate, if any, shall be delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by clause (ii) of
Section 4.01(a) for the authentication and delivery of such Bonds.
(b) Except as may be otherwise provided pursuant to
Section 3.01, Bonds of each series shall be issuable in registered form
without coupons. The definitive Bonds shall be produced in such manner
as shall be determined by the officers executing such Bonds, as
evidenced by their execution thereof.
Section 2.02. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Bonds of the series designated therein
referred to in the within-mentioned Indenture.
---------------------------
as Trustee
By:________________________
Authorized Signatory
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ARTICLE THREE
THE BONDS
Section 3.01. Limit on Amount of Bonds; Issuable in Series.
(a) The aggregate principal amount of Bonds which may be
authenticated and delivered under this Indenture shall be unlimited.
(b) The Bonds may be issued in one or more series, each
of which series may be issued in Tranches. Subject to subsection (c) of
this Section, there shall be established in one or more indentures
supplemental hereto, or in a Board Resolution, or in an Officer's
Certificate pursuant to an indenture supplemental hereto or a Board
Resolution, prior to the issuance of Bonds of any series:
(i) the title of the Bonds of such series (which
title shall distinguish the Bonds of such series from Bonds of
all other series);
(ii) any limit upon the aggregate principal amount
of the Bonds of such series which may be authenticated and
delivered under this Indenture (except for Bonds authenticated
and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Bonds of such series pursuant to
Section 3.04, 3.05, 3.06, 5.06 or 14.06 and except for any
Bonds which, pursuant to Section 3.03(d), are deemed never to
have been authenticated and delivered hereunder);
(iii) the Person (without specific identification)
to whom interest on the Bonds of such series, or any Tranche
thereof, shall be payable on any Interest Payment Date, if
other than the Person in whose name that Bond (or one or more
Predecessor Bonds) is registered at the close of business on
the Regular Record Date for such interest;
(iv) the date or dates on which the principal of
the Bonds of such series (including any scheduled amortization
payments payable prior to the final Maturity of the Bonds) is
payable;
(v) the rate or rates at which the Bonds of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal,
premium or interest shall bear interest, if any), or any
method or methods by which such rate or rates shall be
determined, the date or dates from which
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such interest shall accrue, the Interest Payment Dates on
which such interest shall be payable and the Regular Record
Date for the interest payable on the Bonds on any Interest
Payment Date; and the basis of computation of interest, if
other than as provided in Section 3.10;
(vi) the place or places where (A) the principal of
(including installments of principal, if any, payable prior to
the final Maturity of the Bonds) and premium, if any, and
interest, if any, on the Bonds of such series, or any Tranche
thereof, shall be payable upon presentation thereof (and, if
payments of principal are to be paid prior to the final
Maturity thereof, the method, if any, of evidencing the
payment of such principal amounts), (B) Bonds of such series,
or any Tranche thereof, may be surrendered for registration of
transfer, (C) Bonds of such series, or any Tranche thereof,
may be surrendered for exchange, and (D) notices and demands
to or upon the Company in respect of the Bonds of such series,
or any Tranche thereof, and this Indenture may be served;
(vii) the period or periods within which, the price
or prices at which and the terms and conditions upon which the
Bonds of such series, or any Tranche thereof, may be redeemed,
in whole or in part, at the option of the Company;
(viii) the obligation, if any, of the Company to
redeem or purchase the Bonds of such series, or any Tranche
thereof, pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and
conditions upon which such Bonds shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(ix) the denominations in which Bonds, if any, of
such series, or any Tranche thereof, shall be issuable if
other than denominations of $1,000 and any integral multiple
thereof;
(x) the currency or currencies, including
composite currencies, in which payment of the principal of and
premium, if any, and interest, if any, on the Bonds of such
series, or any Tranche thereof, shall be payable (if other
than in Dollars); provided, however, that, unless otherwise
expressly provided herein, for purposes of calculations under
this Indenture (including calculations of Annual Interest
Requirements contemplated by Section 1.03 and calculations of
principal amount under Article Four), any amounts denominated
in a currency other than Dollars or in a composite currency
shall be converted to Dollar
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equivalents by calculating the amount of Dollars which could
have been purchased by the amount of such other currency based
(A) on the average of the mean of the buying and selling spot
rates quoted by three banks which are members of the New York
Clearing House Association selected by the Company in effect
at 11:00 A.M. (New York time) in The City of New York on the
fifth Business Day preceding the date of such calculation, or
(B) if on such fifth Business Day it shall not be possible or
practical to obtain such quotations from such three banks, on
such other quotations or alternative methods of determination
as shall be selected by an Authorized Executive Officer and
which shall be reasonably acceptable to the Trustee;
(xi) if the principal of or premium, if any, or
interest, if any, on the Bonds of such series, or any Tranche
thereof, are to be payable, at the election of the Company or
a Holder thereof, in a coin or currency other than that in
which the Bonds are stated to be payable, the period or
periods within which, and the terms and conditions upon which,
such election may be made;
(xii) if the principal of or premium, if any, or
interest, if any, on the Bonds of such series, or any Tranche
thereof, are to be payable, or are to be payable at the
election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or
other property, or the method by which such amount shall be
determined, and the period or periods within which, and the
terms and conditions upon which, any such election may be
made; provided, however, that, notwithstanding any provision
of this Indenture to the contrary, for purposes of
calculations under this Indenture (including without
limitation calculations under Article Four), any such election
shall be disregarded;
(xiii) if the amount of payments of principal of or
premium, if any, or interest, if any, on the Bonds of such
series, or any Tranche thereof, may be determined with
reference to an index or other fact or event ascertainable
outside of this Indenture, the manner in which such amounts
shall be determined;
(xiv) if other than the principal amount thereof,
the portion of the principal amount of Bonds of such series,
or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 10.02(a);
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(xv) the terms, if any, pursuant to which the Bonds
of such series, or Tranche thereof, may be converted into or
exchanged for shares of capital stock or other securities of
the Company or any other Person;
(xvi) the obligations or instruments, if any, which
shall be considered Eligible Obligations in respect of the
Bonds of such series, or any Tranche thereof, denominated in a
currency other than Dollars or in a composite currency, and
any additional or alternative provisions for the reinstatement
of the Company's indebtedness in respect of such Bonds after
the satisfaction and discharge thereof as provided in Section
9.01;
(xvii) if a service charge will be made for the
registration of transfer or exchange of Bonds of such series,
or any Tranche thereof, the amount or terms thereof;
(xviii)any exceptions to Section 1.16, or variation
in the definition "Business Day", with respect to the Bonds of
such series, or any Tranche thereof;
(xix) the terms of any sinking, improvement,
maintenance, replacement or analogous found for any series;
(xx) if the Bonds of a series are to be issued in
global form, (A) any limitations on the rights of the Holder
or Holders thereof to transfer or exchange such Bonds or to
obtain the registration of transfer thereof, (B) any
limitations on the rights of the Holder or Holders thereof to
obtain certificates therefor, and (C) any and all other matter
incidental to the issuance of such Bonds in global form;
(xxi) if the Bonds of a series are to be issuable in
bearer form, any and all matters incidental to form or
ownership of such Bonds not specifically addressed in a
supplemental indenture pursuant to clause (xvii) of Section
14.01(a); and
(xxii) any other terms of the Bonds of such series,
or any Tranche thereof, not inconsistent with the provisions
of this Indenture.
(c) With respect to Bonds of a series subject to a
Periodic Offering, the indenture supplemental hereto or the Board
Resolution, or Officer's Certificate pursuant to an indenture
supplemental hereto or Board Resolution, as the case may be, which
establishes such series may provide
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general terms or parameters for Bonds of such series and provide either
that the specific terms of particular Bonds of such series shall be
specified in a Company Order or that such terms shall be determined by
the Company or its agent in accordance with a Company Order as
contemplated by clause (ii) of Section 4.01(a).
Section 3.02. Denominations.
Unless otherwise provided as contemplated by Section 3.01 with
respect to any series of Bonds, the Bonds of each series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 3.03. Execution, Dating, Certificate of
Authentication.
(a) The Bonds shall be executed on behalf of the Company
by an Authorized Executive Officer, and may have the corporate seal of
the Company affixed thereto or reproduced thereon and attested by any
other Authorized Executive Officer. The signature of any or all of
these officers on the Bonds may be manual or facsimile.
(b) Bonds bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Bonds or did not hold such offices at the date of such
Bonds.
(c) Each Bond shall be dated the date of its
authentication.
(d) No Bond shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Bond a certificate of authentication substantially in
the form provided for herein executed by the Trustee or an
Authenticating Agent by manual signature, and such certificate upon any
Bond shall be conclusive evidence, and the only evidence, that such
Bond has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Bond shall have been authenticated and delivered
hereunder to the Company, or any Person acting on its behalf, but shall
never have been issued and sold by the Company, and the Company shall
deliver such Bond to the Bond Registrar for cancellation or shall
cancel such Bond and deliver evidence of such cancellation to the
Trustee, in each case as provided in Section 3.09, together with a
written statement (which need not comply with Section 1.05 and need not
be accompanied by an Opinion of Counsel) stating that such Bond has
never been issued and sold by the
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Company, for all purposes of this Indenture such Bond shall be deemed
never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits hereof.
Section 3.04. Temporary Bonds.
(a) Pending the preparation of definitive Bonds of any
series, the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Bonds which are printed,
lithographed, typewritten, mimeographed, photocopied or otherwise
produced, in any authorized denomination, substantially of the tenor of
the definitive Bonds in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other variations
as the officers executing such Bonds may determine, as evidenced by
their execution of such Bonds, provided, however, that temporary Bonds
need not recite specific redemption, sinking fund, conversion or
exchange provisions.
(b) After the preparation of definitive Bonds of such
series, the temporary Bonds of such series shall be exchangeable for
definitive Bonds of such series upon surrender of the temporary Bonds
of such series at the office or agency of the Company maintained
pursuant to Section 6.02 in a Place of Payment for such series, without
charge to the Holder. Upon surrender for cancellation of any one or
more temporary Bonds of any series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor definitive
Bonds of the same series, of authorized denominations and of like tenor
and aggregate principal amount.
(c) Until exchanged in full as hereinabove provided, the
temporary Bonds shall in all respects be entitled to the same benefits
under this Indenture as definitive Bonds of the same series and Tranche
and of like tenor authenticated and delivered hereunder.
Section 3.05. Registration, Registration of Transfer
and Exchange.
(a) The Company shall cause to be kept in each office
designated pursuant to Section 6.02 a register (all registers kept in
accordance with this Section being collectively referred to herein as
the "Bond Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Bonds and the registration of transfer thereof. All Persons maintaining
a Bond Register are referred to herein collectively as the "Bond
Registrar." Anything herein to the contrary notwithstanding, the
Company may designate one or more of its offices as an office in which
the Bond
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Register shall be maintained, in which event the Company shall act as
Bond Registrar.
(b) Upon surrender for registration of transfer of any
Bond at the office or agency of the Company maintained pursuant to
Section 6.02 in a Place of Payment for such series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Bonds of the
same series and Tranche, of authorized denominations and of like tenor
and aggregate principal amount.
(c) At the option of the Holder, any Bond may be
exchanged for one or more new Bonds of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal
amount, upon surrender of the Bonds to be exchanged at any such office
or agency. Whenever any Bonds are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Bonds which the Holder making the exchange is entitled to receive.
(d) All Bonds issued upon any registration of transfer or
exchange of Bonds shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Bonds surrendered upon such registration of transfer
or exchange.
(e) Every Bond presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the
Trustee or any transfer agent) be duly endorsed or shall be accompanied
by a written instrument of transfer in form satisfactory to the Company
and the Bond Registrar or any transfer agent duly executed by the
Holder thereof or his attorney duly authorized in writing.
(f) Unless otherwise provided in the indenture
supplemental hereto, a Board Resolution or Officer's Certificate
pursuant to a supplemental indenture or a Board Resolution with respect
to Bonds of any series, or any Tranche thereof, no service charge shall
be made for any registration of transfer or exchange of Bonds, but the
Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Bonds, other than exchanges
pursuant to Section 3.04, 5.06 or 14.06 not involving any transfer.
(g) The Company shall not be required to issue and the
Bond Registrar shall not be required to register the transfer of or to
exchange (a) Bonds of any series during a period of 15 days immediately
preceding the date notice is given identifying the serial numbers of
the Bonds of such
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series called for redemption, or (b) any Bond so selected for
redemption in whole or in part, except the unredeemed portion of any
Bond being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Bonds.
(a) If any mutilated Bond is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Bond of the same series, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
(b) If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the ownership of and the
destruction, loss or theft of any Bond, and (ii) such security or
indemnity as may be reasonably required by them to save each of them
and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Bond has been acquired
by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Bond, a new Bond of the same series and Tranche, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
(c) Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Bond has become or is about to
become due and payable, the Company in its discretion may, instead of
issuing a new Bond, pay such Bond.
(d) Upon the issuance of any new Bond under this Section,
the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.
(e) Every new Bond of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Bond shall constitute
an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Bond shall be at any time
enforceable by anyone, and any such new Bond shall be entitled to all
the benefits of this Indenture equally and proportionately with any and
all other Bonds of such series duly issued hereunder.
(f) The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Bonds.
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Section 3.07. Payment of Interest; Interest Rights
Preserved.
(a) Unless otherwise provided as contemplated by Section
3.01 with respect to the Bonds of any series, or any Tranche thereof,
interest on any Bond which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Regular Record Date for such
interest.
(b) Any interest on any Bond of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the related Regular
Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as
provided in clause (i) or (ii) below.
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Bonds of
such series (or their respective Predecessor Bonds) are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Bond of such series and the date
of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as
provided in this clause (i). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at
the expense of the Company, shall promptly cause notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Bonds of such series at the address
of such Holder as it appears in the Bond Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor
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having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Bonds of such series (or
their respective Predecessor Bonds) are registered at the
close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (ii).
(ii) The Company may make payment of any Defaulted
Interest on the Bonds of any series in any other lawful manner
not inconsistent with the requirements of any securities
exchange on which such Bonds may be listed, and upon such
notice as may be required by such exchange, if, after notice
is given by the Company to the Trustee of the proposed payment
pursuant to this clause (ii), such manner of payment shall be
deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section
and Section 3.05, each Bond delivered under this Indenture upon
registration of, transfer of, or in exchange for, or in lieu of, any
other Bond shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Bond.
Section 3.08. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Bond, issued in registered form
without coupons, is registered as the absolute owner of such Bond for the
purpose of receiving payment of principal of and premium, if any, and (subject
to Sections 3.05 and 3.07) interest, if any, on such Bond and for all other
purposes whatsoever, whether or not such Bond be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 3.09. Cancellation by Bond Registrar.
All Bonds surrendered for payment, redemption, registration of
transfer or exchange, or upon purchase or other acquisition by or on behalf of
the Company, shall, if surrendered to any Person other than the Bond Registrar,
be delivered to the Bond Registrar and, if not theretofore canceled, shall be
promptly canceled by the Bond Registrar. The Company may at any time deliver to
the Bond Registrar for cancellation any Bonds previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever
or which the Company shall not have issued and sold, and all Bonds so delivered
shall be promptly canceled by the Bond Registrar. No Bonds shall be
authenticated in lieu of or in exchange for any Bonds canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Bonds held by the Bond Registrar shall be disposed of in accordance with a
Company Order
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and the Bond Registrar shall promptly deliver a certificate of disposition to
the Company unless, by a Company Order, the Company shall direct that canceled
Bonds be returned to it. The Bond Registrar shall promptly deliver evidence of
any cancellation of a Bond in accordance with this Section to the Trustee and
the Company.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.01
for Bonds of any series, or any Tranche thereof, interest (if any) on the Bonds
of each series shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
Section 3.11. Payment to Be in Proper Currency.
In the case of any Bonds denominated in any currency other
than Dollars or in a composite currency (the "Required Currency"), except as
otherwise provided therein, the obligation of the Company to make any payment of
the principal thereof, or the premium, if any, or interest, if any, thereon,
shall not be discharged or satisfied by any tender by the Company, or recovery
by the Trustee, in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the Trustee timely holding
the full amount of the Required Currency then due and payable. If any such
tender or recovery is in a currency other than the Required Currency, the
Trustee may take such actions as it considers appropriate to exchange such
currency for the Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate fluctuation,
shall be borne by the Company, the Company shall remain fully liable for any
shortfall or delinquency in the full amount of Required Currency then due and
payable, and in no circumstances shall the Trustee be liable therefor except in
the case of its negligence or willful misconduct. The Company hereby waives any
defense of payment based upon any such tender or recovery which is not in the
Required Currency, or which, when exchanged for the Required Currency by the
Trustee, is less than the full amount of Required Currency then due and payable.
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ARTICLE FOUR
ISSUANCE OF BONDS
Section 4.01. General.
(a) Subject to the provisions of Section 4.02, 4.03, 4.04
or 4.05, whichever may be applicable, the Trustee shall authenticate
and deliver Bonds of a series, for original issue, at one time or from
time to time in accordance with the Company Order referred to below,
upon receipt by the Trustee of:
(i) if the terms of such series are established in
an indenture supplemental hereto or in a Board Resolution, or
in an Officer's Certificate pursuant to an indenture
supplemental hereto or Board Resolution, such indenture
supplemental hereto or Board Resolution, or such Officer's
Certificate and the related indenture supplemental hereto or
Board Resolution;
(ii) a Company Order requesting the authentication
and delivery of such Bonds and, to the extent that the terms
of such Bonds shall not have been established in the indenture
supplemental hereto which established such series, in a Board
Resolution or in an Officer's Certificate pursuant to an
indenture supplemental hereto or Board Resolution, all as
contemplated by Section 3.01, either establishing such terms
or, in the case of Bonds of a series subject to a Periodic
Offering, specifying procedures, acceptable to the Trustee, by
which such terms are to be established (which procedures may
provide for authentication and delivery pursuant to oral or
electronic instructions from the Company or any agent or
agents thereof, which oral instructions are to be promptly
confirmed electronically or in writing);
(iii) the Bonds of such series or Tranche, executed
on behalf of the Company as provided herein;
(iv) a Net Earnings Certificate showing the
Adjusted Net Earnings of the Company for the period therein
specified to have been not less than an amount equal to two
(2) times the Annual Interest Requirements therein specified,
all in accordance with the provisions of Section 1.03;
provided, however, that the Trustee shall not be entitled to
receive a Net Earnings Certificate hereunder if the Bonds of
such series are to have no Stated Interest Rate prior to
Maturity; and provided, further, that, with respect to Bonds
of a series subject to a Periodic Offering, other than Bonds
theretofore authenticated and delivered, (A) it shall
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be assumed in the Net Earnings Certificate delivered in
connection with the authentication and delivery of Bonds of
such series that none of the Bonds of such series not yet
authenticated and delivered shall have a Stated Interest Rate
in excess of a maximum rate to be stated therein, and
thereafter no Bonds of such series which would have a Stated
Interest Rate at the time of the initial authentication and
delivery thereof in excess of such maximum rate shall be
authenticated and delivered under the authority of such Net
Earnings Certificate but instead shall only be authenticated
and delivered under the authority of a new Net Earnings
Certificate which complies with the requirements of this
clause (iv), including the proviso relating to Bonds of a
series subject to a Periodic Offering, and (B) so long as the
Stated Interest Rate that Bonds of a series subject to a
Periodic Offering bear at the time of the initial
authentication and delivery thereof does not exceed the
maximum rate assumed in the most recent Net Earnings
Certificate delivered with respect to the Bonds of such
series, the Trustee shall not be entitled to receive a new Net
Earnings Certificate at the time of any subsequent
authentication and delivery of the Bonds of such series
(unless the Company Order requesting the authentication and
delivery of such Bonds is delivered on or after the date which
is two years after the most recent Net Earnings Certificate
with respect to such series was delivered pursuant to this
clause (iv), in which case this subclause (B) shall not
apply);
(v) an Opinion of Counsel to the effect that:
(A) the forms of such Bonds have been duly
authorized by the Company and have been established
in conformity with the provisions of this Indenture;
(B) the terms of such Bonds have been duly
authorized by the Company and have been established
in conformity with the provisions of this Indenture;
and
(C) such Bonds, when authenticated and
delivered by the Trustee and issued and delivered by
the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will
constitute valid and legally binding obligations of
the Company, entitled to the benefits provided by
this Indenture, and enforceable in accordance with
their terms, subject to the Customary Exceptions;
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provided, however, that, with respect to Bonds of a series
subject to a Periodic Offering, the Trustee shall be entitled
to receive such Opinion of Counsel only once at or prior to
the time of the first authentication and delivery of Bonds of
such series and that the opinions described in subclauses (B)
and (C) of clause (v) above may state, respectively:
(1) that, when the terms of such Bonds
shall have been established pursuant to a Company
Order or Orders or pursuant to such procedures as may
be specified from time to time by a Company Order or
Orders, all as contemplated by and in accordance with
the indenture supplemental hereto delivered pursuant
to clause (i) above, such terms will have been duly
authorized by the Company and will have been
established in conformity with the provisions of this
Indenture; and
(2) that such Bonds, when authenticated
and delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or the
specified procedures referred to in subclause (1)
above and issued and delivered by the Company in the
manner and subject to any conditions specified in
such Opinion of Counsel, will have been duly issued
under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled
to the benefits provided by this Indenture, and
enforceable in accordance with their terms, subject
to the Customary Exceptions;
(vi) an Officer's Certificate to the effect that,
to the knowledge of the signer, no Event of Default, or event
which with lapse of time would constitute an Event of Default,
has occurred and is continuing; provided, however, that with
respect to Bonds of a series subject to a Periodic Offering,
either (A) such an Officer's Certificate shall be delivered at
the time of the authentication and delivery of each Bond of
such series, or (B) the Officer's Certificate delivered at the
time of the first authentication and delivery of the Bonds of
such series shall state that the statements therein shall be
deemed to be made at the time of each subsequent
authentication and delivery of Bonds of such series; and
(vii) such other Opinions of Counsel, certificates
and other documents as may be required under Section 4.02,
4.03, 4.04 or 4.05, whichever may be applicable to the
authentication and delivery of the Bonds of such series.
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(b) With respect to Bonds of a series subject to a
Periodic Offering, the Trustee may conclusively rely, as to the
authorization by the Company of any of such Bonds, the forms and terms
thereof, the legality, validity, binding effect and enforceability
thereof and the compliance of the authentication and delivery thereof
with the terms and conditions of this Indenture, upon the Opinion or
Opinions of Counsel and the certificates and other documents delivered
pursuant to this Article Four at or prior to the time of the first
authentication and delivery of Bonds of such series until any of such
opinions, certificates or other documents have been superseded or
revoked or expire by their terms.
(c) In connection with the authentication and delivery of
Bonds of a series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the Company's instructions to authenticate and
deliver such Bonds do not violate any laws with respect to, or any
rules, regulations or orders of, any governmental agency or commission
having jurisdiction over the Company.
Section 4.02. Issuance of Bonds on the Basis of Pledged
Bonds.
