<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ............ to ............
Commission file number 1-11429
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0233140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 COX ROAD, P. O. BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(Address of principal executive offices) (Zip Code)
(704) 864-6731
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Number of shares of Common Stock, $1 par value, outstanding
at January 31, 1996 . . . . . . . . . . . . . . . . 18,943,584
<PAGE> 2
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
The condensed financial statements included herein have been
prepared by the registrant without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Although certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, the registrant believes that the disclosures herein are
adequate to make the information presented not misleading. It is
recommended that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included
in the registrant's latest annual report on Form 10-K.
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 December 31
------------------ -------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating revenues $ 74,922 $ 66,835 $255,980 $269,098
Cost of gas 38,406 33,736 121,735 147,531
-------- -------- -------- --------
Gross margin 36,516 33,099 134,245 121,567
-------- -------- -------- --------
Operating expenses and taxes:
Operating and maintenance 13,212 11,074 53,406 48,750
Provision for depreciation 4,797 4,433 18,520 15,830
General taxes 3,704 3,525 14,003 14,329
Income taxes 4,429 4,229 13,721 12,013
------- -------- -------- --------
26,142 23,261 99,650 90,922
-------- -------- ------- --------
Operating income 10,374 9,838 34,595 30,645
Other income 434 12 642 3,914
Interest deductions 3,677 3,187 13,348 12,936
-------- -------- -------- --------
Net income $ 7,131 $ 6,663 $ 21,889 $ 21,623
======== ======== ======== ========
Average common shares outstanding 18,771 18,292 18,629 17,566
Earnings per share $.38 $.36 $1.18 $1.23 *
Cash dividends declared per share $.2125 $.205 $.8425 $.8125
* Includes $.09 related to the sale of propane assets effective June 1994.
</TABLE>
<PAGE> 4
<TABLE>
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
<CAPTION>
Dec 31 Sep 30 Dec 31
1995 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Gas utility plant $584,495 $573,945 $532,994
Less - Accumulated depreciation 171,637 166,506 156,221
-------- -------- --------
412,858 407,439 376,773
-------- -------- --------
Non-utility property, net 728 801 889
-------- -------- --------
Current assets:
Cash and temporary investments 3,285 993 5,047
Restricted cash and temporary investments 5,101 4,215 1,422
Receivables, less allowance for
doubtful accounts 37,761 13,605 30,016
Materials and supplies 5,975 5,577 5,531
Stored gas inventory 10,357 12,141 12,998
Deferred gas costs, net 14,878 3,692 822
Prepayments and other 1,867 2,089 2,389
-------- -------- --------
79,224 42,312 58,225
-------- -------- --------
Deferred charges and other assets 6,680 6,443 6,225
-------- -------- --------
Total $499,490 $456,995 $442,112
======== ======== ========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common equity -
Common stock, $1 par $ 18,793 $ 18,689 $ 18,301
Capital in excess of par value 108,230 106,655 101,556
Retained earnings 51,166 48,028 45,027
-------- -------- --------
178,189 173,372 164,884
Long-term debt 93,900 100,700 109,380
-------- -------- --------
272,089 274,072 274,264
-------- -------- --------
Current liabilities:
Maturities of long-term debt 9,300 10,480 9,540
Accounts payable 35,159 20,411 26,353
Accrued taxes 4,360 1,824 5,334
Customer prepayments and deposits 6,844 5,742 7,200
Cash dividends and interest 5,615 6,423 5,358
Restricted supplier refunds 5,101 4,215 1,422
Other 3,361 3,416 3,776
-------- -------- --------
69,740 52,511 58,983
Interim bank loans 77,000 51,000 31,000
-------- -------- --------
146,740 103,511 89,983
-------- -------- --------
Deferred Credits and Other Liabilities:
Income taxes, net 53,802 52,606 49,362
Investment tax credits 4,509 4,646 4,968
Accrued pension cost 12,817 12,931 15,386
Other 9,533 9,229 8,149
-------- -------- --------
80,661 79,412 77,865
-------- -------- --------
Total $499,490 $456,995 $442,112
======== ======== ========
</TABLE>
<PAGE> 5
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands)
Twelve Months Ended
December 31
-------------------
1995 1994
------- -------
Balance beginning of period $45,027 $37,913
Add - Net income 21,889 21,623
Deduct - Common stock dividends
and other 15,750 14,509
------- -------
Balance end of period $51,166 $45,027
======= =======
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 December 31
------------------ -------------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 7,131 $ 6,663 $21,889 $21,623
Adjustments to reconcile net income
to net cash provided by operating
activities -
Depreciation, depletion and other 5,779 5,215 22,177 19,335
Deferred income taxes, net 1,196 893 4,439 318
Gain on sale of propane assets - - - (3,128)
------- ------- ------- -------
14,106 12,771 48,505 38,148
Change in operating assets and
liabilities:
Receivables, net (24,572) (13,740) (9,192) 704
Inventories 1,386 1,878 2,198 1,263
Accounts payable 14,748 10,697 8,807 (345)
Accrued pension cost (114) (146) (2,569) 1,361
Other (8,183) 825 (13,768) 9,995
------- ------- ------- -------
(2,629) 12,285 33,981 51,126
------- ------- ------- -------
Cash Flows From Investing Activities:
Construction expenditures (10,765) (15,322) (56,562) (53,079)
Non-utility and other 112 (1,040) (963) (1,940)
Proceeds from sale of propane assets - - - 12,800
------- ------- ------- -------
(10,653) (16,362) (57,525) (42,219)
------- ------- ------- -------
Cash Flows From Financing Activities:
Issuance of common stock through public
offering, net of expenses - - - 23,406
Issuance of common stock through
dividend reinvestment, stock purchase
and stock option plans 1,525 1,277 7,011 6,790
Increase (decrease) in interim bank
loans, net 26,000 8,000 46,000 (13,000)
Retirement of long-term debt
and common stock (7,980) (27) (15,765) (10,940)
Cash dividends (3,971) (2,660) (15,464) (13,795)
------- ------- ------- -------
15,574 6,590 21,782 (7,539)
------- ------- ------- -------
Net increase (decrease) in cash and
temporstments 2,292 2,513 (1,762) 1,368
Cash and temporary investments
at beginning of period 993 2,534 5,047 3,679
------- ------- ------- -------
Cash and temporary investments
at end of period $ 3,285 $ 5,047 $ 3,285 $ 5,047
======= ======= ======= =======
Cash paid during the period for:
Interest (net of amount capitalized) $ 4,411 $ 3,720 $12,829 $12,551
Income taxes - 2,443 11,043 11,371
</TABLE>
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements and notes
should be read in conjunction with the financial statements and notes
included in PSNC's 1995 Annual Report. In the opinion of management, all
adjustments necessary for a fair statement of the results of operations for
the interim periods have been recorded. Certain amounts previously reported
have been reclassified to conform with the current period's presentation.
PSNC's business is seasonal in nature; therefore, the financial results
for any interim period are not necessarily indicative of those which may be
expected for the annual period.
2. In October 1994, the Financial Accounting Standards Board (FASB) issued
SFAS No. 119, "Disclosure about Derivative Financial Instruments and Fair
Value of Financial Instruments." PSNC currently uses derivatives primarily
to reduce the level of price volatility of PSNC's gas supply. PSNC plans to
adopt this standard on October 1, 1996. Due to its limited use of
derivatives, PSNC does not expect the adoption of this statement to
materially affect PSNC's financial position or the results of operations.
3. In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of."
This statement imposes stricter criteria for regulatory assets by requiring
that such assets be probable of future recovery at each balance sheet date.
PSNC plans to adopt this standard on October 1, 1996. Based on the current
regulatory structure in which PSNC operates, PSNC does not expect the
adoption of this statement to materially affect PSNC's financial position or
the results of operations.
4. In October 1995, the FASB issued SFAS No. 123, "Accounting for Awards of
Stock-Based Compensation to Employees." This statement establishes financial
accounting and reporting standards for stock-based employee compensation
plans. PSNC will adopt this standard on October 1, 1996. The effect on
PSNC's financial position or the results of operations of adopting this
standard has not yet been determined.
