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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PUBLIC SERVICE COMPANY OF NEW MEXICO
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
New Mexico Alvarado Square 85-0019030
(State or Other Jurisdiction Albuquerque, New Mexico 87158 (I.R.S. Employer
of Incorporation or Organization) (505) 241-2700 Identification Number)
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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M. H. Maerki
Senior Vice President and Chief Financial Officer
Public Service Company of New Mexico
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies To:
Charles L. Moore, Esq. Michael F. Cusick, Esq.
Keleher & McLeod, P.A. Winthrop, Stimson, Putnam & Roberts
414 Silver Avenue, S.W., 12th Floor One Battery Park Plaza
Albuquerque, New Mexico 87102 New York, New York 10004
(505) 346-4646 (212) 858-1000
Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
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. / /
CALCULATION OF REGISTRATION FEE
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TITLE OF CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER UNIT(2) PRICE (1)(2)
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<S> <C> <C> <C> <C>
Senior Unsecured Notes $650,000,000 100% $650,000,000 $191,750
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(1) Or the equivalent amount of any securities denominated in a foreign currency
or composite currency.
(2) Exclusive of accrued interest, if any, and estimated solely for the purpose
of calculating the registration fee.
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION
8(A), MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION DATED MAY 21, 1998
PROSPECTUS
$650,000,000
PUBLIC SERVICE COMPANY OF NEW MEXICO
SENIOR UNSECURED NOTES
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Public Service Company of New Mexico (the "Company") intends to issue
from time to time up to $650,000,000 (or the equivalent in foreign currency or
composite currency) aggregate principal amount of its senior unsecured notes
(the "SUNs"), or if any SUNs are issued at an original issue discount, such
greater amount as shall result in net proceeds to the Company of $650,000,000,
which will be offered to the public on terms determined by market conditions at
the time of sale. The SUNs may be issued in one or more series with the same or
various maturities at par, at a premium or with an original issue discount. When
particular SUNs are offered, a prospectus supplement (a "Prospectus
Supplement"), together with this Prospectus, will be delivered setting forth the
terms of such SUNs, including, where applicable, the specific designation,
aggregate principal amount, denominations, maturity, rate of interest (or manner
of calculation thereof) and time of payment thereof, any redemption provisions,
the initial public offering price and any other specific terms in connection
with the offering and sale of such SUNs. The SUNs will be unsecured and
unsubordinated obligations of the Company ranking equally with all existing and
future unsecured and unsubordinated obligations of the Company. Unless otherwise
specified in the applicable Prospectus Supplement, the SUNs will be represented
by global certificates (each, a "Registered Global SUN") registered in the name
of a nominee of The Depository Trust Company, New York, New York (the
"Depositary"). Beneficial interests in the SUNs will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
(with respect to participants' interests) and its participants. Except as
described in this Prospectus, SUNs in certificated form will not be issued in
exchange for Registered Global SUNs.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of SUNs unless
accompanied by a Prospectus Supplement. The Company may sell SUNs through
underwriters, dealers or agents, or directly to one or more purchasers. The
applicable Prospectus Supplement will set forth the names of the underwriters,
dealers or agents, if any, the net proceeds to the Company from any such sale,
and any applicable commissions or discounts. See "Plan of Distribution" for
possible indemnification arrangements for underwriters, dealers, and agents.
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The date of this Prospectus is , 1998.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE SUNS OFFERED HEREBY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments thereto,
the "Registration Statement") on Form S-3 under the Securities Act of 1933 (the
"Securities Act"), with respect to the SUNs offered hereby. This Prospectus,
filed as a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
In addition, certain documents filed by the Company with the Commission have
been incorporated herein by reference. See "Incorporation of Certain Information
by Reference." For further information regarding the Company and the SUNs
offered hereby, reference is made to the Registration Statement, including the
exhibits and schedules thereto and the documents incorporated herein by
reference. The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549;
and at the regional offices of the Commission at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding reporting companies under the Exchange Act,
including the Company, at http://www.sec.gov. The Common Stock of the Company is
listed on the New York Stock Exchange. Reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 are hereby incorporated by reference.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the SUNs shall be deemed to be
incorporated by reference in this Prospectus and be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference, modifies or
replaces such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to:
Barbara Barsky, Vice President of Strategy, Analysis and Investor Relations,
Public Service Company of New Mexico, Alvarado Square, Albuquerque, New Mexico
87158, or by telephone at (505) 241-2477.
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THE COMPANY
Public Service Company of New Mexico (the "Company") was incorporated
in the State of New Mexico in 1917 and has its principal offices at Alvarado
Square, Albuquerque, New Mexico 87158 (telephone number 505-241-2700). The
Company is a public utility primarily engaged in the generation, transmission,
distribution and sale of electricity and in the transmission, distribution and
sale of natural gas within the State of New Mexico. In addition, in pursuing new
business opportunities, the Company is focusing on energy and utility related
activities under its Energy Services Business Unit. The Company is also
operating the City of Santa Fe's water system.
The total population of the area served by one or more of the Company's
utility services is estimated to be approximately 1.3 million, of which 52.1%
live in the greater Albuquerque area.
For the year ended December 31, 1997, the Company derived 63.6% of its
operating revenues from electric operations, 26.0% from natural gas operations
and 10.4% from energy services operations.
As of December 31, 1997, the Company employed 2,789 persons.
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SUMMARY FINANCIAL AND OPERATING INFORMATION
The following material is qualified in its entirety by reference to the
information incorporated herein by reference (as specified above). The selected
data presented below under the caption "Selected Earnings Statement Data" as of
the end of and for each of the years in the five year period ended December 31,
1997, are derived from the consolidated financial statements of Public Service
Company of New Mexico and subsidiaries, which financial statements have been
audited by Arthur Andersen LLP, independent public accountants. The
consolidated financial statements as of December 31, 1997 and 1996, and for each
of the years in the three-year period ended December 31, 1997, and the report
thereon, are incorporated by reference elsewhere in this Prospectus. The
selected unaudited data presented below under the caption "Selected Earnings
Statement Data" and "Capitalization" for the three-month periods ended March 31,
1997 and 1998, and as of March 31, 1998, are derived from the unaudited
consolidated financial statements of Public Service Company of New Mexico and
its subsidiaries, which Arthur Andersen LLP have reviewed in accordance with
professional standards for a review of such interim financial information.
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Three Months Ended
March 31, Year Ended December 31,
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1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED EARNINGS
STATEMENT DATA:
Electric, Gas, Water,
Energy Services Revenues $ 329,764 $ 298,822 $ 1,135,267 $ 883,386 $ 808,465 $ 904,711 $ 873,878
Operating Expenses ........ 297,485 262,129 1,011,222 757,367 695,077 753,633 740,594
Earnings (Loss) Before
Interest Charges and
Income Taxes ............ 47,681 53,924 183,927 167,781 184,289 191,776 (32,741)
Interest Charges, Net ..... 13,787 14,234 56,214 54,707 57,934 70,587 85,823
Income Taxes (Benefit)(1) . 12,680 14,794 46,718 40,494 50,793 40,871 (57,078)
Net Income (Loss) from
Continuing Operations ... 21,214 24,896 80,995 72,580 75,562 80,318 (61,486)
ELECTRIC SALES (MWH) ......... 3,383,876 2,858,554 13,320,542 10,981,516 8,619,878 9,315,084 8,822,004
GAS THROUGHPUT -
DECATHERMS (000'S)(2) ...... 32,540 32,099 84,610 100,096 109,594 132,071 135,332
RATIO OF EARNINGS TO FIXED
CHARGES(3) ................. 2.14 2.30 2.05 1.94 1.99 1.83 0.27(4)
</TABLE>
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As of March 31, 1998
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Amount Percent
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CAPITALIZATION: (in thousands)
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Short-Term Debt........................................................... $ 243,860 14.8%
Long-Term Debt............................................................ 574,344 34.7
Cumulative Preferred Stock, without
Mandatory Redemption Requirements....................................... 12,800 0.8
Common Shareholders' Equity............................................... 822,112 49.7
---------- -----
Total Capitalization(5)......................................... $1,653,116 100.0%
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(1) Income Taxes (Benefit) calculated on earnings (loss) from continuing
operations.
(2) On June 30, 1995, the Company sold substantially all of the gas gathering
and processing assets. Gas Throughput data for 1995, 1996, 1997 and the
first three months of 1997 and 1998 reflect the effects of such sale.
(3) For purposes of computing the Ratio of Earnings to Fixed Charges, earnings
have been calculated by adding back the provision for income taxes and
fixed charges. Fixed charges include total interest charges (without
reduction for the allowance for borrowed funds used during construction),
the interest portion of all rents and certain payments under a purchase
power contract.
(4) The less than 1:1 ratio for 1993 was primarily the result of the write-down
of certain assets resulting from the stipulation filed with the New Mexico
Public Utility Commission recommending that electric retail rates be
reduced by $30 million. The fixed charge coverage deficiency aggregated
approximately $119 million for 1993.
(5) Total capitalization does not include the present value of the Company's
lease obligations for Palo Verde Nuclear Generating Station ("PVNGS") Units
1 and 2 and Eastern Interconnection Project as debt.
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USE OF PROCEEDS
On April 27, 1998, the Company requested the New Mexico Public Utility
Commission ("NMPUC") approval to issue up to $435 million principal amount of
SUNs to provide funds to refinance the lease debt associated with the sale and
leaseback portions of the Company's interests in PVNGS Units 1 and 2 ("Lease
Debt"). As of May 1, 1998, the Company held $277 million principal amount of
Lease Debt as an investment with the remaining $151 million principal amount of
Lease Debt held by the public in the form of Lease Obligation Bonds. The net
proceeds from such $435 million principal amount of SUNs would be applied in
accordance with NMPUC authorization, including the repayment of short-term debt.
Issuance of additional SUNs would require additional regulatory approval, and
the net proceeds from the issuance of any additional SUNs are expected to be
applied to general corporate purposes, except as may be set forth in the
applicable Prospectus Supplement.
DESCRIPTION OF SUNS
The SUNs will be issued under an Indenture (the "Indenture") between
the Company and The Chase Manhattan Bank, as trustee (the "Trustee"). The
following description of certain provisions of the Indenture and the SUNs
summarizes the material terms thereof but does not purport to be complete, and
such summaries are subject to the detailed provisions of the Indenture to which
reference is hereby made, including the definition of certain terms used herein
and those terms made a part of the Indenture by reference to the Trust Indenture
Act of 1939 (the "Trust Indenture Act"), and for other information regarding the
SUNs. The Indenture is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Numerical references in parentheses below are
to sections in the Indenture. Wherever particular sections or defined terms of
the Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. Capitalized terms that are used and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
GENERAL
The Indenture provides for the issuance from time to time of SUNs by
the Company in an unlimited aggregate principal amount by specification in an
indenture supplemental to the Indenture or in a Board Resolution, or in an
Officer's Certificate pursuant to one or more indentures supplemental to the
Indenture or a Board Resolution. (Section 3.01) The SUNs may be issued in one or
more series, each of which series may be issued in one or more Tranches.
Reference is made to the applicable Prospectus Supplement relating to the
particular series of SUNs offered thereby for the following terms of the SUNs:
(i) the title of the SUNs of the series, which shall distinguish the SUNs of
such series from the SUNs of all other series; (ii) any limit upon the aggregate
principal amount of the SUNs of such series that may be authenticated and
delivered under the Indenture; (iii) the Person or Persons (without specific
identification) to whom interest on SUNs of such series, or any Tranche thereof,
shall be payable on any Interest Payment Date, if other than the Persons in
whose names such SUNs (or one or more Predecessor SUNs) are 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 SUNs of such series, or any Tranche thereof,
is payable or any formula or other method or other means by which such date or
dates shall be determined, by reference to an index or other fact or event
ascertainable outside of the Indenture or otherwise (without regard to any
provisions for redemption, prepayment, acceleration, purchase or extension); (v)
the rate or rates at which the SUNs of such series, or any Tranche thereof,
shall bear interest, if any (including the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates at which such
SUNs shall bear interest prior to Maturity, and, if applicable, the rate or
rates at which overdue premium or interest shall bear interest, if any), or any
formula or other method or other means by which such rate or rates shall be
determined, by reference to an index or other fact or event ascertainable
outside of the Indenture or otherwise; the date or dates from which such
interest shall accrue; and the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date, if any, for the interest payable
on such SUNs on any Interest Payment Date; (vi) the right, if any, to extend the
interest payment periods and the duration of such extension; (vii) the place or
places at which or methods by which (A) the principal of and premium, if any,
and interest, if any, on SUNs of such series, or any Tranche thereof, shall be
payable, (B) registration of transfer of SUNs of such series, or any Tranche
thereof, may be effected, (C) exchanges of SUNs of such series, or any Tranche
thereof, may be effected and (D) notices and demands to or upon the Company in
respect of the SUNs of such series, or any Tranche thereof, and the Indenture
may be served; the SUN Registrar and any Paying Agent or Agents for such series
or any Tranche thereof; and if such is the case, that the principal of such SUNs
shall be
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payable without presentment or surrender thereof; (viii) the period or periods
within which, the price or prices at which and the terms and conditions upon
which any SUNs of such series, or any Tranche thereof, may be redeemed, in whole
or in part, at the option of the Company and, if other than by a Board
Resolution, the manner in which any election by the Company to redeem such SUNs
shall be evidenced; (ix) the obligation, if any, of the Company to redeem or
purchase any SUNs of such series, or any Tranche thereof, pursuant to any
sinking fund or analogous provisions or at the option of the Holder (as defined
herein) thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which any SUNs of such series, or any
Tranche thereof, shall be redeemed or purchased, in whole or in part, pursuant
to such obligation; (x) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which SUNs of such series, or any Tranche
thereof, shall be issuable; (xi) if the amount of principal of or any premium or
interest on any SUNs of such series, or any Tranche thereof, may be determined
with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined to the extent not established pursuant to clause (v)
of this paragraph; (xii) if other than the currency of the United States of
America, the currency, currencies or currency units in which the principal of or
any premium or interest on any SUNs of such series, or any Tranche thereof,
shall be payable and the manner of determining the equivalent thereof in the
currency of the United States of America for any purpose; (xiii) if the
principal of or any premium or interest on any SUNs of such series, or any
Tranche thereof, is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those in
which such SUNs are stated to be payable, the currency, currencies or currency
units in which the principal of or any premium or interest on such SUNs as to
which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined); (xiv) if other
than the entire principal amount thereof, the portion of the principal amount of
any SUNs of such series, or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof; (xv) if the principal
amount payable at the Stated Maturity of any SUNs of such series, or any Tranche
thereof, will not be determinable as of any one or more dates prior to the
Stated Maturity, the amount which shall be deemed to be the principal amount of
such SUNs as of any such date for any purpose under the Indenture or under such
SUNs, including the principal amount thereof which shall be due and payable upon
any Maturity other than the Stated Maturity or which shall be deemed to be
Outstanding (as defined herein) as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be the principal
amount shall be determined); (xvi) if applicable, that the SUNs of such series,
or any Tranche thereof, in whole or any specified part, shall be defeasible
pursuant to the Defeasance provisions of the Indenture or that the SUNs of such
series, but not Tranches thereof alone, shall be defeasible pursuant to the
Covenant Defeasance provisions of the Indenture or both such sections and, if
other than by a Board Resolution, the manner in which any election by the
Company to defease such SUNs shall be evidenced; (xvii) if applicable, that any
SUNs of such series, or any Tranche thereof, shall be issuable in whole or in
part in the form of one or more Global SUNs and, in such case, the respective
Depositaries for such Global SUNs, the form of any legend or legends which
shall be borne by any such Global SUN and any circumstances in which any such
Global SUN may be exchanged in whole or in part for SUNs registered, and any
transfer of such Global SUN in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global SUN or a nominee
thereof; (xviii) any addition to or change in the Events of Default which
applies to any SUNs of such series, or any Tranche thereof, and any change in
the right of the Trustee or the requisite Holders of such SUNs to declare the
principal amount thereof due and payable pursuant to the Indenture; (xix) any
addition to or change in the covenants set forth in the Indenture which applies
to SUNs of such series, or any Tranche thereof; and (xx) any other terms of
such series, or any Tranche thereof (which terms shall not be inconsistent with
the provisions of the Indenture). (Section 3.01)
All SUNs of any one series, or, if issued in Tranches thereof, any such
Tranche, shall be substantially identical except as to denomination and except
as may otherwise be determined in the manner provided for in the Indenture. With
respect to SUNs of a series subject to a Periodic Offering, the indenture
supplemental to the Indenture or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such supplemental indenture or
Board Resolution, as the case may be, may provide general terms or parameters
for SUNs of such series and provide either that the specific terms of SUNs of
such series, or any Tranche thereof, shall be specified in a Company Order or
that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by the Indenture.
(Section 3.01)
The Indenture does not contain any restriction on the payment of
dividends or, except as set forth under " -- Certain Covenants, - Restriction on
Liens and - Restrictions on Sale and Lease-Back Transactions," any financial
covenants. The SUNs will be unsubordinated and unsecured obligations of the
Company ranking equally with all existing and future unsubordinated and
unsecured obligations of the Company. Claims of Holders of SUNs will be
effectively subordinated to the claims of holders of secured debt of the Company
with respect to the collateral securing
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such claims. Currently the Company has outstanding $111,000,000 of first
mortgage bonds secured by the Company's owned interest in PVNGS; no future bonds
may be issued under the mortgage securing such bonds.
REGISTERED GLOBAL SUNS
Unless otherwise specified in the applicable Prospectus Supplement, the
Depositary will act as securities depository for the SUNs and the SUNs will be
issued only as Registered Global SUNs registered in the name of Cede & Co. (the
Depositary's partnership nominee). Unless otherwise specified in the applicable
Prospectus Supplement, one or more Registered Global SUNs will be issued for the
SUNs representing the aggregate principal amount of such series of SUNs and will
be deposited with the Depositary. If, however, the aggregate principal amount of
any issue exceeds $200 million, one certificate will be issued with respect to
each $200 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount of such issue.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking 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. The Depositary holds securities that its participants (the "Direct
Participants") deposit with the Depositary. The Depositary also facilitates the
settlement among Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Direct Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its Direct Participants and by The New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly (the "Indirect Participants," and together with the Direct
Participants, the "Participants"). The rules applicable to the Depositary and
its Participants are on file with the Commission.
Purchases of SUNs within the Depositary's system must be made by or
through Direct Participants, which will receive a credit for the SUNs on the
Depositary's records. The ownership interest of each actual purchaser of each
SUN (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interest in the SUNs are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interest in SUNs except in the event that use of the book-entry system for the
SUNs is discontinued.