(a) Bonds of any one or more series may be authenticated
and delivered upon the basis of, and in an aggregate principal amount
not exceeding, the aggregate principal amount of Unbonded Class "A"
Bonds issued and delivered to the Trustee for such purpose.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of the issuance and delivery to
the Trustee of Class "A" Bonds until the Trustee shall have received:
(i) Class "A" Bonds (A) maturing on such dates and
in such principal amounts that, at each Stated Maturity of the
Bonds of such series (or the Tranche thereof then to be
authenticated and delivered), there shall mature Class "A"
Bonds equal in principal amount to the Bonds of such series or
Tranche then to mature, and (B) containing, in addition to any
mandatory redemption provisions applicable to all Class "A"
Bonds Outstanding under the related Class "A" Mortgage,
mandatory redemption provisions correlative to the provisions,
if any, for the mandatory redemption (pursuant to a sinking
fund or otherwise) of the Bonds of such series or Tranche or
for the redemption thereof at the option of the Holder; it
being expressly understood that such Class "A" Bonds (1) may,
but need not, bear interest, any such interest to be payable
at the same times as interest on the Bonds of such series or
Tranche, (2) may, but need not, contain provisions
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for the redemption thereof at the option of the Company, any
such redemption to be made at a redemption price or prices not
less than the principal amount thereof, and (3) shall be held
by the Trustee in accordance with Article Seven;
(ii) the documents with respect to the Bonds of
such series specified in Section 4.01; provided, however, that
no Net Earnings Certificate shall be required to be delivered
if there shall be delivered an Officer's Certificate to the
effect that such Class "A" Bonds have been authenticated and
delivered under the related Class "A" Mortgage on the basis of
retired Class "A" Bonds;
(iii) an Opinion of Counsel to the effect that:
(A) the forms of such Class "A" Bonds have
been duly authorized by the Company and have been
established in conformity with the provisions of the
related Class "A" Mortgage;
(B) the terms of such Class "A" Bonds have
been duly authorized by the Company and have been
established in conformity with the provisions of the
related Class "A" Mortgage; and
(C) such Class "A" Bonds have been duly
issued under the related Class "A" Mortgage and
constitute valid and legally binding obligations of
the Company, entitled to the benefits provided by
such Class "A" Mortgage, and enforceable in
accordance with their terms, subject to the Customary
Exceptions;
provided, however, that, with respect to Bonds of a series
subject to a Periodic Offering, the Trustee shall be entitled
to receive such Opinion of Counsel only once at or prior to
the time of the first authentication and delivery of Bonds of
such series and that the opinions described in subclauses (B)
and (C) of clause (iii) above may state, respectively:
(1) that, when the terms of such Class "A"
Bonds shall have been established in accordance with
the instrument or instruments creating the series of
which such Class "A" Bonds are a part, such terms
will have been duly authorized by the Company and
will have been established in conformity with the
provisions of the related Class "A" Mortgage; and
(2) that such Class "A" Bonds, when
authenticated and delivered by the trustee under
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the related Class "A" Mortgage in accordance with
such instrument or instruments and issued and
delivered by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel,
will have been duly issued under such Class "A"
Mortgage, and will constitute valid and legally
binding obligations of the Company, entitled to the
benefits provided by such Class "A" Mortgage, and
enforceable in accordance with their terms, subject
to the Customary Exceptions; and
(iv) an Officer's Certificate stating that no part
of the principal amount of the Class "A" Bonds upon the basis
of which the Bonds are to be authenticated and delivered has
theretofore been Bonded.
Section 4.03. Issuance of Bonds on the Basis of Property
Additions.
(a) Bonds of any one or more series may be authenticated
and delivered upon the basis of Property Additions which do not
constitute Bonded Property Additions in a principal amount not
exceeding seventy percent (70%) of the balance of the Cost or of the
Fair Value of such Unbonded Property Additions to the Company
(whichever shall be less) after making any deductions pursuant to
Section 1.04(b).
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of Property Additions until the
Trustee shall have received:
(i) the documents with respect to the Bonds of
such series specified in Section 4.01;
(ii) an Engineer's Certificate dated as of a date
not more than ninety (90) days prior to the date of the
Company Order requesting the authentication and delivery of
such Bonds:
(A) stating the amount, as of a date not
more than ninety (90) days prior to the date of such
certificate, of Property Additions made a basis for
such application;
(B) stating that all such property
constitutes Property Additions;
(C) stating that such Property Additions
are desirable for use in the proper conduct of the
business of the Company;
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(D) stating that such amount of Property
Additions is not then Bonded;
(E) stating, except as to Property
Additions acquired, made or constructed wholly
through the delivery of securities or other property,
that the amount of cash forming all or part of the
Cost thereof was equal to or more than an amount to
be stated therein;
(F) briefly describing, with respect to
any Property Additions acquired, made or constructed
in whole or in part through the delivery of
securities or other property, the securities or other
property so delivered and stating the date of such
delivery;
(G) stating what part, if any, of such
Property Additions includes property which within six
months prior to the date of acquisition thereof by
the Company had been used or operated by others than
the Company in a business similar to that in which it
has been or is to be used or operated by the Company
and stating whether or not, in the judgment of the
signers, the Fair Value thereof to the Company, as of
the date of such certificate, is less than
Twenty-Five Thousand Dollars ($25,000) and whether or
not such Fair Value is less than one percent (1%) of
the sum of (x) the aggregate principal amount of
Bonds then Outstanding, and (y) the aggregate
principal amount of Class "A" Bonds then Outstanding
other than Pledged Bonds;
(H) stating, in the judgment of the
signers, the Fair Value to the Company, as of the
date of such certificate, of such Property Additions,
except any thereof with respect to the Fair Value to
the Company of which a statement is to be made in an
Independent Engineer's Certificate as provided for in
clause (iii) below;
(I) stating the amount required to be
deducted under clause (i) of Section 1.04(b); and
(J) stating that the Liens, if any, of the
character described in clause (e) of the definition
of "Permitted Liens" to which any property included
in such Property Additions is subject do not, in the
judgment of the signers, materially impair the use of
such property for the purposes for which the same is
held by the Company;
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(iii) in case any Property Additions are shown by
the Engineer's Certificate provided for in clause (ii) above
to include property which, within six months prior to the date
of acquisition thereof by the Company, had been used or
operated by others than the Company in a business similar to
that in which it has been or is to be used or operated by the
Company and such certificate does not show the Fair Value
thereof to the Company, as of the date of such certificate, to
be less than Twenty-Five Thousand Dollars ($25,000) or less
than one percent (1%) of the sum of (x) the aggregate
principal amount of Bonds then Outstanding, and (y) the
aggregate principal amount of Class "A" Bonds then Outstanding
other than Pledged Bonds, an Independent Engineer's
Certificate stating, in the judgment of the signer, the Fair
Value to the Company, as of the date of such Independent
Engineer's Certificate, of (A) such Property Additions which
have been so used or operated and (at the option of the
Company) as to any other Property Additions included in the
Engineer's Certificate provided for in clause (ii) above, and
(B) in case such Independent Engineer's Certificate is being
delivered in connection with the authentication and delivery
of Bonds, any property so used or operated which has been
subjected to the Lien of this Indenture since the commencement
of the then current calendar year which has been used as the
basis for the authentication and delivery of Bonds and as to
which an Independent Engineer's Certificate has not previously
been furnished to the Trustee;
(iv) in case any Property Additions are shown by
the Engineer's Certificate provided for in clause (ii) above
to have been acquired, made or constructed in whole or in part
through the delivery of securities or other property, a
written appraisal of an Engineer stating, in the judgment of
the Engineer, the Fair Value in cash of such securities or
other property at the time of delivery thereof in payment for
or for the acquisition of such Property Additions;
(v) an Opinion of Counsel to the effect:
(A) that (except as to paving, grading and
other improvements to, under or upon highways,
bridges, parks or other public property of analogous
character) this Indenture is, or upon the delivery
of, or the filing or recording in the proper places
and manner of, the instruments of conveyance,
assignment or transfer, if any, specified in said
opinion, will be, a Lien on all the Property
Additions to be made the basis of the authentication
and delivery of such Bonds, subject
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to no Lien thereon prior to the Lien of this
Indenture except Permitted Liens; and
(B) that the Company has corporate
authority to operate the Property Additions with
respect to which such application is made; and
(vi) copies of the instruments of conveyance,
assignment and transfer, if any, specified in the Opinion of
Counsel provided for in clause (v) above.
(c) The amount of the Cost of any Property Additions and
the Fair Value thereof to the Company and the Fair Market Value in cash
of any securities or other property so delivered in payment therefor or
for the acquisition thereof and the amount of any deductions made
pursuant to Section 1.04 shall be determined for the purposes of this
Section by the appropriate certificate provided for in this Section.
Section 4.04. Issuance of Bonds on the Basis of Retired
Bonds.
(a) Subject to the provisions of subsection (c) of this
Section, Bonds of any one or more series may be authenticated and
delivered upon the basis of, and in an aggregate principal amount not
exceeding the aggregate principal amount of, Unbonded Retired Bonds.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of Retired Bonds until the
Trustee shall have received:
(i) the documents with respect to the Bonds of
such series specified in Section 4.01; provided, however, that
no Net Earnings Certificate shall be required to be delivered
unless:
(A) the original, final Stated Maturity of
the Retired Bonds to be made the basis of the
authentication and delivery of such Bonds under this
Section was a date less than five years after the
date of the Company Order which requested the
authentication and delivery of such Retired Bonds;
and
(B) the maximum Stated Interest Rate, if
any, on such Retired Bonds at the time of their
authentication and delivery is less than the maximum
Stated Interest Rate, if any, on such Bonds to be in
effect upon the initial authentication and delivery
thereof; and
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(ii) an Officer's Certificate stating that Retired
Bonds, specified by series, in an aggregate principal amount
not less than the aggregate principal amount of Bonds to be
authenticated and delivered, have theretofore been
authenticated and delivered and, as of the date of such
Officer's Certificate, constitute Retired Bonds and are the
basis for the authentication and delivery of such Bonds, and
further stating that no part of such principal amount of
Retired Bonds has theretofore been Bonded.
(c) No Bonds shall be authenticated or delivered
hereunder on the basis of any Retired Bonds theretofore authenticated
and delivered on the basis of Pledged Bonds pursuant to Section 4.02 if
such Pledged Bonds can again be used as the basis for the issuance of
Bonds pursuant to Section 4.02, until the Class "A" Mortgage under
which such Pledged Bonds were issued has been discharged pursuant to
the provisions thereof.
Section 4.05. Issuance of Bonds upon Deposit of Cash with
Trustee.
(a) Bonds of any one or more series may be authenticated
and delivered upon the basis of, and in an aggregate principal not
exceeding the amount of, any deposit with the Trustee of cash for such
purpose.
(b) No Bonds of any series shall be authenticated and
delivered by the Trustee upon the basis of the deposit of cash until
the Trustee shall have received the documents with respect to the Bonds
of such series specified in Section 4.01.
(c) All cash deposited with the Trustee under the
provisions of this Section shall be held by the Trustee as a part of
the Mortgaged Property and may be withdrawn from time to time by the
Company, upon application of the Company to the Trustee, in an amount
equal to the aggregate principal amount of Bonds to the authentication
and delivery of which the Company shall be entitled under any of the
provisions of this Indenture by virtue of compliance with all
applicable provisions of this Indenture (except as otherwise provided
in subsection (d) of this Section).
(d) Upon any such application for withdrawal, the Company
shall comply with all applicable provisions of this Indenture relating
to the authentication and delivery of Bonds except that the Company
shall not in any event be required to comply with Section 4.01.
(e) Any withdrawal of cash under subsection (c) of this
Section shall operate as a waiver by the Company of its right to the
authentication and delivery of the Bonds on
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which it is based and such Bonds may not thereafter be authenticated
and delivered hereunder. Any Property Additions which have been made
the basis of any such right to the authentication and delivery of Bonds
so waived shall be deemed to have been made the basis of the withdrawal
of such cash; any Retired Bonds which have been made the basis of any
such right to the authentication and delivery of Bonds so waived shall
be deemed to have been made the basis of the withdrawal of such cash;
and any Pledged Bonds which have been made the basis of any such right
to the authentication and delivery of Bonds so waived shall be deemed
to have been made the basis of the withdrawal of such cash.
(f) If at any time the Company shall so direct, any sums
deposited with the Trustee under the provisions of this Section may be
used or applied to the purchase, redemption or payment of Bonds in the
manner and subject to the conditions provided in clauses (iv) and (v)
of Section 8.06(a); provided, however, that, none of such cash shall be
applied to the payment of more than the principal amount of any Bonds
so purchased, redeemed or paid, except to the extent that the aggregate
principal amount of all Bonds theretofore, and of all Bonds then to be,
purchased, redeemed or paid with cash deposited under this Section is
not less than the aggregate cost for principal, premium, if any,
interest, if any, and brokerage commission, if any, on or with respect
to all Bonds theretofore, and on or with respect to all Bonds then to
be, purchased, redeemed or paid with cash so deposited.
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ARTICLE FIVE
REDEMPTION OF BONDS
Section 5.01. Applicability of Article.
Bonds of any series, or any Tranche thereof, which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 3.01
for Bonds of such series or Tranche) in accordance with this Article.
Section 5.02. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Bonds shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company shall,
at least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the series and principal amount of such
Bonds to be redeemed. In the case of any redemption of Bonds (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Bonds or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such Bonds,
the Company shall furnish the Trustee with an Officer's Certificate evidencing
compliance with such restriction or condition.
Section 5.03. Selection of Bonds to Be Redeemed.
(a) If less than all the Bonds of any series, or any
Tranche thereof, are to be redeemed, the particular Bonds (or portions
thereof) to be redeemed shall be selected by the Bond Registrar from
the Outstanding Bonds of such series or Tranche not previously called
for redemption, by such method as shall be provided for any particular
series, or, in the absence of any such provision, by such method as the
Bond Registrar, with the approval of the Trustee, shall deem fair and
appropriate and which may, in any case, provide for the selection for
redemption of portions (equal to the minimum authorized denomination
for Bonds of such series or Tranche or any integral multiple thereof)
of the principal amount of Bonds of such series or Tranche of a
denomination equal to or larger than the minimum authorized
denomination for Bonds of such series or Tranche; provided, however,
that if, as indicated in an Officer's Certificate, the Company shall
have offered to purchase all Bonds then Outstanding of any series, or
any Tranche thereof, and less than all of such Bonds shall have been
tendered to the Company for such purchase, the Bond Registrar, if so
directed by Company
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Order, shall select for redemption only such Bonds which have not been
so tendered.
(b) The Bond Registrar shall promptly notify the Company
and the Trustee in writing of the Bonds selected for redemption and, in
the case of any Bonds selected to be redeemed in part, the principal
amount thereof to be redeemed.
(c) For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption
of Bonds shall relate, in the case of any Bonds redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Bonds which has been or is to be redeemed.
Section 5.04. Notice of Redemption.
(a) Notice of redemption shall be given in the manner
provided in Section 1.09 to the Holders of the Bond to be redeemed not
less than 30 nor more than 180 days prior to the Redemption Date.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all the Bonds of any series or
Tranche are to be redeemed, the identification of the
particular Bonds to be redeemed and the portion of the
principal amount of any Bond to be redeemed in part;
(iv) that on the Redemption Date the Redemption
Price, together with accrued interest, if any, to the
Redemption Date, will become due and payable upon each such
Bond to be redeemed and, if applicable, that interest thereon
will cease to accrue on and after said date;
(v) the place or places where such Bonds are to be
surrendered for payment of the Redemption Price;
(vi) that the redemption is for a sinking or other
fund, if such is the case; and
(vii) such other matters as the Company shall deem
desirable or appropriate.
(c) With respect to any notice of redemption of Bonds at
the election of the Company, unless, upon the giving of
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such notice, such Bonds shall be deemed to have been paid in accordance
with Section 9.01, such notice may state that such redemption shall be
conditional upon the receipt by the Trustee or Paying Agent, on or
prior to the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on such
Bonds and that if such money shall not have been so received such
notice shall be of no force or effect and the Company shall not be
required to redeem such Bonds. In the event that such notice of
redemption contains such a condition and such money is not so received,
the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such
redemption was not required to be made.
(d) Notice of redemption of Bonds to be redeemed at the
election of the Company, and any notice of non- satisfaction of a
condition for redemption as aforesaid, shall be given by the Company
or, at the Company's request, by the Bond Registrar in the name and at
the expense of the Company. Notice of mandatory redemption of Bonds
shall be given by the Bond Registrar in the name and at the expense of
the Company.
Section 5.05. Bonds Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the Bonds or
portions thereof so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption, the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Bonds or portions thereof, if interest-bearing, shall cease to bear
interest. Upon surrender of any such Bond for redemption in accordance with such
notice, such Bond or portion thereof shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that any installment of interest on any Bond the Stated
Maturity of which is on or prior to the Redemption Date shall be payable to the
Holder of such Bond, or one or more Predecessor Bonds, registered as such at the
close of business on the related Regular Record Date according to the terms of
such Bond and subject to the provisions of Section 3.07.
Section 5.06. Bonds Redeemed in Part.
Any Bond which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney
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duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Bond, without service
charge, a new Bond or Bonds of the same series and Tranche, of any authorized
denomination requested by such Holder and of like tenor and in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Bond so surrendered; provided, however, that the payment of any
principal in accordance with the scheduled amortization payments specified for
the Bonds of any series, or any Tranche thereof, as contemplated by Section
3.01, shall not constitute a redemption in part subject to this Section 5.06
(except as otherwise specified as contemplated by Section 3.01 for Bonds of such
series or Tranche).
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ARTICLE SIX
REPRESENTATIONS AND COVENANTS
Section 6.01. Payment of Bonds; Lawful Possession;
Maintenance of Lien.
(a) The Company shall pay the principal of and premium,
if any, and interest, if any, on the Bonds of each series in accordance
with the terms of such Bonds and this Indenture.
(b) At the date of the execution and delivery of this
Indenture, the Company is lawfully possessed of the Mortgaged Property
and has good right and lawful authority to mortgage and pledge the
Mortgaged Property.
(c) The Company shall maintain and preserve the Lien of
this Indenture so long as any Bonds shall remain Outstanding.
Section 6.02. Maintenance of Office or Agency.
(a) The Company shall maintain in each Place of Payment
for the Bonds of any series, or any Tranche thereof, an office or
agency where such Bonds may be presented or surrendered for payment,
where such Bonds may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in
respect of such Bonds and this Indenture may be served. The Company
shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency and prompt notice
to the Holders of any such change in the manner specified in Section
1.09. If at any time the Company shall fail to maintain any such
required office or agency in respect of Bonds of any series, or any
Tranche thereof, or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of such Bonds may be made
and notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive such respective presentations, surrenders, notices
and demands.
(b) The Company may also from time to time designate one
or more other offices or agencies where the Bonds of one or more
series, or any Tranche thereof, may be presented or surrendered for any
or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain
an office or agency for such purposes in each Place of Payment for such
Bonds in accordance with the requirements set forth above. The Company
shall give prompt written notice to the
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Trustee, and prompt notice to the Holders in the manner specified in
Section 1.09, of any such designation or rescission and of any change
in the location of any such other office or agency.
(c) Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform all
functions to be performed at such office or agency.
Section 6.03. Money for Bond Payments to Be Held in Trust.
(a) If the Company shall at any time act as its own
Paying Agent with respect to the Bonds of any series, or any Tranche
thereof, it shall, on or before each due date of the principal of and
premium, if any, or interest, if any, on any of such Bonds, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and premium or interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and shall promptly notify the Trustee of its action
or failure so to act.
(b) Whenever the Company shall have one or more Paying
Agents for the Bonds of any series, or any Tranche thereof, it shall,
on or before each due date of the principal of and premium, if any, or
interest, if any, on such Bonds, deposit with such Paying Agents sums
sufficient (without duplication) to pay the principal and premium or
interest so becoming due, such sums to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall promptly
notify the Trustee of its action or failure so to act.
(c) The Company shall cause each Paying Agent for the
Bonds of any series, or any Tranche thereof, other than the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent shall:
(i) hold all sums held by it for the payment of
the principal of and premium, if any, or interest, if any, on
the Bonds of such series or Tranche in trust for the benefit
of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the
Company (or any other obligor upon the Bonds of such
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series) in the making of any payment of principal of and
premium, if any, or interest, if any, on the Bonds of such
series or Tranche; and
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.
(d) The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust
by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent and, if so stated in a Company Order
delivered to the Trustee, in accordance with the provisions of Article
Nine; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect
to such money.
(e) Any money deposited with the Trustee (other than
money held under the provisions of Article Nine) or any Paying Agent,
or then held by the Company, in trust for the payment of the principal
of and premium, if any, or interest, if any, on any Bond and remaining
unclaimed for two years after such principal and premium, if any, or
interest, if any, has become due and payable shall be paid to the
Company on Company Request, or, if then held by the Company, shall be
discharged from such trust; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make
any such payment to the Company, may at the expense of the Company
cause to be mailed, on one occasion only, notice to such Holder that
such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such mailing, any
unclaimed balance of such money then remaining will be paid to the
Company.
Section 6.04. Corporate Existence.
Subject to the rights of the Company under Article Thirteen,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the rights (charter
and statutory) and franchises of the Company; provided, however, that the
Company shall not be required to preserve any such right or franchise if, in the
judgment of the Company, the preservation thereof is no
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longer desirable in the conduct of the business of the Company and the loss
thereof would not adversely affect the interests of the Holders in any material
respect.
Section 6.05. Maintenance of Properties.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) the Mortgaged Property, as
an operating system or systems, to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made such repairs,
renewals, replacements, betterments and improvements thereof, as, in the
judgment of the Company, may be necessary in order that the operation of the
Mortgaged Property, considered as an operating system or systems, may be
conducted in accordance with common industry practice; provided, however, that
nothing in this Section shall prevent the Company from discontinuing, or causing
the discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
Section 6.06. Payment of Taxes; Discharge of Liens.
The Company shall pay all taxes and assessments and other
governmental charges lawfully levied or assessed upon the Mortgaged Property, or
upon any part thereof, or upon the interest of the Trustee in the Mortgaged
Property, before the same shall become delinquent, and will duly observe and
conform in all material respects to all valid requirements of any Governmental
Authority relative to any of the Mortgaged Property; and all covenants, terms
and conditions upon or under which any of the Mortgaged Property is held; and
the Company shall not suffer any Lien to be hereafter created upon the Mortgaged
Property, or any part thereof, prior to the Lien hereof, other than Permitted
Liens and other than, in the case of property hereafter acquired, vendors'
Liens, purchase money mortgages and any other Lien thereon at the time of the
acquisition thereof (including, but not limited to, the Lien of the 1930
Mortgage and any other Class "A" Mortgage); and within four months after any
lawful claim or demand for labor, materials, supplies or other objects has
become delinquent which if unpaid would or might by law be given precedence over
the Lien of this Indenture as a Lien upon any of the Mortgaged Property, the
Company shall pay or cause to be discharged or make adequate provisions to
satisfy or discharge the same; provided, however, that nothing in this Section
contained shall require the Company to observe or conform to any requirement of
a Governmental Authority or to cause to be paid or discharged, or to make
provision for, any such Lien, or to pay any such tax, assessment or governmental
charge so long as the validity thereof shall be contested in good faith and by
appropriate legal proceedings; and provided, further, that nothing in this
Section contained shall require the Company to pay, discharge or make provisions
for any tax, assessment or
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other governmental charge the validity of which shall not be so contested if
adequate security for the payment of such tax, assessment or other governmental
charge and for any damages which may reasonably be anticipated from failure to
pay the same shall be given to the Trustee, nor shall anything in this Section
require the Company to pay, discharge or make provisions for any Liens existing
on the Mortgaged Property at the date of execution and delivery of this
Indenture.
Section 6.07. Insurance.
(a) The Company will keep or cause to be kept all the
Mortgaged Property insured with reasonable deductibles and retentions
against loss by fire to the extent that property of similar character
is usually so insured by companies similarly situated and operating
like properties, by insurance companies which the Company believes to
be reputable; or the Company will, in lieu of or supplementing such
insurance in whole or in part, adopt some other method or plan of
protection, which may include, either alone or in conjunction with any
other Person or Persons, creation of an insurance fund to protect the
Mortgaged Property against loss by fire.