<PAGE> 7
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
<CAPTION>
Changes in Results of Operations
- --------------------------------
(Amounts in thousands except
degree day and customer data) Three Months Ended December 31
-----------------------------------------
Increase
1995 1994 (Decrease) %
-------- -------- --------- ---
<S> <C> <C> <C> <C>
Gross margin $ 36,516 $ 33,099 $ 3,417 10
Less - Franchise taxes 2,419 2,159 260 12
-------- -------- ---------
Net margin $ 34,097 $ 30,940 $ 3,157 10
======== ======== =========
Total volume throughput (DT):
Residential 5,702 4,167 1,535 37
Commercial/small industrial 3,721 2,902 819 28
Large commercial/industrial 7,795 7,575 220 3
-------- -------- ---------
17,218 14,644 2,574 18
======== ======== =========
Raleigh/Durham area degree days:
Actual 1,427 1,000 427 43
Normal 1,264 1,264 - -
Percent of normal 113% 79%
Weather normalization adjustment
income (refund), net of
franchise taxes $ (2,030) $ 3,521 $ (5,551)
Customers at end of period:
Residential 261,706 249,193 12,513 5
Commercial/small industrial 31,471 29,451 2,020 7
Large commercial/industrial 389 381 8 2
-------- -------- ---------
293,566 279,025 14,541 5
======== ======== =========
</TABLE>
<TABLE>
Net margin for the three months ended December 31, 1995 increased
$3,157,000 as compared to the same period last year. This increase in net
margin is attributable to the items shown below (in thousands):
<CAPTION>
Commercial/ Large
Small Commercial/
Residential Industrial Industrial Other Total
----------- ---------- ---------- ------ ------
<S> <C> <C> <C> <C> <C>
Price variances*-
Cardinal rate increase
effective 1/95 $ 423 $ 239 $ 225 $ - $ 887
Volume variances, net 635 253 145 - 1,033
Refund ordered in rate case - - - 732 732
Other 50 - - 455 505
------ ------ ------ ------ ------
Total $1,108 $ 492 $ 370 $1,187 $3,157
====== ====== ====== ====== ======
</TABLE>
*Includes changes in sales mix.
<PAGE> 8
MANAGEMENT'S DISCUSSION (Continued)
This increase in net margin is due primarily to (i) an increase in the
number of customers served, (ii) the Cardinal Pipeline rate increase
effective January 26, 1995, and (iii) additional throughput to all three
customer classes. Other items include $200,000 related to unauthorized gas
usage by certain large commercial/industrial customers that was billed at
penalty rates and a $732,000 refund ordered by the North Carolina Utilities
Commission (NCUC) in the October 7, 1994 rate case order. The refund related
to income tax credits taken in prior periods.
<TABLE>
<CAPTION>
(Amounts in thousands except
degree day data) Twelve Months Ended December 31
-----------------------------------------
Increase
1995 1994 (Decrease) %
-------- -------- --------- ---
<S> <C> <C> <C> <C>
Gross margin $134,245 $121,567 $ 12,678 10
Less - Franchise taxes 8,202 8,618 (416) (5)
-------- -------- ---------
Net margin $126,043 $112,949 $ 13,094 12
======== ======== =========
Total volume throughput (DT):
Residential 19,101 18,281 820 4
Commercial/small industrial 12,674 12,154 520 4
Large commercial/industrial 29,417 27,827 1,590 6
-------- -------- ---------
61,192 58,262 2,930 5
======== ======== =========
Raleigh/Durham area degree days:
Actual 3,381 3,071 310 10
Normal 3,341 3,341 - -
Percent of normal 101% 92%
Weather normalization adjustment
income (refund), net of
franchise taxes $ 248 $ 2,944 $ (2,696)
</TABLE>
<TABLE>
Net margin for the twelve months ended December 31, 1995 increased
$13,094,000 as compared to the same period last year. This increase in net
margin is attributable to the items shown below (in thousands):
<CAPTION>
Commercial/ Large
Small Commercial/
Residential Industrial Industrial Other Total
----------- ---------- ---------- ------ -------
<S> <C> <C> <C> <C>
Price variances*-
General rate increase
effective 10/94 $ 6,779 $1,364 $(1,887) $ - $ 6,256
Cardinal rate increase
effective 1/95 1,047 651 702 2,400
Volume variances, net 1,789 333 1,296 - 3,418
Refund ordered in rate case - - - 732 732
Other - - - 288 288
------- ------ ------- ------ -------
Total $ 9,615 $2,348 $ 111 $1,020 $13,094
======= ====== ======= ====== =======
</TABLE>
* Includes changes in sales mix.
<PAGE> 9
MANAGEMENT'S DISCUSSION (Continued)
This increase in net margin is due primarily to rate increases
associated with the October 7, 1994 general rate case order, the Cardinal
Pipeline rate increase effective January 26, 1995, and an increase in the
number of customers served. The increase in margin also reflects the
previously mentioned $732,000 refund ordered by the NCUC.
Operating and maintenance expenses for the three and twelve months ended
December 31, 1995 increased 19% and 10%, respectively, as compared to the
same periods last year. However, prior period expenses were reduced
$1,579,000 by accounting adjustments discussed below. On a straight
comparison basis without these adjustments, operating and maintenance
expenses for the three and twelve months ended December 31, 1995,
respectively, increased only 4.4% and 6.1% from the comparable periods the
prior year. Adjustments in the prior periods which lowered operating and
maintenance expenses were $829,000 related to health and life insurance
refunds received due to favorable experience realized, along with the
transfer of a large number of employees to a less-costly health maintenance
organization (HMO) provider. Also contributing was a $750,000 reversal of
expenses in the prior periods related to the investigation of former
manufactured gas plant (MGP) sites. A favorable ruling in PSNC's November
1994 general rate case order from the NCUC enabled PSNC to recover such
prudently incurred expenses through gas rates. Operating and maintenance
expenses increased in the current periods due to the recording of certain
expenses related to employee benefits and to increased salary expenses
related to payroll reallocations. The twelve-month period also reflects
increases related to employee severance expenses related to departmental
reorganizations, higher employee educational expenses, outside consulting
services related to information systems and employee benefits, fees related
to listing on the New York Stock Exchange, and increased advertising
expenses. These increases were partially offset by the reclassification of
certain sales compensation expenses to merchandising and jobbing and
decreased power usage at the liquefied natural gas facility.
Depreciation expense increased for the three and twelve months due to
utility plant additions. For the three-month period, general taxes increased
5% due mainly to increased franchise taxes based on operating revenues that
increased 12%. However, general taxes for the twelve-month period decreased
2% due mainly to decreased franchise taxes based on operating revenues that
decreased 5%.
Other income for the three months ended December 31, 1995 increased
$422,000 due mainly to interest income associated with deferred gas costs and
gains realized by PSNC's gas marketing subsidiary when buying and selling gas
on the spot market, along with a growth in the number of customer accounts
and related higher margins. For the twelve-month period, other income
decreased $3,272,000 due mainly to proceeds received in June 1994 from the
sale of propane assets and the absence of operating income from propane
operations, the reclassification of certain sales commissions to merchandise
and jobbing from operation and maintenance in connection with the October
1994 general rate case order, and the reclassification of income from
pipeline capacity sales from operating revenues to other income.
Interest deductions for the three and twelve months ended December 31,
1995 increased 15% and 3% as compared to the same periods last year. These
increases are primarily due to interest expense on increased short-term debt
balances. The balance in short-term debt increased from $31 million at
December 31, 1994 to $77 million at December 31, 1995. This increase is due
to financing a portion of fiscal 1995 and 1996 construction expenditures.
<PAGE> 10
MANAGEMENT'S DISCUSSION (Continued)
The change in earnings per share for the three and twelve months periods
reflect an increase of 3% and 6% in the average number of common shares
outstanding as compared to the same periods last year. These increases are
primarily due to shares issued through PSNC's dividend reinvestment and stock
option plans.