To facilitate subsequent transfers, all SUNs deposited by Direct
Participants with the Depositary are registered in the name of Cede & Co. The
deposit of the SUNs with the Depositary and their registration in the name of
Cede & Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the SUNs; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such SUNs
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
SUNs of a series or Tranche are being redeemed, the Depositary's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series or Tranche to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the SUNs. Under its usual procedures, the Depositary mails an omnibus proxy
(an "Omnibus Proxy") to the Participants as soon as possible after
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the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the SUNs are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the SUNs will be
made to Cede & Co., as nominee of the Depositary. The Depositary's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive payment on
such payment date. Payments by participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers held in bearer form or registered
in "street-name," and will be the responsibility of such Participant and not of
the Depositary or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
redemption premium, if any, and interest, if any, to Cede & Co., as nominee of
the Depositary, is the responsibility of the Company or the respective trustees
(with funds furnished by the Company). Disbursement of such payments to Direct
Participants is the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants. Registered Global SUNs will settle in immediately available funds
in the secondary trading market. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
SUNs.
The Depositary may discontinue providing its services as securities
depository with respect to the SUNs at any time by giving reasonable notice to
the Company. Under such circumstances and in the event that a successor
securities depository is not obtained, SUNs certificates are required to be
printed and delivered. In addition, the Company may decide to discontinue use of
the system of book-entry transfers through the Depositary (or a successor
securities depository). In that event, SUNs certificates will be printed and
delivered.
The Company will not have any responsibility or obligation to
Participants or the persons for whom they act as nominees with respect to the
accuracy of the records of the Depositary, its nominee or any Direct or Indirect
Participant with respect to any ownership interest in the SUNs, or with respect
to payments to or providing of notice for the Direct Participants, the Indirect
Participants or the Beneficial Owners.
So long as Cede & Co. is the registered owner of the SUNs, as nominee
of the Depositary, references herein to Holders of the SUNs shall mean Cede &
Co. or the Depositary and shall not mean the Beneficial Owners of the SUNs.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from the Depositary. Neither
the Company, the Trustee nor the underwriters, dealers or agents takes
responsibility for the accuracy or completeness thereof.
CERTAIN COVENANTS
The following covenants apply to all series, or any Tranches thereof,
of SUNs:
Restrictions on Liens. The Indenture provides that so long as any SUNs
are outstanding, the Company will not issue, assume, or guarantee any Debt (as
defined herein) secured by any mortgage, security interest, pledge, or lien
(herein referred to as a "mortgage") of or upon any Operating Property (as
defined herein) of the Company, whether owned at the date of the Indenture or
thereafter acquired, without in any such case effectively securing the
Outstanding SUNs (as defined herein) (together with, if the Company shall so
determine, any other Debt of or guaranteed by the Company ranking senior to, or
equally with, the SUNs) equally and ratably with such Debt. This covenant shall
not apply in the case of any Debt secured by: (i) mortgages on any property
existing at the time of acquisition thereof; (ii) mortgages on property of a
corporation existing at the time such corporation is merged into or consolidated
with the Company, or at the time of a sale, lease, or other disposition of the
properties of such corporation or a division thereof as an entirety or
substantially as an entirety to the Company, provided that such mortgage as a
result of such merger, consolidation, sale, lease, or other disposition is not
extended to property owned by the Company immediately prior thereto; (iii)
mortgages on property to secure all or part of the cost of acquiring,
constructing, developing, or substantially repairing, altering, or improving
such property, or to secure indebtedness incurred to provide funds for any such
purpose or for reimbursement of funds previously expended for any such purpose,
provided such mortgages are created or assumed contemporaneously with, or within
eighteen (18) months after, such acquisition or completion of construction,
development, or substantial repair, alteration, or improvement or within six (6)
months thereafter pursuant
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to a commitment for financing arranged with a lender or investor within such
eighteen (18) month period; (iv) mortgages in favor of the United States of
America or any State thereof, or any department, agency, or instrumentality or
political subdivision of the United States of America or any State thereof, or
for the benefit of holders of securities issued by any such entity, to secure
any Debt incurred for the purpose of financing all or any part of the purchase
price or the cost of constructing, developing or substantially repairing,
altering, or improving the property subject to such mortgages; (v) mortgages on
any property (x) which, at any time subsequent to January 1, 1985 through the
date of the Indenture, was leased to the Company, or, (y) pursuant to the terms
of any lease to the Company in effect at any time subsequent to January 1, 1985
through the date of the Indenture, title to which would not have been vested in
the Company (assuming such lease remained in effect on the date of determination
as such lease was in effect immediately prior to the date of the Indenture); or
(vi) any extension, renewal or replacement (or successive extensions, renewals,
or replacements), in whole or in part, of any mortgage referred to in the
foregoing clauses (i) to (v), inclusive; provided, however, that the principal
amount of Debt secured thereby and not otherwise authorized by said clauses (i)
to (v), inclusive, shall not exceed the principal amount of Debt, plus any
premium or fee payable in connection with any such extension, renewal, or
replacement, so secured at the time of such extension, renewal, or replacement.
(Section 10.05(a)) Notwithstanding the foregoing, so long as any SUNs are
Outstanding, the Company may issue, assume, or guarantee Debt, or permit to
exist Debt, secured by mortgages which would otherwise be subject to the
foregoing restrictions up to an aggregate principal amount that, together with
the principal amount of all other Debt of the Company secured by mortgages
(other than mortgages permitted by the Indenture that would otherwise be subject
to the foregoing restrictions) and the Value of all Sale and Lease-Back
Transactions in existence at such time (other than certain Sale and Lease-Back
Transactions specified in the Indenture), does not exceed at the time the
greater of ten percent (10%) of Net Tangible Assets (as defined herein) or ten
percent (10%) of Capitalization. (Section 10.05(b)). Taking into account the
$111,000,000 of outstanding first mortgage bonds, the Company currently could
secure debt of up to approximately $102,000,000 without also equally and ratably
securing the SUNs.
Restrictions on Sale and Lease-Back Transactions. The Indenture
provides that so long as any SUNs are Outstanding, the Company will not enter
into any Sale and Lease-Back Transaction with respect to any Operating Property
if, in any case, the commitment by or on behalf of the purchaser is or was
obtained more than eighteen (18) months after the later of (i) the completion of
the acquisition, construction, or development of such Operating Property or (ii)
the placing in operation of such Operating Property or of such Operating
Property as constructed, developed, or substantially repaired, altered, or
improved, unless (x) the Company would be entitled pursuant to the Indenture to
issue, assume, or guarantee Debt secured by a mortgage on such Operating
Property without equally and ratably securing the SUNs or (y) the Company would
be entitled pursuant to the Indenture, after giving effect to such Sale and
Lease-Back Transaction, to incur $1.00 of additional Debt secured by mortgages
or (z) the Company shall apply or cause to be applied, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof (but not in
excess of the net book value of such Operating Property at the date of such sale
or transfer) and, in the case of a sale or transfer otherwise than for cash, an
amount equal to the fair value (as determined by the Board of Directors) of the
Operating Property so leased, to the retirement, within one hundred eighty (180)
days after the effective date of such Sale and Lease-Back Transaction, of Debt
of the Company ranking senior to, or equally with, the SUNs; provided, however,
that the amount to be applied to such retirement of Debt shall be reduced by an
amount equal to the principal amount, plus any premium or fee paid in connection
with any redemption in accordance with the terms of Debt voluntarily retired by
the Company within such one hundred eighty (180) day period, excluding
retirement pursuant to mandatory sinking fund or prepayment provisions and
payments at maturity. (Section 10.10) The Company's existing sale and lease-back
transactions regarding Units 1 and 2 of PVNGS and certain transmission
facilities, office buildings and other equipment are excluded from this
provision of the Indenture.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless: (i) the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a Person organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental to the Indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium, and interest on all the SUNs and the performance or observance
of every covenant of the Indenture on the part of the Company to be
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performed or observed; (ii) immediately after giving effect to such transaction
and treating any indebtedness which becomes an obligation of the Company as a
result of such transaction as having been incurred by the Company at the time of
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with the Indenture and that all conditions precedent therein
provided for relating to such transaction have been complied with. (Section
8.01)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the SUNs of
any series are: (i) the Company defaults in the payment of any interest upon any
SUN of that series when it becomes due and payable, and continuance of such
default for a period of 60 days; (ii) the Company defaults in the payment of the
principal of or any premium on any SUN of that series at its Maturity; (iii) the
Company defaults in the deposit of any sinking fund payment, when and as due by
the terms of a SUN of that series; (iv) the Company defaults in the performance
of or breaches any covenant or warranty of the Company in the Indenture (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this paragraph specifically dealt with or which has expressly been
included in the Indenture solely for the benefit of series of SUNs other than
that series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of a majority in
principal amount of the Outstanding SUNs of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the Indenture, unless the
Trustee, or the Trustee and Holders of a principal amount of SUNs of such series
not less than the principal amount of SUNs 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 SUNs, 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; (v) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; (vi) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action by the Board
of Directors; or (vii) any other Event of Default provided with respect to SUNs
of that series. (Section 5.01)
The Indenture provides that if an Event of Default with respect to SUNs
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of a majority in principal amount of the
Outstanding SUNs of that series may declare the principal amount of all the SUNs
of that series (or, if any SUNs of that series are Original Issue Discount SUNs,
such portion of the principal amount of such SUNs as may be specified by the
terms thereof) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable; provided, however, that if an Event of Default shall have occurred and
be continuing with respect to more than one series of SUNs, the Trustee or the
Holders of not less than a majority in
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principal amount of the Outstanding SUNs of all such series, considered as one
class (and not the Holders of the SUNs of any one of such series), may make such
declaration of acceleration. (Section 5.02)
At any time after such a declaration of acceleration with respect to
SUNs of any series has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee, the related Event of Default and
its consequences will be automatically waived, resulting in an automatic
rescission and annulment of the acceleration of the SUNs if (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay (A) all overdue
interest on all SUNs of that series, (B) the principal of (and premium, if any,
on) any SUNs of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such SUNs, (C) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such SUNs, and (D) all amounts due to the Trustee as
provided in the Indenture; and (ii) any other Event of Default with respect to
SUNs of that series, other than the non-payment of the principal of SUNs of that
series which have become due solely by such declaration of acceleration, has
been cured or waived as provided in the Indenture. No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereon.
(Section 5.02)
The Holders of not less than a majority in principal amount of the
Outstanding SUNs of any series may on behalf of the Holders of all the SUNs of
such series waive any past default under the Indenture with respect to such
series and its consequences, except a default (i) in the payment of the
principal of or any premium or interest on any SUN of such series, or (ii) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended by supplemental Indenture without the consent of the Holder of each
Outstanding SUN of such series affected, provided, however, that if any such
default shall have occurred and be continuing with respect to more than one such
series of SUNs, the Holders of a majority in aggregate principal amount of the
Outstanding SUNs of all such series, considered as one class, shall have the
right to waive such default, and not the Holders of the SUNs of any one such
series. 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 the Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. (Section
5.13)
If an Event of Default shall have occurred and be continuing in respect
of a series of SUNs, the Holders of a majority in principal amount of the
Outstanding SUNs of such series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
SUNs of such series; provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one series of SUNs, the
Holders of a majority in aggregate principal amount of the Outstanding SUNs of
all such series, considered as one class, shall have the right to make such
direction, and not the Holders of the SUNs of any one of such series; and
provided, further, that (i) such direction shall not be in conflict with any
rule of law or with the Indenture; (ii) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction, and
(iii) subject to the provisions of the Indenture the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability. (Section
5.12)
The Indenture provides that no Holder of any SUN of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to the Indenture, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (i) such Holder has previously given written
notice to the Trustee of a continuing Event of Default with respect to the SUNs
of that series; (ii) the Holders of not less than a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class,
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee under the Indenture;
(iii) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request; (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(v) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class.
(Section 5.07)
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that upon Company Request the Indenture shall
cease to be of further effect (except as to any surviving rights of registration
of transfer or exchange of SUNs therein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of the Indenture, when (i) either (A)
all SUNs theretofore authenticated and delivered (other than (x) SUNs which have
been destroyed, lost or stolen and which have been replaced or paid and (y) SUNs
for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for cancellation;
or (B) all such SUNs not theretofore delivered to the Trustee for cancellation
(x) have become due and payable, or (y) will become due and payable at their
Stated Maturity within one year, or (z) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (B)(x), (y) or (z) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
of making the following payment, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such SUNs, money in an amount
sufficient to pay and discharge the entire indebtedness on such SUNs not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of SUNs which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be; (ii) the Company has paid or caused to be paid all other sums
payable under the Indenture by the Company; and (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent therein provided for relating to the satisfaction
and discharge of the Indenture have been complied with. Notwithstanding the
satisfaction and discharge of the Indenture, the obligations of the Company to
compensate and reimburse the Trustee, the obligations of the Company to any
Authenticating Agent and the obligations under the Indenture of the Trustee to
apply the trust money and make repayments, shall survive. If the Company shall
have paid or caused to be paid the principal of and premium, if any, and
interest on any SUN, as and when the same shall have become due and payable or
the Company shall have delivered to the Trustee for cancellation any outstanding
SUN, such SUN shall cease to be entitled to any benefit under the Indenture.
(Section 4.01)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Defeasance) applied to any SUNs or the SUNs of any
series, or any Tranche thereof, as the case may be, the Company shall be deemed
to have been discharged from its obligations with respect to such SUNs as
described in this paragraph on and after the date the conditions as described in
the second paragraph below are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such SUNs and to have
satisfied all its other obligations under such SUNs and the Indenture insofar as
such SUNs are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of such SUNs to receive, solely from the
trust fund described in the second paragraph below and as more fully set forth
in the Indenture, payments in respect of the principal of and any premium and
interest on such SUNs when payments are due, (ii) the Company's obligations with
respect to such SUNs under the sections of the Indenture dealing with temporary
notes; registration and registration of transfer and exchange; mutilated,
destroyed, lost and stolen notes; maintenance of office or agency; or money for
notes payments to be held in trust, and with respect to compensation and
reimbursement of the Trustee, (iii) the rights, powers, trusts, duties and
immunities of the Trustee under the Indenture and (iv) the provisions described
in this paragraph. Subject to compliance with the Article in the Indenture
regarding Defeasance and Covenant Defeasance, the Company may exercise its
option to have the provisions described in this paragraph (Defeasance) applied
to any SUNs notwithstanding the prior exercise of its option to have the
provisions described in the paragraph below (Covenant Defeasance) applied to
such SUNs. (Section 13.02)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Covenant Defeasance) applied to the SUNs or the
SUNs of any series, but not to Tranches thereof alone, as the case may be, (i)
the Company shall be released from its obligations under the sections of the
Indenture dealing with restrictions on liens, maintenance of properties and
restrictions on sale and lease-back transactions, and any covenants for the
benefit of the Holders of such SUNs provided pursuant to the Article of the
Indenture setting forth covenants and the sections of the Indenture dealing with
entering into supplemental indentures without the consent of Holders for the
purpose of adding covenants, securing the SUNs and establishing the form or
terms of SUNs of any series or Tranche and the section of the Indenture
specifying Events of Default and (ii) the occurrence of any event specified in
the section of the Indenture
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dealing with default in the performance, or breach, of any covenant or warranty
of the Company (with respect to specified sections of the Indenture) shall be
deemed not to be or result in an Event of Default with respect to such SUNs as
provided in the Indenture and described in this paragraph on and after the date
the conditions described in the paragraph below are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such SUNs, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified section of the Indenture (to the extent so specified in the
case of default in the performance or breach of any covenant or warranty of the
Company), whether directly or indirectly by reason of any reference elsewhere
therein to any such section or by reason of any reference in any such section to
any other provision in the Indenture or in any other document, but the remainder
of the Indenture and such SUNs shall be unaffected thereby. (Section 13.03)
The Indenture provides that the following shall be the conditions to
the application of the Defeasance and Covenant Defeasance provisions, as the
case may be: (i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such SUNs, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination of (A) and (B), in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee to pay and discharge, the principal of
and any premium and interest on such SUNs on the respective Stated Maturities or
on any Redemption Date established as described in clause (ix) below, in
accordance with the terms of the Indenture and such SUNs. As used in this
paragraph, "U.S. Government Obligation" means (x) any security which is (1) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (2) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (1) or (2), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt; (ii) in the event of an election to have the
provisions of the Indenture relating to Defeasance apply to any SUNs or the SUNs
of any series, or any Tranche thereof, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date of the Indenture, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such SUNs will
not recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such SUNs and
will be subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit, Defeasance and discharge
were not to occur; (iii) in the event of an election to have the provision of
the Indenture relating to Covenant Defeasance apply to the SUNs or the SUNs of
any series, but not Tranches thereof alone, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such SUNs will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such SUNs and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur; (iv) the Company shall have
delivered to the Trustee an Officers' Certificate to the effect that neither
such SUNs nor any other SUNs of the same series, as the case may be, if then
listed on any securities exchange, will be delisted as a result of such deposit;
(v) no event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to such SUNs or any other SUNs shall have occurred
and be continuing at the time of such deposit or, with regard to certain
bankruptcy Events of Default, at any time on or prior to the 90th day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day); (vi) such Defeasance or Covenant
Defeasance shall not cause the Trustee to have a conflicting interest within the
meaning of the Trust Indenture Act (assuming all SUNs are in default within the
meaning of such Act); (vii) such Defeasance or
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<PAGE> 15
Covenant Defeasance shall not result in a breach or violation of, or constitute
a default under, any other agreement or instrument to which the Company is a
party or by which it is bound; (viii) such Defeasance or Covenant Defeasance
shall not result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment Company Act of 1940
unless such trust shall be registered under such Act or exempt from registration
thereunder; (ix) if the SUNs are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of such
redemption shall have been duly given pursuant to the Indenture or provision
therefor satisfactory to the Trustee shall have been made; and (x) the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such
Defeasance or Covenant Defeasance have been complied with. (Section 13.04)
MODIFICATION OF THE INDENTURE
The Indenture provides that without the consent of any Holders, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental to the
Indenture, 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 in the
Indenture and in the SUNs; or (ii) to add to the covenants of the Company or
other provisions for the benefit of the Holders of all or any series of SUNs, or
any Tranche thereof, (and if such covenants are to be for the benefit of less
than all series of SUNs or Tranches thereof, stating that such covenants are
expressly being included solely for the benefit of such series or Tranche or
Tranches) or to surrender any right or power conferred in the Indenture upon the
Company; or (iii) to add any additional Events of Default for the benefit of the
Holders of all or any series of SUNs, or any Tranche or Tranches thereof (and if
such additional Events of Default are to be for the benefit of less than all
series of SUNs or any Tranches thereof, stating that such additional Events of
Default are expressly being included solely for the benefit of such series or
Tranche or Tranches); or (iv) to add to or change any of the provisions of the
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of SUNs in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance of
SUNs in uncertificated form; or (v) to change or eliminate any provision of the
Indenture or to add any new provision to the Indenture; provided, however, that
if such change, elimination or addition shall adversely affect the interests of
the Holders of SUNs of any series, or a Tranche thereof, Outstanding on the date
of such indenture supplemental to the Indenture in any material respect, such
change, elimination or addition shall become effective (a) with respect to such
series or Tranche only pursuant to the provisions described in the succeeding
paragraph or (b) when no SUN of such series or Tranche remains Outstanding; or
(vi) to secure the SUNs; or (vii) to establish the form or terms of SUNs of any
series or Tranche as permitted by the Indenture; or (viii) to evidence and
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the SUNs of one or more series and to add to or change
any of the provisions of the Indenture as shall be necessary to provide for or
facilitate the administration of the trusts thereunder by more than one Trustee;
or (ix) to cure any ambiguity, to correct or supplement any provision in the
Indenture which may be defective or inconsistent with any other provision
thereof, or to make any other changes to the provisions of the Indenture or to
add other provisions with respect to matters or questions arising under the
Indenture, provided that such other changes or additions shall not adversely
affect the interests of the Holders of SUNs of any series in any material
respect. Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the Indenture or at any time
thereafter shall be amended and (A) if any such amendment shall require one or
more changes to any provisions of the Indenture or the inclusion therein of any
additional provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise, the 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 thereto to effect or evidence
such changes or additional provisions; or (B) if any such amendment shall permit
one or more changes to, or the elimination of, any provisions of the Indenture
which, at the date of the execution and delivery of the Indenture or at any time
thereafter, are required by the Trust Indenture Act to be contained therein, the
Indenture shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental thereto to evidence such amendment
thereof. (Section 9.01)
The Indenture also contains provisions providing that with the consent
of the Holders of not less than a majority in aggregate principal amount of the
SUNs of all series then Outstanding, considered as one class, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution,
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<PAGE> 16
and the Trustee may enter into one or more indentures supplemental to the
Indenture for the purpose of adding any provisions to, or changing in any manner
or eliminating any of the provisions of, the Indenture; provided, however, that
if there shall be SUNs of more than one series Outstanding under the Indenture
and if a proposed supplemental indenture shall directly affect the rights of the
Holders of SUNs 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 SUNs of all series so directly affected, considered as one class,
shall be required; and provided further, that if the SUNs 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 SUNs 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 SUNs of all
Tranches so directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall: (i) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any SUN, 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 an Original
Issue Discount SUN or any other SUN which would be due and payable upon a
declaration of acceleration of the Maturity thereof, or change the coin or
currency (or other property) in which any SUN or any premium or interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), without, in any such case, the
consent of the Holder of such SUN, or (ii) reduce the percentage in principal
amount of the Outstanding SUNs of any 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 the
Indenture or of any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the consent of the
Holder of such SUN, or (iii) modify any of the provisions described in this
paragraph and the sections of the Indenture regarding waiver of past defaults
and waiver of certain covenants with respect to the SUNs of any series or any
Tranche thereof, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding SUN 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". (Section
9.02)
A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of SUNs or one or more Tranches
thereof, or which modifies the rights of the Holders of SUNs of such series or
Tranches with respect to such covenant or other provision, shall be deemed not
to affect the rights under the Indenture of the Holders of SUNs of any other
series or Tranche. It shall not be necessary for any Act of Holders under the
section of the Indenture described in this paragraph to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
Act shall approve the substance thereof. A waiver by a Holder of such Holder's
right to consent described in the preceding paragraph shall be deemed to be a
consent of such Holder. (Section 9.02)
INFORMATION CONCERNING THE TRUSTEE
The Trustee under the Indenture will be The Chase Manhattan Bank. The
Company maintains normal banking arrangements with The Chase Manhattan Bank. The
Chase Manhattan Bank also serves as trustee under an indenture for the holders
of certain other senior unsecured notes of the Company, (ii) serves as trustee
for the holders of two series of bonds secured by, among other things, the
Company's payments under its PVNGS leases (these bonds were issued by a party
unaffiliated with the Company), as well as trustee under the lease indentures
related to such leases, and (iii) has a commitment to lend the Company up to $50
million under a revolving credit agreement. The Chase Manhattan Bank also acts
as administrative agent and a letter of credit issuing bank under the revolving
credit agreement, and an affiliate of The Chase Manhattan Bank acted as arranger
under such revolving credit agreement. In addition, affiliates of The Chase
Manhattan Bank are the lessors with respect to three leases with the Company
relating to the sale and leaseback of portions of Unit 1 and Unit 2 of PVNGS.