(b) Proceeds of any insurance or alternative method or
plan of protection of the Company against losses of the kind specified
in Section 6.07(a) shall, at the request of the Company, be paid to the
Company, and the Company shall be under no obligation to use such
proceeds to rebuild or repair damaged or destroyed Mortgaged Property
to the extent that the Fair Value of all of the Mortgaged Property
after the damage or destruction of Mortgaged Property with respect to
which such proceeds are payable equals or exceeds an amount equal to
twenty-fourteenths (20/14ths) of the aggregate principal amount of
Bonds Outstanding and Class "A" Bonds Outstanding (other than Pledged
Bonds), as evidenced by, and within 10 days after receipt by the
Trustee of:
(i) an Engineer's Certificate stating that the
Fair Value, in the opinion of the signers of such Engineer's
Certificate, of the Mortgaged Property remaining after such
damage or destruction of Mortgaged Property is a specified
amount; and
(ii) an Officer's Certificate stating that the Fair
Value of all of the Mortgaged Property, as certified in the
Engineer's Certificate provided for in clause (i) of Section
6.07(b) equals or exceeds an amount equal to
twenty-fourteenths (20/14ths) of the aggregate principal
amount of Bonds Outstanding and Class "A" Bonds Outstanding
(other than Pledged Bonds).
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(c) To the extent that the Fair Value of all of the
Mortgaged Property after such damage or destruction of Mortgaged
Property does not equal or exceed an amount equal to twenty-fourteenths
(20/14ths) of the aggregate principal amount of Bonds Outstanding and
Class "A" Bonds Outstanding (other than Pledged Bonds), as evidenced by
an Engineer's Certificate and an Officer's Certificate similar to those
described in clauses (i) and (ii) of Section 6.07(b), (i) the proceeds
of such insurance paid with respect to any such loss shall be paid to
the Trustee, as the interest of the Trustee may appear, or to the
trustee of a Class "A" Mortgage, or to the trustee or other holder of
any mortgage or other Lien prior hereto upon the Mortgaged Property so
destroyed or damaged, if the terms thereof require such proceeds so to
be paid; and (ii) if the Company shall adopt such other method or plan,
it will pay or cause to be paid to the Trustee on account of any loss
sustained because of the destruction or damage of any Mortgaged
Property by fire, an amount of cash equal to such loss less any amount
otherwise paid with respect to such loss to the Trustee, or to the
trustee of a Class "A" Mortgage, or to the trustee or other holder of
any mortgage or other Lien prior hereto upon the Mortgaged Property so
destroyed or damaged, if the terms thereof require payments for such
loss so to be paid. Any amounts of cash so required to be paid by the
Company pursuant to any such method or plan shall for the purposes of
this Indenture be deemed to be proceeds of insurance.
(d) All moneys paid to the Trustee by the Company or
received by the Trustee as proceeds of any insurance shall, subject to
Section 6.07(b) and to the requirements of any Class "A" Mortgage or
any mortgage or other Lien prior hereto upon the Mortgaged Property, be
held by the Trustee and, subject to such requirements, shall, at the
request of the Company, be paid by the Trustee to the Company to
reimburse or fund the Company for an equal amount spent or committed to
be spent for the purchase or other acquisition of property which
becomes Mortgaged Property at the time of such purchase or acquisition,
or in the rebuilding or renewal of the Mortgaged Property destroyed or
damaged, upon receipt by the Trustee of:
(i) an Officer's Certificate requesting such
reimbursement;
(ii) an Engineer's Certificate stating the amounts
so expended or committed for expenditure and the nature of
such rebuilding or renewal and the Fair Value to the Company
of the property rebuilt or renewed or to be rebuilt or renewed
and if:
(A) within six months prior to the date of
acquisition thereof by the Company, such property has
been used or operated, by a Person other than
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the Company, in a business similar to that in which
it has been or is to be used or operated by the
Company, and
(B) the Fair Value to the Company of such
property as set forth in such Engineer's Certificate
is not less than Twenty-Five Thousand Dollars
($25,000) and not less than one percent (1%) of the
sum of (1) the principal amount of the Bonds at the
time Outstanding, and (2) the principal amount of
Class "A" Bonds Outstanding (other than Pledged
Bonds) at the time,
the Engineer making such certificate shall be an Independent Engineer;
and
(iii) an Opinion of Counsel stating that, in the
opinion of the signer, the property so rebuilt or renewed or
to be rebuilt or renewed is or will be subject to the Lien
hereof to the same extent as was the property so destroyed or
damaged.
(e) Any such money not so applied within eighteen (18)
months after its receipt by the Trustee, or in respect of which notice
in writing of intention to apply the same to the work of rebuilding or
renewal then in progress and uncompleted shall not have been given to
the Trustee by the Company within such eighteen (18) months, or which
the Company shall at any time notify the Trustee is not to be so
applied, shall thereafter be withdrawn, used or applied in the manner,
to the extent and for the purposes, and subject to the conditions,
provided in Section 8.06.
(f) Whenever under the provisions of this Section the
Company is required to deliver moneys to the Trustee and at the same
time shall have satisfied the conditions set forth herein for
reimbursement, there shall be paid to or retained by the Trustee or
reimbursed to the Company, as the case may be, only the net amount.
(g) In the event that the Company adopts a method or plan
of protection other than insurance as provided in Section 6.07(a), the
Company shall furnish to the Trustee a certificate of a qualified
Person appointed by the Company with respect to the adequacy of such
method or plan.
Section 6.08. Recording, Filing, etc.
(a) The Company shall cause this Indenture and all
indentures and instruments supplemental hereto (or notices, memoranda
or financing statements as may be recorded or filed to place third
parties on notice thereof), including all financing statements and
continuation statements covering security interests in personal
property, and all
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mortgages securing purchase moneys obligations delivered to the
Trustee, or the trustee, mortgagee or other holder of a Prior Lien,
pursuant to Section 8.05 to be promptly recorded and filed and
re-recorded and re-filed and will execute or cause to be executed and
file such financing statements and such continuation statements, all in
such manner and in such places, as may be required by law in order
fully to preserve and protect the security of the Holders of the Bonds
and all rights of the Trustee, and shall furnish to the Trustee:
(i) promptly after the execution and delivery of
this Indenture and of each supplemental indenture, an Opinion
of Counsel either stating that in the opinion of such counsel
this Indenture or such supplemental indenture (or notice or
memorandum thereof or financing statement in connection
therewith) has been properly recorded and filed, so as to make
effective the Lien intended to be created hereby or thereby,
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. The Company shall be deemed to be in
compliance with this clause (i) if (A) the Opinion of Counsel
herein required to be delivered to the Trustee shall state
that this Indenture or such supplemental indenture (or
financing statement or notice or memorandum thereof) has been
received for recording or filing in each jurisdiction in which
it is required to be recorded or filed and that, in the
opinion of counsel (if such is the case), such receipt for
recording or filing makes effective the Lien intended to be
created by this Indenture or such supplemental indenture, and
(B) such opinion is delivered to the Trustee within such time,
following the date of the execution and delivery of this
Indenture or such supplemental indenture, as shall be
practicable having due regard to the number and distance of
the jurisdictions in which this Indenture or such supplemental
indenture is required to be recorded or filed; and
(ii) on or before August 1 of each year, beginning
August 1, 1996, an Opinion of Counsel either stating that in
the opinion of the signer such action has been taken, since
the date of the most recent Opinion of Counsel furnished
pursuant to this clause (ii) or the first Opinion of Counsel
furnished pursuant to clause (i) of this subsection (a), with
respect to the recording, filing, re-recording, and re-filing
of this instrument and of each indenture supplemental to this
Indenture (or financing statement or notice or memorandum
thereof), as is necessary to maintain the Lien hereof, 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.
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(b) The Company shall execute and deliver such
supplemental indenture or indentures and such further instruments and
do such further acts as may be necessary or proper to carry out more
effectually the purposes of this Indenture and to make subject to the
Lien hereof any property hereafter acquired, made or constructed,
intended to be subject to the Lien hereof, and to transfer to any new
trustee or trustees or co-trustee or co-trustees, the estate, powers,
instruments or funds held in trust hereunder.
Section 6.09. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in (a) Section 6.02 or any additional
covenant or restriction specified with respect to the Bonds of any series, or
any Tranche thereof, as contemplated by Section 3.01 if before the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Outstanding Bonds of all series and Tranches with respect to which
compliance with Section 6.02 or such additional covenant or restriction is to be
omitted, considered as one class, shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition, and (b) Section 6.04, 6.05, 6.06, 6.07 or 6.08 or
Article Thirteen if before the time for such compliance the Holders of at least
a majority in aggregate principal amount of Bonds Outstanding under this
Indenture shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition;
but, in the case of (a) or (b), no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
Section 6.10 Statement as to Compliance.
For so long as the Trustee Indenture Act shall so require, the
Company will deliver to the Trustee, on May 1 of each year, beginning with May
1, 1997, a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all conditions and covenants under this Indenture.
For purposes of the Section 6.10, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
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Section 6.11 Use of Trust Moneys and Advances by Trustee.
If the Company shall fail to perform any of its covenants in
this Indenture, the Trustee may, at any time and from time to time, use and
apply any Funded Cash held by it pursuant to Section 8.06, or make advances, to
effect performance of any such covenant on behalf of the Company; and all moneys
so used or advanced by the Trustee shall be repaid by the Company, together with
interest thereon at a rate per annum equal to the highest interest rate per
annum borne by Bonds Outstanding at the time of such repayment, upon demand by
the Trustee and any such advances by the Trustee shall be secured under this
Indenture prior to the Bonds. For the repayment of all such advances by the
Trustee the Trustee shall have the right to use and apply any Funded Cash held
by it pursuant to Section 8.06, but no such use or application of Funded Cash
nor any such advance shall relieve the Company from any default hereunder.
Section 6.12 Limited Issuance of Class "A" Bonds.
So long as any Bonds are Outstanding, the Company will not
issue any additional Class "A" Bonds except (i) to replace mutilated, destroyed,
lost or stolen Class "A" Bonds of the same series or to effect transfers and
exchanges of Class "A" Bonds or (ii) such Class "A" Bonds as shall immediately
after issuance be made the basis for the authentication and delivery of Bonds
under Section 4.02.
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ARTICLE SEVEN
PLEDGED BONDS; ADDITIONAL CLASS "A" MORTGAGES;
DISCHARGE OF CLASS "A" MORTGAGE
Section 7.01. Registration and Ownership of Pledged Bonds.
All Pledged Bonds shall be registered in the name of the
Trustee or its nominee and shall be owned and held by the Trustee, subject to
the provisions of this Indenture, for the benefit of the Holders of all Bonds
from time to time Outstanding, and the Company shall have no interest therein.
The Trustee shall be entitled to exercise all rights of bondholders under each
Class "A" Mortgage either in its discretion or as otherwise provided in this
Article or in Article Ten.
Section 7.02. Payments on Pledged Bonds.
(a) Any payment by the Company of principal of or premium
or interest on any Pledged Bonds shall be applied by the Trustee to the
payment of any principal, premium or interest, as the case may be, in
respect of the Bonds which is then due, and, to the extent of such
application, the obligation of the Company hereunder to make such
payment in respect of the Bonds shall be deemed to have been satisfied
and discharged. If, at the time of any such payment of principal of
Pledged Bonds, there shall be no principal then due in respect of the
Bonds, the proceeds of such payment in respect of the Pledged Bonds
shall be deemed to constitute Funded Cash and shall be held by the
Trustee as part of the Mortgaged Property, to be withdrawn, used or
applied in the manner, to the extent and for the purposes, and subject
to the conditions, provided in Section 4.05 for the withdrawal of cash.
If, at the time of any such payment of premium or interest on Pledged
Bonds, there shall be no premium or interest, as the case may be, then
due in respect of the Bonds, the proceeds of such payment in respect of
the Pledged Bonds shall be remitted to the Company upon receipt by the
Trustee of a Company Order requesting the same; provided, however, that
following the occurrence and during the continuance of an Event of
Default, the Trustee shall not pay such proceeds over to the Company,
but shall instead hold such proceeds as part of the Mortgaged Property.
(b) Each supplemental indenture pursuant to which any
Pledged Bonds are issued shall contain a provision to the effect that
any payment by the Company hereunder of principal of or premium or
interest on Bonds which shall have been authenticated and delivered
upon the basis of the issuance and delivery to the Trustee of such
Pledged Bonds (other than by the application of the proceeds of a
payment in respect of such Pledged Bonds) shall, to the extent thereof,
be deemed to satisfy and discharge the obligation
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of the Company, if any, to make a payment of principal, premium or
interest, as the case may be, in respect of such Pledged Bonds which is
then due.
Section 7.03. Surrender of Pledged Bonds.
At the time any Bonds of any series, or any Tranche thereof,
which shall have been authenticated and delivered upon the basis of Pledged
Bonds, cease to be Outstanding (other than as a result of the application of the
proceeds of the payment or redemption of such Pledged Bonds), the Trustee shall
surrender to or upon the order of the Company an equal principal amount of such
Pledged Bonds having the same Stated Maturity and provisions, if any, for
mandatory redemption as such Bonds.
Section 7.04. No Transfer of Pledged Bonds.
The Trustee shall not sell, assign or otherwise transfer any
Pledged Bonds except to a successor trustee under this Indenture. The Company
may take such actions as it shall deem necessary, desirable or appropriate to
effect compliance with such restrictions on transfer, including the placing of a
legend on each Pledged Bond and the issuance of stop-transfer instructions to
the trustee under the related Class "A" Mortgage or any other transfer agent
thereunder.
Section 7.05. Voting of Pledged Bonds.
The Trustee shall, as the holder of Pledged Bonds Outstanding
under each Class "A" Mortgage, attend such meeting or meetings of bondholders
under such Class "A" Mortgage or, at its option, deliver its proxy in connection
therewith, as relate to matters with respect to which it is entitled to vote or
consent. So long as no Event of Default hereunder shall have occurred and be
continuing, either at any such meeting or meetings, or otherwise when the
consent of the holders of the Class "A" Bonds Outstanding under any Class "A"
Mortgage is sought without a meeting, the Trustee shall vote as holder of such
Pledged Bonds, or shall consent with respect thereto, as follows:
(a) the Trustee shall vote all Pledged Bonds Outstanding
under the 1930 Mortgage then held by it, or consent with respect
thereto, in favor of any or all amendments or modifications of the 1930
Mortgage which the Company has requested and which do not have a
material adverse effect on Holders of Bonds; and
(b) with respect to any other amendments or modifications
of the 1930 Mortgage and to any amendments or modifications of any
other Class "A" Mortgage:
(i) at any time when the Pledged Bonds Outstanding
constitute less than a majority in aggregate principal amount
of the Class "A" Bonds then
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Outstanding under such Class "A" Mortgage, the Trustee shall
vote all Pledged Bonds Outstanding under such Class "A"
Mortgage then held by it, or consent with respect thereto,
proportionately with what the Trustee reasonably believes will
be the vote or consent of the holders of all other Class "A"
Bonds Outstanding under such Class "A" Mortgage the holders of
which are eligible to vote or consent; provided, however, that
the Trustee shall not so vote in favor of, or so consent to,
any amendment or modification of a Class "A" Mortgage which,
if it were an amendment or modification of this Indenture,
would require the consent of Holders, without the prior
consent, obtained in the manner prescribed in Section 14.02,
of Holders of Bonds which would be required under said Section
14.02 for such an amendment or modification of this Indenture;
and
(ii) at any time when the Pledged Bonds Outstanding
constitute at least a majority in aggregate principal amount
of the Class "A" Bonds then Outstanding under such Class "A"
Mortgage, the Trustee shall vote all Pledged Bonds Outstanding
under such Class "A" Mortgage then held by it, or consent with
respect thereto, in accordance with the written direction of
the Company evidenced by an Officer's Certificate or, in the
absence of any such direction, proportionately with what the
Trustee reasonably believes will be the vote or consent of the
holders of all other Class "A" Bonds Outstanding under such
Class "A" Mortgage the holders of which are eligible to vote
or consent; provided, however, that the Trustee shall not so
vote in favor of, or so consent to, any amendment or
modification of a Class "A" Mortgage which, if it were an
amendment or modification of this Indenture, would require the
consent of Holders, without the prior consent, obtained in the
manner prescribed in Section 14.02, of Holders of Bonds which
would be required under said Section 14.02 for such an
amendment or modification of this Indenture.
Section 7.06. Designation of Additional Class "A" Mortgages.
(a) In the event that, after the date of the execution
and delivery of this Indenture, a corporation which was the mortgagor
under a mortgage or deed of trust or similar indenture qualified under
the Trust Indenture Act is merged into or consolidated with the
Company, such mortgage, deed of trust or similar indenture may be
designated an additional Class "A" Mortgage upon delivery to the
Trustee of the following:
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(i) a Company Order authorizing the designation of
such mortgage, deed of trust or similar indenture as an
additional Class "A" Mortgage;
(ii) an Officer's Certificate (A) stating that no
event has occurred and is continuing which entitles the
trustee under such mortgage, deed of trust or similar
indenture to accelerate the maturity of the obligations
outstanding thereunder, (B) reciting the aggregate principal
amount of obligations theretofore issued under such mortgage,
deed of trust or similar indenture and the aggregate principal
amount of obligations then outstanding thereunder, and (C)
either (x) stating that all obligations outstanding under such
mortgage, deed of trust or similar indenture that were issued
on the basis of property additions were issued in principal
amounts that did not exceed seventy percent (70%) of the cost
or Fair Value of such property additions to the issuer thereof
(whichever was less), or (y) in the event that the foregoing
clause (x) is not the case, stating that the Company has
irrevocably waived its right to the authentication and
delivery of further obligations under such mortgage, deed of
trust or similar indenture in a principal amount equal to the
excess of the aggregate dollar amount of property additions
certified to the trustee under such mortgage, deed of trust or
similar indenture as the basis for all obligations outstanding
thereunder that were issued on the basis of property additions
(and outstanding obligations issued on the basis of
retirements of obligations issued on the basis of property
additions) over twenty-fourteenths (20/14ths) of the aggregate
principal amount of all such outstanding obligations; and
(iii) an Opinion of Counsel to the effect that (A)
the corporation that was the mortgagor under such mortgage,
deed of trust or similar indenture has been duly and lawfully
merged into or consolidated with the Company; (B) such
mortgage, deed of trust or similar indenture is qualified
under the Trust Indenture Act; (C) the Company has duly
assumed and agreed to perform and pay the obligations of the
mortgagor under such mortgage, deed of trust or similar
indenture; (D) such mortgage, deed of trust or similar
indenture constitutes a Lien upon the property described
therein prior to the Lien of this Indenture; (E) the Lien of
this Indenture constitutes a Lien on the property described in
such mortgage, deed of trust or similar indenture of the
character described in Granting Clause First, and in any
subsequent generic grant of unspecified property as
contemplated in Granting Clause Third, acquired by the Company
from such corporation by virtue of such merger or
consolidation, subject to no
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Lien thereon prior to the Lien of this Indenture except the
Lien of such mortgage, deed of trust or similar indenture,
Permitted Liens and Liens of the character permitted to exist
or to be hereafter created under Section 6.06; (F) the terms
of such mortgage, deed of trust or similar indenture, as then
in effect do not permit the further issuance of obligations
thereunder except on the basis of cash, property additions of
a character substantially similar to Property Additions or the
retirement of outstanding obligations; (G) the terms of such
mortgage, deed of trust or similar indenture, as then in
effect and taking into account any waiver contemplated by
clause (y) of subclause (C) of clause (ii) above, do not
permit the further issuance of obligations thereunder upon the
basis of property additions in a principal amount exceeding
seventy percent (70%) of the balance of the cost or the Fair
Value thereof to the issuer thereof (whichever shall be less);
and (H) the Indenture supplemental hereto referred to in
subsection (b) of this Section complies with the requirements
of clauses (i) and (ii) of said subsection (b).
(b) At such time as the Company and the Trustee have
executed, and the Company has caused to be recorded:
(i) an indenture supplemental hereto (A) in which
such mortgage, deed of trust or similar indenture has been
designated as an additional Class "A" Mortgage, and (B) by
which the Company has specifically imposed the Lien of this
Indenture upon properties of the character described in
Granting Clause First, and in any subsequent generic grant of
unspecified property as contemplated in Granting Clause Third,
acquired by the Company from such corporation by virtue of the
merger or consolidation (and later improvements, extensions
and additions thereto and renewals and replacements thereof);
and
(ii) an indenture supplemental to such mortgage,
deed of trust or similar indenture by which such mortgage,
deed of trust or similar indenture has been amended to provide
that a Matured Event of Default thereunder shall include an
Event of Default hereunder or a Matured Event of Default under
any other Class "A" Mortgage; provided, however, that the
waiver or cure of such Event of Default or Matured Event of
Default and the rescission and annulment of the consequences
thereof shall constitute a waiver of the corresponding Matured
Event of Default under such mortgage, deed of trust or similar
indenture and a rescission and annulment of the consequences
thereof;
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then such mortgage, deed of trust or similar indenture and all
obligations issued and outstanding thereunder shall for all purposes
hereof be treated as a Class "A" Mortgage and as Class "A" Bonds,
respectively, to the full and same extent as if specifically identified
in Article One.
Section 7.07. Discharge of Class "A" Mortgage.