Changes in Financial Condition
- ------------------------------
The capital expansion program, through the construction of lines,
services, systems, and facilities, and the purchase of equipment, is designed
to help PSNC meet the growing demand for its product. PSNC's fiscal 1996
construction budget is approximately $61,000,000, compared to actual
construction expenditures for fiscal 1995 of $61,119,000. The construction
program is regularly reviewed by management and is dependent upon PSNC's
continuing ability to generate adequate funds internally and to sell new
issues of debt and equity securities on acceptable terms. Construction
expenditures during the three and twelve months ended December 31, 1995 were
$10,765,000 and $56,562,000, respectively, as compared to $15,322,000 and
$53,079,000 for the same periods a year ago. During the three and twelve
months ended December 31, 1994, construction expenditures included $6,979,000
and $16,367,000, respectively, of expenditures related to the Cardinal
Pipeline project. The remaining increases are largely due to expenditures
related to expanding the transmission and distribution facilities to serve
the growing customer base.
PSNC generally finances its operations with internally generated funds,
supplemented with bank lines of credit to satisfy seasonal requirements.
PSNC also borrows under its bank lines of credit to finance portions of its
construction expenditures pending refinancing through the issuance of equity
or long-term debt at a later date depending upon prevailing market
conditions. PSNC has committed lines of credit with eight commercial banks
which vary monthly depending upon seasonal requirements. For the twelve-
month period beginning April 1, 1995, lines of credit with these banks range
from a minimum of $22,000,000 to a winter-period maximum of $79,000,000.
PSNC also has uncommitted annual lines of credit with three of these banks
totaling $21,000,000. Lines of credit are evaluated periodically by
management and renegotiated to accommodate anticipated short-term financing
needs. Management believes these lines are currently adequate to finance a
portion of construction expenditures, stored gas inventories and other
corporate needs.
PSNC sold 1,725,000 new shares of $1 par common stock through an
underwritten public offering during May 1994. The net proceeds of
$23,406,000 were used to repay all outstanding short-term indebtedness, to
redeem the outstanding $3,098,000 of First Mortgage Bonds, 9 7/8% Series H,
due 1995, and to help finance a portion of fiscal 1994's construction
expenditures. During September 1995, PSNC made an additional payment on its
10% Senior Debentures due 2003 of $2,500,000, the maximum additional annual
payment permitted pursuant to the terms of the debenture agreement.
Effective December 1, 1995, PSNC redeemed the remaining $3,680,000
balance of its 8% Series I First Mortgage Bonds, due 1998, at a redemption
price of 100.35%. PSNC financed this redemption through the use of short-
term bank debt. Since the retirement of the first mortgage bonds, PSNC is in
the process of closing the original indenture and all supplemental
indentures.
<PAGE> 11
MANAGEMENT'S DISCUSSION (Continued)
On December 20, 1995, PSNC filed with the Securities and Exchange
Commission a registration statement covering up to an aggregate amount of
$125,000,000 of PSNC's unsecured debt securities. On January 10, 1996, PSNC
sold $50,000,000 of 6.99% senior debentures due 2026 in a public offering
under the registration statement. The net proceeds of $49,562,500 received
on January 16 were used to pay down a significant portion of the outstanding
short-term bank debt.
At December 31, 1995, restricted cash and temporary investments were
$5,101,000, an increase from $1,422,000 at December 31, 1994. This net
increase was due primarily to refunds received from PSNC's pipeline supplier
that have not been deposited into the expansion fund in the Office of the
State Treasurer. This fund was created by an order of the NCUC, dated June
3, 1993, for the purpose of constructing natural gas lines into unserved
areas of PSNC's service territory that otherwise would not be economically
feasible to serve. Since December 1994, PSNC has received supplier refunds
totaling $3,477,000 that will be held for deposit into the expansion fund at
a later date, along with interest earned.
Net deferred gas costs fluctuate in response to the operation of PSNC's
Rider D rate mechanism. This mechanism allows PSNC to recover margin losses
on negotiated sales to large commercial and industrial customers with
alternate fuel capability. It also allows PSNC to recover from customers all
prudently incurred gas costs. On a monthly basis, any difference in amounts
paid and collected for these costs is recorded for subsequent refund to or
collection from PSNC's customers. Deferred gas costs at December 31, 1995
and December 31, 1994 primarily represent undercollections from customers of
$14,878,000 and $822,000, respectively.
The increase in accounts payable at December 31, 1995 of $8,806,000 as
compared to December 31, 1994 is largely due to additional gas purchases. An
additional 3,000,000 DT were purchased in December 1995 due to colder
weather.
The decrease in accrued taxes at December 31, 1995 as compared to the
prior year is primarily due to a decrease in accrued income taxes that
includes an overpayment of approximately $2,100,000 for fiscal 1995.
The decrease in accrued pension cost at December 31, 1995 is due to
pension contribution payments of $2,601,000 made during fiscal 1995. PSNC
did not have to fund its pension plan during fiscal 1994 or fiscal 1993.
Rate Matters
- ------------
Management currently anticipates filing a general rate case on or about
March 1, 1996, using the twelve months ended December 31, 1995, as its test
year. If this rate case is filed as planned, a general rate order from the
NCUC would be expected in the October 1996 time frame.
<PAGE> 12
<TABLE>
EXHIBIT 11
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 December 31
------------------- -------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 7,131 $ 6,663 $ 21,889 $ 21,623
-------- -------- -------- --------
Average common shares outstanding 18,771 18,292 18,629 17,566
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 93 50 70 64
-------- -------- -------- --------
Average common shares outstanding
as adjusted 18,864 18,342 18,699 17,630
-------- -------- -------- --------
Earnings per share, as adjusted $ .38 $ .36 $1.17 $1.23
===== ===== ===== =====
This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although
not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in
dilution of less than 3%.
</TABLE>
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
As more fully disclosed in Part I under "Environmental Matters" and in Part
II in Note 8 to the financial statements in the Annual Report on Form 10-K
for the period ending September 30, 1995, PSNC owns or has owned portions of
sites at which manufactured gas plants were formerly operated and is
cooperating with the North Carolina Department of Environment, Health and
Natural Resources to investigate these sites.
Item 2. Changes in Securities
- ------------------------------
None.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Part I Exhibits:
11 - Statement re: computation of per share earnings.
27 - Financial Data Schedule.
Part II Exhibits:
4-E-1 Indenture dated as of January 1, 1996, as supplemented by a
First Supplemental Indenture dated as of January 1, 1996,
between PSNC and First Union National Bank of North
Carolina, as trustee.
4-E-2 Specimen of the certificate representing the $50,000,000
aggregate principal amount of 6.99% Senior Debentures Due
2026 issued by PSNC on January 16, 1996.
10-E Underwriting Agreement, dated January 10, 1996, between PSNC
and Morgan Stanley & Co. Incorporated.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months
ended December 31, 1995.
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PUBLIC SERVICE COMPANY
OF NORTH CAROLINA, INCORPORATED
---------------------------------------
(Registrant)
Date 2-13-96 Charles E. Zeigler, Jr.
------- ---------------------------------------
Charles E. Zeigler, Jr.
Chairman, President and
Chief Executive Officer
Date 2-13-96 Robert D. Voigt
------- ---------------------------------------
Robert D. Voigt
Senior Vice President - Corporate
Development and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 3-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 412,858
<OTHER-PROPERTY-AND-INVEST> 728
<TOTAL-CURRENT-ASSETS> 79,224
<TOTAL-DEFERRED-CHARGES> 6,680
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 499,490
<COMMON> 18,793
<CAPITAL-SURPLUS-PAID-IN> 108,230
<RETAINED-EARNINGS> 51,166
<TOTAL-COMMON-STOCKHOLDERS-EQ> 178,189
0
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<TOTAL-OPERATING-EXPENSES> 26,142
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0
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</TABLE>
INDENTURE, dated as of January 1, 1996, between PUBLIC SERVICE
COMPANY OF NORTH CAROLINA, INCORPORATED, a North Carolina corporation (the
"Company"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as trustee (the
"Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness ("Securities"), to be
issued in one or more series as herein provided and to rank as to priority of
payment equally with all other outstanding unsubordinated and unsecured
indebtedness of the Company.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined below) thereof, it is mutually
covenanted and agreed as follows for the equal and ratable benefit of the
Holders of the Securities:
ARTICLE
1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. 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 GAAP;
(4) 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; and
(5) all references to any law shall include such law or any
successor law as amended, supplemented or otherwise modified and
in effect from time to time, and any other law in substance
substitute therefor.