Subject to the provisions in the Indenture and the applicable
provisions of the Trust Indenture Act: (i) the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties; (ii) any request or direction of the Company
mentioned in the Indenture
15
<PAGE> 17
shall be sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided in the Indenture, and any resolution of the Board
of Directors shall be sufficiently evidenced by a Board Resolution; (iii)
whenever in the administration of the Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action under the Indenture, the Trustee (unless other evidence be
specifically prescribed in the Indenture) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate; (iv) the Trustee may consult with
counsel of its selection, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it under the Indenture in good faith
and in reliance thereon; (v) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by the Indenture at the
request or direction of any Holder pursuant to the 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; (vi) 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 the books, records and
premises of the Company, personally or by agent or attorney; (vii) the Trustee
may execute any of the trusts or powers under the Indenture or perform any
duties thereunder 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 under the Indenture; and
(viii) except as otherwise provided in the Indenture the Trustee shall not be
charged with knowledge of any Event of Default with respect to the SUNs of any
series for which it is acting as Trustee unless either (A) a Responsible Officer
of the Trustee shall have actual knowledge of the Event of Default, or (B)
written notice of such Event of Default shall have been given to the Trustee by
the Company, any other obligor on the SUNs or by any Holder of such SUNs.
(Section 6.03)
The Indenture contains a covenant that the Company will file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such information, documents and
reports to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants thereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates). (Section
7.04)
CERTAIN DEFINITIONS
The term "Debt" as defined in the Indenture means any outstanding debt
for money borrowed evidenced by notes, debentures, bonds or other securities.
The term "Net Tangible Assets" as defined in the Indenture means the
amount shown as total assets on the consolidated balance sheet of the Company,
less the following: (i) intangible assets including, but without limitation,
such items as goodwill, trademarks, trade names, patents, and unamortized debt
discount and expense and other regulatory assets carried as an asset on the
Company's consolidated balance sheet; and (ii) appropriate adjustments, if any,
on account of minority interests. Net Tangible Assets shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged and that are
approved by the independent accountants regularly retained by the Company, and
may be determined as of a date not more than sixty (60) days prior to the
happening of the event for which such determination is being made.
The term "Operating Property" as defined in the Indenture means (i) any
interest in real property owned by the Company and (ii) any asset owned by the
Company that is depreciable in accordance with generally accepted accounting
principles.
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<PAGE> 18
The term "Original Issue Discount SUN" as defined in the Indenture
means any SUN 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.
The term "Outstanding" as defined in the Indenture when used with
respect to SUNs, means, as of the date of determination, all SUNs theretofore
authenticated and delivered under the Indenture, except: (i) SUNs theretofore
cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) SUNs
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such SUNs;
provided that, if such SUNs are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture or provision therefor satisfactory to
the Trustee has been made; (iii) SUNs as to which Defeasance has been effected
pursuant to Section 13.02 of the Indenture; and (iv) SUNs which have been paid
pursuant to Section 3.06 of the Indenture or in exchange for or in lieu of which
other SUNs have been authenticated and delivered pursuant to the Indenture,
other than any such SUNs in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such SUNs are held by a bona fide
purchaser in whose hands such SUNs are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the SUNs Outstanding under the Indenture, or the
Outstanding SUNs of any series or Tranche, have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action under the Indenture as of any date or whether or not a quorum is present
at a meeting of Holders, (A) the principal amount of an Original Issue Discount
SUN (as defined herein) which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such date
upon acceleration of the Maturity thereof to such date pursuant to Section 5.02
of the Indenture, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a SUN is not determinable, the principal amount of such SUN
which shall be deemed to be Outstanding shall be the amount as specified or
determined as contemplated by Section 3.01 of the Indenture, (C) the principal
amount of a SUN denominated in one or more foreign currencies or currency units
which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by Section
3.01 of the Indenture, of the principal amount of such SUN (or, in the case of a
SUN described in clause (A) or (B) above, of the amount determined as provided
in such clause), and (D) SUNs owned by the Company or any other obligor upon the
SUNs or any Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all SUNs Outstanding under the
Indenture, or all Outstanding SUNs of each such series and each such Tranche, as
the case may be, determined without regard to this clause (D)) shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action, or
upon such determination as to the presence of a quorum, only SUNs which the
Trustee actually knows to be so owned shall be so disregarded. SUNs so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such SUNs and that the pledgee is not the Company or any
other obligor upon the SUNs or any Affiliate of the Company or of such other
obligor.
The term "Sale and Lease-Back Transaction" as defined in the Indenture
means any arrangement with any Person providing for the leasing to the Company
of any Operating Property (except for temporary leases for a term, including any
renewal thereof, of not more than forty-eight (48) months), which Operating
Property has been or is to be sold or transferred by the Company to such person;
provided, however, Sale and Lease-back Transaction shall not include any
arrangement (i) first entered into prior to the date of the Indenture and (ii)
involving the exchange of any Operating Property for any property subject to an
arrangement specified in the preceding clause (i).
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the SUNs being offered hereby: (i) directly to
purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
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<PAGE> 19
The distribution of the SUNs may be effected from time to time in one
or more transactions either: (i) at a fixed price or prices which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase the SUNs may be solicited directly by the Company.
Offers to purchase SUNs may also be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, involved in the
offer or sale of the SUNs in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company to such agent will be set
forth, in the applicable Prospectus Supplement.
If a dealer is utilized in the sale of the SUNs in respect of which
this Prospectus is delivered, the Company will sell such SUNs to the dealer, as
principal. The dealer, who may be deemed to be an "underwriter" as that term is
defined in the Securities Act, may then resell such SUNs to the public at
varying prices to be determined by such dealer at the time of resale.
If an underwriter or underwriters are utilized in the sales of the
SUNs, the Company will execute an underwriting agreement with such underwriters
at the time of such sale and the name of the underwriters will be set forth in
the applicable Prospectus Supplement, which will be used by the underwriters to
make resales of the SUNs in respect of which this Prospectus is delivered to the
public. In connection with the sale of SUNs, such underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
SUNs for whom they may act as agents. Underwriters may also sell SUNs to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Any underwriting
compensation paid by the Company to underwriters in connection with the offering
and sale of SUNs, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with the Company, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act. Underwriters and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the SUNs offered hereby will be passed upon for the
Company by Keleher & McLeod, P.A., Albuquerque, New Mexico, and, it is currently
anticipated, for any underwriters of SUNs by Winthrop, Stimson, Putnam &
Roberts, New York, New York. In giving their opinions, Winthrop, Stimson, Putnam
& Roberts and Keleher & McLeod, P.A. may rely as to matters of Arizona law upon
the opinion of Snell & Wilmer L.L.P., Phoenix, Arizona. Winthrop, Stimson,
Putnam & Roberts may rely as to all matters of New Mexico law upon the opinion
of Keleher & McLeod, P.A., and Keleher & McLeod, PA. may relay as to all matters
of New York law upon the opinion of Winthrop, Stimson, Putnam & Roberts.
Winthrop, Stimson, Putnam & Roberts has rendered, and may in the future render,
legal services to the Company.
EXPERTS
The consolidated financial statements of the Company at December 31,
1997 and 1996, and for each of the three years in the period ended December 31,
1997, appearing in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the expenses the Registrant expects to pay
in connection with the issuance and distribution of the SUNs registered hereby:
<TABLE>
<CAPTION>
ESTIMATED
AMOUNT
CATEGORY OF EXPENSE OF EXPENSE
- ------------------- ----------
<S> <C>
Filing and Registration Fees......................................................... $ 191,750
Legal Fees and Expenses*............................................................. 200,000
Cost of Printing*.................................................................... 40,000
Accounting Fees and Expenses*........................................................ 40,000
Rating Agency Fees................................................................... 150,000
Blue Sky Fees and Expenses*.......................................................... 3,000
NASD Filing Fee...................................................................... 65,500
Miscellaneous Expenses*.............................................................. 20,000
-----------
*Total...................................................................... $ 710,250
===========
</TABLE>
- ------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 8 of Article II of the Company's By-Laws contains the following
provision with respect to indemnification of directors and officers:
Each person who shall have served as a director or an officer of the
Company, or, at the request of the Company, as a director or an officer
of any other corporation, partnership or joint venture, whether profit
or nonprofit, in which the Company (a) owns shares of capital stock,
(b) has an ownership interest, (c) is a member, or (d) is a creditor,
and regardless of whether or not such person is then in office, and the
heirs, executors, administrators and personal representatives of any
such person shall be indemnified by the Company to the full extent of
the authority of the Company to so indemnify as authorized by the law
of New Mexico.
Section 53-11-4.1 of the Business Corporation Act of the State of New
Mexico provides that a corporation shall have power to indemnify any person made
(or threatened to be made) a party to any proceeding (whether threatened,
pending or completed) by reason of the fact that the person is or was a director
(or, while a director, is or was serving in any of certain other capacities) if:
(1) the person acted in good faith; (2) the person reasonably believed: (a) in
the case of conduct in the person's official capacity with the corporation, that
the person's conduct was in its best interests; and (b) in all other cases, that
the person's conduct was at least not opposed to its best interests; and (3) in
the case of any criminal proceeding, the person had no reasonable cause to
believe the person's conduct was unlawful. Indemnification may be made against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by the person in connection with the proceeding, but may be limited or
unavailable with respect to certain proceedings. In some instances,
indemnification of a director may be mandatory or, upon the application of a
director, may be ordered by a court. Reasonable expenses incurred by a director
may, under certain circumstances, be paid or reimbursed in advance of a final
disposition of a proceeding. Unless limited by its articles of incorporation, a
corporation may (or, as the case may be, shall) indemnify and advance expenses
to an officer of the corporation to the same extent as to a director under
Section 53-11-4.1. Also, unless limited by its articles of incorporation, a
corporation has (1) the power to indemnify and to advance expenses to an
employee or agent of the corporation to the same extent that it may indemnify
and advance expenses to directors under the statute and (2) additional power to
indemnify and to
II-1
<PAGE> 21
advance reasonable expenses to an officer, employee or agent who is not a
director to such further extent, consistent with law, as may be provided by its
articles of incorporation, bylaws, general or specific action of its board of
directors, or contract.
Section 53-11-4.1 was amended in 1987 to provide that the
indemnification authorized thereunder shall not be deemed exclusive of any
rights to which those seeking indemnification may be entitled under the articles
of incorporation, the by-laws, an agreement, a resolution of shareholders or
directors or otherwise. At the Company's 1987 Annual Meeting of Stockholders,
the stockholders approved certain agreements with the Company's directors and
officers relating to indemnification of directors and officers. Such agreements
have been entered into with each director and officer. The agreements provide
for indemnification of directors and officers to the fullest extent permitted by
law, including advancement of litigation expenses where appropriate. The
agreements provide for the appointment of a reviewing party by the Board of
Directors to make a determination whether claimed indemnification is permitted
under applicable law.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the Company out of its foregoing indemnification provisions, subject
to certain exclusions and to the policy limits.
ITEM 16. EXHIBITS.
See Exhibit Index.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; provided, however, that any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
II-2
<PAGE> 22
(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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 23
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 ALBUQUERQUE, STATE OF NEW MEXICO, ON THIS MAY 21,
1998.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/ B. F. Montoya
-------------------------------------
B. F. Montoya
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH OFFICER OR DIRECTOR OF PUBLIC
SERVICE COMPANY OF NEW MEXICO WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND
APPOINTS B. F. MONTOYA AND M. H. MAERKI EACH OF THEM SINGLY, HIS OR HER TRUE AND
LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL AND SEVERAL POWER OF SUBSTITUTION,
FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS,
AND SUPPLEMENTS TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEY-IN-FACT AND
AGENT FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL
INTENTS AND PURPOSES AS THEY OR HE OR SHE MIGHT OR COULD DO IN PERSON, HEREBY
RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEY-IN-FACT AND AGENT OR HIS OR HER
OR THEIR SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE THEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ B. F. Montoya Principal Executive Officer May 21, 1998
- -------------------------------------- and Director
B. F. Montoya
President and Chief Executive Officer
/s/ M. H. Maerki Principal Financial Officer May 21, 1998
- --------------------------------------
M. H. Maerki
Senior Vice President and
Chief Financial Officer
/s/ D. M. Burnett Principal Accounting Officer May 21, 1998
- ------------------------------------- and Controller
D. M. Burnett
Corporate Controller and
Chief Accounting Officer
</TABLE>
II-4
<PAGE> 24
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ J. T. Ackerman Chairman of the Board May 21, 1998
- --------------------------------------
J. T. Ackerman
/s/ R. G. Armstrong Director May 21, 1998
- --------------------------------------
R. G. Armstrong
/s/ J. A. Godwin Director May 21, 1998
- --------------------------------------
J. A. Godwin
/s/ L. H. Latterman Director May 21, 1998
- --------------------------------------
L. H. Lattman
/s/ M. Lujan Jr. Director May 21, 1998
- --------------------------------------
M. Lujan Jr.
/s/ R. U. Ortiz Director May 21, 1998
- --------------------------------------
R. U. Ortiz
/s/ R. M. Price Director May 21, 1998
- --------------------------------------
R. M. Price
/s/ P. F. Roth Director May 21, 1998
- --------------------------------------
P. F. Roth
</TABLE>
II-5
<PAGE> 25
FORM S-3
PUBLIC SERVICE COMPANY OF NEW MEXICO
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Pages
- ------ ----------- -----
<S> <C> <C>
1 Form of Underwriting Agreement*
3.1 Restated Articles of Incorporation of the Company, as amended through
May 10, 1985 (incorporated by reference to Exhibit 4-(b) to the
Company's Registration Statement, File No. 2-99990)
3.2 By-Laws of the Company With All Amendments to and including December
5, 1994 (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, File
No. 1-6986)
4.1 Form of Indenture, dated as of July __, 1998 between the Company and
The Chase Manhattan Bank, as Trustee
4.2 Form of SUN Security (included in Exhibit 4.1 above)
4.3 Form(s) of Supplemental Indenture Relating to SUNs*
5 Opinion of Keleher & McLeod, P.A.
12 Statements Regarding Computation of Ratio of Earnings to Fixed Charges
15 Letter From Arthur Andersen LLP Regarding Unaudited Interim
Financial Information
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Keleher & McLeod, P.A. (included in Exhibit 5 above)
24 Power of Attorney (see page II-4)
25 Statement of Eligibility under the Trust Indenture Act of 1939 of The
Chase Manhattan Bank, as Trustee under the Indenture between the
Company and The Chase Manhattan Bank, on Form T-1
</TABLE>
* To be filed as an Exhibit by means of Form 8-K.