(a) The Trustee shall surrender for cancellation to the
trustee under any Class "A" Mortgage all Pledged Bonds then held by the
Trustee issued under such Class "A" Mortgage upon receipt by the
Trustee of:
(i) a Company Order requesting such surrender for
cancellation of such Pledged Bonds;
(ii) an Officer's Certificate to the effect that no
Class "A" Bonds are Outstanding under such Class "A" Mortgage
other than Pledged Bonds and that promptly upon such surrender
such Class "A" Mortgage will be satisfied and discharged
pursuant to the terms thereof;
(iii) an Engineer's Certificate:
(A) describing in reasonable detail all
property constituting Property Additions designated
by the Company, in its discretion, to be deemed, on
and after the date of such surrender for cancellation
and for all purposes of this Indenture, to have been
made the basis of the authentication and delivery of
all Bonds then Outstanding which shall have been
authenticated and delivered under Section 4.02 on the
basis of Pledged Bonds authenticated and delivered
under such Class "A" Mortgage, such Property
Additions to have, in the aggregate, a Cost (or as to
Property Additions of which the Fair Value to the
Company specified pursuant to subclause (H) or clause
(iv) below is less than the Cost thereof, then such
Fair Value in lieu of Cost) not less than
twenty-fourteenths (20/14ths) of the aggregate
principal amount of such Bonds;
(B) stating that all such property
constitutes Property Additions;
(C) stating that such Property Additions
are desirable for use in the proper conduct of the
business of the Company;
(D) stating that such Property Additions,
to the extent of the Cost (or as to Property
Additions of which the Fair Value to the Company
specified pursuant to subclause (H) or clause (iv)
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below is less than the Cost thereof, then such Fair
Value in lieu of Cost) to the Company to be deemed to
have been made the basis of the authentication and
delivery of such Bonds, will no longer constitute
Bonded Property Additions (other than pursuant to
clause (vi) of the definition of "Bonded") upon the
discharge of the Class "A" Mortgage pursuant to which
such Pledged Bonds were issued;
(E) stating, except as to Property
Additions acquired, made or constructed wholly
through the delivery of securities or other property,
that the amount of cash forming all or part of the
Cost thereof was equal to or more than an amount to
be stated therein;
(F) briefly describing, with respect to
any Property Additions acquired, made or constructed
in whole or in part through the delivery of
securities or other property, the securities or other
property so delivered and stating the date of such
delivery;
(G) stating what part, if any, of such
Property Additions included property which within six
months prior to the date of acquisition thereof by
the Company had been used or operated by others than
the Company in a business similar to that in which it
has been or is to be used or operated by the Company
and stating whether or not, in the judgment of the
signers, the Fair Value thereof to the Company, as of
the date of such certificate, is less than
Twenty-Five Thousand Dollars ($25,000) and whether or
not the fair value thereof to the Company, as of such
date, is less than one percent (1%) of the sum of (x)
the aggregate principal amount of Bonds then
Outstanding, and (y) the aggregate principal amount
of Class "A" Bonds then Outstanding other than
Pledged Bonds;
(H) stating, in the judgment of the
signers, the Fair Value to the Company, as of the
date of such certificate, of such Property Additions,
except any thereof with respect to the Fair Value to
the Company of which a statement is to be made in an
Independent Engineer's Certificate as provided for in
clause (iv) below; provided, however, that if any
such Property Additions shall have theretofore been
certified to the trustee under such Class "A"
Mortgage as the basis for the authentication and
delivery of Class "A" Bonds:
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a) which are Pledged Bonds as of
the date of such certificate; or
b) the retirement of which shall
have theretofore been made the basis
(whether directly or indirectly when
considered in light of the issuance and
retirement of successive issues of Class "A"
Bonds) of the authentication and delivery of
Pledged Bonds then held by the Trustee;
then there may be stated, in lieu of the Fair Value
of such Property Additions as of the date of such
certificate, the Fair Value thereof as so certified
to the trustee under such Class "A" Mortgage; and
(I) stating that the Liens, if any, of the
character described in clause (e) of the definition
of "Permitted Liens" to which any property included
in such Property Additions is subject do not, in the
judgment of the signers, materially impair the use of
such property for the purposes for which the same is
held by the Company;
(iv) in case any Property Additions are shown by
the Engineer's Certificate provided for in clause (iii) above
to include property which, within six months prior to the date
of acquisition thereof by the Company, had been used or
operated by others than the Company in a business similar to
that in which it has been or is to be used or operated by the
Company and such certificate does not show the Fair Value
thereof to the Company, as of the date of such certificate, to
be less than Twenty-Five Thousand Dollars ($25,000) or less
than one percent (1%) of the sum of (x) the aggregate
principal amount of Bonds then Outstanding, and (y) the
aggregate principal amount of Class "A" Bonds then Outstanding
other than Pledged Bonds, an Independent Engineer's
Certificate stating, in the judgment of the signer, the Fair
Value to the Company, as of the date of such Independent
Engineer's Certificate, of (A) such Property Additions which
have been so used or operated and (at the option of the
Company) as to any other Property Additions included in the
Engineer's Certificate provided for in clause (iii) above, and
(B) any property so used or operated which has been subjected
to the Lien of this Indenture since the commencement of the
then current calendar year as the basis for the authentication
and delivery of Bonds and as to which an Independent
Engineer's Certificate has not previously been furnished to
the Trustee;
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(v) in case any Property Additions are shown by
the Engineer's Certificate provided for in clause (iii) above
to have been acquired, made or constructed in whole or in part
through the delivery of securities or other property, a
written appraisal of an Engineer stating, in the judgment of
the Engineer, the Fair Value in cash of such securities or
other property at the time of delivery thereof in payment for
or for the acquisition of such Property Additions;
(vi) an Opinion of Counsel to the effect:
(A) that (except as to paving, grading and
other improvements to, under or upon highways,
bridges, parks or other public property of analogous
character) this Indenture is, or upon (x) the
delivery of, or the filing or recording in the proper
places and manner of, the instruments of conveyance,
assignment or transfer, if any, specified in said
opinion, or (y) the satisfaction and discharge of the
Class "A" Mortgage to be satisfied and discharged
pursuant to this Section, will be, a Lien on all the
Property Additions to be deemed to have been made the
basis of the authentication and delivery of Bonds
then Outstanding which shall have been authenticated
and delivered under Section 4.02 on the basis of
Pledged Bonds authenticated and delivered under such
Class "A" Mortgage, subject to no Lien thereon prior
to the Lien of this Indenture except Permitted Liens;
and
(B) that the Company has corporate
authority to operate the Property Additions with
respect to which such application is made;
(vii) an Opinion of Counsel to the effect that upon
satisfaction and discharge of such Class "A" Mortgage the Lien
of this Indenture on the property formerly subject to the Lien
of such Class "A" Mortgage, to the extent the same is part of
the Mortgaged Property, will be subject to no Lien prior to
the Lien of this Indenture except Permitted Liens and Liens of
the character permitted to exist or to be hereafter created
under Section 6.06; and
(viii) copies of the instruments of conveyance,
assignment and transfer, if any, specified in the Opinion of
Counsel provided for in clause (vi) above.
(b) The amount of the Cost of any Property Additions and
the Fair Value thereof to the Company and the fair market value in cash
of any securities or other property so delivered in payment therefor or
for the acquisition thereof
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shall be determined for the purposes of this Section by the appropriate
certificate provided for this Section.
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ARTICLE EIGHT
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY
Section 8.01. Quiet Enjoyment.
Unless one or more Events of Default shall have occurred and
be continuing, the Company shall be permitted to possess, use and enjoy the
Mortgaged Property (except such cash as is expressly required to be deposited
with the Trustee and except, to the extent not otherwise provided herein, such
securities as are expressly required to be deposited with the Trustee).
Section 8.02. Dispositions without Release.
Unless an Event of Default shall have occurred and be
continuing, the Company may at any time and from time to time, without any
release or consent by, or report to, the Trustee:
(a) sell or otherwise dispose of, free from the Lien of
this Indenture, or abandon or otherwise retire, any machinery,
apparatus, equipment, frames, towers, poles, wire, pipe, cable,
conduit, mains, tubes, drains, valves, tools, or implements, or any
other fixture or personalty, then subject to the Lien hereof, which
shall have become old, inadequate, obsolete, worn out, unfit,
unadapted, unserviceable, undesirable or unnecessary for use in one or
more of the Primary Purposes of the Company's Business;
(b) cancel or make changes in or alterations of or
substitutions for any and all leases;
(c) alter, change the location of, add to, repair and
replace any and all transmission and distribution lines, pipes,
substations, machinery, fixtures and other equipment;
(d) cancel, make changes in or substitutions for or
dispose of any and all rights of way (including easements and
licenses);
(e) surrender or assent to the modification of any
franchise (including in that term any ordinances, indeterminate
permits, licenses or other operating rights, however denominated,
granted by federal, state, municipal or other governmental authority)
under which the Company may be operating if, in the judgment of the
Company, it is advisable to do so;
(f) abandon, or permit the abandonment of, the operation
of any Mortgaged Property and surrender any franchise (as defined in
Section 8.02(e)) under which such Mortgaged Property is operated, if,
in the judgment of the Company, the operation of such Mortgaged
Property and such
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franchise is not, under the circumstances, necessary or important for
the operation of the remaining Mortgaged Property, or whenever the
Company deems such abandonment or surrender to be advisable for any
reason; provided however, that if the amount at which such Mortgaged
Property and all other Mortgaged Property so abandoned or surrendered
during the same calendar year was originally charged to the fixed
property accounts of the Company is equal to ten percent (10%) or more
of the aggregate principal amount of Bonds Outstanding and Class "A"
Bonds Outstanding (other than Pledged Bonds) immediately prior to such
abandonment or surrender, there shall be furnished to the Trustee an
Independent Engineer's Certificate to the effect that neither such
Mortgaged Property nor such franchise is, under the circumstances,
necessary or important for the operation of the remaining property of
the Company or that such abandonment or surrender is advisable for some
other specified reason, and in either case that such abandonment or
surrender will not impair the security under this Indenture in
contravention of the provisions hereof; and
(g) grant, free from the Lien of this Indenture,
easements, ground leases or rights of way in, upon, over or across the
property or rights of way of the Company for the purpose of roads, pipe
lines, transmission lines, distribution lines, communication lines,
railways, removal of coal or other minerals or timber, and other like
purposes, or for the joint or common use of real property, rights of
way, facilities or equipment; provided, however, that such grant shall
not materially impair the use of the property or rights of way for the
purposes for which such property or rights of way are held by the
Company.
Section 8.03. Release of Mortgaged Property if Bonding
Ratio Test Satisfied.
Unless an Event of Default shall have occurred and be
continuing, upon receipt of a Company Order requesting the release of Mortgaged
Property pursuant to this Section 8.03, the Trustee shall execute and deliver to
the Company the documents and instruments described in Section 8.03(a),
releasing from the Lien of this Indenture any Mortgaged Property if the Fair
Value of all of the Mortgaged Property (excluding the Mortgaged Property to be
released but including any Property Additions to be acquired by the Company with
the proceeds of, or otherwise in connection with, such release) stated on the
Engineer's Certificates delivered pursuant to Section 8.03(b) and Section
8.03(c), equals or exceeds an amount equal to twenty-fourteenths (20/14ths) of
the aggregate principal amount of Bonds Outstanding and Class "A" Bonds
Outstanding (other than Pledged Bonds) at the date of such Company Order as
stated on the Officer's Certificate delivered pursuant to Section 8.03(d), upon
receipt by the Trustee of:
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(a) documents and instruments releasing without recourse
the interest of the Trustee in the Mortgaged Property to be released,
and describing in reasonable detail the Mortgaged Property to be
released;
(b) an Engineer's Certificate, dated the date of such
Company Order, stating (i) that the signers of such Engineer's
Certificate have examined the Officer's Certificate delivered pursuant
to Section 8.03(d) in connection with such release, (ii) the Fair
Value, in the opinion of the signers of such Engineer's Certificate, of
(A) all of the Mortgaged Property, and (B) the Mortgaged Property to be
released, in each case as of a date not more than 90 days prior to the
date of such Company Order, and (iii) that in the judgment of such
signers, such release (A) will not materially adversely affect the
Primary Purposes of the Company's Business, and (B) will not impair the
security under this Indenture in contravention of the provisions
hereof;
(c) in case any Property Additions are being acquired by
the Company with the proceeds of, or otherwise in connection with, such
release, an Engineer's Certificate, dated the date of such Company
Order, as to the Fair Value, as of a date not more than 90 days prior
to the date of such Company Order, of the Property Additions being so
acquired (and if within six months prior to the date of acquisition by
the Company of the Property Additions being so acquired, any property
included within such Property Additions had been used or operated by
others than the Company in a business similar to that in which it has
been or is to be used or operated by the Company, and the Fair Value
thereof to the Company, as set forth in such Engineer's Certificate, is
not less than Twenty-Five Thousand Dollars ($25,000) and not less than
one percent (1%) of the sum of (i) the aggregate principal amount of
Bonds then Outstanding, and (ii) the aggregate principal amount of
Class "A" Bonds then Outstanding other than Pledged Bonds, such
certificate shall be an Independent Engineer's Certificate); and
(d) an Officer's Certificate, dated the date of such
Company Order, stating (i) that the aggregate principal amount of
Outstanding Bonds and Class "A" Bonds (other than Pledged Bonds)
outstanding at the date of such Company Order, and stating that the
Fair Value of all of the Mortgaged Property (excluding the Mortgaged
Property to be released but including any Property Additions to be
acquired by the Company with the proceeds of, or otherwise in
connection with, such release) stated on the Engineer's Certificate
filed pursuant to Section 8.03(b) equals or exceeds an amount equal to
twenty-fourteenths (20/14ths) of such aggregate principal amount, and
(ii) that, to the knowledge of the signer, no Event of Default has
occurred and is continuing.
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Section 8.04. Release of Limited Amount of Mortgaged
Property.
If the Company is unable, or elects not, to obtain, in
accordance with Section 8.03, the release from the Lien of this Indenture of
Mortgaged Property, unless an Event of Default shall have occurred and be
continuing, upon receipt of a Company Order requesting the release of Mortgaged
Property pursuant to this Section 8.04, the Trustee shall execute and deliver to
the Company the documents and instruments described in Section 8.04(a) releasing
from the Lien of this Indenture any Mortgaged Property if the Fair Value
thereof, as stated on the Engineer's Certificate delivered pursuant to Section
8.04(b), is less than one percent (1%) of the aggregate principal amount of
Bonds Outstanding and Class "A" Bonds Outstanding (other than Pledged Bonds) at
the date of such Company Order, provided that the aggregate Fair Value of all
Mortgaged Property released pursuant to this Section 8.04, as stated on all
Engineer's Certificates filed pursuant to this Section 8.04(b) in any period of
12 consecutive calendar months which includes the date of such Engineer's
Certificate, shall not exceed three percent (3%) of the aggregate principal
amount of Bonds Outstanding and Class "A" Bonds Outstanding (other than Pledged
Bonds) at the date of such Company Order as stated on the Officer's Certificate
delivered pursuant to Section 8.04(c), upon receipt by the Trustee of:
(a) documents and instruments releasing without recourse
the interest of the Trustee in the Mortgaged Property to be released,
and describing in reasonable detail the Mortgaged Property to be
released;
(b) an Engineer's Certificate, dated the date of such
Company Order, stating (i) that the signer of such Engineer's
Certificate has examined the Officer's Certificate delivered pursuant
to Section 8.04(c) in connection with such release, (ii) the Fair
Value, in the opinion of the signers of such Engineer's Certificate, of
such Mortgaged Property to be released as of a date not more than 90
days prior to the date of such Company Order, and (iii) that in the
judgment of such signers, such release will not impair the security
under this Indenture in contravention of the provisions hereof;
(c) an Officer's Certificate, dated the date of such
Company Order, stating (i) the aggregate principal amount of Bonds
Outstanding and Class "A" Bonds Outstanding (other than Pledged Bonds)
at the date of such Company Order, (ii) that one percent (1%) of such
aggregate principal amount exceeds the Fair Value of the Mortgaged
Property for which such release is applied for, (iii) that three
percent (3%) of such aggregate principal amount exceeds the aggregate
Fair Value of all Mortgaged Property released from the Lien of this
Indenture pursuant to this Section 8.04, as shown by all Engineer's
Certificates filed pursuant to Section
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8.04(b) in such period of 12 consecutive calendar months, and (iv)
that, to the knowledge of the signer, no Event of Default has occurred
and is continuing.
Section 8.05. Release of Mortgaged Property Not
Subject to a Class "A" Mortgage.
(a) If the Company is unable, or elects not, to obtain,
in accordance with Section 8.03, the release from the Lien of this
Indenture of Mortgaged Property which is not subject to a Class "A"
Mortgage, unless an Event of Default shall have occurred and be
continuing, on the basis of cash, Government Obligations, purchase
money obligations, Property Additions acquired by the Company with the
proceeds of, or otherwise in connection with, such release, or the
waiver of the right to the authentication and delivery of Bonds as
described in subclause (B) of clause (iii) of this Section 8.05(a), or
a combination thereof, upon receipt of a Company Order requesting the
release of Mortgaged Property pursuant to this Section 8.05, the
Trustee shall execute and deliver to the Company the documents and
instruments described in Section 8.05(a)(i) releasing such Mortgaged
Property from the Lien of this Indenture, upon receipt by the Trustee
of:
(i) appropriate documents and instruments
releasing without recourse the interest of the Trustee in the
Mortgaged Property to be released, describing in reasonable
detail the Mortgaged Property to be released and stating the
amount and character of the proceeds to be received by the
Company therefor;
(ii) an Engineer's Certificate, dated the date of
such Company Order, stating (A) that the signers of such
Engineer's Certificate have examined the Officer's
Certificate, if any, delivered pursuant to clause (iii) of
this Section 8.05(a) in connection with such release, (B) the
Fair Value, in the opinion of the signers of such Engineer's
Certificate, of the Mortgaged Property to be released as of a
date not more than 90 days prior to the date of such Company
Order, (C) the fair market value in cash, in the opinion of
such signers (which opinion may be based on an Appraiser's
Certificate), of any Government Obligations and purchase money
obligations included in the consideration for such release,
and (D) that in the judgment of such signers, such release
will not impair the security under this Indenture in
contravention of the provisions hereof;
(iii) (A) an aggregate amount of Government
Obligations and purchase money obligations having a fair
market value in cash as evidenced by an Appraiser's
Certificate, cash and evidence of the
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acquisition by the Company of Property Additions with the
proceeds of, or otherwise in connection with, such release
(the amount of such Property Additions shall be the Fair Value
thereof as of a date not more than 90 days prior to the date
of such Company Order, as evidenced to the Trustee by an
Engineer's Certificate dated the date of such Company Order,
and if within six months prior to the date of acquisition by
the Company of the Property Additions being so acquired, any
property included within such Property Additions had been used
or operated by others than the Company in a business similar
to that in which it has been or is to be used or operated by
the Company, and the Fair Value thereof to the Company, as set
forth in such Engineer's Certificate, is not less than
Twenty-Five Thousand Dollars ($25,000) and not less than one
percent (1%) of the sum of (i) the aggregate principal amount
of Bonds then Outstanding, and (ii) the aggregate principal
amount of Class "A" Bonds then Outstanding other than Pledged
Bonds, such certificate shall be an Independent Engineer's
Certificate), not less than the Fair Value of the Mortgaged
Property to be released, or (B) an Officer's Certificate,
dated the date of such Company Order, waiving the right of the
Company to the authentication and delivery of an aggregate
principal amount of Bonds up to the amount required by
subclause (A) of clause (iii) of this Section 8.05(a), on the
basis of Class "A" Bonds under Section 4.02 or on the basis of
Retired Bonds under Section 4.04, and stating the matters
required to be stated in the Officer's Certificates provided
for in clause (vi) of Section 4.01(a) and in clause (iv) of
Section 4.02(b) or clause (ii) of Section 4.04(b), as the case
may be, in either case appropriately modified to reflect that
the action being taken is the waiver of the right to, rather
than a request for, the authentication and delivery of Bonds,
or (C), a combination of the items specified in subclauses (A)
and (B) of clause (iii) of this Section 8.05(a);
(iv) in case any obligations secured by purchase
money mortgage upon the Mortgaged Property to be released are
included in the consideration for such release and are
delivered to the Trustee in connection with such release, an
Opinion of Counsel, dated the date of the Company Order,
stating that, in the opinion of the signer, such obligations
are valid obligations enforceable in accordance with their
terms, subject to the Customary Exceptions, and that the
purchase money mortgage securing the same is sufficient to
afford a valid purchase money Lien upon the property to be
released subject to no Lien prior thereto except Permitted
Liens and such Liens, if any, as shall have
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existed thereon just prior to such release as Liens prior to
the Lien of this Indenture; and
(v) an Officer's Certificate, dated the date of
such Company Order, stating that, to the knowledge of the
signer, no Event of Default has occurred and is continuing.
(b) Any purchase money obligations received or to be
received by the Trustee under this Indenture in consideration for the
release of any Mortgaged Property from the Lien of this Indenture by
the Trustee, and the purchase money mortgage securing such purchase
money obligations, shall be released by the Trustee from the Lien of
this Indenture and delivered or assigned to the Company, or as it shall
request, upon payment by the Company to the Trustee of the unpaid
principal of such purchase money mortgage and/or of the obligations
thereby secured; the principal of any such purchase money obligations
not so released shall be paid to or collected by the Trustee as and
when such principal shall become payable, and the Trustee may take any
action which in its judgment may be desirable or necessary to preserve
the security of such purchase money mortgage.
(c) Any cash deposited with the Trustee under this
Section 8.05 may thereafter be withdrawn, used or applied in the
manner, to the extent and for the purposes, and subject to the
conditions, provided in Section 8.06.
Section 8.06. Withdrawal or Other Application of
Funded Cash.
(a) Subject to the provisions of Section 4.05 and Section
6.07 and except as hereafter in this Section provided, unless an Event
of Default shall have occurred and be continuing, any Funded Cash held
by the Trustee, and any other cash which is required to be withdrawn,
used or applied as provided in this Section:
(i) may be withdrawn from time to time by the
Company to the extent of the Cost or the Fair Value to the
Company (whichever is less) of Unbonded Property Additions,
after making any deductions pursuant to Section 1.04(b),
described in an Engineer's Certificate, dated not more than
ninety (90) days prior to the date of the Company Order
requesting such withdrawal and complying with clause (ii) of
Section 4.03(b), delivered to the Trustee; provided, however,
that the deductions contemplated by Section 1.04(b) shall not
be required to be made if such Property Additions were
acquired, made or constructed on or after the ninetieth (90th)
day preceding the date of such Company Order;
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(ii) may be withdrawn from time to time by the
Company (A) in the case of cash deposited with the Trustee
under Section 4.05 or Section 7.02(a), to the extent of the
aggregate principal amount of Bonds the authentication and
delivery of which the Company shall be entitled under the
provisions of Section 4.04, by virtue of compliance with all
applicable provisions of Section 4.04 (except as hereinafter
in this Section otherwise provided) and (B) in the case of all
other Funded Cash and any other cash, in an amount equal to
twenty-fourteenths (20/14ths) of such aggregate principal
amount; provided, however, that such withdrawal of cash shall
operate as a waiver by the Company of the right to the
authentication and delivery of such Bonds and, to such extent
no such Bonds may thereafter be authenticated and delivered
hereunder; and any such Bonds which were the basis of such
right to the authentication and delivery of Bonds so waived
shall be deemed to have been made the basis of such withdrawal
of cash;
(iii) may be withdrawn from time to time by the
Company in an amount equal to twenty-fourteenths (20/14ths) of
the aggregate principal amount of any Outstanding Bonds
delivered to the Trustee;
(iv) may, upon the request to the Company, be used
by the Trustee for the purchase of Bonds in the manner, at the
time or times, in the amount or amounts, at the price or
prices (not exceeding twenty- fourteenths (20/14ths) of the
principal amount thereof) and otherwise as directed or
approved by the Company; or
(v) may, upon the request of the Company, be
applied by the Trustee to the payment at Stated Maturity of
any Bonds or to the redemption of any Bonds which are, by the
terms, redeemable, in each case of such series as may be
designated by the Company, any such redemption to be in the
manner and as provided in Article Five.
(b) Such moneys shall, from time to time, be paid or used
or applied by the Trustee, as aforesaid, upon the request of the
Company in a Company Order, and upon receipt by the Trustee of an
Officer's Certificate stating that no Event of Default has occurred and
is continuing. If and to the extent that the withdrawal of cash is
based upon Unbonded Property Additions (as permitted under the
provisions of clause (i) of Section 8.06(a)), the Company shall,
subject to the provisions of said clause (i) and except as hereafter in
this subsection (b) provided, comply with all applicable provisions of
this Indenture as if such Property Additions were made the basis for
the
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authentication and delivery of Bonds equal in principal amount to
seventy percent (70%) of the cash so to be withdrawn. If and to the
extent that the withdrawal of cash is based upon the right to the
authentication and delivery of Bonds (as permitted under the provisions
of clause (ii) of Section 8.06(a)), the Company shall, except as
hereafter in this subsection (b) provided, comply with all applicable
provisions of Section 4.04 relating to such authentication and
delivery. Notwithstanding the foregoing provisions of this subsection
(b) and of Section 4.04, in no event shall the Company be required to
comply with Section 4.01.