"Act" shall have the meaning set forth in Section 1.4(a).
"Affiliate" of any specified Person means any Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For 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.
"Agent" means any Paying Agent or Registrar.
"Attributable Debt" means, as to a lease under which any Person is
at the time liable that is required to be classified and accounted for as a
Capitalized Lease Obligation on a Person's balance sheet under GAAP, at any
date as of which the amount thereof is to be determined, the total net amount
of rent required to be paid by such Person under such lease during the
remaining primary term thereof, discounted from the respective due dates
thereof to such date at the rate per annum equal to the interest rate
implicit in such lease. The net amount of rent required to be paid under any
such lease for such period shall be the aggregate amount of rent payable by
lessee with respect to such period after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar expenses or any amount required to be paid by such
lessee thereunder contingent upon the amount of revenues (or other similar
contingent amounts). In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be
paid under such lease subsequent to the first date upon which it may be so
terminated. Notwithstanding the foregoing, the term Attributable Debt
excludes any amounts in respect of any Sale and Leaseback Transaction which
the Company or a Subsidiary is permitted to enter into in accordance with the
last sentence of Section 9.9 of this Indenture.
"Authenticating Agent" means any authenticating agent appointed by
the Trustee pursuant to Section 6.14.
"Authorized Newspaper" means a newspaper of general circulation, in
the official language of the country of publication or in the English
language, customarily published on each Business Day whether or not published
on Saturdays, Sundays or holidays. Whenever successive publications in an
Authorized Newspaper are required hereunder they may be made (unless
otherwise expressly provided herein) on the same or different days of the
week and in the same or different Authorized Newspapers.
"Bankruptcy Law" shall have the meaning set forth in Section 5.1.
"Bearer Security" means any Security issued hereunder which is
payable to bearer.
"Board" or "Board of Directors" means the Board of Directors of the
Company, or any other duly authorized committee thereof.
"Board Resolution" means a copy of a resolution of the Board of
Directors, certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of the certificate, and delivered to the
Trustee.
"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment or
particular location are authorized or obligated by law or executive order to
close.
"Capitalized Lease Obligation" means, as applied to any Person, the
rental obligation under any lease of any Property (whether real, personal or
mixed) the discounted present value of the rental obligations of such Person
as lessee under which, in conformity with GAAP, is required to be capitalized
on the balance sheet of that Person.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the party named as the Company in the first
paragraph of this Indenture until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
means such successor.
"Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers, one of
whom must be the Chairman of the Board, the President, the Chief Financial
Officer, the Treasurer, the Assistant Treasurer, the Controller or a Vice-
President of the Company.
"Consolidated Net Tangible Assets" means, with respect to the
Company as of any date, the total assets of the Company as they appear on the
most recently prepared consolidated balance sheet of the Company as of the
end of a fiscal quarter, less (i) all liabilities shown on such consolidated
balance sheet that are classified and accounted for as current liabilities or
that otherwise would be considered current liabilities under GAAP; and (ii)
all assets shown on such consolidated balance sheet that are classified and
accounted for as intangible assets of the Company or that otherwise would be
considered intangible assets under GAAP, including, without limitation,
franchises, licenses, patents and patent applications, trademarks, brand
names and goodwill.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 230 South Tryon
Street, 9th Floor, Charlotte, North Carolina 28288-1179, Attention:
Corporate Trust Administration.
"Custodian" shall have the meaning set forth in Section 5.1.
"Default" means any event which is, or after notice or passage of
time, or both, would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section
3.7(b).
"Depository" when used with respect to the Securities of or within
any series issuable or issued in whole or in part in global form, means the
Person designated as Depository by the Company pursuant to Section 3.1 until
a successor Depository shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter shall mean or include each
Person which is then a Depository hereunder, and if at any time there is more
than one such Person, shall be a collective reference to such Persons.
"Dollar" means the currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
"Event of Default" shall have the meaning set forth in Section 5.1.
"Fiscal Year" means the fiscal year of the Company, which as of the
date hereof consists of the 12 month period ending September 30.
"Funded Debt" means all indebtedness for borrowed money owed or
guaranteed by the Company or any of its Subsidiaries and any other
indebtedness which, under GAAP, would appear as indebtedness on the most
recent consolidated balance sheet of the Company, which matures by its terms
more than 12 months from the date of such consolidated balance sheet or which
matures by its terms in less than 12 months but by its terms is renewable or
extendible beyond 12 months from the date of such consolidated balance sheet
at the option of the borrower.
"GAAP" means generally accepted accounting principles in the United
States as in effect on the date of application thereof.
"Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment
of which is unconditionally guaranteed as a full faith and credit obligation
by the United States, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository
receipt issued by a bank or trust company subject to federal or state
supervision or examination with a combined capital and surplus of at least
$50,000,000, as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government
Obligation held by such custodian for the account of the holder of a
depository receipt, 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 depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on
or principal of the Government Obligation evidenced by such depository
receipt.
"Holder" means, with respect to a Bearer Security, a bearer thereof
or of a coupon appertaining thereto and, with respect to a Registered
Security, a person in whose name a Security is registered on the Register.
"Indenture" means this Indenture as originally executed or as
amended or supplemented from time to time and shall include the forms and
terms of particular series of Securities established as contemplated
hereunder.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity, means
interest payable after maturity.
"Interest Payment Date" when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Lien" means any mortgage, pledge, lien, charge, security interest,
trust arrangement, conditional sale or other title retention agreement or
other encumbrance of any nature whatsoever.
"Maturity" when used with respect to any Security, means the date on
which the principal of such Security 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.
"Officer" means the Chairman of the Board, the President, any Vice-
President, the Chief Financial Officer, the Treasurer, the Assistant
Treasurer, the Controller, the Secretary or any Assistant Secretary of the
Company.
"Officer's Certificate," when used with respect to the Company,
means a certificate signed by an Officer who must be the Chairman of the
Board, the President, the Chief Financial Officer, the Treasurer, the
Assistant Treasurer, the Controller or a Vice-President of the Company.
"Opinion of Counsel" means a written opinion from the general
counsel of the Company or other legal counsel who is reasonably acceptable to
the Trustee. Such counsel may be an employee of or counsel to the Company.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of such Securities and any
coupons appertaining thereto, provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provisions therefor satisfactory to the Trustee have been
made;
(iii) Securities, except to the extent provided in Sections 4.4
and 4.5, with respect to which the Company has effected defeasance
and/or covenant defeasance as provided in Article 4; and
(iv) Securities which have been paid pursuant to Section 3.6 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, or
whether sufficient funds are available for redemption or for any other
purpose, and for the purpose of making the calculations required by Section
313 of the Trust Indenture Act, (a) the principal amount of any Original
Issue Discount Securities that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for such purpose shall
be equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.2,
and (b) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making such calculation or in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate
or rates of interest thereon, if any, the Maturity thereof and the redemption
provisions, if any, with respect thereto, are to be determined by the Company
upon the issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment," when used with respect to the Securities of or
within any series, means the place or places where the principal of, premium,
if any, and interest on such Securities are payable as specified or
contemplated by Sections 3.1 and 9.2.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"principal amount," when used with respect to any Security, means
the amount of principal, if any, payable in respect thereof at Maturity;
provided, however, that when used with respect to an Indexed Security in any
context other than the making of payments at Maturity, "principal amount"
means the principal face amount of such Indexed Security at original
issuance.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, in whole or in part, means the price at which it is to be redeemed
pursuant to this Indenture.
"Register" shall have the meaning set forth in Section 3.5.
"Registered Security" means any Security issued hereunder and
registered as to principal and interest in the Register.
"Registrar" shall have the meaning set forth in Section 3.5.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of or within any series means the date
specified for that purpose as contemplated by Section 3.1.