II-6
<PAGE> 1
EXHIBIT 4.1
PUBLIC SERVICE COMPANY OF NEW MEXICO
TO
THE CHASE MANHATTAN BANK
TRUSTEE
--------------
INDENTURE
DATED AS OF , 1998
--------------
(FOR SENIOR NOTES)
<PAGE> 2
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section
Section
Section 310(a)(1) ..................................... 6.09
(a)(2) ..................................... 6.09
(a)(3) ..................................... Not Applicable
(a)(4) ..................................... Not Applicable
(b) ..................................... 6.08
6.10
Section 311(a) ..................................... 6.13
(b) ..................................... 6.13
Section 312(a) ..................................... 7.01
7.02
(b) ..................................... 7.02
(c) ..................................... 7.02
Section 313(a) ..................................... 7.03
(b) ..................................... 7.03
(c) ..................................... 7.03
(d) ..................................... 7.03
Section 314(a) ..................................... 7.04
(a)(4) ..................................... 1.01
10.04
(b) ..................................... Not Applicable
(c)(1) ..................................... 1.02
(c)(2) ..................................... 1.02
(c)(3) ..................................... Not Applicable
(d) ..................................... Not Applicable
(e) ..................................... 1.02
Section 315(a) ..................................... 6.01
(b) ..................................... 6.02
(c) ..................................... 6.01
(d) ..................................... 6.01
(e) ..................................... 5.14
Section 316(a) ..................................... 1.01
(a)(1)(A) ..................................... 5.02
5.12
(a)(1)(B) ..................................... 5.13
(a)(2) ..................................... Not Applicable
(b) ..................................... 5.08
(c) ..................................... 1.04
Section 317(a)(1) ..................................... 5.03
(a)(2) ..................................... 5.04
(b) ..................................... 10.03
Section 318(a) ..................................... 1.07
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01 Definitions.......................................................1
"Act,".........................................................................2
"Affiliate" ..................................................................2
"Authenticating Agent".........................................................2
"Board of Directors............................................................2
"Board Resolution..............................................................2
"Business Day".................................................................2
"Capitalization"...............................................................2
"Commission"...................................................................2
"Company"......................................................................3
"Company Request"..............................................................3
"Corporate Trust Office".......................................................3
"Corporation"..................................................................3
"Covenant Defeasance"..........................................................3
"Debt".........................................................................3
"Defaulted Interest"...........................................................3
"Defeasance"...................................................................3
"Depositary"...................................................................3
"Event of Default".............................................................3
"Exchange Act".................................................................3
"Expiration Date"..............................................................3
"Global Note"..................................................................3
"Holder".......................................................................4
"Indenture"....................................................................4
"independent"..................................................................4
"interest".....................................................................4
"Interest Payment Date"........................................................4
"Investment Company Act".......................................................4
"Maturity".....................................................................4
"Net Tangible Assets"..........................................................4
"Notes"........................................................................4
"Note Register"................................................................4
"Notice of Default"............................................................4
"Officers' Certificate"........................................................5
"Operating Property"...........................................................5
"Opinion of Counsel"...........................................................5
"Original Issue Discount Note".................................................5
"Outstanding"..................................................................5
"Paying Agent".................................................................6
"Periodic Offering"............................................................6
i
<PAGE> 4
"Person".......................................................................6
"Place of Payment".............................................................6
"Predecessor Note".............................................................6
"Redemption Date"..............................................................7
"Redemption Price".............................................................7
"Regular Record Date"..........................................................7
"Required Currency"............................................................7
"Responsible Officer"..........................................................7
"Sale and Lease-Back Transaction"..............................................7
"Securities Act"...............................................................7
"Special Record Date"..........................................................7
"Stated Maturity"..............................................................7
"Subsidiary"...................................................................7
"Tranche"......................................................................7
"Trust Indenture Act"..........................................................7
"Trustee"......................................................................8
"U.S. Government Obligation"...................................................8
"Value"........................................................................8
"Vice President"...............................................................8
Section 1.02 Compliance Certificates and Opinions..............................8
Section 1.03 Form of Documents Delivered to Trustee............................9
Section 1.04 Acts of Holders; Record Dates....................................10
Section 1.05 Notices, Etc., to Trustee and Company............................12
Section 1.06 Notice to Holders; Waiver........................................13
Section 1.07 Conflict with Trust Indenture Act................................13
Section 1.08 Effect of Headings and Table of Contents.........................13
Section 1.09 Successors and Assigns...........................................13
Section 1.10 Separability Clause..............................................14
Section 1.11 Benefits of Indenture............................................14
Section 1.12 Governing Law....................................................14
Section 1.13 Legal Holidays...................................................14
ARTICLE II
NOTE FORMS
Section 2.01 Forms Generally..................................................14
Section 2.02 Form of Face of Note.............................................15
Section 2.03 Form of Reverse of Note..........................................17
Section 2.04 Form of Legend for Global Notes..................................20
Section 2.05 Form of Trustee's Certificate of Authentication..................21
ARTICLE III
THE NOTES
Section 3.01 Amount Unlimited; Issuable in Series.............................21
Section 3.02 Denominations....................................................24
Section 3.03 Execution, Authentication, Delivery and Dating...................24
Section 3.04 Temporary Notes..................................................27
ii
<PAGE> 5
Section 3.05 Registration, Registration of Transfer and Exchange..............28
Section 3.06 Mutilated, Destroyed, Lost and Stolen Notes......................29
Section 3.07 Payment of Interest; Interest Rights Preserved...................30
Section 3.08 Persons Deemed Owners............................................31
Section 3.09 Cancellation.....................................................31
Section 3.10 Computation of Interest..........................................32
Section 3.11 CUSIP Numbers....................................................32
Section 3.12 Payment to Be Proper Currency....................................32
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture..........................33
Section 4.02 Application of Trust Money.......................................34
ARTICLE V
REMEDIES
Section 5.01 Events of Default................................................34
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............35
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee..........................................................36
Section 5.04 Trustee May File Proofs of Claim.................................37
Section 5.05 Trustee May Enforce Claims Without Possession of Notes...........38
Section 5.06 Application of Money Collected...................................38
Section 5.07 Limitation on Suits..............................................39
Section 5.08 Unconditional Right of Holders to Receive Principal, Premium
and Interest.....................................................39
Section 5.09 Restoration of Rights and Remedies...............................39
Section 5.10 Rights and Remedies Cumulative...................................40
Section 5.11 Delay or Omission Not Waiver.....................................40
Section 5.12 Control by Holders...............................................40
Section 5.13 Waiver of Past Defaults..........................................41
Section 5.14 Undertaking for Costs............................................41
Section 5.15 Waiver of Stay or Extension Laws.................................41
ARTICLE VI
THE TRUSTEE
Section 6.01 Certain Duties and Responsibilities..............................42
Section 6.02 Notice of Defaults...............................................43
Section 6.03 Certain Rights of Trustee........................................43
Section 6.04 Not Responsible for Recitals or Issuance of Notes................44
Section 6.05 May Hold Notes...................................................45
Section 6.06 Money Held in Trust..............................................45
Section 6.07 Compensation and Reimbursement...................................45
Section 6.08 Conflicting Interests............................................46
Section 6.09 Corporate Trustee Required; Eligibility..........................46
Section 6.10 Resignation and Removal; Appointment of Successor................46
iii
<PAGE> 6
Section 6.11 Acceptance of Appointment by Successor...........................48
Section 6.12 Merger, Conversion, Consolidation or Succession to Business......49
Section 6.13 Preferential Collection of Claims Against Company................49
Section 6.14 Appointment of Authenticating Agent..............................50
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01 Company to Furnish Trustee Names and Addresses of Holders........51
Section 7.02 Preservation of Information; Communications to Holders...........52
Section 7.03 Reports by Trustee...............................................52
Section 7.04 Reports by Company...............................................52
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01 Company May Consolidate, Etc., Only on Certain Terms.............53
Section 8.02 Successor Substituted............................................53
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Holders...............54
Section 9.02 Supplemental Indentures With Consent of Holders..................55
Section 9.03 Execution of Supplemental Indentures.............................57
Section 9.04 Effect of Supplemental Indentures................................57
Section 9.05 Conformity with Trust Indenture Act..............................57
Section 9.06 Reference in Notes to Supplemental Indentures....................57
ARTICLE X
COVENANTS
Section 10.01 Payment of Principal, Premium and Interest......................58
Section 10.02 Maintenance of Office or Agency.................................58
Section 10.03 Money for Notes Payments to Be Held in Trust....................58
Section 10.04 Statement by Officers as to Default.............................59
Section 10.05 Restrictions on Liens...........................................60
Section 10.06 Corporate Existence.............................................61
Section 10.07 Maintenance of Properties.......................................62
Section 10.08 Waiver of Certain Covenants.....................................62
Section 10.09 Calculation of Original Issue Discount..........................62
Section 10.10 Restrictions on Sale and Lease-Back Transactions................62
iv
<PAGE> 7
ARTICLE XI
REDEMPTION OF NOTES
Section 11.01 Applicability of Article........................................63
Section 11.02 Election to Redeem; Notice to Trustee...........................63
Section 11.03 Selection by Trustee of Notes to be Redeemed....................64
Section 11.04 Notice of Redemption............................................64
Section 11.05 Deposit of Redemption Price.....................................65
Section 11.06 Notes Payable on Redemption Date................................65
Section 11.07 Notes Redeemed in Part..........................................66
ARTICLE XII
SINKING FUNDS
Section 12.01 Applicability of Article........................................66
Section 12.02 Satisfaction of Sinking Fund Payments with Notes................66
Section 12.03 Redemption of Notes for Sinking Fund............................67
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
Section 13.01 Company's Option to Effect Defeasance or Covenant Defeasance....67
Section 13.02 Defeasance and Discharge........................................68
Section 13.03 Covenant Defeasance.............................................68
Section 13.04 Conditions to Defeasance or Covenant Defeasance.................68
Section 13.05 Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.................................70
Section 13.06 Reinstatement...................................................71
ARTICLE XIV
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
Section 14.01 Purposes for Which Meetings May Be Called.......................71
Section 14.02 Call, Notice and Place of Meetings..............................71
Section 14.03 Persons Entitled to Vote at Meetings............................72
Section 14.04 Quorum: Action..................................................72
Section 14.05 Attendance at Meetings; Determination of Voting Rights; Conduct
and Adjournment of Meetings.....................................73
Section 14.06 Counting Votes and Recording Action of Meetings.................74
Section 14.07 Action Without Meeting..........................................74
v
<PAGE> 8
ARTICLE XV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01 Liability Solely Corporate......................................75
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
vi
<PAGE> 9
INDENTURE dated as of ___________, 1998 between PUBLIC SERVICE COMPANY OF
NEW MEXICO, a corporation duly organized and existing under the laws of the
State of New Mexico (herein called the "Company"), having its principal office
at Alvarado Square, Albuquerque, New Mexico 87158, and THE CHASE MANHATTAN BANK,
a New York banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior notes
(herein called the "NOTES"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes or of series thereof, as
follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted in the
United States of America;
(4) unless the context otherwise requires, any reference to an "ARTICLE"
or a "SECTION" refers to an Article or a Section, as the case may be, of this
Indenture; and
1
<PAGE> 10
(5) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT" when used with respect to any Holder, has the meaning specified in
SECTION 1.04.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee pursuant
to SECTION 6.14 to act on behalf of the Trustee to authenticate Notes of one or
more series or any Tranche thereof.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary or Associate Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"BUSINESS DAY" when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by
law, regulation or executive order to close, except as may be otherwise
specified as contemplated by Section 3.01.
"CAPITALIZATION" means the total of all the following items appearing on,
or included in, the consolidated balance sheet of the Company: (i) liabilities
for indebtedness maturing more than twelve (12) months from the date of
determination; and (ii) common stock, preferred stock, premium on capital stock,
capital surplus, capital in excess of par value, and retained earnings (however
the foregoing may be designated), less, to the extent not otherwise deducted,
the cost of shares of capital stock of the Company held in its treasury. Subject
to the foregoing, Capitalization shall be determined in accordance with
generally accepted accounting principles and practices applicable to the type of
business in which the Company is engaged and that are approved by independent
accountants regularly retained by the Company, and may be determined as of a
date not more than (sixty) 60 days prior to the happening of an event for which
such determination is being made.
"COMMISSION" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
2
<PAGE> 11
"COMPANY" means the Person named as the "COMPANY" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "COMPANY" shall
mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee in The City of
New York, at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at 450 West
33rd Street - 15th Floor, New York, New York 10001.
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COVENANT DEFEASANCE" has the meaning specified in SECTION 13.03.
"DEBT" means any outstanding debt for money borrowed evidenced by notes,
debentures, bonds, or other securities.
"DEFAULTED INTEREST" has the meaning specified in SECTION 3.07.
"DEFEASANCE" has the meaning specified in SECTION 13.02.
"DEPOSITARY" means, with respect to Notes of any series issuable in whole
or in part in the form of one or more Global Notes, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such Notes as
contemplated by SECTION 3.01.
"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.
"EVENT OF DEFAULT" has the meaning specified in SECTION 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"EXPIRATION DATE" has the meaning specified in Section 1.04.
"GLOBAL NOTE" means a Note that evidences all or part of the Notes of any
series and bears the legend set forth in or contemplated by SECTION 2.04 (or
such legend as may be specified as contemplated by SECTION 3.01 for such Notes).
3
<PAGE> 12
"HOLDER" means a Person in whose name a Note is registered in the Note
Register.
"INDENTURE" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Notes established as contemplated by SECTION 3.01.
"INDEPENDENT" when applied to any accountant shall mean such a Person who
is in fact independent, selected by the Company and approved by the Trustee in
the exercise of reasonable care.
"INTEREST" when used with respect to an Original Issue Discount Note which
by its terms bears interest only after Maturity, means interest payable after
Maturity.
"INTEREST PAYMENT DATE" when used with respect to any Note, means the
Stated Maturity of an installment of interest on such Note.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"MATURITY" when used with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"NET TANGIBLE ASSETS" means the amount shown as total assets on the
consolidated balance sheet of the Company, less the following: (i) intangible
assets including, but without limitation, such items as goodwill, trademarks,
trade names, patents, and unamortized debt discount and expense and other
regulatory assets carried as an asset on the Company's consolidated balance
sheet; and (ii) appropriate adjustments, if any, on account of minority
interests. Net Tangible Assets shall be determined in accordance with generally
accepted accounting principles and practices applicable to the type of business
in which the Company is engaged and that are approved by the independent
accountants regularly retained by the Company, and may be determined as of a
date not more than sixty (60) days prior to the happening of the event for which
such determination is being made.
"NOTES" has the meaning stated in the first recital of this Indenture and
more particularly means any Notes authenticated and delivered under this
Indenture.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in SECTION 3.05.
"NOTICE OF DEFAULT" means a written notice of the kind specified in
SECTION 5.01(4).
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"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee; provided,
that an Assistant Treasurer or Assistant Secretary need not be an officer of the
Company under the Company's Bylaws. One of the officers signing an Officers'
Certificate given pursuant to SECTION 10.04 shall be the principal executive,
financial or accounting officer of the Company.
"OPERATING PROPERTY" means (i) any interest in real property owned by the
Company and (ii) any asset owned by the Company that is depreciable in
accordance with generally accepted accounting principles.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, or other counsel who shall be acceptable to the
Trustee.
"ORIGINAL ISSUE DISCOUNT NOTE" means any Note which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to SECTION 5.02.
"OUTSTANDING" when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(1) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(2) Notes for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for the Holders of such Notes;
provided that, if such Notes are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(3) Notes as to which Defeasance has been effected pursuant to SECTION
13.02; and
(4) Notes which have been paid pursuant to SECTION 3.06 or in exchange for
or in lieu of which other Notes have been authenticated and delivered pursuant
to this Indenture, other than any such Notes in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Notes are
held by a protected purchaser in whose hands such Notes are valid obligations of
the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Notes Outstanding under this Indenture, or the
Outstanding Notes of any series or Tranche, have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date or whether or not a quorum is present at
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a meeting of Holders, (A) the principal amount of an Original Issue Discount
Note which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to SECTION 5.02, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Note is not determinable, the principal amount of such Note which shall be
deemed to be Outstanding shall be the amount as specified or determined as
contemplated by SECTION 3.01, (C) the principal amount of a Note denominated in
one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by SECTION 3.01, of the principal amount of
such Note (or, in the case of a Note described in Clause (A) or (B) above, of
the amount determined as provided in such Clause), and (D) Notes owned by the
Company or any other obligor upon the Notes or any Affiliate of the Company or
of such other obligor (unless the Company, such Affiliate or such obligor owns
all Notes Outstanding under this Indenture, or all Outstanding Notes of each
such series and each such Tranche, as the case may be, determined without
regard to this clause (D)) each shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, or upon such determination as to the presence
of a quorum, only Notes which the Trustee actually knows to be so owned shall
be so disregarded. Notes so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Notes on behalf of the Company.
"PERIODIC OFFERING" means an offering of Notes of a series from time to
time any or all of the specific terms of which Notes, including without
limitation the rate or rates of interest, if any, thereon, the Stated Maturity
or Stated 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 Notes.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency, instrumentality
or political subdivision thereof.
"PLACE OF PAYMENT" when used with respect to the Notes of any series, or
any Tranche thereof, means the place or places where the principal of and any
premium and interest on the Notes of that series or Tranche are payable as
specified as contemplated by SECTION 3.01.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under SECTION 3.06 in exchange for or in lieu of
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a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"REDEMPTION DATE" when used with respect to any Note to be redeemed, means
the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE" when used with respect to any Note 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 Notes of any series means the date specified for that purpose as
contemplated by SECTION 3.01.