(c) The principal of and interest on any obligations
secured by a purchase money mortgage held by the Trustee shall be
collected by the Trustee as and when the same become payable. Unless an
Event of Default shall have occurred and be continuing, the interest
received by the Trustee on any such obligations shall be remitted to
the Company, and any payments received by the Trustee on account of the
principal of any such obligations in excess of the amount of credit
used by the Company in respect of such obligations upon the release of
any property from the Lien hereof shall be deemed not to constitute
Funded Cash and shall also be remitted to the Company. The Trustee
shall have and may exercise all the rights and powers of an owner of
such obligations and of all substitutions therefor and, without
limiting the generality of the foregoing may collect and receive all
insurance moneys payable to it under any of the provisions thereof and
apply the same in accordance with the provisions thereof, may consent
to extensions thereof at a higher or lower rate of interest, may join
in any plan or plans of voluntary or involuntary reorganization or
readjustment or rearrangement and may accept and hold hereunder new
obligations, stocks or other securities issued in exchange therefor
under any such plan. Any discretionary action which the Trustee may be
entitled to take in connection with any such obligations or
substitutions therefor shall be taken, so long as no Event of Default
shall exist, in accordance with a Company Order, and, during the
existence of an Event of Default, in its own discretion.
(d) Any Bonds received by the Trustee pursuant to the
provisions of this Section shall forthwith be canceled by the Trustee.
Section 8.07. Release of Property Taken by Eminent
Domain, etc.
Should any of the Mortgaged Property, or any interest therein,
be taken by exercise of the power of eminent domain or be sold to an entity
possessing the power of eminent domain under a threat to exercise the same, and
should the Company not elect to obtain the release of such property pursuant to
other provisions of this Article Eight, the Trustee shall, upon request
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of the Company evidenced by a Company Order, release from the Lien hereof all
its right, title and interest in and to the property so taken or sold (or with
respect to an interest in property, subordinate the Lien hereof to such
interest), upon receiving (a) an Opinion of Counsel to the effect that such
property has been taken by exercise of the power of eminent domain or has been
sold to an entity possessing the power of eminent domain under threat of an
exercise of such power, (b) an Officer's Certificate stating the amount of net
proceeds received or to be received for such property so taken or sold under
threat of exercise of such power, and the amount so stated shall be deemed to be
the Fair Value of such property for the purpose of any notice to the Holders of
Bonds, and (c) a deposit by the Company of an amount in cash equal to the Cost
of the Mortgaged Property so taken or sold (or, if the Fair Value to the Company
of such property at the time the same became Mortgaged Property was less than
the Cost thereof, then such Fair Value in lieu of Cost); provided, however, that
no such deposit shall be required to be made hereunder if the proceeds of such
taking or sale shall, as indicated in an Officer's Certificate delivered to the
Trustee, have been deposited with the trustee or other holder of a Class "A"
Mortgage or other Lien prior to the Lien of this Indenture. Any cash deposited
with the Trustee under this Section may thereafter be withdrawn, used or applied
in the manner, to the extent and for the purposes, and subject to the
conditions, provided in Section 8.06.
Section 8.08. Alternative Release Provision.
In lieu of the other provisions for the release of the
Mortgaged Property provided in this Indenture, unless an Event of Default shall
have occurred and be continuing, the Company may in the alternative obtain the
release of any part of the Mortgaged Property which is subject to the Lien of a
Class "A" Mortgage (except cash or obligations secured by a purchase money
mortgage) by delivery to the Trustee of an Officer's Certificate as to the
non-existence of an Event of Default referred to above, an Engineer's
Certificate as to the Fair Value of the property to be released and a copy of a
release of such part of the Mortgaged Property from the Lien of such Class "A"
Mortgage executed by the trustee thereunder; provided, however, that this
Section shall not apply with respect to any release of Mortgaged Property from
the Lien of any Class "A" Mortgage in connection with the discharge of such
Class "A" Mortgage.
Section 8.09. Disclaimer or Quitclaim.
In case the Company has sold, exchanged, dedicated or
otherwise disposed of, or has agreed or intends to sell, exchange, dedicate or
otherwise dispose of, or a Governmental Authority has lawfully ordered the
Company to divest itself of, any property of a character excepted from the Lien
hereof, or the Company desires to disclaim or quitclaim title to property to
which the Company does not purport to have title, the Trustee
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shall, from time to time, execute such instruments of disclaimer or quitclaim as
may be appropriate upon receipt by the Trustee of the following:
(a) an Officer's Certificate describing in reasonable
detail the property to be disclaimed or quitclaimed; and
(b) an Opinion of Counsel stating the signer's opinion
that such property is not subject to the Lien hereof or required to be
subject thereto by any of the provisions hereof and that the execution
of such disclaimer or quitclaim is appropriate.
Section 8.10. Miscellaneous.
(a) If the Mortgaged Property shall be in the possession
of a receiver or trustee, lawfully appointed, the powers hereinbefore
conferred upon the Company with respect to the release of any part of
the Mortgaged Property or any interest therein or the withdrawal of
cash may be exercised, with the approval of the Trustee, by such
receiver or trustee, notwithstanding that an Event of Default may have
occurred and be continuing, and any request, certificate, appointment
or approval made or signed by such receiver or trustee for such
purposes shall be as effective as if made by the Company or any of its
officers or appointees in the manner herein provided; and if the
Trustee shall be in possession of the Mortgaged Property under any
provision of this Indenture, then such powers may be exercised by the
Trustee in its discretion notwithstanding that an Event of Default may
have occurred and be continuing.
(b) If any property released from the Lien of this
Indenture as provided in Section 8.03, 8.04 or 8.05 shall continue to
be owned by the Company after such release, this Indenture shall not
become or be, or be required to become or be, a Lien upon such property
or any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such
property unless the Company shall execute and deliver to the Trustee an
indenture supplemental hereto, in recordable form, containing a grant,
conveyance, transfer and mortgage thereof to the Trustee.
(c) Notwithstanding the occurrence and continuance of an
Event of Default, the Trustee, in its discretion, may release from the
Lien hereof any part of the Mortgaged Property or permit the withdrawal
of cash, upon compliance with the other conditions specified in this
Article in respect thereof.
(d) No purchaser in good faith of property purporting to
have been released hereunder shall be bound to ascertain the authority
of the Trustee to execute the release, or to
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inquire as to any facts required by the provisions hereof for the
exercise of this authority; nor shall any purchaser or grantee of any
property or rights permitted by this Article to be sold, granted,
exchanged, dedicated or otherwise disposed of, be under obligation to
ascertain or inquire into the authority of the Company to make any such
sale, grant, exchange, dedication or other disposition.
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ARTICLE NINE
SATISFACTION AND DISCHARGE
Section 9.01. Satisfaction and Discharge of Bonds.
(a) Any Bond or Bonds, or any portion of the principal
amount thereof, shall be deemed to have been paid for all purposes of
this Indenture, and the entire indebtedness of the Company in respect
thereof shall be deemed to have been satisfied and discharged, if there
shall have been irrevocably deposited with the Trustee, in trust:
(i) money (including Funded Cash not otherwise
applied pursuant to Section 8.06) in an amount which shall be
sufficient, or
(ii) in the case of a deposit made prior to the
Maturity of such Bonds or portions thereof, Eligible
Obligations, which shall not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will
provide moneys which shall be sufficient, or
(iii) a combination of (i) or (ii) which shall be
sufficient,
to pay when due the principal of and premium, if any, and interest, if
any, due and to become due on such Bonds or portions thereof; provided,
however, that in the case of the provision for payment or redemption of
less than all the Bonds of any series or Tranche, such Bonds or
portions thereof shall have been selected by the Bond Registrar as
provided herein and, in the case of a redemption, the notice requisite
to the validity of such redemption shall have been given or irrevocable
authority shall have been given by the Company to the Trustee and the
Bond Registrar to give such notice, under arrangements satisfactory to
the Trustee; and provided, further, that the Company shall have
delivered to the Trustee:
(x) if such deposit shall have been made prior to
the Maturity of such Bonds, a Company Order stating that the
money and Eligible Obligations deposited with the Trustee in
accordance with this Section shall be held by the Trustee, in
trust, as provided in Section 9.03; and
(y) if Eligible Obligations shall have been
deposited with the Trustee, an Opinion of Counsel that the
obligations so deposited with the Trustee
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constitute Eligible Obligations and do not contain provisions
permitting the redemption or other prepayment at the option of
the issuer thereof, and an opinion of an Independent public
accountant of nationally recognized standing, selected by the
Company, to the effect that the other requirements set forth
in clause (ii) above have been satisfied.
(b) Upon receipt by the Trustee of money or Eligible
Obligations, or both, in accordance with this Section, together with
the documents required by clauses (x) and (y) of Section 9.01(a), (i)
the Holders of the Bonds or portions thereof in respect of which such
deposit was made shall no longer be entitled to the benefit of the
covenants of the Company under Article Six (except the covenants
contained in Sections 6.01(a), 6.02 and 6.03), and (ii) the Trustee
shall, upon receipt of a Company Request, acknowledge in writing that
such Bonds or portions thereof are deemed to have been paid for all
purposes of this Indenture and that the entire indebtedness of the
Company in respect thereof is deemed to have been satisfied and
discharged.
(c) If payment at Stated Maturity of less than all of the
Bonds of any series, or any Tranche thereof, is to be provided for in
the manner and with the effect provided in this Section, the Bond
Registrar shall select such Bonds, or portions of principal amount
thereof in the manner specified by Section 5.03 for selection for
redemption of less than all the Bonds of a series or Tranche, unless a
different manner is specified as contemplated by Section 3.01 for Bonds
of such series or Tranche.
(d) In the event that Bonds which shall be deemed to have
been paid as provided in this Section do not mature and are not to be
redeemed within the sixty (60) day period commencing with the date of
the deposit with the Trustee of moneys or Eligible Obligations as
aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect to
such Bonds, to the Holders of such Bonds to the effect that such
deposit has been made and the effect thereof.
(e) Notwithstanding the satisfaction and discharge of any
Bonds as aforesaid, the obligations of the Company and the Trustee in
respect of such Bonds under Sections 3.04, 3.05, 3.06, 5.04, 6.02,
6.03, 11.07 and 11.15, Article Seven and this Article Nine shall
survive.
(f) The Company shall pay, and shall indemnify the
Trustee and each Holder of Bonds which are deemed to have been paid as
provided in this Section against, any tax, fee or other charge imposed
on or assessed against the Eligible Obligations deposited with the
Trustee or the principal or
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interest received by the Trustee in respect of such Eligible
Obligations.
(g) Anything herein to the contrary notwithstanding, if,
at any time after a Bond would be deemed to have been satisfied or
discharged pursuant to this Section (without regard to the provisions
of this subsection (g)), the Trustee shall be required to return the
money or Eligible Obligations, or combination thereof, deposited with
it as aforesaid to the Company or its representative under any
applicable federal or state bankruptcy, insolvency or other similar
law, the indebtedness of the Company in respect of such Bond shall
thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain Outstanding.
Section 9.02. Satisfaction and Discharge of Indenture.
(a) This Indenture shall upon Company Request cease to be
of further effect (except as hereinafter expressly provided), and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture,
when
(i) either:
(A) all Bonds theretofore authenticated
and delivered (other than (1) Bonds which have been
destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.06, and (2)
Bonds deemed to have been paid in accordance with
Section 9.01) have been delivered to the Trustee for
cancellation; or
(B) all Bonds not theretofore delivered to
the Trustee for cancellation (other than Bonds
described in clause (1) of subclause (A) above) shall
be deemed to have been paid in accordance with
Section 9.01;
(ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
(b) Notwithstanding the satisfaction and discharge of
this Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 11.07 and 11.15 and this Article Nine shall
survive.
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(c) Upon satisfaction and discharge of this Indenture as
provided in this Section, the Trustee shall assign, transfer, reconvey
and otherwise turn over to the Company the Mortgaged Property (other
than money and Eligible Obligations held by the Trustee pursuant to
Section 9.03) and shall execute and deliver to the Company such deeds
and other instruments as, in the judgment of the Company, shall be
necessary, desirable or appropriate to effect or evidence such
assignment, transfer, reconveyance and turning over and the release and
discharge of the Lien of this Indenture.
Section 9.03. Application of Trust Money.
Neither the Eligible Obligations nor the money deposited with
the Trustee pursuant to Section 9.01, nor the principal or interest payments on
any such Eligible Obligations, shall be withdrawn or used for any purpose other
than, and shall be held in trust for, the payment of the principal of and
premium, if any, and interest, if any, on the Bonds or portions of principal
amount thereof in respect of which such deposit was made, all subject, however,
to the provisions of Section 6.03; provided, however, that, unless an Event of
Default shall have occurred and be continuing, any cash received from such
principal or interest payments on such Eligible Obligations deposited with the
Trustee, if not then needed for such purpose, shall, to the extent practicable,
be invested in Eligible Obligations of the type described in clause (ii) of
Section 9.01(a), and, subject to the rights of the Trustee under Section 11.07,
interest earned from such reinvestment shall be paid over to the Company as
received by the Trustee, free and clear of the Lien of this Indenture; and
provided, further, that unless an Event of Default shall have occurred and be
continuing, any moneys held by the Trustee in accordance with this Section on
the Maturity of all such Bonds in excess of the amount required to pay the
principal of and premium, if any, and interest, if any, then due on such Bonds,
subject to the rights of the Trustee under Section 11.07, shall be paid over to
the Company free and clear of the Lien of this Indenture.
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ARTICLE TEN
EVENTS OF DEFAULT; REMEDIES
Section 10.01. Events of Default.
An "Event of Default", wherever used herein with respect to
the Bonds, means any one the following events:
(a) failure to pay interest, if any, on any Bond within
sixty (60) days after same becomes due and payable; or
(b) failure to pay the principal of or premium, if any,
on any Bond within fifteen (15) days after its Maturity; or
(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance of which or breach of which is
elsewhere in this Section specifically dealt with) for a period of
sixty (60) days after there has been given, by registered or certified
mail, to the Company by the Trustee, or to the Company and the Trustee
by the Holders of at least 50% in principal amount of the Bonds then
Outstanding, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder, unless the Trustee, or the Trustee and the
Holders of a principal amount of Bonds not less than the principal
amount of Bonds the Holders of which gave such notice, as the case may
be, shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Bonds, as the case may be, shall be
deemed to have agreed to an extension of such period if corrective
action is initiated by the Company within such period and is being
diligently pursued; or
(d) the entry by a court having jurisdiction in the
premises of (i) a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or
(ii) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition by one or more Persons other
than the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for relief or
any such other decree or order shall have remained unstayed and in
effect for a period of ninety (90) consecutive days; or
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(e) the commencement by the Company of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in a case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the
authorization of such action by the Board of Directors; or
(f) the occurrence of a Matured Event of Default under
any Class "A" Mortgage; provided, however, that, anything in this
Indenture to the contrary notwithstanding, the waiver or cure of such
event of default under such Class "A" Mortgage and the rescission and
annulment of the consequences thereof shall constitute a waiver of the
corresponding Event of Default hereunder and a rescission and annulment
of the consequences thereof.
Section 10.02. Acceleration of Maturity; Rescission and
Annulment.
(a) If an Event of Default shall have occurred and be
continuing, then in every such case the Trustee or the Holders of not
less than a majority in aggregate principal amount of the Bonds then
Outstanding may declare the principal amount (or, if any of the Bonds
are Discount Bonds, such portion of the principal amount of such Bonds
as may be specified in the terms thereof as contemplated by Section
3.01) of all of the Bonds to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by
Holders), and upon receipt by the Company of notice of such declaration
such principal amount (or specified amount), together with premium, if
any, and accrued interest, if any, thereon, shall become immediately
due and payable.
(b) At any time after such a declaration of acceleration
of the maturity of the Bonds then Outstanding shall have been made, but
before any sale of any of the Mortgaged Property has been made and
before a judgment or decree for payment of the money due shall have
been obtained by the Trustee as provided in this Article, the Event or
Events of Default giving rise to such declaration of acceleration
shall, without further act, be deemed to have been waived, and such
declaration and its
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consequences shall, without further act, be deemed to have been
rescinded and annulled, if:
(i) the Company shall have paid or deposited with
the Trustee a sum sufficient to pay
(A) all overdue interest, if any, on all
Bonds then Outstanding;
(B) the principal of and premium, if any,
on any Bonds then Outstanding which have become due
otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed
therefor in such Bonds; and
(C) all amounts due to the Trustee under
Section 11.07; and
(ii) any other Event or Events of Default, other
than the non-payment of the principal of Bonds which shall
have become due solely by such declaration of acceleration,
shall have been cured or waived as provided in Section 10.17.
No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereon.
Section 10.03. Entry Upon Mortgaged Property.
If an Event of Default shall have occurred and be continuing,
the Company, upon demand of the Trustee and if and to the extent permitted by
law, shall forthwith surrender to the Trustee the actual possession of, and the
Trustee, by such officers or agents as it may appoint, may enter upon, and take
possession of, the Mortgaged Property; and the Trustee may hold, operate and
manage the Mortgaged Property, and in that connection shall have access to the
books and accounts of the Company, and may make all needful repairs and such
renewals, replacements, betterments and improvements as to the Trustee shall
seem prudent; and the Trustee may receive the rents, issues, profits, revenues
and other income of the Mortgaged Property; and, after deducting the costs and
expenses of entering, taking possession, holding, operating and managing the
Mortgaged Property, as well as payments for insurance and taxes and other proper
charges upon the Mortgaged Property prior to the Lien of this Indenture and
reasonable compensation to itself, its agents and counsel, the Trustee may apply
the same as provided in Section 10.07. Whenever all that is then due in respect
of the principal of and premium, if any, and interest, if any, on the Bonds and
under any of the terms of this Indenture shall have been paid and all defaults
hereunder shall have been cured, the Trustee shall surrender possession of the
Mortgaged Property to the Company.
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Section 10.04. Power of Sale; Suits for Enforcement.
If an Event of Default shall have occurred and be continuing,
the Trustee, by such officers or agents as it shall appoint, with or without
entry, in its discretion may, subject to the provisions of Section 10.16 and if
and to the extent permitted by law:
(a) sell, subject to any mandatory requirements of
applicable law, the Mortgaged Property as an entirety, or in such
parcels as the Holders of a majority in aggregate principal amount of
the Bonds then Outstanding shall in writing request, or in the absence
of such request, as the Trustee may determine, to the highest bidder at
public auction at such place and at such time (which sale may be
adjourned by the Trustee from time to time in its discretion by
announcement at the time and place fixed for such sale, without further
notice) and upon such terms as the Trustee may fix and briefly specify
in a notice of sale to be published once in each week for four
successive weeks prior to such sale in an Authorized Publication in
each Place of Payment for the Bonds of each series; or
(b) proceed to protect and enforce its rights and the
rights of the Holders of Bonds under this Indenture by sale pursuant to
judicial proceedings or by a suit, action or proceeding in equity or at
law or otherwise, whether for the specific performance of any covenant
or agreement contained in this Indenture or in aid of the execution of
any power granted in this Indenture or for the foreclosure of this
Indenture or for the enforcement of any other legal, equitable or other
remedy, as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or
the Holders of Bonds.
Section 10.05. Incidents of Sale.
Upon any sale of any of the Mortgaged Property, whether made
under the power of sale hereby given or pursuant to judicial proceedings, to the
extent permitted by law:
(a) the principal amount (or, if any of the Bonds are
Discount Bonds, such portion of the principal amount of such Bonds as
may be specified in the terms thereof as contemplated by Section 3.01)
of all Outstanding Bonds, if not previously due, shall at once become
and be immediately due and payable together with premium, if any, and
accrued interest, if any, thereon;
(b) any Holder or Holders of Bonds or the Trustee may bid
for and purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any
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Outstanding Bonds or claims for interest thereon in lieu of cash to the
amount which shall, upon distribution of the net proceeds of such sale,
be payable thereon, and such Bonds, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to
the Holders thereof after being appropriately stamped to show partial
payment;
(c) the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient deed, bill of sale and instrument of
assignment and transfer of the property sold;
(d) the Trustee is hereby irrevocably appointed the true
and lawful attorney of the Company, in its name and stead, to make all
necessary deeds, bills of sale and instruments of assignment and
transfer of the property so sold; and for that purpose it may execute
all necessary deeds, bills of sale and instruments of assignment and
transfer, and may substitute one or more persons, firms or corporations
with like power, the Company hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do
by virtue hereof; but, if so requested by the Trustee or by any
purchaser, the Company shall ratify and confirm any such sale or
transfer by executing and delivering to the Trustee or to such
purchaser or purchasers all proper deeds, bills of sale, instruments of
assignment and transfer and releases as may be designated in any such
request;
(e) all right, title, interest, claim and demand
whatsoever, either at law or in equity or otherwise, of the Company of,
in and to the property so sold shall be divested and such sale shall be
a perpetual bar both at law and in equity against the Company, its
successors and assigns, and against any and all persons claiming or who
may claim the property sold or any part thereof from, through or under
the Company; and
(f) the receipt of the Trustee or of the officer making
such sale shall be a sufficient discharge to the purchaser or
purchasers at such sale for his or her or their purchase money and such
purchaser or purchasers and his or her or their assigns or personal
representatives shall not, after paying such purchase money and
receiving such receipt, be obliged to see to the application of such
purchase money, or be in anywise answerable for any loss,
misapplication or non-application thereof.
Section 10.06. Collection of Indebtedness and Suits for
Enforcement by Trustee.
(a) If an Event of Default described in Section 10.01(a)
or 10.01(b) shall have occurred and be continuing, the Company shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders
of the Bonds with respect to which such Event of Default shall have
occurred, the whole amount then due and
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payable on such Bonds for principal and premium, if any, and interest,
if any, and, in addition thereto, such further amount as shall be
sufficient to cover any amounts due to the Trustee under Section 11.07.
(b) If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding
to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Bonds and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Bonds,
wherever situated.
(c) The Trustee shall, to the extent permitted by law, be
entitled to sue and recover judgment as aforesaid either before, during
or after the pendency of any proceedings for the enforcement of the
Lien of this Indenture, and in case of a sale of the Mortgaged Property
or any part thereof and the application of the proceeds of sale as
aforesaid, the Trustee, in its own name and as trustee of an express
trust, shall be entitled to enforce payment of, and to receive, all
amounts then remaining due and unpaid upon the Bonds then Outstanding
for principal, premium if any, and interest, if any, for the benefit of
the Holders thereof, and shall be entitled to recover judgment for any
portion of the same remaining unpaid, with interest as aforesaid. No
recovery of any such judgment by the Trustee and no levy of any
execution upon any such judgment upon any of the Mortgaged Property or
any other property of the Company shall affect or impair the Lien of
this Indenture upon the Mortgaged Property or any part thereof or any
rights, powers or remedies of the Trustee hereunder, or any rights,
powers or remedies of the Holders of the Bonds.
Section 10.07. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article,
including any rents, issues, profits, revenues and other income collected
pursuant to Section 10.03 (after the deductions therein provided) and any
proceeds of any sale (after deducting the costs and expenses of such sale,
including a reasonable compensation to the Trustee, its agents and counsel, and
any taxes, assessments or Liens prior to the Lien of this Indenture, except any
thereof subject to which such sale shall have been made), whether made under any
power of sale herein granted or pursuant to judicial proceedings, and any other
money collected by the Trustee under the provisions of this Indenture (unless
otherwise herein specifically provided for), together with, in the case of an
entry or sale or as otherwise provided herein, any other sums then held by the
Trustee as part of the Mortgaged Property, shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or premium, if
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any, or interest, if any, upon presentation of the Bonds and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 11.07;
SECOND: To the payment of the whole amount then due and
unpaid upon the Outstanding Bonds for principal and premium, if any, and
interest, if any, in respect of which or for the benefit of which such money has
been collected; and in case such proceeds shall be insufficient to pay in full
the whole amount so due and unpaid upon such Bonds, then to the payment of such
principal and interest, if any, without any preference or priority, ratably
according to the aggregate amount so due and unpaid, with any balance then
remaining to the payment of premium, if any, ratably as aforesaid; provided,
however, that any money specifically collected by the Trustee in respect of
interest or pursuant to Section 10.03 shall first be applied to the payment of
interest so due; and
THIRD: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may order.