"Responsible Officer," when used with respect to the Trustee, shall
mean the chairman or any vice-chairman of the board of directors, the
chairman or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any senior
vice president, any vice president, any assistant vice president, the
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any senior trust officer, any trust officer, the controller, any
assistant controller, or any officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with a particular
subject.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of any Property, whether owned
at the date of this Indenture or thereafter acquired, which has been or is to
be sold or transferred by the Company or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person
on the security of such Property.
"Secured Debt" shall have the meaning set forth in Section 9.8(a).
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means a Security or
Securities of the Company issued, authenticated and delivered under this
Indenture.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security or in a coupon representing such installment of
interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" of any Person means any Person of which at least a
majority of capital stock having ordinary voting power for the election of
directors or other governing body of such Person is owned by such Person
directly or through one or more Subsidiaries of such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect on the date of this Indenture, except as provided in Section 8.3.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor Trustee replaces it pursuant to the
applicable provisions of this Indenture, and thereafter means such successor
Trustee and if, at any time, there is more than one Trustee, "Trustee" as
used with respect to the Securities of any series shall mean the Trustee with
respect to the Securities of that series.
"United States" means, unless otherwise specified with respect to
the Securities of any series as contemplated by Section 3.1, the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
"U.S. Person" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, a citizen, national
or resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust, the income of which is
subject to United States federal income taxation regardless of its source.
"Yield to Maturity" means the yield to maturity, calculated by the
Company at the time of issuance of a series of Securities or, if applicable,
at the most recent determination of interest on such series, in accordance
with accepted financial practice.
Section 1.2. 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 an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Sections 2.3 and 9.7) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such condition or covenant 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 1.3. 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 such
Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b). The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c). The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed
by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depository, or exhibited to it,
the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding
such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company
may assume that such ownership of any Bearer Security continues until
(i) another such certificate or affidavit bearing a later date issued in
respect of the same Bearer Security is produced, (ii) such Bearer
Security is produced to the Trustee by some other Person, (iii) such
Bearer Security is surrendered in exchange for a Registered Security
or (iv) such Bearer Security is no longer Outstanding. The
ownership of Bearer Securities may also be proved in any other
manner which the Trustee deems sufficient.
(d). The ownership of Registered Securities shall be proved by the
Register.
(e). Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
lieu thereof in respect of anything done, omitted or
exchange suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action ish
made upon such Security.
(f) Until such time as written instruments shall have been
delivered with respect to the requisite percentage of principal amount of
Securities for the action contemplated by such instruments, any such
instrument executed and delivered by or on behalf of a Holder may be revoked
with respect to any or all of such Holder's Securities by written notice by
such Holder or any subsequent Holder, delivered in the manner in which such
instrument was delivered.
(g) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date,
but only the Holders of record at the close of business on such record date
shall be deemed to be Holders for the purpose of determining whether Holders
of the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of such record date; provided that no such
authorization, agreement or consent by the Holders on such record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
Section 1.5. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Trustee at First Union National Bank of North
Carolina, 230 South Tryon Street, 9th Floor, Charlotte, North
Carolina 28288-1179, Attention: Corporate Trust Administration,
or
(2) the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at Public Service Company
of North Carolina, Incorporated, 400 Cox Road, P.O. Box 1398,
Gastonia, North Carolina 28053-1398, Attention: Chief Financial
Officer, or at any other address previously furnished in writing
to the Trustee by the Company.
Section 1.6. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, (i) if any of the Securities
affected by such event are Registered Securities, such notice to the
Holders thereof shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each such Holder affected by such event, at his address
as it appears in the Register, within the time prescribed for the
giving of such notice, and (ii) if any of the Securities affected by
such event are Bearer Securities, notice to the Holders thereof
shall be sufficiently given (unless otherwise herein or in the terms
of such Bearer Securities expressly provided) if published once in
an Authorized Newspaper in New York, New York, and in such other
city or cities, if any, as may be specified as contemplated by Section 3.1.
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 of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. In any case where
notice is given to Holders by publication, neither the failure to publish
such notice, nor any defect in any notice so published, shall affect the
sufficiency of such notice with respect to other Holders of Bearer Securities
or the sufficiency of any notice to Holders of Registered Securities given as
provided herein.
If by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice as provided
above, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder. If it is impossible or, in the opinion of the Trustee,
impracticable to give any notice by publication in the manner herein
required, then such publication in lieu thereof as shall be made with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
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.
Section 1.7. 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 1.8. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.
Section 1.9. Separability. In case any provision of this Indenture
or the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.10. Benefits of Indenture. Nothing in this Indenture or in
the Securities, expressed 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 1.11. Gocerning Law. THIS INDENTURE, THE SECURITIES AND ANY
COUPONS APPERTAINING THERETO SHALL, PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO THE CHOICE OF LAW PROVISIONS THEREOF (OTHER THAN SUCH SECTION 5-
1401). This Indenture is subject to the Trust Indenture Act and if
any provision hereof limits, qualifies or conflicts with the Trust
Indenture Act, the Trust Indenture Act shall control.
Section 1.12. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, sinking fund payment date, Stated Maturity or
Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture
or of any Security or coupon other than a provision in the
Securities of any series which specifically states that such
provision shall apply in lieu of this Section), payment of
principal, premium, if any, or interest 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 such date; provided that if such payment is
timely made, no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption
Date, sinking fund payment date, Stated Maturity or Maturity, as the
case may be, until such next succeeding Business Day.
ARTICLE
2.
SECURITY FORMS
Section 2.1
Forms Generally. The Securities of each series and the coupons,
if any, to be attached thereto shall be in substantially such form
as shall be established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently
herewith, be determined by the officers executing such Securities
and coupons, if any, as evidenced by their execution of the
Securities and coupons, if any. Unless otherwise provided as
contemplated in Section 3.1, Securities will be issued only in
registered, certificated form without coupons or in the form of one
or more global securities. If temporary Securities of any series
are issued as permitted by Section 3.4, the form thereof also shall
be established as provided in the preceding sentence. If the forms
of Securities and coupons, if any, of any series are established by,
or by action taken pursuant to, a Board Resolution, a copy of the
Board Resolution together with an appropriate record of any such
action taken pursuant thereto, including a copy of the approved form
of Securities or coupons, if any, shall be certified by the
Corporate Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 for the authentication and
delivery of such Securities.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
coupons, if any, as evidenced by their execution of such Securities and
coupons, if any.
Section 2.2
Form of Trustee's Certificate of Authentication. The Trustee's
certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series described in the within-
mentioned Indenture.
First Union National Bank of North Carolina,
as Trustee
By___________________________
Authorized Signatory
Section 2.3
Securities in Global Form. If Securities of or within a series
are issuable in whole or in part in global form, any such Security
may provide that it shall represent the aggregate or specified
amount of Outstanding Securities from time to time endorsed thereon
and may also provide that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to
reflect exchanges. Any endorsement of a Security in global form to
reflect the amount, or any increase or decrease in the amount, or
changes in the rights of Holders, of Outstanding Securities
represented thereby, shall be made in such manner and by such Person
or Persons as shall be specified therein or in the Company Order to
be delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject
to the provisions of Section 3.3 and, if applicable, Section 3.4,
the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person
or Persons specified therein or in the applicable Company Order.
Any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 1.2 hereof and need not be
accompanied by an Opinion of Counsel.
The provisions of the last paragraph of Section 3.3 shall apply to
any Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.2
and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last paragraph of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of,
premium, if any, and interest on any Security in permanent global form shall
be made to the Person or Persons specified therein.
Section 2.4
Form of Legend for Securities in Global Form. Any Security in
global form authenticated and delivered hereunder shall bear a
legend in substantially the following form:
This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository. Unless and until it is exchanged in whole or in
part for Securities in certificated form, this Security may not be
transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
ARTICLE
3.
THE SECURITIES
Section 3.1
Amount Unlimited; Issuable in Series. (a) The aggregate principal
amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued from time
to time in one or more series.