"REQUIRED CURRENCY" has the meaning specified in Section 3.12.
"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.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with any Person
providing for the leasing to the Company of any Operating Property (except for
temporary leases for a term, including any renewal thereof, of not more than
forty-eight (48) months), which Operating Property has been or is to be sold or
transferred by the Company to such Person; provided, however, Sale and
Lease-back Transaction shall not include any arrangement (i) first entered into
prior to the date specified in the first paragraph of this instrument and (ii)
involving the exchange of any Operating Property for any property subject to an
arrangement specified in the preceding clause (i).
"SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to SECTION 3.07.
"STATED MATURITY" when used with respect to any Note or any installment of
principal thereof or interest thereon, means the date specified in such Note as
the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "VOTING STOCK" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"TRANCHE" means a group of Notes which (a) are of the same series and (b)
have identical terms except as to principal amount and/or date of issuance.
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"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "TRUST
INDENTURE ACT" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUSTEE" means the Person named as the "TRUSTEE" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Notes 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 Notes of any series shall mean the Trustee
with respect to Notes of that series.
"U.S. GOVERNMENT OBLIGATION" has the meaning specified in SECTION 13.04.
"VALUE" means, with respect to a Sale and Lease-Back Transaction, as of
any particular time, the amount equal to the greater of (1) the net proceeds to
the Company from the sale or transfer of the property leased pursuant to such
Sale and Lease-Back Transaction or (2) the net book value of such property, as
determined in accordance with generally accepted accounting principles by the
Company at the time of entering into such Sale and Lease-Back Transaction, in
either case multiplied by a fraction, the numerator of which shall be equal to
the number of full years of the term of the lease that is part of such Sale and
Lease-Back Transaction remaining at the time of determination and the
denominator of which shall be equal to the number of full years of such term,
without regard, in any case, to any renewal or extension options contained in
such lease.
"VICE PRESIDENT" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer or an Assistant Treasurer or
Assistant Secretary of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirements set forth in this Indenture.
Every certificate (other than certificates pursuant to Section 314(a)(4)
of the Trust Indenture Act) or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or opinion
has read such
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covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he 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
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or an Assistant
Treasurer or Assistant Secretary of the Company, stating that the information
with respect to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been
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taken by or at the request of the Company which could not have been taken had
the original document or instrument not contained such error or omission, the
action so taken shall not be invalidated or otherwise rendered ineffective but
shall be and remain in full force and effect, except to the extent that such
action was a result or willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Notes issues under the authority of such
defective document or instrument shall nevertheless be the valid obligations of
the Company entitled to the benefits of this Indenture equally and ratably with
all other Outstanding Notes, except as aforesaid.
SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by 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 Fourteen, 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 of record
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 shall be sufficient for any purpose of this Indenture
and (subject to SECTION 6.01) 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 14.06.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. 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. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.
The ownership of Notes shall be proved by the Note Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Note shall bind every future Holder of the same
Note and the Holder of every Note 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 Note.
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The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes of any series entitled to give,
make or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders of Notes of such series, provided that the Company may not
set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Notes of the relevant series on
such record date, and no other Holders, shall be entitled to take or revoke the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes of the relevant series on
the date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Notes of the
relevant series in the manner set forth in SECTION 1.06.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes of any series entitled to join in
the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in SECTION 5.02, (iii) any request to institute
proceedings referred to in SECTION 5.07(2) or (iv) any direction referred to in
SECTION 5.12, in each case with respect to Notes of such series. If any record
date is set pursuant to this paragraph, the Holders of Outstanding Notes of such
series on such record date, and no other Holders, shall be entitled to join in
such notice, declaration, request or direction or to revoke the same, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes of such series on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Notes of the relevant series on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Trustee, at the Company's expense, shall cause notice of
such record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Company in writing and to each Holder of Notes of the
relevant series in the manner set forth in SECTION 1.06.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "EXPIRATION
DATE" and from time to time may
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change the Expiration Date to any earlier or later day; provided that no such
change shall be effective unless notice of the proposed new Expiration Date is
given to the other party hereto in writing, and to each Holder of Notes of the
relevant series in the manner set forth in SECTION 1.06, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with respect
to any record date set pursuant to this Section, the party hereto which set such
record date shall be deemed to have initially designated the 180th day after
such record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Note may do so with regard to all
or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.05 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, election,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, the Trustee by
any Holder or by the Company, or the Company by the Trustee or by any Holder,
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by facsimile
transmission or other direct written electronic means to such telephone number
or other electronic communications address as the parties hereto shall from time
to time designate, or transmitted by first-class mail, charges prepaid, to the
applicable address set opposite such party's name below or to such other address
as either party hereto may from time to time designate:
IF TO THE TRUSTEE, TO:
The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, New York 10001-2697
Attention: Global Trust Services
Telephone: (212) 946-8595
Telecopy: (212) 946-8160
IF TO THE COMPANY, TO:
Public Service Company of New Mexico
Alvarado Square MS-2704
Albuquerque, New Mexico 87158
Attention: Treasurer
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Telephone: (505) 241-2700
Telecopy: (505) 241-2369
Any communication contemplated herein shall be deemed to have been made,
given, furnished and filed if personally delivered, on the date of delivery, if
transmitted by facsimile transmission or other direct written electronic means,
on the date of transmission, and if transmitted by first-class mail, on the date
of receipt.
SECTION 1.06 NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his or her address as it appears in the Note Register, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which would be required under such Act to be a part of
and govern this Indenture, the latter provision shall control. If any provision
of this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
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SECTION 1.10 SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes 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 1.11 BENEFITS OF INDENTURE.
The trusts created by this Indenture are for the equal and proportionate
benefit and security of the Holders without any priority of any Note over any
other Note. Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 1.12 GOVERNING LAW.
This Indenture and the Notes shall be governed by and construed in
accordance with the law of the State of New York, without regard to conflicts of
laws principles thereof.
SECTION 1.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Note shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Notes (other
than a provision of any Note of any series, or any Tranche thereof, or in the
Board Resolution or Officers' Certificate which establishes the terms of such
series of Notes 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 is made or duly provided for on such
Business Day, then 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.
ARTICLE II
NOTE FORMS
SECTION 2.01 FORMS GENERALLY.
The definitive Notes of each series shall be in substantially the form
thereof set forth in this Article, or in such other form or forms thereof
established in the indenture supplemental hereto establishing such series or in
a Board Resolution establishing such series, or in an Officer's Certificate
pursuant to such supplemental indenture or Board Resolution, in each case
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with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or Depositary therefor or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. If the
form or forms of Notes of any series are established in a Board Resolution or in
an Officer's Certificate pursuant to a Board Resolution, such Board Resolution
and Officer's Certificate, if any, shall be delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by SECTION 3.03 for the
authentication and delivery of such Notes.
Unless otherwise specified as contemplated by Section 3.01, the Notes of
each series shall be issuable in registered form without coupons. The definitive
Notes shall be printed, lithographed or engraved on steel engraved borders or
may be produced in any other manner, all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 2.02 FORM OF FACE OF NOTE.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
PUBLIC SERVICE COMPANY OF NEW MEXICO
No. ____________ $______________
CUSIP No. ____________
Public Service Company of New Mexico, a corporation duly organized and
existing under the laws of New Mexico (herein called the "COMPANY," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ____________, or registered assigns,
the principal sum of ______________ Dollars on _____________ [if the Note is to
bear interest prior to Maturity, insert - , and to pay interest thereon from or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on _____________ and _____________ in each
year, commencing ____________, at the rate of ___% per annum, until the
principal hereof is paid or made available for payment] [if applicable, insert -
, provided that any principal and premium, and any such installment of interest,
which is overdue shall bear interest at the rate of ___% per annum (to the
extent that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest, which shall be the __________ or
__________ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this
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Note (or one or more Predecessor Notes) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Notes of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes of this series may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
said Indenture].
[If the Note is not to bear interest prior to Maturity, insert - The
principal of this Note shall not bear interest except in the case of a default
in payment of principal upon acceleration, upon redemption or at Stated Maturity
and in such case the overdue principal and any overdue premium shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ___% per annum (to the extent that the payment of such interest on interest
shall be legally enforceable), from the date of such demand until the amount so
demanded is paid or made available for payment. Interest on any overdue interest
shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert - any such] interest on this Note will be made at the office or agency of
the Company maintained for that purpose in _______________, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert - ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Note Register].
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By:_________________________________
Attest:
_______________________________
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SECTION 2.03 FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of senior notes of the Company
(herein called the "NOTES"), issued and to be issued in one or more series under
an Indenture, dated as of [____________], 1998 (herein called the "INDENTURE",
which term shall have the meaning assigned to it in such instrument), between
the Company and The Chase Manhattan Bank, as Trustee (herein called the
"TRUSTEE," which term includes any successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof [if applicable, insert - , limited in aggregate
principal amount to $____________].
[If applicable, insert - The Notes of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert -
(1) on ________ in any year commencing with the year _________ and ending with
the year ________ through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert - on or after ________, 19__], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert - on or
before __________, ___%, and if redeemed] during the 12-month period beginning
___________________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert - (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Notes, or
one or more Predecessor Notes, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert - The Notes of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ___________ in any
year commencing with the year ___ and ending with the year __________ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert - on or after ______________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the
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<PAGE> 26
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ___________ of the
years indicated,
Redemption Price For Redemption Price For
Redemption Through Redemption Otherwise Than
Operation of the Sinking Through Operation of the
Year Fund Sinking Fund
---- ---- ------------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Notes, or one or more Predecessor
Notes, of record at the close of business on the relevant Record Dates referred
to on the face hereof, all as provided in the Indenture.]
[If applicable, insert - Notwithstanding the foregoing, the Company may
not, prior to _____________, redeem any Notes of this series as contemplated by
[if applicable, insert - Clause (2) of] the preceding paragraph as a part of, or
in anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ___% per annum.]
[If applicable, insert - The sinking fund for this series provides for the
redemption on ____________ in each year beginning with the year ______________
and ending with the year ________________ of [if applicable, insert - not less
than $_____________ ("mandatory sinking fund") and not more than] $__________
aggregate principal amount of Notes of this series. Notes of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert mandatory] sinking fund payments may be credited against subsequent [if
applicable, insert - mandatory] sinking fund payments otherwise required to be
made [if applicable, insert - , in the inverse order in which they become due].]
[If the Note is subject to redemption of any kind, insert - In the event
of redemption of this Note in part only, a new Note or Notes of this series and
of like tenor for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert - The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Note] [or] [certain restrictive
covenants and Events of Default with respect to this Note] [, in each case] upon
compliance with certain conditions set forth in the Indenture.]
[If the Note is not an Original Issue Discount Note, insert - If an Event
of Default with
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<PAGE> 27
respect to Notes of this series shall occur and be continuing, the principal of
the Notes of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.]
[If the Note is an Original Issue Discount Note, insert - If an Event of
Default with respect to Notes of this series shall occur and be continuing, an
amount of principal of the Notes of this series may be declared due and payable
in the manner and with the effect provided in the Indenture. Such amount shall
be equal to __________________ [insert formula for determining the amount]. Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal, premium and interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
premium and interest, if any, on the Notes of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in principal amount of the Notes at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and to waive certain past defaults under the
Indenture and their consequences, provided, however, that if any such past
default affects more than one series of Notes, the Holders of a majority in
aggregate principal amount of the Outstanding Notes of all such series,
considered as one class, shall have the right to waive such past default, and
not the Holders of the Notes of any one such series. Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than a majority in aggregate
principal amount of the Notes of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing shall have
made written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Notes of all series at the time Outstanding in respect of which an
Event of Default shall have occurred and be continuing a direction inconsistent
with such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Note for
the enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
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No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this Note are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $_______ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
SECTION 2.04 FORM OF LEGEND FOR GLOBAL NOTES.
Unless otherwise specified as contemplated by SECTION 3.01 for the Notes
evidenced thereby, every Global Note authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE
IN
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<PAGE> 29
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.05 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially the
following form:
CERTIFICATION OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
Dated: [______________________________],
As Trustee
By:____________________________
Authorized Officer
ARTICLE III
THE NOTES
SECTION 3.01 AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited. The Notes may be issued in one or
more series, each of which series may be issued in one or more Tranches. Subject
to the last paragraph of this Section, prior to the authentication and delivery
of Notes of any series there shall be established by specification in an
indenture supplemental hereto or in a Board Resolution, or in an Officer's
Certificate pursuant to one or more indentures supplemental hereto or a Board
Resolution:
(1) the title of the Notes of the series (which shall distinguish the
Notes of such series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the Notes of such
series which may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of the series pursuant to SECTION 3.04,
3.05, 3.06, 9.06 OR 11.07 and except for any Notes which, pursuant to SECTION
3.03, are deemed never to have been authenticated and delivered hereunder);
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<PAGE> 30
(3) the Person or Persons (without specific identification) to whom
interest on Notes of such series, or any Tranche thereof, shall be payable on
any Interest Payment Date, if other than the Persons in whose names such Notes
(or one or more Predecessor Notes) are registered at the close of business on
the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Notes of such series,
or any Tranche thereof, is payable or any formula or other method or other means
by which such date or dates shall be determined, by reference to an index or
other fact or event ascertainable outside of this Indenture or otherwise
(without regard to any provisions for redemption, prepayment, acceleration,
purchase or extension);
(5) the rate or rates at which the Notes of such series, or any Tranche
thereof, shall bear interest, if any (including the rate or rates at which
overdue principal shall bear interest, if different from the rate or rates at
which such Notes shall bear interest prior to Maturity, and, if applicable, the
rate or rates at which overdue premium or interest shall bear interest, if any),
or any formula or other method or other means by which such rate or rates shall
be determined, by reference to an index or other fact or event ascertainable
outside of this Indenture or otherwise; the date or dates from which such
interest shall accrue; and the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date, if any, for the interest payable
on such Notes on any Interest Payment Date;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the place or places at which or methods by which (A) the principal of
and premium, if any, and interest, if any, on Notes of such series, or any
Tranche thereof, shall be payable, (B) registration of transfer of Notes of such
series, or any Tranche thereof, may be effected, (C) exchanges of Notes of such
series, or any Tranche thereof, may be effected and (D) notices and demands to
or upon the Company in respect of the Notes of such series, or any Tranche
thereof, and this Indenture may be served; the Note Registrar and any Paying
Agent or Agents for such series, or any Tranche thereof; and if such is the
case, that the principal of such Notes shall be payable without presentment or
surrender thereof;
(8) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Notes of such series, or any Tranche
thereof, may be redeemed, in whole or in part, at the option of the Company and,
if other than by a Board Resolution, the manner in which any election by the
Company to redeem such Notes shall be evidenced;
(9) the obligation, if any, of the Company to redeem or purchase any Notes
of such series, or any Tranche thereof, pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which any Notes of such series, or any Tranche thereof, shall be redeemed
or purchased, in whole or in part, pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the
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<PAGE> 31
denominations in which any Notes of such series, or any Tranche thereof, shall
be issuable;
(11) if the amount of principal of or any premium or interest on any Notes
of such series, or any Tranche thereof, may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts shall be
determined to the extent not established pursuant to clause (5) of this
paragraph;
(12) if other than Dollars, the currency, currencies or currency units in
which the principal of or any premium or interest on any Notes of such series,
or any Tranche thereof, shall be payable and the manner of determining the
equivalent thereof in Dollars for any purpose, including for purposes of the
definition of "Outstanding" in SECTION 1.01;
(13) if the principal of or any premium or interest on any Notes of such
series, or any Tranche thereof, is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other than
that or those in which such Notes are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Notes as to which such election is made shall be payable, the
periods within which and the terms and conditions upon which such election is to
be made and the amount so payable (or the manner in which such amount shall be
determined);
(14) if other than the entire principal amount thereof, the portion of the
principal amount of any Notes of such series, or any Tranche thereof, which
shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to SECTION 5.02;
(15) if the principal amount payable at the Stated Maturity of any Notes
of such series, or any Tranche thereof, will not be determinable as of any one
or more dates prior to the Stated Maturity, the amount which shall be deemed to
be the principal amount of such Notes as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be
due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);
(16) if applicable, that the Notes of such series, or any Tranche thereof,
in whole or any specified part, shall be defeasible pursuant to SECTION 13.02 or
that the Notes of such series, but not Tranches thereof alone, shall be
defeasible pursuant to SECTION 13.03, or both such sections, and, if other than
by a Board Resolution, the manner in which any election by the Company to
defease such Notes shall be evidenced;
(17) if applicable, that any Notes of such series, or any Tranche thereof,
shall be issuable in whole or in part in the form of one or more Global Notes
and, in such case, the respective Depositaries for such Global Notes, the form
of any legend or legends which shall be borne by any such Global Note in
addition to or in lieu of that set forth in SECTION 2.04 and any circumstances
in addition to or in lieu of those set forth in Clause (2) of the last paragraph
of SECTION 3.05 in which any such Global Note may be exchanged in whole or in
part for Notes registered, and any transfer of such Global Note in whole or in
part may be registered, in the name or names of Persons other than the
Depositary for such Global Note or a nominee thereof;
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<PAGE> 32
(18) any addition to or change in the Events of Default which applies to
any Notes of such series, or any Tranche thereof, and any change in the right of
the Trustee or the requisite Holders of such Notes to declare the principal
amount thereof due and payable pursuant to SECTION 5.02;
(19) any addition to or change in the covenants set forth in ARTICLE X
which applies to Notes of such series, or any Tranche thereof; and
(20) any other terms of such series, or any Tranche thereof (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by SECTION 9.01(5)).
All Notes of any one series or, if issued in Tranches thereof, any such
Tranche, shall be substantially identical except as to denomination and except
as may otherwise be determined in the manner provided for in this Indenture.
With respect to Notes of a series subject to a Periodic Offering, the indenture
supplemental hereto or the Board Resolution which establishes such series, or
the Officer's Certificate pursuant to such supplemental indenture or Board
Resolution, as the case may be, may provide general terms or parameters for
Notes of such series and provide either that the specific terms of Notes of
such series, or any Tranche thereof, shall be specified in a Company Order or
that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by clause (b) of
Section 3.03.
SECTION 3.02 DENOMINATIONS.