Section 10.08. Receiver.
If an Event of Default shall have occurred and, during the
continuance thereof, the Trustee shall have commenced judicial proceedings to
enforce any right under this Indenture, the Trustee shall, to the extent
permitted by law, be entitled, as against the Company, without notice or demand
and without regard to the adequacy of the security for the Bonds or the solvency
of the Company, to the appointment of a receiver of the Mortgaged Property, and
of the rents, issues, profits, revenues and other income thereof, but,
notwithstanding the appointment of any receiver, the Trustee shall be entitled
to retain possession and control of, and to collect and receive the income from,
cash, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder.
Section 10.09. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Bonds or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Bonds shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or
otherwise:
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(i) to file and prove a claim for the whole amount
of principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Bonds and to file such other papers
or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for amounts due
to the Trustee under Section 11.07) and of the Holders allowed
in such judicial proceeding; and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amounts due it under Section 11.07.
(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.
Section 10.10. Trustee May Enforce Claims without
Possession of Bonds.
All rights of action and claims under this Indenture or on the
Bonds may be prosecuted and enforced by the Trustee without the possession of
any of the Bonds or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
recovered.
Section 10.11. Limitation on Suits.
No Holder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default;
(b) the Holders of not less than a majority in aggregate
principal amount of the Bonds then Outstanding shall have made written
request to the Trustee to institute proceedings in
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respect of such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute
any such proceeding; and
(e) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period by the
Holders of a majority in aggregate principal amount of the Bonds then
Outstanding;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 10.12. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Bond shall have the right, which is absolute and unconditional to
receive payment of the principal of and premium if any, and (subject to Section
3.07) interest, if any, on such Bond on the Stated Maturity or Maturities
expressed in such Bond (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Section 10.13. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
Section 10.14. Rights and Remedies Cumulative.
Except as otherwise provided in Section 3.06(f), no right or
remedy herein conferred upon or reserved to the Trustee or to the
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Holders is intended to be exclusive of any other right or remedy, and, subject
to Section 10.11, every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 10.15. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 10.16. Control by Holders of Bonds.
If an Event of Default shall have occurred and be continuing,
the Holders of a majority in aggregate principal amount of the Bonds then
Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee herein; provided, however, that
(a) such direction shall not be in conflict with any rule
of law or with this Indenture, and could not involve the Trustee in
personal liability in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate;
(b) such direction shall not be unduly prejudicial to the
rights of the nonassenting Holders; and
(c) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
Section 10.17. Waiver of Past Defaults.
(a) Before any sale of any of the Mortgaged Property and
before a judgment or decree for payment of the money due shall have
been obtained by the Trustee as hereinafter in this Article provided,
the Holders of not less than a majority in aggregate principal amount
of the Bonds then Outstanding may, by an Act of such Holders delivered
to the Trustee and the Company, on behalf of the Holders of all the
Bonds then Outstanding waive any past default hereunder and its
consequences, except a default:
(i) in the payment of the principal of or premium,
if any, or interest, if any, on any Bond Outstanding, or
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(ii) in respect of a covenant or provision hereof
which under Section 14.02(a) cannot be modified or amended
without the consent of the Holder of each Outstanding Bond of
any series or Tranche affected.
(b) Upon any such waiver, such default shall cease to
exist, and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.
Section 10.18. Undertaking for Costs.
The Company and the Trustee agree, and each Holder of Bonds by
its acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Bonds then Outstanding, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Bond on or after the Stated Maturity or
Maturities expressed in such Bond (or, in the case of redemption, on or after
the Redemption Date).
Section 10.19. Waiver of Appraisement and Other Laws.
To the full extent that it may lawfully so agree, the Company
shall not at any time set up, claim or otherwise seek to take the benefit or
advantage of any appraisement, valuation, stay, extension or redemption law now
or hereafter in effect, in order to prevent or hinder the enforcement of this
Indenture or the absolute sale of the Mortgaged Property, or any part thereof,
or the possession thereof, or any part thereof, by any purchaser at any sale
under this Article; and the Company, for itself and all who may claim under it,
so far as it or they now or hereafter may lawfully do so, hereby waives the
benefit of all such laws. The Company, for itself and all who may claim under
it, waives, to the extent that it may lawfully do so, all right to have the
Mortgaged Property marshalled upon any foreclosure of the Lien hereof, and
agrees that any court having jurisdiction to foreclose the Lien of this
Indenture may order the sale of the Mortgaged Property as an entirety.
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Section 10.20. Defaults under Class "A" Mortgages.
In addition to every other right and remedy provided herein,
the Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and holder of Pledged Bonds which arises as a result of a
default or Matured Event of Default under any Class "A" Mortgage, whether or not
an Event of Default shall then have occurred and be continuing.
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ARTICLE ELEVEN
THE TRUSTEE
Section 11.01. Certain Duties and Responsibilities.
(a) The Trustee shall have and be subject to all the
duties and responsibilities and all of the protections, exculpations
and limitations on liability specified with respect to an indenture
trustee in the Trust Indenture Act, including those deemed by the Trust
Indenture Act to be included herein, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(b) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
Section 11.02. Notice of Defaults.
(a) The Trustee shall give the Holders notice of any
default hereunder in the manner and to the extent required to do so by
the Trust Indenture Act, unless such default shall have been cured or
waived; provided, however, that in the case of any default of the
character specified in Section 10.01(c), no such notice to Holders
shall be given until at least 45 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which
is, or after notice or lapse of time, or both, would become, an Event
of Default.
(b) The Trustee shall give to the trustee under each
Class "A" Mortgage a copy of each notice of default given to the
Holders pursuant to this Section. In addition, the Trustee shall give
to the Holders copies of each notice of default under any Class "A"
Mortgage given to the Trustee in its capacity as owner and holder of
Pledged Bonds issued and outstanding thereunder.
Section 11.03. Certain Rights of Trustee.
Subject to the provisions of Section 11.01:
(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,
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direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order, or as otherwise expressly provided herein, and any resolution of
the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence is specifically prescribed herein) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any Holder pursuant to this Indenture, unless
such Holder shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during normal
business hours, the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) except as otherwise provided in Section 10.01(c), the
Trustee shall not be charged with knowledge of any Event of Default
unless either (i) a Responsible Officer of the Trustee
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assigned to the Corporate Trust Administration Division of the Trustee
(or any successor division or department of the Trustee) shall have
actual knowledge of the Event of Default, or (ii) written notice of
such Event of Default shall have been given to the Trustee by the
Company, any other obligor on the Bonds or by any Holder of such Bonds
or, in the case of an Event of Default described in Section 10.01(f),
by the trustee under the related Class "A" Mortgage; and
(i) the Trustee shall not be personally liable, in the
case of entry by it upon the Mortgaged Property, for debts contracted
or damages incurred in the management or operation of the Mortgaged
Property.
Section 11.04. Not Responsible for Recitals or Issuance of
Bonds.
The recitals contained herein and in the Bonds (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Bonds, as to the value
or condition of the Mortgaged Property or any part thereof, or as to the title
of the Company thereto or as to the security afforded thereby or hereby, or as
to the validity of any Class "A" Bonds or other securities at any time pledged
or deposited with the Trustee hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Bonds or the proceeds thereof or of any moneys paid to the Company or
upon Company Order under any provision hereof.
Section 11.05. May Hold Bonds.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Bond Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Bonds and, subject to
Sections 11.08 and 11.13, may otherwise deal with the Company with the same
rights it would have if it were not such Trustee, Authenticating Agent, Paying
Agent, Bond Registrar or other agent.
Section 11.06. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
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Section 11.07. Compensation and Reimbursement.
(a) The Company shall:
(i) pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust);
(ii) except as otherwise expressly provided herein,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(iii) indemnify the Trustee and hold it harmless
from and against any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the
trust or trusts hereunder, including the reasonable costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its
powers or duties hereunder.
(b) As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a Lien prior to
the Bonds upon the Mortgaged Property and any money collected by the
Trustee as proceeds of the Mortgaged Property, other than property and
funds held in trust under Section 9.03 (except as otherwise provided in
Section 9.03).
Section 11.08. Disqualification; Conflicting Interests.
If the Trustee shall have or acquire any conflicting interest
within the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and subject to the conditions, provided in the Trust Indenture Act and this
Indenture.
Section 11.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall
be:
(a) a corporation organized and doing business under the
laws of the United States of America, any state or territory thereof or
the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal
or state authority, or
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(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or other
Person and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to
supervision or examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to supervision
or examination applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and not otherwise
disqualified under Section 310(a)(5) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of such supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 11.10. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section
11.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 11.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Bonds then Outstanding
delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
11.08 after written request therefor by the Company or by any
Holder who has been a bona fide Holder for at least six
months, or
(ii) the Trustee shall cease to be eligible under
Section 11.09 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
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(iii) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (x) the
Company by a Board Resolution may remove the Trustee, or (y)
subject to Section 10.18, any Holder who has been a bona fide
Holder for at least six months may, on behalf of itself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause (other than as contemplated in subclause (y) of
clause (iii) of subsection (d) of this Section), the Company, by a
Board Resolution, shall take prompt steps to appoint a successor
Trustee or Trustees and shall comply with the applicable requirements
of Section 11.11. In case all or substantially all of the Mortgaged
Property shall be in the possession of a receiver or trustee lawfully
appointed, such receiver or trustee, by written instrument, may
similarly appoint a successor to fill such vacancy until a new Trustee
shall be so appointed by the Holders. If, within one year after such
resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders
of a majority in principal amount of the Bonds then Outstanding
delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section
11.11, become the successor Trustee and to that extent supersede the
successor Trustee appointed by the Company or by such receiver or
trustee. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required
by Section 11.11, any Holder who has been a bona fide Holder of a Bond
for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default shall have
occurred and be continuing, if the Company shall have delivered to the
Trustee (i) a Board Resolution appointing a successor Trustee,
effective as of a date specified therein, and (ii) an instrument of
acceptance of such appointment, effective as of such date, by such
successor Trustee in accordance with Section 11.11, the Trustee shall
be deemed to have resigned as contemplated in subsection (b) of this
Section, the successor Trustee shall be deemed to have been appointed
pursuant to subsection (d) of this Section and such
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appointment shall be deemed to have been accepted as contemplated in
Section 11.11, all as of such date, and all other provisions of this
Section and Section 11.11 shall be applicable to such resignation,
appointment and acceptance except to the extent inconsistent with this
subsection (f).
(g) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee
by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the Bond
Register. Each notice shall include the name of the successor Trustee
and the address of its corporate trust office.
Section 11.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all sums owed to
it, execute and deliver an instrument transferring to such successor
Trustee, upon the trusts herein expressed, all the estates, properties,
rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder subject, nevertheless, to
the provisions of Section 11.07(b).
(b) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in and confirm
to such successor Trustee all such estates, properties, rights, powers
and trusts referred to in subsection (a) of this Section.
(c) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article to the extent operative.
Section 11.12. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation
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shall be otherwise qualified and eligible under this Article to the extent
operative, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Bonds shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Bonds so authenticated with the same effect
as if such successor Trustee had itself authenticated such Bonds.
Section 11.13. Preferential Collection of Claims Against
Company.
If the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Bonds), the Trustee shall be subject to any and
all applicable provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or such other obligor).
Section 11.14. Co-Trustees and Separate Trustees.
(a) At any time or times, for the purpose of meeting the
legal requirements of any jurisdiction in which any of the Mortgaged
Property may at the time be located, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or
of the Holders of at least a majority in aggregate principal amount of
the Bonds then Outstanding, the Company shall for such purpose join
with the Trustee in the execution and delivery of all instruments and
agreements necessary or proper to appoint, one or more Persons approved
by the Trustee either to act as co-trustee, jointly with the Trustee,
of all or any part of the Mortgaged Property, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person,
in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this
Section. If the Company does not join in such appointment within 15
days after receipt by it of a request to do so, or in case an Event of
Default has occurred and is continuing, the Trustee alone shall have
the power to make such appointment.
(b) Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so appointed
to more fully confirm to such co-trustee or separate trustee such
property, title, right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the Company.
(c) Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed subject
to the following conditions:
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(i) the Bonds shall be authenticated and
delivered, and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, cash and
other personal property held by, or required to be deposited
or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(ii) the rights, powers, duties and obligations
hereby conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(iii) the Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Company,
may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, if an
Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the
concurrence of the Company. Upon the written request of the
Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or removal.
A successor to any co-trustee or separate trustee so resigned
or removed may be appointed in the manner provided in this
Section;
(iv) no co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of
the Trustee, or any other such trustee hereunder; and
(v) any Act of Holders delivered to the Trustee
shall be deemed to have been delivered to each such co-trustee
and separate trustee.
Section 11.15. Appointment of Authenticating Agent.
(a) The Trustee may appoint an Authenticating Agent or
Agents (which, except for authentication of Bonds upon the original
issuance thereof, may be the Company) with respect to the Bonds of one
or more series, or any Tranche thereof, which shall be authorized to
act on behalf of the Trustee to authenticate Bonds of such series or
Tranche issued upon original issuance, exchange, registration of
transfer or
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partial redemption thereof or pursuant to Section 3.06, and Bonds so
authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by
the Trustee hereunder. Wherever reference is made in this Indenture to
the authentication and delivery of Bonds by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent, other than the Company, shall be acceptable to the Company and
shall at all times be a corporation organized and doing business under
the laws of the United States of America, any state or territory
thereof or the District of Columbia or the Commonwealth of Puerto Rico,
authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
(b) Any corporation into which an Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent,
provided such corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent
by giving written notice thereof to such Authenticating Agent and to
the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its
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predecessor hereunder, with like effect originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
(d) The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services under
this Section, and the Trustee shall have no liability for such
payments. The Trustee shall not be responsible for any misconduct, bad
faith or negligence on the part of any Authenticating Agent appointed
with due care by the Trustee hereunder.
(e) The provisions of Sections 3.08, 11.04 and 11.05
shall be applicable to each Authenticating Agent.
(f) If an appointment with respect to the Bonds of one or
more series, or any Tranche thereof, shall be made pursuant to this
Section, the Bonds of such series or Tranche may have endorsed thereon,
in addition to or in lieu of the Trustee's certificate of
authentication substantially in the following form:
This is one of the Bonds of the series designated
therein referred to in the within-mentioned Indenture.
------------------------------
as Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Officer
(g) If all of the Bonds of a series, or any Tranche
thereof, may not be originally issued at one time, and if the Trustee
does not have an office capable of authenticating Bonds upon original
issuance located in a Place of Payment where the Company wishes to have
Bonds of such series or such Tranche authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 1.05 and need not be accompanied
by an Opinion of Counsel), shall appoint, in accordance with this
Section and in accordance with such procedures as shall be acceptable
to the Trustee, an Authenticating Agent having an office in a Place of
Payment designated by the Company with respect to such series of Bonds
or such Tranche.
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ARTICLE TWELVE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
Section 12.01. Lists of Holders; Preservation of
Information.
Semiannually, between April 15 and May 1 and between October
15 and November 1 in each year, and at such other times as the Trustee may
request in writing, the Company shall furnish or cause to be furnished to the
Trustee information as to the names and addresses of the Holders, and the
Trustee shall preserve such information and similar information received by it
in any other capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner as shall be
required by the Trust Indenture Act. Every Holder of Bonds, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Bonds in accordance with Section 312 of the
Trust Indenture Act, or any successor section of such Act, 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 312(b) of the Trust Indenture Act, or any successor section of
such Act.
Section 12.02. Reports by Trustee and Company.
Annually, not later than sixty (60) days after May 15 in each
year commencing with the first May 15th following the first issuance of Bonds
pursuant to Section 3.01, if required by Section 313(a) of the Trust Indenture
Act, or any successor section of such Act, the Trustee shall transmit to the
Holders and the Commission a report with respect to any events described in
Section 313(a) of the Trust Indenture Act, or any successor section of such Act,
in such manner and to the extent required by the Trust Indenture Act. The
Trustee shall transmit to the Holders and the Commission, and the Company shall
file with the Trustee and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such manner, as shall
be required by the Trust Indenture Act. A copy of each report required to be
transmitted to the Holders pursuant to Section 313 of the Trust Indenture Act
shall, at the time of such transmission to the Holders, be furnished to the
Company and be filed by the Trustee with each stock exchange, if any, upon which
the Bonds of any series, or any Tranche thereof, are listed and also with the
Commission. The Company agrees to notify the Trustee when and as the Bonds of
such series, of any such Tranche, become admitted to trading on any national
securities exchange.
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ARTICLE THIRTEEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 13.01. Company May Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, or otherwise transfer or lease, subject to the Lien of
this Indenture, the Mortgaged Property as or substantially as an entirety to any
Person, unless:
(a) such consolidation, merger, conveyance, other
transfer or lease shall be on such terms as shall fully preserve in all
material respects the Lien and security of this Indenture and the
rights and powers of the Trustee and the Holders of the Bonds
hereunder;
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or other transfer, or which leases, the Mortgaged Property as or
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any state or
territory thereof or the District of Columbia (such corporation being
hereinafter sometimes called the ("Successor Corporation") and shall
execute and deliver to the Trustee an indenture supplemental hereto, in
form recordable and satisfactory to the Trustee, which:
(i) in the case of a consolidation, merger,
conveyance or other transfer, or in the case of a lease if the
term thereof extends beyond the last Stated Maturity of the
Bonds then Outstanding, contains an assumption by the
Successor Corporation of the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all
the Bonds then Outstanding and the performance and observance
of every covenant and condition of this Indenture to be
performed or observed by the Company, and
(ii) in the case of a consolidation, merger,
conveyance or other transfer, contains a grant, conveyance,
transfer and mortgage by the Successor Corporation, of the
same tenor of the Granting Clauses herein:
(A) confirming the Lien of this Indenture
on the Mortgaged Property (as constituted immediately
prior to the time such transaction became effective)
and subjecting to the Lien of this Indenture all
property real, personal and mixed, thereafter
acquired by the Successor Corporation which shall
constitute an improvement, extension or addition to
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the Mortgaged Property (as so constituted) or a
renewal, replacement or substitution of or for any
part thereof, and
(B) at the election of the Successor
Corporation, subjecting to the Lien of this Indenture
such property, real, personal or mixed, in addition
to the property described in subclause (A) above,
then owned or thereafter acquired by the Successor
Corporation as the Successor Corporation shall, in
its sole discretion, specify or describe therein,
and the Lien confirmed or created by such grant, conveyance, transfer
and mortgage shall have force, effect and standing similar to those
which the Lien of this Indenture would have had if the Company had not
been a party to such consolidation, merger, conveyance or other
transfer and had itself, after the time such transaction became
effective, purchased, constructed or otherwise acquired the property
subject to such grant, conveyance, transfer and mortgage;
(c) in the case of a lease, such lease shall be made
expressly subject to termination by the Company or by the Trustee at
any time during the continuance of an Event of Default, and also by the
purchaser of the property so leased at any sale thereof hereunder,
whether such sale be made under the power of sale hereby conferred or
pursuant to judicial proceedings; and
(d) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each of which shall
state that such consolidation, merger, conveyance or other transfer or
lease, and such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Section 13.02. Successor Corporation Substituted.
Upon any consolidation or merger or any conveyance or other
transfer, subject to the Lien of this Indenture, of the Mortgaged Property as or
substantially as an entirety in accordance with Section 13.01, the Successor
Corporation shall succeed to, and be substituted for, and may exercise every
power and right of, the Company under this Indenture with the same effect as if
such Successor Corporation had been named as the "Company" herein.
Without limiting the generality of the foregoing:
(a) all property of the Successor Corporation then
subject to the Lien of this Indenture, of the character described in
Section 1.04(a), shall constitute Property Additions;
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(b) the Successor Corporation may execute and deliver to
the Trustee, and thereupon the Trustee shall, subject to the provisions
of Article Four, authenticate and deliver, Bonds upon the basis of
Property Additions or upon any other basis provided in Article Four;
and
(c) the Successor Corporation may, subject to the
applicable provisions of this Indenture, cause Property Additions to be
applied to any other Authorized Purpose.
All Bonds so executed by the Successor Corporation, and authenticated and
delivered by the Trustee, shall in all respects be entitled to the same benefit
of the Lien and security of this Indenture as all Bonds executed, authenticated
and delivered prior to the time such consolidation, merger, conveyance or other
transfer became effective.
Section 13.03. Extent of Lien Hereof on Property of
Successor Corporation.
Unless, in the case of a consolidation, merger, conveyance or
other transfer contemplated by Section 13.01, the indenture supplemental hereto
contemplated in clause (ii) of Section 13.01(b), or any other indenture,
contains a grant, conveyance, transfer and mortgage by the Successor Corporation
as described in subclause (B) thereof, neither this Indenture nor such
supplemental indenture shall become or be required to become or be a Lien upon
any of the properties then owned or thereafter acquired by the Successor
Corporation except properties acquired from the Company in or as a result of
such transaction and improvements, extensions and additions to such properties
and renewals, replacements and substitutions of or for any part or parts of such
properties.
Section 13.04. Release of Company upon Conveyance Or Other
Transfer.
In the case of a conveyance or other transfer contemplated in
Section 13.01, upon the satisfaction of all the conditions specified in Section
13.01 the Company (such term being used in this Section without giving effect to
such transaction) shall be released and discharged from all obligations and
covenants under this Indenture and on and under all Bonds then Outstanding
unless the Company shall have delivered to the Trustee an instrument in which it
shall waive such release and discharge.
Section 13.05. Merger into Company; Extent of Lien Hereof.
(a) Nothing in this Indenture shall be deemed to prevent
or restrict any consolidation or merger after the consummation of which
the Company would be the surviving or resulting corporation or any
conveyance or other transfer or lease, subject to the Lien of this
Indenture, of any part of the Mortgaged Property which does not
constitute the entirety, or substantially the entirety, thereof.
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(b) Unless, in the case of a consolidation or merger
described in subsection (a) of this Section, an indenture supplemental
hereto shall otherwise provide, this Indenture shall not become or be,
or be required to become or be, a Lien upon any of the properties
acquired by the Company in or as a result of such transaction or any
improvements, extensions or additions to such properties or any
renewals, replacements or substitutions of or for any part or parts of
such properties.
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ARTICLE FOURTEEN
SUPPLEMENTAL INDENTURES
Section 14.01. Supplemental Indentures Without Consent of
Holders.