(b) The following matters shall be established with respect to each
series of Securities issued hereunder (i) by a Board Resolution,
(ii) by action taken pursuant to a Board Resolution and (subject
to Section 3.3) set forth, or determined in the manner provided,
in an Officer's Certificate or (iii) in one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (which limit shall not pertain to Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series
pursuant to Section 3.4, 3.5, 3.6, 8.6, or 10.7);
(3) the date or dates on which the principal of and premium, if
any, on the Securities of the series is payable or the method of
determination thereof;
(4) the rate or rates (which may be fixed, variable or zero) at
which the Securities of the series shall bear interest, if any,
or the method of calculating such rate or rates of interest;
(5) the date or dates from which interest, if any, shall accrue or
the method by which such date or dates shall be determined;
(6) the Interest Payment Dates on which any such interest shall be
payable and, with respect to Registered Securities, the Regular
Record Date, if any, for the interest payable on any Registered
Security on any Interest Payment Date;
(7) the place or places where the principal of, premium, if any,
and interest, if any, on Securities of the series shall be
payable;
(8) the period or periods within which, the price or prices at
which, the currency in which, and the other terms and conditions
upon which, Securities of the series may be redeemed, in whole or
in part, at the option of the Company and, if other than as
provided in Section 10.3, the manner in which the particular
Securities of such series (if less than all Securities of such
series are to be redeemed) are to be selected for redemption;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or
analogous provisions or upon the happening of a specified event
or at the option of a Holder thereof and the period or periods
within which, the price or prices at which, and the other terms
and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(10) if other than denominations of $1,000 and any integral
multiple thereof, if Registered Securities, and if other than the
denomination of $5,000, if Bearer Securities, the denominations
in which Securities of the series shall be issuable;
(11) if other than Dollars, the currency for which the
Securities of the series may be purchased or in which the
Securities of the series shall be denominated and/or the currency
in which the principal of, premium, if any, and interest, if any,
on the Securities of the series shall be payable and the
particular provisions applicable thereto in accordance with, in
addition to, or in lieu of the provisions of this Indenture;
(12) if the amount of payments of principal of, premium, if any,
and interest, if any, on the Securities of the series shall be
determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation,
on a currency or currencies (including currency unit or units)
other than that in which the Securities of the series are
denominated or designated to be payable), the index, formula or
other method by which such amounts shall be determined;
(13) if the amount of payments of principal, premium, if any,
and interest, if any, on the Securities of the series shall be
determined with reference to an index, formula or other method
based on the prices of securities or commodities, with reference
to changes in the prices of securities or commodities or
otherwise by application of a formula, the index, formula or
other method by which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the
portion of the principal amount of such Securities of the series
which shall be payable upon declaration of acceleration thereof
pursuant to Section 5.2 or the method by which such portion shall
be determined;
(15) if other than as provided in Section 3.7, the Person to
whom any interest on any Registered Security of the series shall
be payable and the manner in which, or the Person to whom, any
interest on any Bearer Securities of the series shall be payable;
(16) provisions, if any, granting special rights to the Holders
of Securities of the series upon the occurrence of such events as
may be specified;
(17) any addition to or modification or deletion of any Events
of Default set forth in Section 5.1 or covenant of the Company
set forth in Article 9 pertaining to the Securities of the
series;
(18) under what circumstances, if any, the Company will pay
additional amounts on the Securities of that series held by a
Person who is not a U.S. Person in respect of taxes or similar
charges withheld or deducted and, if so, whether the Company will
have the option to redeem such Securities rather than pay such
additional amounts (and the terms of any such option);
(19) whether Securities of the series shall be issuable as
Registered Securities or Bearer Securities (with or without
interest coupons), or both, and any restrictions applicable to
the offering, sale or delivery of Bearer Securities and, if other
than as provided in Section 3.5, the terms upon which Bearer
Securities of a series may be exchanged for Registered Securities
of the same series and vice versa;
(20) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding
Securities of the series shall be dated if other than the date of
original issuance of the first Security of the series to be
issued;
(21) the forms of the Securities and coupons, if any, of the
series;
(22) the applicability, if any, to the Securities of or within
the series of Sections 4.4 and 4.5, or such other means of
defeasance or covenant defeasance as may be specified for the
Securities and coupons, if any, of such series;
(23) if other than the Trustee, the identity of the Registrar
and any Paying Agent;
(24) if the Securities of the series shall be issued in whole or
in part in global form, (i) the Depository for such global
Securities, (ii) whether beneficial owners of interests in any
Securities of the series in global form may exchange such
interests for certificated Securities of such series and of like
tenor of any authorized form and denomination and (iii) if other
than as provided in Section 3.5, the circumstances under which
any such exchange may occur; and
(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture) including any
terms which may be required by or advisable under United States
laws or regulations or advisable in connection with the marketing
of Securities of the series.
(c) All Securities of any one series and coupons, if any,
appertaining to any Bearer Securities of such series shall be
substantially identical except, in the case of Registered
Securities, as to denomination and except as may otherwise be
provided (i) by a Board Resolution, (ii) by action taken pursuant
to a Board Resolution and (subject to Section 3.3) set forth, or
determined in the manner provided, in the related Officer's
Certificate or (iii) in an indenture supplemental hereto. All
Securities of any one series need not be issued at the same time
and, if permitted by the terms of a series as established pursuant
to Section 3.1(b), such series may be reopened, without the consent
of the Holders, for issuances of additional Securities of such
series.
(d) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy
of such Board Resolution shall be certified by the Corporate
Secretary or an Assistant Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for
determining, the terms of the Securities of such series, and an
appropriate record of any action taken pursuant thereto in
connection with the issuance of any Securities of such series
shall be delivered to the Trustee prior to the authentication and
delivery thereof.
Section 3.2
Denominations. Unless otherwise provided as contemplated by
Section 3.1, any Registered Securities of a series shall be issuable
in denominations of $1,000 and any integral multiple thereof.
Section 3.3
Execution, Authentication, Delivery and Dating. Securities shall
be executed on behalf of the Company by an Officer (other than the
Corporate Secretary or the Assistant Secretary) under the Company's
seal affixed thereto or reproduced thereon attested by the Corporate
Secretary or the Assistant Secretary. The signatures of any of
these Officers on the Securities may be manual or facsimile. The
coupons, if any, of Bearer Securities shall bear the facsimile
signature of two Officers.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time, the Company may deliver
Securities, together with any coupons appertaining thereto, of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Securities; provided, however, that in the case of Securities offered in
a Periodic Offering, the Trustee shall authenticate and deliver such
Securities from time to time in accordance with such other procedures
(including, without limitation, the receipt by the Trustee of oral or
electronic instructions from the Company or its duly authorized agents,
promptly confirmed in writing) acceptable to the Trustee as may be specified
by or pursuant to a Company Order delivered to the Trustee prior to the time
of the first authentication of Securities of such series.
If the form or terms of the Securities of a series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to section
315(a) through (d) of the Trust Indenture Act) shall be fully protected in
relying upon, an Opinion of Counsel, or a letter addressed to the Trustee
permitting it to rely upon on an Opinion of Counsel, substantially to the
effect that:
(1) if the forms of such Securities and any coupons have been
established by or pursuant to a Board Resolution as permitted by
Section 2.1, that such forms have been established in conformity
with the provisions of this Indenture;
(2) if the terms of such Securities and any coupons have been
established by or pursuant to a Board Resolution as permitted by
Section 3.1, that such terms have been, or in the case of
Securities of a series offered in a Periodic Offering, will be,
established in conformity with the provisions of this Indenture,
subject, in the case of Securities offered in a Periodic
Offering, to any conditions specified in such Opinion of Counsel;
(3) that such Securities together with any coupons appertaining
thereto, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar
laws of general applicability relating to or affecting the
enforcement of creditors' rights and to general equity
principles; and
(4) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities have been complied with.
Notwithstanding that such form or terms have been so established,
the Trustee shall have the right to decline to authenticate such Securities
if, in the written opinion of counsel to the Trustee, the issue of such
Securities pursuant to this Indenture will adversely affect the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two
preceding paragraphs, if all of the Securities of any series are not to be
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 3.1 or the Company Order
and Opinion of Counsel otherwise required pursuant to the two preceding
paragraphs in connection with the authentication of each Security of such
series if such documents, with appropriate modifications to cover such future
issuances, are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company of any
of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
the other documents delivered pursuant to Sections 2.1 and 3.1 and this
Section, as applicable, in connection with the first authentication of
Securities of such series, unless and until such Opinion of Counsel or other
documents have been suspended or revoked.