Except as permitted by Section 9.01(4), the Notes of each series, or any
Tranche thereof, shall be issuable only in fully registered form without coupons
and only in such denominations as shall be specified as contemplated by SECTION
3.01. In the absence of any such specified denomination with respect to the
Notes of any series, or any Tranche thereof,, the Notes of such series, or any
Tranche thereof, shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by SECTION 3.01 with respect to
any series, or any Tranche thereof, of Notes, the Notes shall be executed on
behalf of the Company by its Chairman of the Board, its Vice Chairman of the
Board, its President or one of its Vice Presidents, or by any other officer or
employee of the Company who is authorized by a Board Resolution to execute the
Notes on behalf of the Company, under its corporate seal affixed thereto or
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these individuals on the Notes may be
manual or facsimile.
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<PAGE> 33
Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers or other employees of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices or be so employed prior to the authentication and delivery of
such Notes or did not hold such offices or were not so employed at the date of
such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Trustee shall authenticate and deliver Notes of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or forms and terms
of such series as provided in Sections 2.01 and 3.01;
(b) a Company Order requesting the authentication and delivery of such
Notes and, to the extent that the terms of such Notes shall not have been
established in an indenture supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture or Board
Resolution, all as contemplated by Sections 2.01 and 3.01, either (i)
establishing such terms or (ii) in the case of Notes of a series subject to a
Periodic Offering, specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may provide, to the extent
acceptable to the Trustee, for authentication and delivery pursuant to oral or
electronic instructions from the Company or any agent or agents thereof, which
oral instructions are to be promptly confirmed electronically or in writing), in
either case in accordance with the instrument or instruments delivered pursuant
to clause (a) above;
(c) the Notes of such series, executed on behalf of the Company by
officers or employees authorized as hereinabove in this Section provided;
(d) an Opinion of Counsel stating that:
(i) if the form or forms of such Notes have been established in the
indenture supplemental hereto establishing such series or in a Board Resolution
establishing such series, or in an Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, as permitted by SECTION 2.01, such
form or forms have been duly authorized by the Company and established in
conformity with the provisions of this Indenture;
(ii) such terms have been duly authorized by the Company and established
in conformity with the provisions of this Indenture;
(iii) such Notes, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will have been duly issued under the Indenture and will
constitute valid and legally binding obligations of the Company, entitled to the
benefits provided by the Indenture, and enforceable in accordance with their
terms, subject to (a) bankruptcy, insolvency, fraudulent transfer,
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<PAGE> 34
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles and (b) the
qualification that certain waivers, procedures, remedies, and other provisions
of such Notes and this Indenture may be unenforceable under or limited by state
law; and
(iv) all consents or approvals of the New Mexico Public Utility Commission
(or any successor agency), the Arizona Corporation Commission (or any successor
agency) and of any federal regulatory agency required in connection with the
Company's execution and delivery of this Indenture or such series, or any
Tranche thereof, of Notes have been obtained and not withdrawn (except that no
statement need be made with respect to state securities laws or the Federal
Power Act).
provided, however, that, with respect to Notes of a series subject to a Periodic
Offering, the Trustee shall be entitled to receive such Opinion of Counsel only
once at or prior to the time of the first authentication of such Notes (provided
that such Opinion of Counsel addresses the authentication and delivery of all
Notes of such series) and that in lieu of the opinions described in clauses (ii)
and (ii) above Counsel may opine that:
(x) when the terms of such Notes shall have been established pursuant to a
Company Order or Orders or pursuant to such procedures (acceptable to the
Trustee) as may be specified from time to time by a Company Order or Orders, all
as contemplated by and in accordance with the instrument or instruments
delivered pursuant to clause (a) above, such terms will have been duly
authorized by the Company and will have been established in conformity with the
provisions of this Indenture; and
(y) such Notes, when authenticated and delivered by the Trustee in
accordance with this Indenture and the Company Order or Orders or specified
procedures referred to in paragraph (x) above and issued and delivered by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will have been duly issued under this Indenture and will constitute
valid and legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, and enforceable in accordance with their terms,
subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and (b) the qualification
that certain waivers, procedures, remedies, and other provisions of such Notes
and this Indenture may be unenforceable under or limited by state law.
With respect to Notes of a series subject to a Periodic Offering, the
Trustee may conclusively rely, as to the authorization by the Company of any
such Notes, the form, terms thereof and the legality, validity, binding effect
and enforceability thereof, and compliance of the authentication and delivery
thereof with the terms and conditions of this Indenture, upon the Opinion of
Counsel and other documents delivered pursuant to Sections 2.01 and 3.01 and
this Section, as applicable, at or prior to the time of the first authentication
of Notes of such series unless and until such opinion or other documents have
been superseded or revoked or expire by their terms. In connection with the
authentication and delivery of Notes of a series subject to a Periodic Offering,
the Trustee shall be entitled to assume that the Company's instructions to
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authenticate and deliver such Notes do not violate any applicable law or any
applicable rule, regulation or order of any governmental agency or commission
having jurisdiction over the Company.
If the form or terms of the Notes of any series have been established by
or pursuant to a Board Resolution or an Officer's Certificate as permitted by
Sections 2.01 and 3.01, the Trustee shall not be required to authenticate such
Notes if the issue of such Notes pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Notes and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 3.01 with respect to
any series of Notes, or any Tranche thereof, each Note shall be dated the date
of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Trustee or an Authenticating Agent by manual signature of an authorized officer,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Note shall have been authenticated and delivered hereunder to the Company
but never have been issued and sold by the Company, and the Company shall
deliver such Note to the Trustee for cancellation as provided in SECTION 3.09
together with a written statement (which need not comply with Section 1.02 and
need not be accompanied by an Opinion of Counsel) stating that such Note has
never been issued and sold by the Company, for all purposes of this Indenture
such Note shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.04 TEMPORARY NOTES.
Pending the preparation of definitive Notes of any series, or any Tranche
thereof,, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers or other employees of the Company executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes of any series, or any Tranche thereof, are issued, the
Company will cause definitive Notes of such series or Tranche to be prepared
without unreasonable delay. After the preparation of such definitive Notes, such
temporary Notes shall be exchangeable for such definitive Notes upon surrender
of such temporary Notes at the office or agency of the Company in a Place of
Payment for such series or Tranche, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes of any series or Tranche,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Notes of the same series or Tranche, of
any authorized denominations and of like
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tenor and aggregate principal amount. Until so exchanged, the temporary Notes of
any series or Tranche shall in all respects be entitled to the same benefits
under this Indenture as definitive Notes of such series and Tranche and of like
tenor authenticated and delivered hereunder.
SECTION 3.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office or in any other
office or agency of the Company in a Place of Payment being herein sometimes
referred to as the "NOTE REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Trustee is hereby appointed "NOTE
REGISTRAR" for the purpose of registering Notes and transfers of Notes as herein
provided. Anything herein to the contrary notwithstanding, the Company may
designate one or more of its offices as an office in which a register with
respect to the Notes of one or more series shall be maintained, and the Company
may designate itself the Note Registrar with respect to one or more of such
series; provided, however, that there shall be no more than one Note Register
and one Note Registrar for each series of Notes. The Note Register shall be open
for inspection by the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by Section 3.01 with respect
to Notes of any series, or any Tranche thereof, upon surrender for registration
of transfer of any Note of a series, or any Tranche thereof, at the office or
agency of the Company in a Place of Payment for that series or Tranche, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of the
same series and Tranche, of any authorized denominations and of like tenor and
aggregate principal amount.
Except as otherwise specified as contemplated by Section 3.01 with respect
to Notes of any series, or any Tranche thereof, at the option of the Holder,
Notes of any series or Tranche may be exchanged for other Notes of the same
series and Tranche, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Trustee or the Note
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee or the Note Registrar,
as the case may be, duly executed, by the Holder thereof or his attorney duly
authorized in writing.
Except as otherwise specified as contemplated by Section 3.01 with respect
to Notes of any series, or any Tranche thereof, no service charge shall be made
for any registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to
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cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to SECTION 3.04, 9.06 or 11.07 not involving any transfer.
If the Notes of any series, or any Tranche thereof, are to be redeemed,
the Company shall not be required (A) to issue, register the transfer of or
exchange any Notes of that series, or any Tranche thereof, during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of any such Notes selected for redemption and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Notes:
(1) Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Note or a
nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Note shall constitute a single Note for
all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Note
may be exchanged in whole or in part for Notes registered, and no transfer of a
Global Note in whole or in part may be registered, in the name of any Person
other than the Depositary for such Global Note or a nominee thereof unless (A)
such Depositary (i) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Note or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) there shall have occurred and be
continuing an Event of Default with respect to such Global Note or (C) there
shall exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by SECTION
3.01.
(3) Subject to Clause (2) above, any exchange of a Global Note for other
Notes may be made in whole or in part, and all Notes issued in exchange for a
Global Note or any portion thereof shall be registered in such names as the
Depositary for such Global Note shall direct.
(4) Every Note authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Note or any portion thereof,
whether pursuant to this Section, SECTION 3.04, 3.06, 9.06 or 11.07 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Note, unless such Note is registered in the name of a Person other than
the Depositary for such Global Note or a nominee thereof.
SECTION 3.06 MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of the same series and Tranche and of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Note 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 Note, a new Note of the same series and
Tranche and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note of any series, or any Tranche thereof, issued pursuant to
this Section in lieu of any destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes of that series and Tranche duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 3.07 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by SECTION 3.01 with respect
to any series of Notes, or any Tranche thereof, interest on any Note 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 Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Note of any series, or any Tranche thereof, which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "DEFAULTED INTEREST") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes of such series, or such Tranche, as the case
may be (or their respective Predecessor Notes) are registered at the close of
business on a Special Record Date for the payment of such
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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 Note of such series, or Tranche, as the case may be, and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given to each
Holder of Notes of such series, or Tranche, as the case may be, in the manner
set forth in SECTION 1.06, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Notes of such series, or Tranche, as the
case may be (or their respective Predecessor Notes) are registered at the close
of business on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Notes of
any series, or any Tranche thereof, in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Notes may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
SECTION 3.08 PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of and any premium and (subject to
SECTION 3.07) any interest on such Note and for all other purposes whatsoever,
whether or not such Note 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.
All Notes surrendered for payment, redemption, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the
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Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Notes previously
authenticated hereunder which the Company has not issued and sold, and all Notes
so delivered shall be promptly cancelled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of as directed by a Company Order;
provided, however, that the Trustee shall not be required to destroy such
cancelled Notes.
SECTION 3.10 COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by SECTION 3.01 for Notes of
any series, or any Tranche thereof, interest on Notes shall be computed on the
basis of a 360-day year of twelve 30-day months.
SECTION 3.11 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 3.12 PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Notes of any series, or any Tranche thereof,
denominated in any currency other than Dollars or in a composite currency (the
"Required Currency"), except as otherwise specified with respect to such Notes
as contemplated by Section 3.01, the obligation of the Company to make any
payment of the principal thereof, or the premium or interest 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
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Currency then due and payable.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Notes herein expressly provided for), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been replaced
or paid as provided in SECTION 3.06 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust, as
provided in SECTION 10.03) have been delivered to the Trustee for cancellation;
or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company, in the
case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds
in trust for the purpose of making the following
payment, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such
Notes, money in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date
of such deposit (in the case of Notes which have become
due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
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(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under SECTION 6.07, the obligations of
the Company to any Authenticating Agent under SECTION 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under SECTION 4.02 and the last
paragraph of SECTION 10.03 shall survive.
If the Company shall have paid or caused to be paid the principal of and
premium, if any, and interest on any Note, as and when the same shall have
become due and payable or the Company shall have delivered to the Trustee for
cancellation any outstanding Note, such Note shall cease to be entitled to any
lien or benefit under this Indenture.
SECTION 4.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of SECTION 10.03, all
money deposited with the Trustee pursuant to SECTION 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein with respect to Notes of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Note of that series
when it becomes due and payable, and continuance of such default for a period of
60 days; or
(2) default in the payment of the principal of or any premium on any Note
of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by
the terms of a Note of that series; or
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(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture solely for the
benefit of series of Notes other than that series), and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of a majority in principal amount of the
Outstanding Notes of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "NOTICE
OF DEFAULT" hereunder, unless the Trustee, or the Trustee and Holders of a
principal amount of Notes of such series not less than the principal amount of
Notes 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 Notes, 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
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action by the Board
of Directors; or
(7) any other Event of Default provided with respect to Notes of that
series.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
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If an Event of Default with respect to Notes of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of a majority in principal amount of the Outstanding Notes of that
series may declare the principal amount of all the Notes of that series (or, if
any Notes of that series are Original Issue Discount Notes, such portion of the
principal amount of such Notes as may be specified by the terms thereof) to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable; provided,
however, that if an Event of Default shall have occurred and be continuing with
respect to more than one series of Notes, the Trustee or the Holders of not less
than a majority in principal amount of the Outstanding Notes of all such series,
considered as one class (and not the Holders of the Notes of any one of such
series), may make such declaration of acceleration.
At any time after such a declaration of acceleration with respect to Notes
of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the related Event of Default and its consequences will be
automatically waived, resulting in an automatic rescission and annulment of the
acceleration of the Notes if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Notes of that series,
(B) the principal of (and premium, if any, on) any Notes of that
series which have become due otherwise than by such declaration of acceleration
and any interest thereon at the rate or rates prescribed therefor in such Notes,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such Notes,
and
(D) all amounts due to the Trustee under Section 6.07; and
(2) any other Event of Default with respect to Notes of that series, other
than the non-payment of the principal of Notes of that series which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13.
No such rescission shall affect any subsequent Event of Default or
impair any right consequent thereon.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any Note when such
interest
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becomes due and payable and such default continues for a period of 60 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof, or
(3) default is made in the deposit of any sinking fund payment, when and
as due by the terms of a Note of that series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Notes, the whole amount then due and payable on such Notes for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor in
such Notes, and, in addition thereto, such further amount as shall be sufficient
to cover any amounts due to the Trustee under Section 6.07.
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 Notes 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 Notes, wherever situated.
If an Event of Default with respect to Notes of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Notes of such series by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, premium,
if any, and interest, if any, owing and unpaid in respect of the Notes 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 6.07) and of the Holders allowed in such judicial
proceeding, and
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(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditors' or other similar
committee.
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered.
SECTION 5.06 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Notes in respect of which or for the
benefit of which such monies shall have been collected and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Notes in respect of which or for the benefit
of which such money has been collected, ratably, without preference or priority
of any kind, according to the amounts due and payable on such Notes for
principal and any premium and interest, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other
Person or Persons legally entitled thereto.
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SECTION 5.07 LIMITATION ON SUITS.
No Holder of any Note of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes of that series;
(2) the Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes of all series in respect of which an Event of Default
shall have occurred and be continuing, considered as one class, shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding Notes of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.07)
interest on such Note on the respective Stated Maturities expressed in such Note
(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 5.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy
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under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and 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 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Notes 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 5.12 CONTROL BY HOLDERS.
If an Event of Default shall have occurred and be continuing in respect of
a series of Notes, the Holders of a majority in principal amount of the
Outstanding Notes of such series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
Notes of such series; provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one series of Notes, the
Holders of a majority in aggregate principal amount of the Outstanding Notes of
all such series, considered as one class, shall have the right to make such
direction, and not the Holders of the Notes of any one of such series; and
provided, further, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or
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Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series may on behalf of the Holders of all the Notes of
such series waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of or any premium or interest on any
Note of such series, or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Note of such series affected,
provided, however, that if any such default shall have occurred and be
continuing with respect to more than one such series of Notes, the Holders of a
majority in aggregate principal amount of the Outstanding Notes of all such
series, considered as one class, shall have the right to waive such default, and
not the Holders of the Notes of any one such series.
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 5.14 UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Notes of all series in respect of which such
suit may be brought, considered as one class, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of or premium, if
any, or interest, if any, on any Note on or after the Stated Maturity or
Maturities expressed in such Note (or, in the case of redemption, on or after
the Redemption Date).
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS.
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The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with respect to
Notes of any series,
(1) the Trustee undertakes to perform, with respect to Notes of such
series, such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Notes of such series, conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Notes of any series shall
have occurred and be continuing, the Trustee shall exercise, with respect to
Notes of such series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this clause (c) shall not be construed to limit the effect of
clause (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining
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the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders of a majority in principal amount of the Outstanding Notes of any
one or more series, as provided herein, relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to the Notes of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.02 NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Notes of any series, the
Trustee shall give the Holders of Notes of such series notice of such default
known to the Trustee as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 5.01(4) with respect to Notes of such series, no such notice to Holders
shall be given until at least 75 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Notes of such series.
SECTION 6.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01 and to applicable provisions of
the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it
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desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any
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;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall (subject to applicable
legal requirements) be entitled to examine the books, records and premises of
the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) except as otherwise provided in Section 5.01(4), the Trustee shall not
be charged with knowledge of any Event of Default with respect to the Notes of
any series for which it is acting as Trustee unless either (i) a Responsible
Officer 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 Notes or by any Holder of such
Notes.
SECTION 6.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, 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 Notes . Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Notes or the proceeds thereof.
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SECTION 6.05 MAY HOLD NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 6.08
and 6.13, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Note Registrar or
such other agent.
SECTION 6.06 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 or investment of any money received by it hereunder
except as expressly provided herein or otherwise agreed with, and for the sole
benefit of, the Company.
SECTION 6.07 COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall be
agreed to in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless from and
against, any and all loss, damage, claims, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including liability which the Trustee may incur as a result of
failure to withhold, pay or report any tax, assessment or other governmental
charges and the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Notes upon all property
and funds held or collected by the Trustee as such, except as otherwise provided
in Sections 4.02 and 13.05. "Trustee" for purposes of this Section shall include
any predecessor Trustee; provided, however, that the negligence, willful
misconduct or bad faith of any Trustee hereunder shall not affect the rights of
any other Trustee hereunder.
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In addition to the rights provided to the Trustee pursuant to the
provisions of the immediately preceding paragraph of this Section 6.07, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.01(5) or Section 5.01(6), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.08 CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
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. To the extent permitted by such Act, the Trustee shall not be
deemed to have a conflicting interest by virtue of being a trustee (i) under
this Indenture with respect to Notes of more than one series or (ii) the
Indenture, dated as of March 11, 1998, between the Company and The Chase
Manhattan Bank, as trustee, or with respect to the securities of any or all of
the series issued thereunder.
SECTION 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Notes of each series, which may be Trustee hereunder for Notes of
one or more other series. Each Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to
the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Notes of any series shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 6.10 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 6.11.