(a) Without the consent of any Holders, the Company and
the Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(i) to evidence the succession of another Person
to the Company and the assumption by any such successor of the
covenants of the Company herein and in the Bonds, all as
provided in Article Thirteen; or
(ii) to add one or more covenants of the Company or
other provisions for the benefit of all Holders or for the
benefit of the Holders of, or to remain in effect only so long
as there shall be Outstanding, Bonds of one or more specified
series, or one or more specified Tranches thereof, or to
surrender any right or power herein conferred upon the
Company; or
(iii) 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, or to subject to the Lien of this Indenture
additional property; or
(iv) to convey, transfer and assign to the Trustee
and to subject to the Lien of this Indenture with the same
force and effect as if included in the Granting Clauses
herein, property of subsidiaries of the Company used or to be
used for one or more purposes which if owned by the Company
would constitute property used or to be used for one or more
of the Primary Purposes of the Company's Business, which
property shall for all purposes of this Indenture be deemed to
be property of the Company, together with such other
provisions as may be appropriate to express the respective
rights of the Trustee and the Company in regard thereto;
(v) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture;
provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders
of Bonds of any series or Tranche in any material respect,
such change, elimination or addition shall become effective
with respect to such series or Tranche only when no Bond of
such series or Tranche remains Outstanding; or
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(vi) to establish the form or terms of Bonds of any
series or Tranche as contemplated by Sections 2.01 and 3.01;
or
(vii) to provide for the authentication and delivery
of Bonds in bearer form and interest coupons appertaining
thereto representing interest, if any, thereon and for the
procedures for the registration of principal thereof and the
exchange and replacement thereof, for the giving of notice to,
and the solicitation of the vote or consent of, the holders
thereof, and for any and all other matters incidental thereto;
or
(viii) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee or by a co-
trustee or separate trustee; or
(ix) to provide for the procedures required to
permit the Company to utilize, at its option, a
non-certificated system of registration for all, or any series
or Tranche of, the Bonds; or
(x) to change any place or places where (A) the
principal of and premium, if any, and interest, if any, on all
or any series of Bonds, or any Tranche thereof, shall be
payable, (B) all or any series of Bonds, or any Tranche
thereof, may be surrendered for registration of transfer, (C)
all or any series of Bonds, or any Tranche thereof, may be
surrendered for exchange, and (D) notices and demands to or
upon the Company in respect of all or any series of Bonds, or
any Tranche thereof, and this Indenture may be served; or
(xi) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein; or to make any
changes to the provisions hereof or to add other provisions
with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall
not adversely affect the interests of the Holders of Bonds of
any series or Tranche in any material respect; or
(xii) to reflect changes in Generally Accepted
Accounting Principles; or
(xiii) to provide the terms and conditions of the
exchange or conversion, at the option of the holders of Bonds
of any series, of the Bonds of such series for or into Bonds
of other series or stock or other securities of the Company or
any other corporation; or
(xiv) to change the words "Mortgage Bonds" to "First
Mortgage Bonds" in the descriptive title of all
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Outstanding Bonds at any time after the discharge of the 1930
Mortgage; or
(xv) to comply with the rules or regulations of any
national securities exchange on which any of the Bonds may be
listed.
(b) Without limiting the generality of the foregoing, if
the Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be amended
and:
(i) if any such amendment shall require one or
more changes to any provisions hereof or the inclusion herein
of any additional provisions, or shall by operation of law be
deemed to effect such changes or incorporate such provisions
by reference or otherwise, this Indenture shall be deemed to
have been amended so as to conform to such amendment to the
Trust Indenture Act, and the Company and the Trustee may,
without the consent of any Holders, enter into an indenture
supplemental hereto to evidence such amendment hereof; or
(ii) if any such amendment shall permit one or more
changes to, or the elimination of, any provisions hereof
which, at the date of the execution and delivery hereof or at
any time thereafter, are required by the Trust Indenture Act
to be contained herein or are contained herein to reflect any
provisions of the Trust Indenture Act as in effect at such
date, the Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental hereto to
effect such changes or elimination.
Section 14.02. Supplemental Indentures With Consent of
Holders.
(a) With the consent of the Holders of not less than a
majority in aggregate principal amount of the Bonds of all series then
Outstanding under this Indenture, considered as one class, by Act of
said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any
of the provisions of, this Indenture; provided, however, that if there
shall be Bonds of more than one series Outstanding hereunder and if a
proposed supplemental indenture shall directly affect the rights of the
Holders of Bonds of one or more, but less than all, of such series,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Bonds of all series so directly
affected, considered as one class, shall be required; and provided,
further, that if the
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Bonds of any series shall have been issued in more than one Tranche and
if the proposed supplemental indenture shall directly affect the rights
of the Holders of Bonds of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Bonds of all Tranches so
directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Bond of each series or
Tranche so directly affected:
(i) change the Stated Maturity of the principal
of, or any installment of principal of or interest on, any
Bond, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest
thereon) or change the method of calculating such rate or
reduce any premium payable upon the redemption thereof, or
reduce the amount of the principal of a Discount Bond that
would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 10.02(a), or change
the coin or currency (or other property), in which any Bond or
any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date); or
(ii) permit the creation of any Lien ranking prior
to the Lien of this Indenture with respect to all or
substantially all of the Mortgaged Property or terminate the
Lien of this Indenture on all or substantially all of the
Mortgaged Property, or deprive such Holder of the benefit of
the security of the Lien of this Indenture; or
(iii) reduce the percentage in principal amount of
the Outstanding Bonds of such series or Tranche, the consent
of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any
waiver of compliance with any provision of this Indenture or
of any default hereunder and its consequences, or reduce the
requirements of Section 15.04(a) for quorum or voting; or
(iv) modify any of the provisions of this Section,
Section 6.09 or Section 10.17, except to increase the
percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Bond affected
thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee"
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and concomitant changes in this Section pursuant to clause
(viii) of Section 14.01(a).
(b) A supplemental indenture which (i) changes or
eliminates any covenant or other provision of this Indenture which has
expressly been included solely for the benefit of the Holders of, or
which is to remain in effect only so long as there shall be
Outstanding, Bonds of one or more specified series, or one or more
Tranches thereof, or (ii) modifies the rights of the Holders of Bonds
of such series or Tranches with respect to such covenant or other
provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Bonds of any other series or Tranche.
(c) It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 14.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 11.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties, immunities or liabilities under this
Indenture or otherwise.
Section 14.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Bonds theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. Any supplemental indenture permitted by this
Article may restate this Indenture in its entirety, and, upon the execution and
delivery thereof, any such restatement shall supersede this Indenture as
theretofore in effect for all purposes.
Section 14.05. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 14.06. Reference in Bonds to Supplemental
Indentures.
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Bonds of any series, or any Tranche thereof, authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Bonds of any series, or any
Tranche thereof, so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered in exchange for Outstanding Bonds of
such series or Tranche.
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<PAGE>
ARTICLE FIFTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section 15.01. Purposes for Which Meetings May be Called.
A meeting of Holders of Bonds of one or more, or all, series,
or any Tranche or Tranches thereof, may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Bonds of such series or
Tranches.
Section 15.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders
of Bonds of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 15.01, to be held at such
time and (except as provided in subsection (b) of this Section) at such
place in the Borough of Manhattan as the Trustee shall determine, or,
with the approval of the Company, at any other place. Notice of every
such meeting, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall
be given, in the manner provided in Section 1.09, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(b) The Trustee may be asked to call a meeting of the
Holders of Outstanding Bonds of one or more, or all, series, or any
Tranche or Tranches thereof, by the Company or by the Holders of 25% in
aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section 15.01, by
written request setting forth in reasonable detail the action proposed
to be taken at the meeting. If the Trustee shall have been asked by the
Company to call such a meeting, the Company shall determine the time
and place for such meeting by giving notice thereof in the manner
provided in subsection (a) of this Section, or shall direct the
Trustee, in the name and at the expense of the Company, to give such
notice. If the Trustee shall have been asked to call such a meeting by
Holders in accordance with this subsection (b), and the Trustee shall
not have given the notice of such meeting within 21 days after receipt
of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Holders of Bonds of such series
and Tranches in the amount above specified, may determine the time and
the place in the Borough of Manhattan, or in such other place as shall
be determined or approved by the Company, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
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<PAGE>
(c) Any meeting of Holders of Bonds of one or more, or
all, series, or any Tranche or Tranches thereof, shall be valid without
notice if the Holders of all Outstanding Bonds of such series or
Tranches are present in person or by proxy and if representatives of
the Company and the Trustee are present, or if notice is waived in
writing before or after the meeting by the Holders of all Outstanding
Bonds of such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy, and by
the Company and the Trustee.
Section 15.03. Persons Entitled to Vote at Meetings;
Record Date.
To be entitled to vote at any meeting of Holders of Bonds of
one or more, or all, series, or any Tranche or Tranches thereof, a Person shall
be (a) a Holder of one or more Outstanding Bonds of such series or Tranches on
the record date fixed as provided below, or (b) a Person appointed by an
instrument in writing by a Holder or Holders of one or more Outstanding Bonds of
such series or Tranches on the record date fixed as provided below as proxy for
such Holder or Holders. The only Persons who shall be entitled to attend any
meeting of Holders of Bonds of any series or Tranche shall be the Persons
entitled to vote at such meeting, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel. The Company may
fix in advance a record date for the determination of Holders who are entitled
to vote at a meeting called pursuant to Section 15.02 and, if the Company does
not so fix a record date, the Trustee may do so.
Section 15.04. Quorum; Action.
(a) The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Bonds of the series and Tranches
with respect to which a meeting shall have been called as hereinbefore
provided, considered as one class, shall constitute a quorum for a
meeting of Holders of Bonds of such series and Tranches; provided,
however, that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Bonds of such series and Tranches, considered as one class,
the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Bonds of such series and Tranches, considered
as one class, shall constitute a quorum. In the absence of a quorum
within one hour of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Bonds of such series
and Tranches, be dissolved. In any other case the meeting may be
adjourned for such period as may be determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for such period as may be determined by the chairman
of the meeting prior to the
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<PAGE>
adjournment of such adjourned meeting. Except as provided by Section
15.05(e), notice of the reconvening of any meeting adjourned for more
than 30 days shall be given as provided in Section 1.09 not less than
ten days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall
state expressly the percentage, as provided above, of the principal
amount of the Outstanding Bonds of such series and Tranches which shall
constitute a quorum.
(b) Except as limited by Section 14.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted only by the affirmative
vote of the Holders of a majority in aggregate principal amount of the
Outstanding Bonds of the series and Tranches with respect to which such
meeting shall have been called, considered as one class; provided,
however, that, except as so limited, any resolution with respect to any
action which this Indenture expressly provides may be taken by the
Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Bonds of such series and Tranches,
considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid
by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Bonds of such series and Tranches,
considered as one class.
(c) Any resolution passed or decision taken at any
meeting of Holders of Bonds duly held in accordance with this Section
shall be binding on all the Holders of Bonds of the series and Tranches
with respect to which such meeting shall have been held, whether or not
present or represented at the meeting.
Section 15.05. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings.
(a) Attendance at meetings of Holders of Bonds may be in
person or by proxy; and, to the extent permitted by law, any such proxy
shall remain in effect and be binding upon any future Holder of the
Bonds with respect to which it was given unless and until specifically
revoked by the Holder or future Holder of such Bonds before being
voted.
(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Holders of Bonds in regard to proof
of the holding of such Bonds and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence
of the right to vote, and such other matters concerning the conduct of
the
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<PAGE>
meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Bonds shall be proved
in the manner specified in Section 1.07 and the appointment of any
proxy shall be proved in the manner specified in Section 1.07. Such
regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the
proof specified in Section 1.07 or other proof.
(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders as provided in Section
15.02(b), in which case the Company or the Holders of Bonds of the
series and Tranches calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Bonds of all series and Tranches represented at the
meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled
to one vote for each $1,000 principal amount of Outstanding Bonds held
or represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Bond challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Bond or proxy.
(e) Any meeting duly called pursuant to Section 15.02 at
which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in aggregate principal amount of the
Outstanding Bonds of all series and Tranches represented at the
meeting, considered as one class; and the meeting may be held as so
adjourned without further notice.
Section 15.06. Counting Votes and Recording Action of
Meetings.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the signatures
of the Holders or of their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Bonds, of the series and Tranches with
respect to which the meeting shall have been called, held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
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<PAGE>
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in Section 15.02
and, if applicable, Section 15.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 15.07. Action Without Meeting.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken by Holders
by written instruments as provided in Section 1.07.
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<PAGE>
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 16.01. Liability Solely Corporate.
No recourse shall be had for the payment of the principal of
or premium if any, or interest, if any, on any Bonds, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
under this Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Bonds are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this Indenture or in any
of the Bonds or to be implied herefrom or therefrom, and that any such personal
liability is hereby expressly waived and released as a condition of, and as part
of the consideration for, the execution of this Indenture and the issuance of
the Bonds.
-----------------------------------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
OHIO EDISON COMPANY
By: ______________________________
Title:______________________________
[Corporate Seal]
Attest:
- ---------------------------
Corporate Secretary
THE BANK OF NEW YORK
By: ______________________________
Title:______________________________
[Corporate Seal]
Attest:
- ---------------------------
Assistant Secretary
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<PAGE>
Exhibit A
Lands and Interests in Land Subject to the
Lien of and Referenced in the 1930
Mortgage and Supplements Thereto
-141-
<PAGE>
DRAFT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GENERAL MORTGAGE INDENTURE
AND
DEED OF TRUST
OHIO EDISON COMPANY
TO
THE BANK OF NEW YORK,
as Trustee
Dated As Of
June 1, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
GRANTING CLAUSE FIRST.....................................................-1-
GRANTING CLAUSE SECOND....................................................-2-
GRANTING CLAUSE THIRD.....................................................-2-
GRANTING CLAUSE FOURTH....................................................-2-
EXCEPTED PROPERTY.........................................................-3-
TRUST.....................................................................-5-
COVENANT .................................................................-5-
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..........-7-
Section 1.01. General Definitions..............................-7-
"Act"............................................................-7-
"Adjusted Net Earnings"..........................................-7-
"Affiliate"......................................................-8-
"Annual Interest Requirements"...................................-8-
"Appraiser"......................................................-8-
"Appraiser's Certificate"........................................-8-
"Authenticating Agent"...........................................-8-
"Authorized Executive Officer"...................................-8-
"Authorized Publication".........................................-8-
"Authorized Purposes"............................................-9-
"Board of Directors".............................................-9-
"Board Resolution"...............................................-9-
"Bonded" ........................................................-9-
"Bond Register" and "Bond Registrar".............................-9-
"Bonds" ........................................................-9-
"Business Day"...................................................-9-
"Class "A" Bonds"................................................-9-
"Class "A" Mortgage".............................................-9-
"Commission".....................................................-9-
"Company".......................................................-10-
"Company Order" or "Company Request"............................-10-
"Corporate Trust Office"........................................-10-
"Cost" .......................................................-10-
"Customary Exceptions"..........................................-10-
"Defaulted Interest"............................................-10-
<PAGE>
"Discount Bond".................................................-10-
"Dollar" or "$".................................................-10-
"Eligible Obligations"..........................................-10-
"Engineer"......................................................-11-
"Engineer's Certificate"........................................-11-
"Event of Default"..............................................-11-
"Excepted Property".............................................-11-
"Fair Value"....................................................-11-
"Funded Cash"...................................................-11-
"Generally Accepted Accounting Principles"......................-12-
"Governmental Authority"........................................-12-
"Government Obligations"........................................-12-
"Holder"........................................................-12-
"Indenture".....................................................-12-
"Independent"...................................................-13-
"Independent Engineer's Certificate"............................-13-
"Interest Payment Date".........................................-13-
"Investment Securities".........................................-13-
"Lien"..........................................................-14-
"Matured Event of Default"......................................-14-
"Maturity"......................................................-14-
"Mortgaged Property"............................................-14-
"Net Earnings Certificate"......................................-14-
"1930 Mortgage".................................................-14-
"Officer's Certificate".........................................-14-
"Opinion of Counsel"............................................-14-
"Outstanding"...................................................-14-
"Paying Agent"..................................................-16-
"Periodic Offering".............................................-16-
"Permitted Liens"...............................................-16-
"Person"........................................................-19-
"Place of Payment"..............................................-19-
"Pledged Bonds".................................................-19-
"Predecessor Bond"..............................................-19-
"Prepaid Lien"..................................................-19-
"Primary Purposes of the Company's Business"....................-20-
"Prior Lien"....................................................-20-
"Property Additions"............................................-20-
"Redemption Date"...............................................-20-
"Redemption Price"..............................................-20-
"Regular Record Date"...........................................-20-
"Required Currency".............................................-20-
"Responsible Officer"...........................................-20-
"Retired Bonds".................................................-20-
"Special Record Date"...........................................-20-
"Stated Interest Rate"..........................................-20-
"Stated Maturity"...............................................-21-
"Successor Corporation".........................................-21-
"Tranche".......................................................-21-
"Trust Indenture Act"...........................................-21-
"Trustee".......................................................-21-
"Unbonded"......................................................-21-
"United States".................................................-21-
Section 1.02. Bonded; Funded Cash.............................-21-
Section 1.03. Net Earnings Certificate; Adjusted Net
<PAGE>
Earnings; Annual Interest Requirements..........-23-
Section 1.04. Property Additions; Cost........................-25-
Section 1.05. Compliance Certificates and Opinions............-29-
Section 1.06. Form of Documents Delivered to Trustee..........-30-
Section 1.07. Acts of Holders.................................-31-
Section 1.08. Notices, Etc. to Trustee and Company............-33-
Section 1.09. Notice to Holders of Bonds; Waiver..............-34-
Section 1.10. Conflict with Trust Indenture Act...............-34-
Section 1.11. Effect of Headings and Table of
Contents........................................-34-
Section 1.12. Successors and Assigns..........................-35-
Section 1.13. Separability Clause.............................-35-
Section 1.14. Benefits of Indenture...........................-35-
Section 1.15. Governing Law...................................-35-
Section 1.16. Legal Holidays..................................-35-
Section 1.17. Investment of Cash Held by Trustee..............-36-
Section 1.18. Approval of Signers.............................-36-
ARTICLE TWO
BOND FORMS...........................-37-
Section 2.01. Forms Generally.................................-37-
Section 2.02. Form of Trustee's Certificate of
Authentication..................................-37-
ARTICLE THREE
THE BONDS............................-38-
Section 3.01. Limit on Amount of Bonds; Issuable in
Series..........................................-38-
Section 3.02. Denominations...................................-42-
Section 3.03. Execution, Dating, Certificate of
Authentication..................................-42-
Section 3.04. Temporary Bonds.................................-43-
Section 3.05. Registration, Registration of Transfer
and Exchange....................................-43-
Section 3.06. Mutilated, Destroyed, Lost and Stolen
Bonds...........................................-45-
Section 3.07. Payment of Interest; Interest Rights
Preserved.......................................-46-
Section 3.08. Persons Deemed Owners...........................-47-
Section 3.09. Cancellation by Bond Registrar..................-47-
Section 3.10. Computation of Interest.........................-48-
Section 3.11. Payment to Be in Proper Currency................-48-
ARTICLE FOUR
ISSUANCE OF BONDS.........................-49-
Section 4.01. General.........................................-49-
Section 4.02. Issuance of Bonds on the Basis of
Pledged Bonds...................................-52-
Section 4.03. Issuance of Bonds on the Basis of
Property Additions..............................-54-
Section 4.04. Issuance of Bonds on the Basis of
Retired Bonds...................................-57-
<PAGE>
Section 4.05. Issuance of Bonds upon Deposit of Cash
with Trustee....................................-58-
ARTICLE FIVE
REDEMPTION OF BONDS.......................-60-
Section 5.01. Applicability of Article........................-60-
Section 5.02. Election to Redeem; Notice to Trustee...........-60-
Section 5.03. Selection of Bonds to Be Redeemed...............-60-
Section 5.04. Notice of Redemption............................-61-
Section 5.05. Bonds Payable on Redemption Date................-62-
Section 5.06. Bonds Redeemed in Part..........................-62-
ARTICLE SIX
REPRESENTATIONS AND COVENANTS..................-64-
Section 6.01. Payment of Bonds; Lawful Possession;
Maintenance of Lien.............................-64-
Section 6.02. Maintenance of Office or Agency.................-64-
Section 6.03. Money for Bond Payments to Be Held in
Trust...........................................-65-
Section 6.04. Corporate Existence.............................-66-
Section 6.05. Maintenance of Properties.......................-67-
Section 6.06. Payment of Taxes; Discharge of Liens............-67-
Section 6.07. Insurance.......................................-68-
Section 6.08. Recording, Filing, etc..........................-70-
Section 6.09. Waiver of Certain Covenants.....................-72-
Section 6.010. Statement as to Compliance......................-72-
Section 6.011. Use of Trust Moneys and Advances by
Trustee.........................................-73-
ARTICLE SEVEN
PLEDGED BONDS; ADDITIONAL CLASS "A" MORTGAGES;
DISCHARGE OF CLASS "A" MORTGAGE..................-74-
Section 7.01. Registration and Ownership of Pledged
Bonds...........................................-74-
Section 7.02. Payments on Pledged Bonds.......................-74-
Section 7.03. Surrender of Pledged Bonds......................-75-
Section 7.04. No Transfer of Pledged Bonds....................-75-
Section 7.05. Voting of Pledged Bonds.........................-75-
Section 7.06. Designation of Additional Class "A"
Mortgages.......................................-76-
Section 7.07. Discharge of Class "A" Mortgage.................-79-
ARTICLE EIGHT
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY........-84-
Section 8.01. Quiet Enjoyment.................................-84-
Section 8.02. Dispositions without Release....................-84-
Section 8.03. Release of Mortgaged Property if Bonding
Ratio Test Satisfied............................-85-
Section 8.04. Release of Limited Amount of Mortgaged
Property........................................-87-
Section 8.05. Release of Mortgaged Property Not
<PAGE>
Subject to a Class "A" Mortgage.................-88-
Section 8.06. Withdrawal or Other Application of
Funded Cash.....................................-90-
Section 8.07. Release of Property Taken by Eminent
Domain, etc.....................................-92-
Section 8.08. Alternative Release Provision...................-93-
Section 8.09. Disclaimer or Quitclaim.........................-93-
Section 8.10. Miscellaneous...................................-94-
ARTICLE NINE
SATISFACTION AND DISCHARGE....................-96-
Section 9.01. Satisfaction and Discharge of Bonds.............-96-
Section 9.02. Satisfaction and Discharge of Indenture.........-98-
Section 9.03. Application of Trust Money......................-99-
ARTICLE TEN
EVENTS OF DEFAULT; REMEDIES..................-100-
Section 10.01. Events of Default..............................-100-