If the Company shall establish pursuant to Section 3.1 that the
Securities of a series are to be issued in whole or in part in global form,
then the Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order with respect to such series, authenticate and
deliver one or more Securities in global form that (i) shall represent and
shall be denominated in an amount equal to the aggregate principal amount of
the Outstanding Securities of such series to be represented by such Security
or Securities in global form, (ii) shall be registered, if a Registered
Security, in the name of the Depository for such Security or Securities in
global form or the nominee of such Depository, (iii) shall be delivered by
the Trustee to such Depository or pursuant to such Depository's instruction
and (iv) shall bear the legend set forth in Section 2.4.
Each Depository designated pursuant to Section 3.1 for a Registered
Security in global form must, at the time of its designation and at all times
while it serves as Depository, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute or
regulation. The Trustee shall have no responsibility to determine if the
Depository is so registered. Each Depository shall enter into an agreement
with the Trustee governing the respective duties and rights of such
Depository and the Trustee with regard to Securities issued in global form.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date
specified as contemplated by Section 3.1.
No Security or coupon appertaining thereto shall be entitled to any
benefits under this Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of one of the authorized signatories of
the Trustee or an Authenticating Agent and no coupon shall be valid until the
Security to which it appertains has been so authenticated. Such signature
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered under this Indenture
and is entitled to the benefits of this Indenture. Except as permitted by
Section 3.6 or 3.7, the Trustee shall not authenticate and deliver any Bearer
Security unless all appurtenant coupons for interest then matured have been
detached and cancelled.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement
(which need not comply with Section 1.2 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall not
be entitled to the benefits of this Indenture.
Section 3.4
Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute and, upon Company
Order, the Trustee shall authenticate and deliver temporary
Securities of such series which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor and form, with or without
coupons, of the definitive Securities in lieu of which they are
issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such
Securities may determine, as conclusively evidenced by their
execution of such Securities and coupons, if any. In the case of
Securities of any series, such temporary Securities may be in global
form, representing all or a portion of the Outstanding Securities of
such series.
Except in the case of temporary Securities in global form, each of
which shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable
delay. After preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company pursuant to Section 9.2 in a
Place of Payment for such series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured coupons appertaining thereto), the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations and of like tenor; provided, however,
that no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that no definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security
unless the Trustee shall have received from the person entitled to receive
the definitive Bearer Security a certificate substantially in the form
approved in the Board Resolutions relating thereto and such delivery shall
occur only outside the United States. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series except
as otherwise specified as contemplated by Section 3.1.
Section 3.5
Registration, Transfer and Exchange. The Company shall cause to
be kept at the Corporate Trust Office of the Trustee or in any
office or agency to be maintained by the Company in accordance with
Section 9.2 in a Place of Payment a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered
Securities. The Register shall be in written form or any other form
capable of being converted into written form within a reasonable
time. The Trustee is hereby appointed "Registrar" for the purpose
of registering Registered Securities and transfers of Registered
Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency maintained pursuant to Section
9.2 in a Place of Payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount containing identical terms and provisions.
Bearer Securities or any coupons appertaining thereto shall be
transferable by delivery.
At the option of the Holder, Registered Securities of any series
(except a Registered Security in global form) may be exchanged for other
Registered Securities of the same series, of any authorized denominations and
of a like aggregate principal amount containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at
such office or agency. Whenever any Registered Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Registered Securities which the Holder making the exchange
is entitled to receive. Unless otherwise specified as contemplated by
Section 3.1, Bearer Securities may not be issued in exchange for Registered
Securities.
Unless otherwise specified as contemplated by Section 3.1, at the
option of the Holder, Bearer Securities of such series may be exchanged for
Registered Securities (if the Securities of such series are issuable in
registered form) or Bearer Securities (if Bearer Securities of such series
are issuable in more than one denomination and such exchanges are permitted
by such series) of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the
Holder of a Bearer Security is unable to produce any such unmatured coupon or
coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that,
except as otherwise provided in Section 9.2, interest represented by coupons
shall be payable only upon presentation and surrender of those coupons at an
office or agency located outside the United States. Notwithstanding the
foregoing, in case any Bearer Security of any series is surrendered at any
such office or agency in exchange for a Registered Security of the same
series after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date of payment, as the case may be (or, if such coupon is so
surrendered with such Bearer Security, such coupon shall be returned to the
person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon, when due in accordance with the
provisions of this Indenture.
Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for Securities in definitive
certificated form, a Security in global form representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depository for such series to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository or
by such Depository or any such nominee to a successor Depository for such
series or a nominee of such successor Depository.
If at any time the Depository for the Securities of a series
notifies the Company that it is unwilling or unable to continue as Depository
for the Securities of such series or if at any time the Depository for the
Securities of such series shall no longer be eligible under Section 3.3, the
Company shall appoint a successor Depository with respect to the Securities
of such series. If a successor Depository for the Securities of such series
is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Company's election
pursuant to Section 3.1(b)(24) shall no longer be effective with respect to
the Securities of such series and the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
certificated Securities of such series of like tenor, shall authenticate and
deliver, Securities of such series of like tenor in certificated form, in
authorized denominations and in an aggregate principal amount equal to the
principal amount of the Security or Securities of such series of like tenor
in global form in exchange for such Security or Securities in global form.
The Company may at any time in its sole discretion determine that
Securities issued in global form shall no longer be represented by such a
Security or Securities in global form. In such event the Company shall
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of certificated Securities of such series of like
tenor, shall authenticate and deliver, Securities of such series of like
tenor in certificated form, in authorized denominations and in an aggregate
principal amount equal to the principal amount of the Security or Securities
of such series of like tenor in global form in exchange for such Security or
Securities in global form.
If specified by the Company pursuant to Section 3.1 with respect to
a series of Securities, the Depository for such series may surrender a
Security in global form of such series in exchange in whole or in part for
Securities of such series in certificated form on such terms as are
acceptable to the Company and such Depository. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to each Person specified by such Depository a new
certificated Security or Securities of the same series of like
tenor, of any authorized denomination as requested by such Person
in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Security in global form; and
(ii) to such Depository a new Security in global form of like
tenor in a denomination equal to the difference, if any, between
the principal amount of the surrendered Security in global form
and the aggregate principal amount of certificated Securities
delivered to Holders thereof.
Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be cancelled by the
Trustee. Unless expressly provided with respect to the Securities of any
series that such Security may be exchanged for Bearer Securities, Securities
in certificated form issued in exchange for a Security in global form
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depository for such Security in global form,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Persons in whose names such Securities are so registered.
Whenever any Securities are surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Registered Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company, the
Registrar or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Registrar and
the Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
for any exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration or transfer or exchange of Securities,
other than exchanges pursuant to Section 3.4 or 10.7 not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of, or exchange any Securities for a period beginning at the opening
of business 15 days before any selection for redemption of Securities of like
tenor and of the series of which such Security is a part and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of Securities of like
tenor and of such series to be redeemed; (ii) to register the transfer of or
exchange any Registered Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part;
or (iii) to exchange any Bearer Security so selected for redemption, except
that such a Bearer Security may be exchanged for a Registered Security of
that series and like tenor; provided that such Registered Security shall be
simultaneously surrendered for redemption.