(b) The Trustee may resign at any time with respect to the Notes of one
or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 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
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competent jurisdiction for the appointment of a successor Trustee with respect
to the Notes of such series.
(c) The Trustee may be removed at any time with respect to the Notes of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Notes, or (B) subject to Section 5.14, any Holder
who has been a bona fide Holder of a Note for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Notes 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, with
respect to the Notes of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the Notes
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Notes of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Notes of
any particular series) and shall comply with the applicable requirements of
Section 6.11. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Notes of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes of such series delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Notes of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Notes of any series shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 6.11, any Holder who
has been a bona fide Holder of a Note of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor
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Trustee with respect to the Notes of such series.
(f) So long as no event which is, or after notice or lapse of time, or
both, would become, an Event of Default shall have occurred and be continuing,
and except with respect to a Trustee appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes pursuant to subsection (e)
of this Section, if the Company shall have delivered to the Trustee (1) a Board
Resolution appointing a successor Trustee, effective as of a date specified
therein, and (2) an instrument of acceptance of such appointment, effective as
of such date, by such successor Trustee in accordance with Section 6.11, 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 by
the Company pursuant to subsection (e) of this Section and such appointment
shall be deemed to have been accepted as contemplated in Section 6.11, all as of
such date, and all other provisions of this Section and Section 6.11 shall be
applicable to such resignation, appointment and acceptance except to the extent
inconsistent with this clause (f).
(g) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Notes of any series and each appointment of a
successor Trustee with respect to the Notes of any series to all Holders of
Notes of such series in the manner provided in Section 1.06. Each notice shall
include the name of the successor Trustee with respect to the Notes of such
series and the address of its Corporate Trust Office.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Notes, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee, but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) series of one or more series,
the Company, the retiring Trustee, and each successor Trustee with respect to
the Notes of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Notes of that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to all Notes,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Notes of that or those series as to which the retiring
Trustee is not retiring shall continue to be
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vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Notes of that or those series to
which the appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Notes of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in clause (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.12 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 shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Notes (other than by reason of a relationship described
in Section 311(b) of the Trustee Indenture Act), 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. For purposes of
Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for
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goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Company for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Notes of one or more series, or any Tranche thereof, of Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes of such
series or Tranche issued upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.06, and Notes 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 Notes
by the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Notes of
the series, or any Tranche thereof, with respect to which such Authenticating
Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section and to
reimburse such Authenticating Agent, from time to time, for its reasonable
out-of-pocket expenses incurred under this Section.
If an appointment with respect to the Notes of one or more series or
Tranche is made pursuant to this Section, the Notes of such series or Tranche
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes of the series designated therein referred to
in the within-mentioned Indenture.
Dated: ,
-----------------------------------
As Trustee
By:
--------------------------------
Authenticating Agent
By:
--------------------------------
Authorized Officer
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
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(1) fifteen days after each Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the Holders
of Notes of each series as of such Regular Record Date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Note Registrar.
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in Section 7.01
upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 7.03 REPORTS BY TRUSTEE.
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Notes
are listed, with the Commission and with the Company. The Company will promptly
notify the Trustee when any Notes are listed on any stock exchange.
SECTION 7.04 REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders,
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such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
Delivery of such information, documents and reports to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an entirety
shall be a Person organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of and any premium, and interest on all the Notes and the
performance or observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company as a result of such
transaction as having been incurred by the Company at the time of such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, 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 8.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company
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substantially as an entirety in accordance with Section 8.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Notes outstanding hereunder.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and in
the Notes, all as provided in Article VIII; or
(2) to add to the covenants of the Company or other provisions for the
benefit of the Holders of all or any series of Notes, or any Tranche or Tranches
thereof, (and if such covenants are to be for the benefit of less than all
series of Notes or Tranches thereof, stating that such covenants are expressly
being included solely for the benefit of such series or Tranche or Tranches) or
to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Notes, or any Tranche or Tranches thereof (and
if such additional Events of Default are to be for the benefit of less than all
series of Notes, or any Tranches thereof, stating that such additional Events of
Default are expressly being included solely for the benefit of such series or
Tranche or Tranches); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Notes in
bearer form, registrable or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of Notes in
uncertificated form; or
(5) 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
Notes of any series, or a Tranche thereof, Outstanding on the date of such
indenture supplemental hereto in any material respect, such change, elimination
or addition shall become effective (1) with respect to such series or Tranche
only pursuant to the provisions of Section 9.02 hereof or (2) when no Note of
such series or Tranche remains
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Outstanding; or
(6) to secure the Notes; or
(7) to establish the form or terms of Notes of any series, or Tranche
as permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other 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 Notes of any series in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date specified in the first paragraph of this
instrument or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to any
provisions hereof or the inclusion herein of any additional provisions, or shall
by operation of law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture shall be deemed to have
been amended so as to conform to such amendment to the Trust Indenture Act, and
the Company and the Trustee may, without the consent of any Holders, enter into
an indenture supplemental hereto to effect or evidence such changes or
additional provisions; or
(y) if any such amendment shall permit one or more changes to, or the
elimination of, any provisions hereof which, at the date of the execution and
delivery hereof or at any time thereafter, are required by the Trust Indenture
Act to be contained herein, this Indenture shall be deemed to have been amended
to effect such changes or elimination, and the Company and the Trustee may,
without the consent of any Holders, enter into an indenture supplemental hereto
to evidence such amendment hereof.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes 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 Notes of more than one
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series Outstanding hereunder and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Notes 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 Notes of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Notes 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 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 Notes of all Tranches so directly affected, considered as one class,
shall be required; and provided, further, that no such supplemental indenture
shall:
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Note, 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 an
Original Issue Discount Note or any other Note which would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
5.02, or change the coin or currency (or other property) in which any Note or
any premium or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such Note, or
(2) reduce the percentage in principal amount of the Outstanding Notes
of any 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 14.04 for
quorum or voting, without, in any such case, the consent of the Holder of such
Note, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.08 with respect to the Notes of any series, or any Tranche thereof,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Note affected thereby; provided, however, that
this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section and Section 10.08, or the deletion of this proviso, in accordance
with the requirements of Sections 6.11 and 9.01(8).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series, or one or more Tranches thereof,
of Notes, or which modifies the rights of the Holders of Notes 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 Notes of any other
series or Tranche.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall
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approve the substance thereof. A waiver by a Holder of such Holder's right to
consent under this Section shall be deemed to be a consent of such Holder.
SECTION 9.03 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 6.01) 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 or immunities under this Indenture or otherwise.
Any supplemental indenture permitted by this Article may be executed on
behalf of the Company by any officers or employees that are authorized to do so
in a Board Resolution, under its corporate seal affixed thereto or reproduced
thereon attested to by its Secretary or one of its Assistant Secretaries.
SECTION 9.04 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 Notes 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 9.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes 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 Notes of any series, or any
Tranche thereof, so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes of such series or Tranche.
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ARTICLE X
COVENANTS
SECTION 10.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Notes that it will duly and punctually pay the principal of and any premium and
interest on the Notes of that series in accordance with the terms of the Notes
and this Indenture.
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for the Notes of any
series, or any Tranche thereof, an office or agency where such Notes may be
presented or surrendered for payment, where such Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of such Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Notes 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 in each Place of Payment for Notes of
any series or Tranche for such purposes. The Company will give prompt written
notice to the Trustee, and prompt notice to Holders in the manner specified in
Section 1.06, of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 10.03 MONEY FOR NOTES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series, or any Tranche thereof, of Notes, it shall, on or before
each due date of the principal of or any premium or interest on any of the Notes
of that series or Tranche, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and any premium
and interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes
of any series, or any Tranche thereof, it will, on or prior to each due date of
the principal of or any premium or interest on any Notes of that series or
Tranche, deposit with a Paying Agent a sum sufficient to pay such amount, such
sum to be held as provided by the Trust Indenture Act, and
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(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for the Notes 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 will (1)
comply with the provisions of the Trust Indenture Act applicable to it as a
Paying Agent and (2) during the continuance of any default by the Company (or
any other obligor upon the Notes of that series or Tranche) in the making of any
payment in respect of the Notes of that series or Tranche, upon the written
request of the Trustee, forthwith pay to the Trustee all sums held in trust by
such Paying Agent for payment in respect of the Notes of that series or Tranche.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Note of any series, or any Tranche thereof, and remaining
unclaimed for two years after such principal, premium or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.04 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have
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knowledge.
SECTION 10.05 RESTRICTIONS ON LIENS.
(a) So long as any Notes are Outstanding, the Company will not issue,
assume, or guarantee any Debt secured by any mortgage, security interest,
pledge, or lien (herein referred to as a "mortgage") of or upon any Operating
Property of the Company, whether owned at the date specified in the first
paragraph of this instrument or thereafter acquired, without in any such case
effectively securing the Outstanding Notes (together with, if the Company shall
so determine, any other Debt of or guaranteed by the Company ranking senior to,
or equally with, the Notes) equally and ratably with such Debt; provided,
however, that the foregoing restriction shall not apply to Debt secured by any
of the following:
(i) mortgages on any property existing at the time of
acquisition thereof;
(ii) mortgages on property of a corporation existing at the
time such corporation is merged into or consolidated with the Company, or at the
time of a sale, lease, or other disposition of the properties of such
corporation or a division thereof as an entirety or substantially as an entirety
to the Company, provided that such mortgage as a result of such merger,
consolidation, sale, lease, or other disposition is not extended to property
owned by the Company immediately prior thereto;
(iii) mortgages on property to secure all or part of the cost
of acquiring, constructing, developing, or substantially repairing, altering, or
improving such property, or to secure indebtedness incurred to provide funds for
any such purpose or for reimbursement of funds previously expended for any such
purpose, provided such mortgages are created or assumed contemporaneously with,
or within eighteen (18) months after, such acquisition or completion of
construction, development, or substantial repair, alteration, or improvement or
within six (6) months thereafter pursuant to a commitment for financing arranged
with a lender or investor within such eighteen (18) month period;
(iv) mortgages in favor of the United States of America or any
State thereof, or any department, agency, or instrumentality or political
subdivision of the United States of America or any State thereof, or for the
benefit of holders of securities issued by any such entity, to secure any Debt
incurred for the purpose of financing all or any part of the purchase price or
the cost of constructing, developing, or substantially repairing, altering, or
improving the property subject to such mortgages;
(v) mortgages on any property (x) which, at any time
subsequent to January 1, 1985 through the date specified in the first paragraph
of this instrument, was leased to the Company, or, (y) pursuant to the terms of
any lease to the Company in effect at any time subsequent to January 1, 1985
through the date specified in the first paragraph of this instrument, title to
which would not have been vested in the Company (assuming such lease remained in
effect on the date of determination as such lease was in effect immediately
prior to the date of this Indenture); or
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(vi) any extension, renewal or replacement (or successive
extensions, renewals, or replacements), in whole or in part, of any mortgage
referred to in the foregoing clauses (i) to (v), inclusive; provided, however,
that the principal amount of Debt secured thereby and not otherwise authorized
by said clauses (i) to (v), inclusive, shall not exceed the principal amount of
Debt, plus any premium or fee payable in connection with any such extension,
renewal, or replacement, so secured at the time of such extension, renewal, or
replacement.
(b) Notwithstanding the provisions of Section 10.05(a), so long as any
Notes are Outstanding, the Company may issue, assume, or guarantee Debt, or
permit to exist Debt, secured by mortgages which would otherwise be subject to
the restrictions of Section 10.05(a) up to an aggregate principal amount that,
together with the principal amount of all other Debt of the Company secured by
mortgages (other than mortgages permitted by Section 10.05(a) that would
otherwise be subject to the foregoing restrictions) and the Value of all Sale
and Lease-Back Transactions in existence at such time (other than any Sale and
Lease-Back Transaction that, if such Sale and Lease-Back Transaction had been a
mortgage, would have been permitted by Section 10.05(a), other than Sale and
Lease-Back Transactions permitted by Section 10.10 because the commitment by or
on behalf of the purchaser was obtained no later than eighteen (18) months after
the later of events described in (i) or (ii) of Section 10.10, and other than
Sale and Lease-Back Transactions as to which application of amounts have been
made in accordance with clause (z) of Section 10.10), does not at the time
exceed the greater of ten percent (10%) of Net Tangible Assets or ten percent
(10%) of Capitalization.
(c) If at any time the Company shall issue, assume, or guarantee any
Debt secured by any mortgage and if Section 10.05(a) requires that the
Outstanding Notes be secured equally and ratably with such Debt, the Company
will promptly execute, at its expense, any instruments necessary to so equally
and ratably secure the Outstanding Notes and deliver the same to the Trustee
along with:
(i) An Officers' Certificate stating that the covenant of the
Company contained in Section 10.05(a) has been complied with; and
(ii) An Opinion of Counsel to the effect that the Company has
complied with the covenant contained in Section 10.05(a), and that any
instrument executed by the Company in the performance of such covenant complies
with the requirements of such covenant.
In the event that the Company shall hereafter secure
Outstanding Notes equally and ratably with any other obligation or indebtedness
pursuant to the provisions of this Section 10.05, the Trustee is hereby
authorized to enter into an indenture or agreement supplemental hereto and to
take such action, if any, as it may, in its sole and absolute discretion, deem
advisable to enable it to enforce effectively the rights of the Holders of
Outstanding Notes so secured, equally and ratably with such other obligation or
indebtedness.
SECTION 10.06 CORPORATE EXISTENCE.
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Subject to the rights of the Company under Article VIII, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
SECTION 10.07 MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in common
with others, make reasonable effort to cause) all its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as,
in the judgment of the Company, may be necessary so that the business carried on
in connection therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from discontinuing, or causing
the discontinuance of, the operation and maintenance of any of it properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
SECTION 10.08 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 10.02 or any additional
covenant or restriction specified with respect to the Notes 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 Notes of all series and Tranches with respect to which
compliance with Section 10.02 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 10.07 or Article VIII if before the time
for such compliance the Holders of at least a majority in principal amount of
Notes 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 10.09 CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Notes as of
the end of such year.
SECTION 10.10 RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS.
So long as any Notes are Outstanding, the Company will not enter into
any Sale and Lease-Back Transaction with respect to any Operating Property if,
in any case, the commitment
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by or on behalf of the purchaser is or was obtained more than eighteen (18)
months after the later of (i) the completion of the acquisition, construction,
or development of such Operating Property or (ii) the placing in operation of
such Operating Property or of such Operating Property as constructed, developed,
or substantially repaired, altered, or improved, unless (x) the Company would be
entitled pursuant to Section 10.05(a) to issue, assume, or guarantee Debt
secured by a mortgage on such Operating Property without equally and ratably
securing the Notes or (y) the Company would be entitled pursuant to Section
10.05(b), after giving effect to such Sale and Lease-Back Transaction, to incur
$1.00 of additional Debt secured by mortgages (other than mortgages permitted by
Section 10.05(a)) or (z) the Company shall apply or cause to be applied, in the
case of a sale or transfer for cash, an amount equal to the net proceeds thereof
(but not in excess of the net book value of such Operating Property at the date
of such sale or transfer) and, in the case of a sale or transfer otherwise than
for cash, an amount equal to the fair value (as determined by the Board of
Directors) of the Operating Property so leased, to the retirement, within one
hundred eighty (180) days after the effective date of such Sale and Lease-Back
Transaction, of Debt of the Company ranking senior to, or equally with, the
Notes; provided, however, that the amount to be applied to such retirement of
Debt shall be reduced by an amount equal to the principal amount, plus any
premium or fee paid in connection with any redemption in accordance with the
terms of Debt voluntarily retired by the Company within such one hundred eighty
(180) day period, excluding retirement pursuant to mandatory sinking fund or
prepayment provisions and payments at maturity.
ARTICLE XI
REDEMPTION OF NOTES
SECTION 11.01 APPLICABILITY OF ARTICLE.
Notes 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 such
Notes of such series or Tranche) in accordance with this Article.
SECTION 11.02 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes shall be evidenced by a
Board Resolution, in an Officer's Certificate or in another manner specified as
contemplated by Section 3.01 for such Notes. In case of any redemption at the
election of the Company, 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 of such Redemption Date, of the
principal amount of Notes of such series to be redeemed and, if applicable, of
the tenor of the Notes to be redeemed. In the case of any redemption of Notes
(a) prior to the expiration of any restriction on such redemption provided in
the terms of such Notes 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 Notes or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
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SECTION 11.03 SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes of any series, or any Tranche thereof, are
to be redeemed, the particular Notes to be redeemed shall be selected by the
Trustee from the Outstanding Notes 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 of random
selection as 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 Notes of such series or any integral multiple
thereof) of the principal amount of Notes of such series of a denomination
larger than the minimum authorized denomination for Notes of such series;
provided, however, that if, as indicated in an Officer's Certificate, the
Company shall have offered to purchase all or any principal amount of the Notes
then Outstanding of any series, and less than all of such Notes as to which such
offer was made shall have been tendered to the Company for such purchase, the
Trustee, if so directed by Company Order, shall select for redemption all or any
principal amount of such Notes which have not been so tendered.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption as aforesaid and, in case of any Notes selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to be redeemed.
SECTION 11.04 NOTICE OF REDEMPTION.
Except as otherwise specified as contemplated by Section 3.01 for Notes
of any series, or Tranche thereof, notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Notes to be redeemed, at his
address appearing in the Note Register.
All notices of redemption shall identify the Notes to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes of any series or Tranche and
of a specified tenor consisting of more than a single Note are to be redeemed,
the identification (and, in the case of partial redemption of any such Notes,
the principal amounts) of the particular Notes to be redeemed and, if less than
all the Outstanding Notes of any series and of a specified tenor consisting of a
single Note are to be redeemed, the principal amount of the particular Note to
be
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redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Note to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date,
(5) the place or places where each such Note is to be surrendered for
payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case, and
(7) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Notes of any series or
Tranche thereof in accordance with Section 3.01, with respect to any notice of
redemption of Notes at the election of the Company, unless, upon the giving of
such notice, such Notes shall be deemed to have been paid in accordance with
Article IV, such notice may state that such redemption shall be conditional upon
the receipt by the Paying Agent or Agents for such Notes, 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 Notes 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 Notes. In the event that such
notice of redemption contains such a condition and such money is not so
received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Notes
otherwise to have been redeemed shall promptly return to the Holders thereof any
of such Notes which had been surrendered for payment upon such redemption.
Notice of redemption of Notes 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
Trustee in the name and at the expense of the Company. Notice of mandatory
redemption of Securities shall be given by the Trustee in the name and at the
expense of the Company.
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.03) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest, if any, on, all the
Notes which are to be redeemed on that date.