Section 10.02. Acceleration of Maturity; Rescission and
Annulment......................................-101-
Section 10.03. Entry Upon Mortgaged Property..................-102-
Section 10.04. Power of Sale; Suits for Enforcement...........-103-
Section 10.05. Incidents of Sale..............................-103-
Section 10.06. Collection of Indebtedness and Suits for
Enforcement by Trustee.........................-104-
Section 10.07. Application of Money Collected.................-105-
Section 10.08. Receiver.......................................-106-
Section 10.09. Trustee May File Proofs of Claim...............-106-
Section 10.10. Trustee May Enforce Claims without
Possession of Bonds............................-107-
Section 10.11. Limitation on Suits............................-107-
Section 10.12. Unconditional Right of Holders to
Receive Principal, Premium and
Interest.......................................-108-
Section 10.13. Restoration of Rights and Remedies.............-108-
Section 10.14. Rights and Remedies Cumulative.................-108-
Section 10.15. Delay or Omission Not Waiver...................-109-
Section 10.16. Control by Holders of Bonds....................-109-
Section 10.17. Waiver of Past Defaults........................-109-
Section 10.18. Undertaking for Costs..........................-110-
Section 10.19. Waiver of Appraisement and Other Laws..........-110-
Section 10.20. Defaults under Class "A" Mortgages.............-111-
ARTICLE ELEVEN
THE TRUSTEE...........................-112-
Section 11.01. Certain Duties and Responsibilities............-112-
Section 11.02. Notice of Defaults.............................-112-
Section 11.03. Certain Rights of Trustee......................-112-
Section 11.04. Not Responsible for Recitals or Issuance
of Bonds.......................................-114-
Section 11.05. May Hold Bonds.................................-114-
Section 11.06. Money Held in Trust............................-114-
<PAGE>
Section 11.07. Compensation and Reimbursement.................-115-
Section 11.08. Disqualification; Conflicting
Interests......................................-115-
Section 11.09. Corporate Trustee Required;
Eligibility....................................-115-
Section 11.10. Resignation and Removal; Appointment of
Successor......................................-116-
Section 11.11. Acceptance of Appointment by Successor.........-118-
Section 11.12. Merger, Conversion, Consolidation or
Succession to Business.........................-118-
Section 11.13. Preferential Collection of Claims
Against Company................................-119-
Section 11.14. Co-Trustees and Separate Trustees..............-119-
Section 11.15. Appointment of Authenticating Agent............-120-
ARTICLE TWELVE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY........-123-
Section 12.01. Lists of Holders; Preservation of
Information....................................-123-
Section 12.02. Reports by Trustee and Company.................-123-
ARTICLE THIRTEEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE........................-124-
Section 13.01. Company May Consolidate, etc., Only on
Certain Terms..................................-124-
Section 13.02. Successor Corporation Substituted..............-125-
Section 13.03. Extent of Lien Hereof on Property of
Successor Corporation..........................-126-
Section 13.04. Release of Company upon Conveyance Or
Other Transfer.................................-126-
Section 13.05. Merger into Company; Extent of Lien
Hereof.........................................-126-
ARTICLE FOURTEEN
SUPPLEMENTAL INDENTURES....................-128-
Section 14.01. Supplemental Indentures Without Consent
of Holders.....................................-128-
Section 14.02. Supplemental Indentures With Consent of
Holders........................................-130-
Section 14.03. Execution of Supplemental Indentures...........-132-
Section 14.04. Effect of Supplemental Indentures..............-132-
Section 14.05. Conformity With Trust Indenture Act............-133-
Section 14.06. Reference in Bonds to Supplemental
Indentures.....................................-133-
ARTICLE FIFTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING..........-134-
Section 15.01. Purposes for Which Meetings May be
Called.........................................-134-
Section 15.02. Call, Notice and Place of Meetings.............-134-
<PAGE>
Section 15.03. Persons Entitled to Vote at Meetings;
Record Date....................................-135-
Section 15.04. Quorum; Action.................................-135-
Section 15.05. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment
of Meetings....................................-136-
Section 15.06. Counting Votes and Recording Action of
Meetings.......................................-137-
Section 15.07. Action Without Meeting.........................-138-
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS.........................-139-
Section 16.01. Liability Solely Corporate.....................-139-
Exhibit A
Lands and Interests in Land Subject to the
Lien of and Referenced in the 1930
Mortgage and Supplements Thereto................-141-
<PAGE>
TABLE OF CONTENTS
Page
----
GRANTING CLAUSE FIRST.................................................... 1
GRANTING CLAUSE SECOND................................................... 2
GRANTING CLAUSE THIRD.................................................... 2
GRANTING CLAUSE FOURTH................................................... 2
EXCEPTED PROPERTY........................................................ 3
TRUST ................................................................ 5
COVENANT ................................................................ 5
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......... 7
Section 1.01. General Definitions............................. 7
"Act" ....................................................... 7
"Adjusted Net Earnings"......................................... 7
"Affiliate"..................................................... 8
"Annual Interest Requirements".................................. 8
"Appraiser"..................................................... 8
"Appraiser's Certificate"....................................... 8
"Authenticating Agent".......................................... 8
"Authorized Executive Officer".................................. 8
"Authorized Publication"........................................ 8
"Authorized Purposes"........................................... 9
"Board of Directors"............................................ 9
"Board Resolution".............................................. 9
"Bonded" ....................................................... 9
"Bond Register" and "Bond Registrar"............................ 9
"Bonds" ....................................................... 9
"Business Day".................................................. 9
"Class "A" Bonds"............................................... 9
"Class "A" Mortgage"............................................ 9
"Commission".................................................... 9
"Company"...................................................... 10
"Company Order" or "Company Request"........................... 10
"Corporate Trust Office"....................................... 10
"Cost" ...................................................... 10
"Customary Exceptions"......................................... 10
"Defaulted Interest"........................................... 10
<PAGE>
"Discount Bond"................................................ 10
"Dollar" or "$"................................................ 10
"Eligible Obligations"......................................... 10
"Engineer"..................................................... 11
"Engineer's Certificate"....................................... 11
"Event of Default"............................................. 11
"Excepted Property"............................................ 11
"Fair Value"................................................... 11
"Funded Cash".................................................. 11
"Generally Accepted Accounting Principles"..................... 12
"Governmental Authority"....................................... 12
"Government Obligations"....................................... 12
"Holder" ...................................................... 12
"Indenture".................................................... 12
"Independent".................................................. 13
"Independent Engineer's Certificate"........................... 13
"Interest Payment Date"........................................ 13
"Investment Securities"........................................ 13
"Lien" ...................................................... 14
"Matured Event of Default"..................................... 14
"Maturity"..................................................... 14
"Mortgaged Property"........................................... 14
"Net Earnings Certificate"..................................... 14
"1930 Mortgage"................................................ 14
"Officer's Certificate"........................................ 14
"Opinion of Counsel"........................................... 14
"Outstanding".................................................. 14
"Paying Agent"................................................. 16
"Periodic Offering"............................................ 16
"Permitted Liens".............................................. 16
"Person" ...................................................... 19
"Place of Payment"............................................. 19
"Pledged Bonds"................................................ 19
"Predecessor Bond"............................................. 19
"Prepaid Lien"................................................. 19
"Primary Purposes of the Company's Business"................... 20
"Prior Lien"................................................... 20
"Property Additions"........................................... 20
"Redemption Date".............................................. 20
"Redemption Price"............................................. 20
"Regular Record Date".......................................... 20
"Required Currency"............................................ 20
"Responsible Officer".......................................... 20
"Retired Bonds"................................................ 20
"Special Record Date".......................................... 20
"Stated Interest Rate"......................................... 20
"Stated Maturity".............................................. 21
"Successor Corporation"........................................ 21
"Tranche"...................................................... 21
"Trust Indenture Act".......................................... 21
"Trustee"...................................................... 21
"Unbonded"..................................................... 21
"United States"................................................ 21
Section 1.02. Bonded; Funded Cash............................ 21
Section 1.03. Net Earnings Certificate; Adjusted Net
<PAGE>
Earnings; Annual Interest Requirements......... 23
Section 1.04. Property Additions; Cost....................... 25
Section 1.05. Compliance Certificates and Opinions........... 29
Section 1.06. Form of Documents Delivered to Trustee......... 30
Section 1.07. Acts of Holders................................ 31
Section 1.08. Notices, Etc. to Trustee and Company........... 33
Section 1.09. Notice to Holders of Bonds; Waiver............. 34
Section 1.10. Conflict with Trust Indenture Act.............. 34
Section 1.11. Effect of Headings and Table of
Contents....................................... 34
Section 1.12. Successors and Assigns......................... 35
Section 1.13. Separability Clause............................ 35
Section 1.14. Benefits of Indenture.......................... 35
Section 1.15. Governing Law.................................. 35
Section 1.16. Legal Holidays................................. 35
Section 1.17. Investment of Cash Held by Trustee............. 36
Section 1.18. Approval of Signers............................ 36
ARTICLE TWO
BOND FORMS
Section 2.01. Forms Generally................................ 37
Section 2.02. Form of Trustee's Certificate of
Authentication................................. 37
ARTICLE THREE
THE BONDS
Section 3.01. Limit on Amount of Bonds; Issuable in
Series......................................... 38
Section 3.02. Denominations.................................. 42
Section 3.03. Execution, Dating, Certificate of
Authentication................................. 42
Section 3.04. Temporary Bonds................................ 43
Section 3.05. Registration, Registration of Transfer
and Exchange................................... 43
Section 3.06. Mutilated, Destroyed, Lost and Stolen
Bonds.......................................... 45
Section 3.07. Payment of Interest; Interest Rights
Preserved...................................... 46
Section 3.08. Persons Deemed Owners.......................... 47
Section 3.09. Cancellation by Bond Registrar................. 47
Section 3.10. Computation of Interest........................ 48
Section 3.11. Payment to Be in Proper Currency............... 48
ARTICLE FOUR
ISSUANCE OF BONDS
Section 4.01. General........................................ 49
Section 4.02. Issuance of Bonds on the Basis of
Pledged Bonds.................................. 52
<PAGE>
Section 4.03. Issuance of Bonds on the Basis of
Property Additions............................. 54
Section 4.04. Issuance of Bonds on the Basis of
Retired Bonds.................................. 57
Section 4.05. Issuance of Bonds upon Deposit of Cash
with Trustee................................... 58
ARTICLE FIVE
REDEMPTION OF BONDS
Section 5.01. Applicability of Article....................... 60
Section 5.02. Election to Redeem; Notice to Trustee.......... 60
Section 5.03. Selection of Bonds to Be Redeemed.............. 60
Section 5.04. Notice of Redemption........................... 61
Section 5.05. Bonds Payable on Redemption Date............... 62
Section 5.06. Bonds Redeemed in Part......................... 62
ARTICLE SIX
REPRESENTATIONS AND COVENANTS
Section 6.01. Payment of Bonds; Lawful Possession;
Maintenance of Lien............................ 64
Section 6.02. Maintenance of Office or Agency................ 64
Section 6.03. Money for Bond Payments to Be Held in
Trust.......................................... 65
Section 6.04. Corporate Existence............................ 66
Section 6.05. Maintenance of Properties...................... 67
Section 6.06. Payment of Taxes; Discharge of Liens........... 67
Section 6.07. Insurance...................................... 68
Section 6.08. Recording, Filing, etc......................... 70
Section 6.09. Waiver of Certain Covenants.................... 72
Section 6.10. Statement as to Compliance..................... 72
Section 6.11. Use of Trust Moneys and Advances by
Trustee........................................ 73
Section 6.12. Limited Issuance of Class "A" Bonds............. 72
ARTICLE SEVEN
PLEDGED BONDS; ADDITIONAL CLASS "A" MORTGAGES;
DISCHARGE OF CLASS "A" MORTGAGE
Section 7.01. Registration and Ownership of Pledged
Bonds........................................... 74
Section 7.02. Payments on Pledged Bonds....................... 74
Section 7.03. Surrender of Pledged Bonds...................... 75
Section 7.04. No Transfer of Pledged Bonds.................... 75
Section 7.05. Voting of Pledged Bonds......................... 75
Section 7.06. Designation of Additional Class "A"
Mortgages....................................... 76
Section 7.07. Discharge of Class "A" Mortgage................. 73
<PAGE>
ARTICLE EIGHT
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY
Section 8.01. Quiet Enjoyment................................. 84
Section 8.02. Dispositions without Release.................... 84
Section 8.03. Release of Mortgaged Property if
Bonding Ratio Test Satisfied.................... 85
Section 8.04. Release of Limited Amount of Mortgaged
Property........................................ 87
Section 8.05. Release of Mortgaged Property Not
Subject to a Class "A" Mortgage................. 88
Section 8.06. Withdrawal or Other Application of
Funded Cash..................................... 90
Section 8.07. Release of Property Taken by Eminent
Domain, etc..................................... 92
Section 8.08. Alternative Release Provision................... 93
Section 8.09. Disclaimer or Quitclaim......................... 93
Section 8.10. Miscellaneous................................... 94
ARTICLE NINE
SATISFACTION AND DISCHARGE
Section 9.01. Satisfaction and Discharge of Bonds............. 96
Section 9.02. Satisfaction and Discharge of
Indenture....................................... 98
Section 9.03. Application of Trust Money...................... 99
ARTICLE TEN
EVENTS OF DEFAULT; REMEDIES
Section 10.01. Events of Default.............................. 100
Section 10.02. Acceleration of Maturity; Rescission and
Annulment...................................... 101
Section 10.03. Entry Upon Mortgaged Property.................. 102
Section 10.04. Power of Sale; Suits for Enforcement........... 103
Section 10.05. Incidents of Sale.............................. 103
Section 10.06. Collection of Indebtedness and Suits for
Enforcement by Trustee......................... 104
Section 10.07. Application of Money Collected................. 105
Section 10.08. Receiver....................................... 106
Section 10.09. Trustee May File Proofs of Claim............... 106
Section 10.10. Trustee May Enforce Claims without
Possession of Bonds............................ 107
Section 10.11. Limitation on Suits............................ 107
Section 10.12. Unconditional Right of Holders to
Receive Principal, Premium and
Interest....................................... 108
Section 10.13. Restoration of Rights and Remedies............. 108
Section 10.14. Rights and Remedies Cumulative................. 108
Section 10.15. Delay or Omission Not Waiver................... 109
Section 10.16. Control by Holders of Bonds.................... 109
Section 10.17. Waiver of Past Defaults........................ 109
<PAGE>
Section 10.18. Undertaking for Costs.......................... 110
Section 10.19. Waiver of Appraisement and Other Laws.......... 110
Section 10.20. Defaults under Class "A" Mortgages............. 111
ARTICLE ELEVEN
THE TRUSTEE
Section 11.01. Certain Duties and Responsibilities............ 112
Section 11.02. Notice of Defaults............................. 112
Section 11.03. Certain Rights of Trustee...................... 112
Section 11.04. Not Responsible for Recitals or Issuance
of Bonds....................................... 114
Section 11.05. May Hold Bonds................................. 114
Section 11.06. Money Held in Trust............................ 114
Section 11.07. Compensation and Reimbursement................. 115
Section 11.08. Disqualification; Conflicting
Interests...................................... 115
Section 11.09. Corporate Trustee Required;
Eligibility.................................... 115
Section 11.10. Resignation and Removal; Appointment
of Successor................................... 116
Section 11.11. Acceptance of Appointment by Successor......... 118
Section 11.12. Merger, Conversion, Consolidation or
Succession to Business......................... 118
Section 11.13. Preferential Collection of Claims
Against Company................................ 119
Section 11.14. Co-Trustees and Separate Trustees.............. 119
Section 11.15. Appointment of Authenticating Agent............ 120
ARTICLE TWELVE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
Section 12.01. Lists of Holders; Preservation of
Information.................................... 123
Section 12.02. Reports by Trustee and Company................. 123
ARTICLE THIRTEEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 13.01. Company May Consolidate, etc., Only on
Certain Terms.................................. 124
Section 13.02. Successor Corporation Substituted.............. 125
Section 13.03. Extent of Lien Hereof on Property of
Successor Corporation.......................... 126
Section 13.04. Release of Company upon Conveyance Or
Other Transfer................................. 126
Section 13.05. Merger into Company; Extent of Lien
Hereof......................................... 126
ARTICLE FOURTEEN
<PAGE>
SUPPLEMENTAL INDENTURES
Section 14.01. Supplemental Indentures Without Consent
of Holders..................................... 128
Section 14.02. Supplemental Indentures With Consent
of Holders..................................... 130
Section 14.03. Execution of Supplemental Indentures........... 132
Section 14.04. Effect of Supplemental Indentures.............. 132
Section 14.05. Conformity With Trust Indenture Act............ 133
Section 14.06. Reference in Bonds to Supplemental
Indentures..................................... 133
ARTICLE FIFTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section 15.01. Purposes for Which Meetings May be
Called. ...................................... 134
Section 15.02. Call, Notice and Place of Meetings............. 134
Section 15.03. Persons Entitled to Vote at Meetings;
Record Date.................................... 135
Section 15.04. Quorum; Action................................. 135
Section 15.05. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment
of Meetings.................................... 136
Section 15.06. Counting Votes and Recording Action of
Meetings....................................... 137
Section 15.07. Action Without Meeting......................... 138
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 16.01. Liability Solely Corporate..................... 139
Exhibit A - Lands and Interests in Land Subject to the
Lien of and Referenced in the 1930 Mortgage and
Supplements Thereto................................................... 141
<PAGE>
EXHIBIT (5)
OHIO EDISON COMPANY
76 South Main Street
Akron, Ohio 44308
330-384-5793
Ohio Edison Company June 5, 1996
76 South Main Street
Akron, Ohio 44308
Gentlemen:
In connection with the proposed issue and sale of up to
$50,000,000 principal amount of Mortgage Bonds of Ohio Edison Company (the
"Company") ("New Bonds"), I have examined, among other things, the registration
statement on Form S-3 (the "Registration Statement"), including the prospectus
comprising a part thereof, which is to be filed under the Securities Act of
1933.
I am of the opinion that when said Registration Statement
shall become effective; when the pertinent provisions of the Trust Indenture Act
of 1939 have been complied with; when your General Mortgage Indenture and Deed
of Trust, to be dated as of June 1, 1996, to the Bank of New York, and any
supplemental indenture or any board resolution, and any officer's certificate
pursuant to a supplemental indenture or board resolution, establishing the terms
of the New Bonds shall have been duly authorized, executed and delivered in
accordance with said Indenture; and when the New Bonds shall have been duly
authorized, executed, authenticated and delivered in accordance with said
Indenture, as to be amended and supplemented by such supplemental indenture,
board resolution or officer's certificate, and have been duly issued, sold and
paid for, the New Bonds will be legally issued and binding obligations of the
Company.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement as presently to be filed or thereafter amended,
and to the statements with respect to me under "LEGAL OPINIONS" and "EXPERTS" in
the prospectus included in the Registration Statement and to the disclosure in
the Registration Statement in response to Item 10 of Form S-3.
Very truly yours,
ANTHONY J. ALEXANDER
Senior Vice President and
General Counsel
<PAGE>
EXHIBIT (12)
<TABLE>
<CAPTION>
OHIO EDISON COMPANY
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
Twelve
Year Ended December 31, Months Ended
March 31,
1996
1991 1992 1993 1994 1995 ------------
---- ---- ---- ---- ----
EARNINGS AS DEFINED IN REGULATION S-K: (Dollars in Thousands) (Unaudited)
<S> <C> <C> <C> <C> <C>
Income before
extraordinary items $264,823 $276,986 $ 24,523 $303,531 $317,241 $319,055
Add-
Interest and other charges,
before reduction for
amounts capitalized 324,017 296,292 285,169 283,849 273,719 270,316
Provision for income taxes 173,725 147,407 32,431 188,886 199,307 201,583
Interest element of rentals
charged to income <F1> 125,777 117,224 104,700 108,463 111,534 112,117
-------- -------- -------- -------- -------- --------
Earnings as defined $888,342 $837,909 $446,823 $884,729 $901,801 $903,071
======== ======== ======== ======== ======== ========
FIXED CHARGES AS DEFINED IN
REGULATION S-K:
Interest on long-term debt $288,599 $275,835 $262,861 $259,554 $243,570 $238,174
Other interest expense 27,696 13,958 16,445 18,931 22,944 22,240
Subsidiaries' preferred stock
dividend requirements 7,722 6,499 5,863 5,364 7,205 9,902
Adjustment to subsidiaries'
preferred stock dividends
to state on a pre-income tax basis 5,018 3,420 7,659 3,294 2,956 2,970
Interest element of rentals charged
to income <F1> 125,777 117,224 104,700 108,463 111,534 112,117
-------- -------- -------- -------- -------- --------
Fixed charges as defined $454,812 $416,936 $397,528 $395,606 $388,209 $385,403
======== ======== ======== ======== ======== ========
CONSOLIDATED RATIO OF EARNINGS TO
FIXED CHARGES <F2> 1.95 2.01 1.12 2.24 2.32 2.34
==== ==== ==== ==== ==== ====
- ----------------------------
<FN>
<F1> Includes the interest element of rentals where determinable plus 1/3 of
rental expense where no readily defined interest element can be
determined.
<F2> These ratios exclude fixed charges applicable to the guarantee of the
debt of a coal supplier aggregating $13,298,000, $9,762,000,
$8,565,000, $7,424,000, $6,315,000 and $5,957,000 for each of the five
years ended December 31, 1995, and the twelve months ended March 31,
1996, respectively.
</FN>
</TABLE>
<PAGE>
Exhibit (15)
June 5, 1996
Ohio Edison Company:
We are aware that Ohio Edison Company has incorporated by
reference in this Registration Statement, Ohio Edison Company's Form 10-Q for
the quarter ended March 31, 1996 which includes our report dated May 1, 1996
covering the unaudited interim consolidated financial information contained
therein. Pursuant to Regulation C of the Securities Act of 1933, that report is
not considered a part of this Registration Statement prepared or certified by
our firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of said Act.
Very truly yours,
ARTHUR ANDERSEN LLP
<PAGE>
Exhibit (23)(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 8, 1996,
included or incorporated by reference in Ohio Edison Company's Annual Report on
Form 10-K for the year ended December 31, 1995, and to all references to our
Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
June 5, 1996
<PAGE>
Exhibit (25)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
OHIO EDISON COMPANY
(Exact name of obligor as specified in its charter)
Ohio 34-0437786
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
76 South Main Street
Akron, Ohio 44308
(Address of principal executive offices) (Zip code)
-----------------
MORTGAGE BONDS*
(Title of the indenture securities)
- --------------
*Specific title(s) to be determined in connection with sale(s) of Mortgage
Bonds.
<PAGE>
Item 1. General Information.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
Item 16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of
the Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect,
which contains the authority to commence business and a
grant of powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4
to Form T-1 filed with Registration Statement No.
33-31019.)
6. - The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- --------------------
*Pursuant to General Instruction B, the Trustee has responded only to Items
1, 2 and 16 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a responsive answer
to Item 2, the answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended
by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 3rd day of June, 1996.
THE BANK OF NEW YORK
By: LUCILLE FIRRINCIELI
-------------------------------
Lucille Firrincieli
Assistant Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business December 31, 1995, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin.................................... $ 4,500,312
Interest-bearing balances.................................. 643,938
Securities:
Held-to-maturity securities................................ 806,221
Available-for-sale securities.............................. 2,036,768
Federal funds sold and securities
purchased under agreements to resell in
domestic offices of the bank:
Federal funds sold......................................... 4,166,720
Securities purchased under
agreements to resell..................................... 50,413
Loans and lease financing
receivables:
Loans and leases, net of unearned
income..................................... 27,068,535
LESS: Allowance for loan and
lease losses............................... 520,024
LESS: Allocated transfer risk
reserve.................................... 1,000
Loans and leases, net of unearned
income and allowance and reserve......................... 26,547,511
Assets held in trading accounts.............................. 758,462
Premises and fixed assets (including
capitalized leases)........................................ 615,330
Other real estate owned...................................... 63,769
Investments in unconsolidated subsid-
iaries and associated companies............................ 223,174
Customers' liability to this bank on
acceptances outstanding.................................... 900,795
Intangible assets............................................ 212,220
Other assets................................................. 1,186,274
-----------
Total assets................................................. $42,711,907
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<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices........................................ $21,248,127
Noninterest-bearing.......................... 9,172,079
Interest-bearing............................. 12,076,048
In foreign offices, Edge and
Agreement subsidiaries, and IBFs........................... 9,535,088
Noninterest-bearing.......................... 64,417
Interest-bearing............................. 9,470,671
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement subsid-
iaries, and in IBFs:
Federal funds purchased.................................... 2,095,668
Securities sold under agreements
to repurchase............................................ 69,212
Demand notes issued to the U.S.
Treasury................................................... 107,340
Trading liabilities.......................................... 615,718
Other borrowed money:
With original maturity of one year or less................. 1,638,744
With original maturity of more than
one year ................................................ 120,863
Bank's liability on acceptances
executed and outstanding................................. 909,527
Subordinated notes and debentures............................ 1,047,860
Other liabilities............................................ 1,836,573
----------
Total liabilities............................................ 39,224,720
----------
EQUITY CAPITAL
Common stock................................................. 942,284
Surplus...................................................... 525,666
Undivided profits and capital
reserves................................................... 1,995,316
Net unrealized holding gains (losses)
on available-for-sale securities........................... 29,668
Cumulative foreign currency
translation adjustments.................................... ( 5,747)
-----------
Total equity capital......................................... 3,487,187
-----------
Total liabilities and equity capital........................ $42,711,907
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE>