SECTION 11.06 NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth
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in such notice having been satisfied, the Notes 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) such Notes shall cease to bear interest. Upon
surrender of any such Note for redemption in accordance with said notice, such
Note shall be paid by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 3.01 with respect to Notes of any
series, or Tranche thereof, any installment of interest on any Note, the Stated
Maturity of which is on or prior to the Redemption Date will be payable to the
Holders of such Notes, or one or more Predecessor Notes, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.07.
SECTION 11.07 NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service
charge, a new Note or Notes of the same series and Tranche and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.01 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Notes of any series, or any Tranche thereof, except as
otherwise specified as contemplated by Section 3.01 for Notes of such series or
Tranche.
The minimum amount of any sinking fund payment provided for by the
terms of any Notes of any series, or any Tranche thereof, is herein referred to
as a "mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Notes of any series, or any Tranche thereof,
is herein referred to as an "optional sinking fund payment". If provided for by
the terms of any Notes of any series, or any Tranche thereof, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section
12.02. Each sinking fund payment shall be applied to the redemption of Notes of
the series or Tranche as provided for by the terms of such Notes.
SECTION 12.02 SATISFACTION OF SINKING FUND PAYMENTS WITH NOTES.
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The Company (1) may deliver Outstanding Notes of a series, or any
Tranche thereof (other than any previously called for redemption) and (2) may
apply as a credit Notes of such series or Tranche, which have been (a) redeemed
either at the election of the Company pursuant to the terms of such Notes or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Notes or (b) purchased by the Company in the open market, by
tender offer or otherwise, in each case in satisfaction of all or any part of
any sinking fund payment with respect to any Notes of such series required to be
made pursuant to the terms of such Notes as and to the extent provided for by
the terms of such Notes; provided that the Notes to be so credited have not been
previously so credited. The Notes to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Notes so to be redeemed, for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 12.03 REDEMPTION OF NOTES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for the
Notes of any series, or any Tranche thereof, the Company will deliver to the
Trustee an Officers' Certificate specifying the amount of the next ensuing
sinking fund payment for such series or Tranche pursuant to the terms of such
Notes, the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Notes of such series or Tranche pursuant to Section 12.02 and stating
the basis for such credit and that such Notes have not been previously so
credited and will also deliver to the Trustee any Notes to be so delivered. Not
less than 30 days prior to each such sinking fund payment date, the Trustee
shall select the Notes to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 11.04. Such notice having been duly given, the redemption of such
Notes shall be made upon the terms and in the manner stated in Sections 11.06
and 11.07.
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may elect, at its option at any time, to have Section 13.02
applied to any Notes or the Notes of any series, or any Tranche thereof, as the
case may be, designated pursuant to Section 3.01 as being defeasible pursuant to
such Section 13.02, in accordance with any applicable requirements provided
pursuant to Section 3.01 and upon compliance with the conditions set forth below
in this Article. The Company may elect, at its option at any time, to have
Section 13.03 applied to the Notes or the Notes of any series, but not to
Tranches thereof alone, as the case may be, designated pursuant to Section 3.01
as being defeasible pursuant to Section 13.03, in accordance with any applicable
requirements provided pursuant to Section 3.01 and upon compliance with the
conditions set forth below in this Article. Any such election shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
3.01 for such Notes.
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SECTION 13.02 DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Notes or the Notes of any series, or any Tranche thereof, as the
case may be, the Company shall be deemed to have been discharged from its
obligations with respect to such Notes as provided in this Section on and after
the date the conditions set forth in Section 13.04 are satisfied (hereinafter
called "Defeasance"). For this purpose, such Defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by such Notes and to have satisfied all its other obligations under such Notes
and this Indenture insofar as such Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Notes to receive,
solely from the trust fund described in Section 13.04 and as more fully set
forth in such Section, payments in respect of the principal of and any premium
and interest on such Notes when payments are due, (2) the Company's obligations
with respect to such Notes under Sections 3.04, 3.05, 3.06, 10.02 and 10.03 and
with respect to the Trustee under Section 6.07, (3) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Notes notwithstanding the prior exercise of its
option (if any) to have Section 13.03 applied to such Notes.
SECTION 13.03 COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this Section
applied to the Notes or the Notes of any series, but not to Tranches thereof
alone, as the case may be, (1) the Company shall be released from its
obligations under Sections 10.05, 10.07, and 10.10, and any covenants provided
pursuant to Section 3.01(19), 9.01(2), 9.01(6) or 9.01(7) and 5.01(7) for the
benefit of the Holders of such Notes and (2) the occurrence of any event
specified in Section 5.01(4) (with respect to any of Sections 10.05, 10.07, and
10.10, and any such covenants provided pursuant to Section 3.01(19), 9.01(2),
9.01(6) or 9.01(7)) and 5.01(7)) shall be deemed not to be or result in an Event
of Default with respect to such Notes as provided in this Section on and after
the date the conditions set forth in Section 13.04 are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
5.01(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Notes shall be unaffected thereby.
SECTION 13.04 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
13.02 or Section 13.03, as the case may be:
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Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Notes, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee to pay and discharge, the principal of
and any premium and interest on such Notes on the respective Stated Maturities
or on any Redemption Date established pursuant to Clause (9) below, in
accordance with the terms of this Indenture and such Notes. As used herein,
"U.S. Government Obligation" means (x) any security which is (i) a direct
obligation of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
Clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt.
(2) In the event of an election to have Section 13.02 apply to any
Notes or the Notes of any series, or any Tranche thereof, as the case may be,
the Company shall have delivered to the Trustee an Opinion of Counsel stating
that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument,
there has been a change in the applicable Federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Notes will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Notes and will be subject to Federal income tax on
the same amount, in the same manner and at the same times as would be the case
if such deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 13.03 apply to the
Notes or the Notes of any series, but not Tranches thereof alone, as the case
may be, the Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of such Notes will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant Defeasance
to be effected with respect to such Notes and will be subject to Federal income
tax on the same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
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(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Notes nor any other Notes of the
same series, as the case may be, if then listed on any securities exchange, will
be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Notes or any other Notes shall
have occurred and be continuing at the time of such deposit or, with regard to
any such event specified in Sections 5.01(5) and (6), at any time on or prior to
the 90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Notes are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
(9) If the Notes are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of such
redemption shall have been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee shall have been made.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 13.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee pursuant to Section 13.04 in respect of any Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any such
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge
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imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 13.04 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Notes.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 13.04
with respect to any Notes which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Notes.
SECTION 13.06 REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Notes by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations under this
Indenture and such Notes from which the Company has been discharged or released
pursuant to Section 13.02 or 13.03 shall be revived and reinstated as though no
deposit had occurred pursuant to this Article with respect to such Notes, until
such time as the Trustee or Paying Agent is permitted to apply all money held in
trust pursuant to Section 13.05 with respect to such Notes in accordance with
this Article; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any such Note following such
reinstatement of its obligations, the Company shall be subrogated to the rights
(if any) of the Holders of such Notes to receive such payment from the money so
held in trust.
ARTICLE XIV
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 14.01 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Notes of one or more, or all, series, or one or
more 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 Notes of such series or Tranches.
SECTION 14.02 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Notes of
one or more, or all, series, or one or more Tranches thereof, for any purpose
specified in Section 14.01, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, as the Trustee shall determine, or,
with the approval of the Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such meeting and in general
terms the
71
<PAGE> 80
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 1.06, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of the
Holders of Notes of one or more, or all, series, or one or more Tranches
thereof, by the Company or by the Holders of 33% in aggregate principal amount
of Notes of all of such series and Tranches, considered as one class, for any
purpose specified in Section 14.01, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have given the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Notes of such
series and Tranches, in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City of New
York, or in such other place as shall be determined or approved by the Company,
for such meeting and may call such meeting for such purposes by giving notice
thereof as provided in clause (a) of this Section.
(c) Any meeting of Holders of Notes of one or more, or all, series, or
one or more Tranches thereof, shall be valid without notice if Holders of all
Outstanding Notes of such series, or Tranches are present in person or by proxy
and if representatives of the Company and the Trustee are present, or notice is
waived in writing before or after the meeting by the Holders of all Outstanding
Notes of such series or Tranches 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 14.03 PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Notes of one or
more, or all, series, or Tranches, a Person shall be (a) a Holder of one or more
Outstanding Notes of such series, or Tranches, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Notes of such series or Tranches by such Holder or Holders. The only
persons who shall be entitled to attend any meeting of Holders of Notes of any
series or Tranches shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 14.04 QUORUM: ACTION.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Notes 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 Notes 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 Notes of such series and Tranches, considered as one class, the
Persons entitled to vote such specified percentage in principal amount of the
Outstanding Notes 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
72
<PAGE> 81
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Notes of such series and Tranches, be dissolved. In any other case
the meeting may be adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for such period as may be determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Except as provided by clause
(e) of Section 14.05, notice of the reconvening of any meeting adjourned for
more than 30 days shall be given as provided in clause (a) of Section 14.02 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 Notes of such series and Tranche, which shall constitute a quorum.
Except as limited by Section 9.02, 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 Notes 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 Notes 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 Notes of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of Holders of
Notes duly held in accordance with this Section shall be binding on all the
Holders of Notes 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 14.05 ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Notes 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 Notes with respect to which
it was given unless and until specifically revoked by the Holder or future
Holder of such Notes 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 Notes in regard to proof of the holding of such Notes and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Notes shall be proved in the
manner specified in Section 1.04 and the appointment of any proxy shall be
proved in the manner specified in Section 1.04. Such
73
<PAGE> 82
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 1.04 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in clause (b) of Section 14.02, in which case
the Company or the Holders of Notes 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 Notes of all series and Tranches represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one vote
for each $1 principal amount of Notes held or represented by him or her;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Note 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 Note or proxy.
(e) Any meeting duly called pursuant to Section 14.02 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 Notes 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 14.06 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 Notes, 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 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 14.02 and, if
applicable, Section 14.04. 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 14.07 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,
74
<PAGE> 83
given or taken by Holders by written instruments as provided in Section 1.04.
ARTICLE XV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01 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 Notes, 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, employee, 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
Notes are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or be incurred by, any incorporator, stockholder,
employee, officer or director, past, present or future, of the Company or of 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 Notes 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 Notes.
-------------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By:
--------------------------------
M. H. Maerki
Senior Vice President and
Chief Financial Officer
Attest:
75
<PAGE> 84
____________________________
Secretary
THE CHASE MANHATTAN BANK,
as Trustee
By:
________________________________
T.J. Foley
Vice President
Attest:
____________________________
Senior Trust Officer
STATE OF NEW MEXICO )
) ss.:
COUNTY OF BERNALILLO )
On the ____ day of __________ before me personally came ______________,
to me known, who, being by me duly sworn, did depose and say that [s]he is
____________ of Public Service Company of New Mexico, one of the corporations
described in and which executed the foregoing instrument; that [s]he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that [s]he signed [her] [his] name thereto by like
authority.
_______________________
Notary Public
My Commission
Expires:_______________
STATE OF ____________ )
) ss.:
COUNTY OF _________ )
On the ____ day of ___________, before me personally came
_____________, to me
76
<PAGE> 85
known, who, being by me duly sworn, did depose and say that [s]he is
____________ of The Chase Manhattan Bank, one of the corporations described in
and which executed the foregoing instrument; that [s]he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that [s]he signed [her] [his] name thereto by like authority.
____________________________
Notary Public
My Commission
Expires:____________________
77
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF KELEHER & McLEOD, P.A.]
May 21, 1998
Public Service Company of New Mexico
Alvarado Square
Albuquerque, NM 87158
Ladies and Gentlemen:
Reference is made to your proposed offering of up to $650,000,000 of
your Senior Unsecured Notes (the "Notes"), as contemplated by the prospectus
contained in the Registration Statement (the "Registration Statement") on Form
S-3 to be filed by you on May 21, 1998, with the Securities and Exchange
Commission under the Securities Act of 1933 (the "Act").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such corporate records, agreements, and other
instruments, certificates, orders, opinions, correspondence with public
officials, certificates provided by your officers and representatives, and other
documents as we have deemed necessary or advisable for the purposes of rendering
the opinions set forth herein.
Based on the foregoing, it is our opinion that after (i) your Board of
Directors has specifically approved the issuance of the Notes, (ii) the New
Mexico Public Utility Commission has approved the issuance of the Notes and any
other required regulatory approvals have been obtained, (iii) the Registration
Statement shall have become effective, and (iv) you shall have entered into one
or more underwriting or distribution agreements with respect to the Notes then
to be offered and the initial public offering price for each of such Notes and
the discounts therefrom and commission therefor shall have been determined in
accordance with such underwriting or distribution agreements, then, when (i) the
Notes have been issued, sold, executed, authenticated, and delivered, and (ii)
the purchase price therefor has been paid to you as contemplated in the
Registration Statement (including the Exhibits thereto) and in any relevant
amendment thereto
<PAGE> 2
May 18, 1998
Page 2
or in any Rule 424 supplement to the prospectus contained in the Registration
Statement, the Notes will be validly issued and will constitute your legal,
valid, and binding obligations except as the same may be limited by general
principles of equity or by bankruptcy, insolvency, reorganization, arrangement,
fraudulent conveyance, moratorium, or other laws or equitable principles that
limit the right to specific performance or otherwise limit remedial action.
Consent is hereby given to the use of this opinion as part of the
Registration Statement and to the use of our name wherever it appears in said
Registration Statement and the related prospectus. In giving such consent, we do
not thereby admit that we are within that category of persons whose consent is
required pursuant to Section 7 of the Securities Act of 1933.
Very truly yours,
KELEHER & McLEOD, P.A.
By /s/ Charles L. Moore
------------------------
Charles L. Moore
CLM/sls
<PAGE> 1
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months Ended Year Ended December 31,
Line ------------------ -----------------------------------------------------
No. 03/31/98 03/31/97 12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
- --------------------------------------------------------- -------- -------- -------- -------- -------- -------- --------
(In Thousand Except for Ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined by the Securities and
Exchange Commission:
1 Interest on Long-term Debt $11,386 $12,123 $46,670 $ 49,009 $ 52,637 $ 65,511 $ 72,525
2 Amortization of Debt Premium, Discount and Expenses 228 184 880 1,115 1,299 1,751 2,472
3 Other Interest 2,174 1,931 8,677 4,696 4,129 3,710 11,473
4 Estimated Interest Factor of Lease Rental Charges 15,890 16,230 65,036 65,911 69,204 74,659 76,062
------- ------- -------- -------- -------- -------- ---------
5 Total Fixed Charges $29,678 $30,468 $121,263 $120,731 $127,269 $145,631 $ 162,532
------- ------- -------- -------- -------- -------- ---------
Earnings, as defined by the Securities and Exchange
Commission:
6 Consolidated Net Earnings (Loss) $21,214 $24,896 $80,995 $ 72,580 $ 75,562 $ 80,318 $ (61,486)
7 Income Taxes (Benefit) 12,680 14,794 46,718 40,494 50,793 40,871 (57,078)
8 Add Fixed Charges as Above 29,678 30,468 121,263 120,731 127,269 145,631 162,532
------- ------- -------- -------- -------- -------- ---------
9 Earnings Available for Fixed Charges $63,572 $70,158 $248,976 $233,805 $253,624 $266,820 $ 43,968
------- ------- -------- -------- -------- -------- ---------
10 Ratio for Earnings to Fixed Charges 2.142 2.303 2.053 1.937 1.993 1.832 0.271
======= ======= ======== ======== ======== ======== =========
</TABLE>
<PAGE> 1
Exhibit 15
May 21, 1998
Public Service Company of New Mexico:
We are aware that Public Service Company of New Mexico has incorporated by
reference in this registration statement its Form 10-Q for the quarter ended
March 31, 1998, which includes our report dated April 28, 1998 covering the
unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933, that report is not considered a part
of the 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 the
Act.
Very truly yours,
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 10, 1998
included in Public Service Company of New Mexico's Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Albuquerque, New Mexico
May 21, 1998
<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
PUBLIC SERVICE COMPANY OF NEW MEXICO
(Exact name of obligor as specified in its charter)
New Mexico 85-0019030
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
Alvarado Square
Albuquerque, New Mexico 87158
(Address of principal executive offices) (Zip Code)
--------------------------------------------
Senior Unsecured Notes
(Title of the indenture securities)
--------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE> 3
- 3 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 8th day of May, 1998.
THE CHASE MANHATTAN BANK
By /s/ Thomas J. Foley
---------------------
/s/ Thomas J. Foley
Vice President
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .......................................... $ 12,428
Interest-bearing balances .................................. 3,428
Securities:
Held to maturity
securities ...................................................... 2,561
Available for sale securities ................................... 43,058
Federal funds sold and securities purchased under
agreements to resell ....................................... 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income ............. $129,260
Less: Allowance for loan and lease losses ............ 2,783
Less: Allocated transfer risk reserve ................ 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ..................................... 126,477
Trading Assets .................................................. 62,575
Premises and fixed assets (including capitalized
leases) ................................................... 2,943
Other real estate owned ......................................... 295
Investments in unconsolidated subsidiaries and
associated companies ....................................... 231
Customers' liability to this bank on acceptances
outstanding ................................................ 1,698
Intangible assets ............................................... 1,466
Other assets .................................................... 10,268
--------
TOTAL ASSETS .................................................... $297,061
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits
In domestic offices ........................................ $ 94,524
Noninterest-bearing ........................................ $ 39,487
Interest-bearing ........................................... 55,037
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ..................................... 71,162
Noninterest-bearing ........................................ $ 3,205
Interest-bearing ........................................... 67,957
Federal funds purchased and securities sold under agree-
ments to repurchase ............................................. 43,181
Demand notes issued to the U.S. Treasury ........................ 1,000
Trading liabilities ............................................. 48,903
Otherborrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less .............. 3,599
With a remaining maturity of more than one year
through three years ................................... 253
With a remaining maturity of more than three years ......... 132
Bank's liability on acceptances executed and outstanding ........ 1,698
Subordinated notes and debentures ............................... 5,715
Other liabilities ............................................... 9,896
TOTAL LIABILITIES ............................................... 280,063
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................... 0
Common stock .................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ....... 10,291
Undivided profits and capital reserves .......................... 5,502
Net unrealized holding gains (losses)
on available-for-sale securities ................................ (22)
Cumulative foreign currency translation adjustments ............. 16
TOTAL EQUITY CAPITAL ............................................ 16,998
---------
TOTAL LIABILITIES AND EQUITY CAPITAL ............................ $ 297,061
=========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
-5-