Section 3.6
Replacement Securities. If a mutilated Security or a Security
with a mutilated coupon appertaining to it is surrendered to the
Trustee, together with, in proper cases, such security or indemnity
as may be required by the Company or the Trustee to save each of
them harmless, the Company shall execute and the Trustee shall
authenticate and deliver a replacement Registered Security, if such
surrendered Security was a Registered Security, or a replacement
Bearer Security with coupons corresponding to the coupons
appertaining to the surrendered Security, if such surrendered
Security was a Bearer Security, of the same series and date of
maturity, if the Trustee's requirements are met.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or Security with a destroyed, lost or stolen coupon and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or stolen
Security or in exchange for the Security to which a destroyed, lost or stolen
coupon appertains (with all appurtenant coupons not destroyed, lost or
stolen), a replacement Registered Security, if such Holder's claim appertains
to a Registered Security, or a replacement Bearer Security with coupons
corresponding to the coupons appertaining to the destroyed, lost or stolen
Bearer Security or the Bearer Security to which such lost, destroyed or
stolen coupon appertains, if such Holder's claim appertains to a Bearer
Security, of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding with
coupons corresponding to the coupons, if any, appertaining to the destroyed,
lost or stolen Security.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new security or coupon, pay such
Security or coupon; provided, however, that payment of principal of and any
premium or interest on Bearer Securities shall, except as otherwise provided
in Section 9.2, be payable only at an office or agency located outside the
United States and, unless otherwise specified as contemplated by Section 3.1,
any interest on Bearer Securities shall be payable only upon presentation and
surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security,
or in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupon, if any, or the destroyed, lost or stolen coupon, shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of
that series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
Section 3.7
Payment of Interest; Interest Rights Preserved. (a) Unless
otherwise provided as contemplated by Section 3.1, interest, if any,
on any Registered Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to
the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency maintained for
such purpose pursuant to 9.2; provided, however, that at the option
of the Company, interest on any series of Registered Securities that
bear interest may be paid (i) by check mailed to the address of the
Person entitled thereto as it shall appear on the Register of
Holders of Securities of such series or (ii) by wire transfer to an
account maintained by the Person entitled thereto as specified in
the Register of Holders of Securities of such series.
Unless otherwise provided as contemplated by Section 3.1, (i)
interest, if any, on Bearer securities shall be paid only against
presentation and surrender of the coupons for such interest installments as
are evidenced thereby as they mature and (ii) original issue discount, if
any, on Bearer Securities shall be paid only against presentation and
surrender of such Securities; in either case at the office of a Paying Agent
located outside the United States, unless the Company shall have otherwise
instructed the Trustee in writing, provided that any such instruction for
payment in the United States does not cause any Bearer Security to be treated
as a "registration-required obligation" under United States laws and
regulations. The interest, if any, on any temporary Bearer Security shall be
paid, as to any installment of interest evidenced by a coupon attached
thereto only upon presentation and surrender of such coupon and, as to other
installments of interest, only upon presentation of such Security for
notation thereon of the payment of such interest. If at the time a payment
of principal of or interest, if any, on a Bearer Security or coupon shall
become due, the payment of the full amount so payable at the office or
offices of all the Paying Agents outside the United States is illegal or
effectively precluded because of the imposition of exchange controls or other
similar restrictions on the payment of such amount in Dollars, then the
Company may instruct the Trustee in writing to make such payments at a Paying
Agent located in the United States, provided that provision for such payment
in the United States would not cause such Bearer Security to be treated as a
"registration-required obligation" under United States laws and regulations.
(b) Unless otherwise provided as contemplated by Section 3.1, any
interest on Registered Securities of any series which is payable,
but is not punctually paid or duly provided for, on any interest
payment date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Holders on the relevant Regular Record
Date by virtue of their having been such Holders, 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 such Defaulted
Interest to the Persons in whose names such Registered Securities
(or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall 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 (1) 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 mailed, first-class postage prepaid, to each
Holder of such Registered Securities at his address as it appears
in the Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in
whose names such Registered Securities (or their respective
Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of such Defaulted Interest to
the Persons in whose names such Registered Securities (or their
respective Predecessor Securities) are registered at the close of
business on a specified date in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Registered Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment
pursuant to this clause (2), such manner of payment shall be
deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section and Section
3.5, each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.8
Persons Deemed Owners. Prior to due presentment of any Registered
Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in
whose name such Registered Security is registered as the owner of
such Registered Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.7) interest
on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as
the absolute owner of such Bearer Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon 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.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Security in global form,
nothing herein shall prevent the Company or the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any Depository (or its nominee), as
a Holder, with respect to such Security in global form or impair, as between
such Depository and owners of beneficial interests in such Security in global
form, the operation of customary practices governing the exercise of the
rights of such Depository (or its nominee) as Holder of such Security in
global form.
Section 3.9
Cancellation. The Company at any time may deliver Securities and
coupons to the Trustee for cancellation. The Registrar and any
Paying Agent shall forward to the Trustee any Securities and coupons
surrendered to them for replacement, for registration of transfer,
or for exchange or payment. The Trustee shall cancel all Securities
and coupons surrendered for replacement, for registration of
transfer, or for exchange, payment, redemption or cancellation and
may, but shall not be required to, dispose of cancelled Securities
and coupons and issue a certificate of destruction to the Company.
The Company may not issue new Securities to replace Securities that
it has paid or delivered to the Trustee for cancellation.
Section 3.10
Computation of Interest. Except as otherwise specified as
contemplated by Section 3.1, interest on the Securities of each
series 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 Securities may use
"CUSIP" numbers (if then generally in use), and, in such case, the
Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that
no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of
a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of
such numbers.
Section 3.12
Currency of Payment in Respect of Securities. Unless otherwise
specified with respect to any Securities pursuant to Section 3.1,
payment of the principal of, premium, if any, and interest, if any,
on any Registered or Bearer Security of such series will be made in
Dollars.
ARTICLE
4.
SATISFACTION, DISCHARGE AND DEFEASANCE
Section 4.1
Termination of Company's Obligations Under the Indenture. (a) This
Indenture shall upon a Company Request cease to be of further effect
with respect to Securities of or within any series and any coupons
appertaining thereto (except as to any surviving rights of
registration of transfer or exchange of such Securities and
replacement of such Securities which may have been lost, stolen or
mutilated as herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with
respect to such Securities and any coupons appertaining thereto when
(1) either
(A) all such Securities previously authenticated and delivered
and all coupons appertaining thereto (other than (i) such coupons
appertaining to Bearer Securities surrendered in exchange for
Registered Securities and maturing after such exchange, surrender
of which is not required or has been waived as provided in
Section 3.5, (ii) such Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 3.6, (iii) such coupons appertaining to
Bearer Securities called for redemption and maturing after the
relevant Redemption Date, surrender of which has been waived as
provided in Section 10.6 and (iv) such Securities and coupons 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 9.3) have been delivered to the Trustee for cancellation;
or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto 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) if redeemable at the option of the Company, 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
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency in
which the Securities of such series are payable, sufficient to pay
and discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation,
for principal, premium, if any, and interest, with respect thereto,
to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture as to such series
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligation of the Company to the Trustee and any predecessor Trustee
under Section 6.9, 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 4.2 and the last paragraph of Section 9.3 shall
survive.
Section 4.2
Application of Trust Funds. Subject to the provisions of the last
paragraph of Section 9.3, all money deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons 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, premium, if any and any interest for whose payment
such money has been deposited with or received by the Trustee, but
such money need not be segregated from other funds except to the
extent required by law.
Section 4.3
Applicability of Defeasance Provisions; Company's Option to Effect
Defeasance or Covenant Defeasance. If pursuant to Section 3.1
provision is made for either or both of (i) defeasance of the
Securities of or within a series under Section 4.4 or (ii) covenant
defeasance of the Securities of or within a series under Section
4.5, then the provisions of such Section or Sections, as the case
may be, together with the provisions of Sections 4.6 through 4.9
inclusive, with such modifications thereto as may be specified
pursuant to Section 3.1 with respect to any Securities, shall be
applicable to such Securities and any coupons appertaining thereto,
and the Company may at its option by Board Resolution, at any time,
with respect to such Securities and any coupons appertaining
thereto, elect to have Section 4.4 (if applicable) or Section 4.5
(if applicable) be applied to such Outstanding Securities and any
coupons appertaining thereto upon compliance with the conditions set
forth below in this Article.
Section 4.4
Defeasance and Discharge. Upon the Company's exercise of the
option specified in Section 4.3 applicable to this Section with
respect to the Securities of or within a series, the Company shall
be deemed to have been discharged from its obligations with respect
to such Securities and any coupons appertaining thereto on the date
the conditions set forth in Section 4.6 are satisfied (hereinafter
"defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and any coupons
appertaining thereto which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 4.7 and the other
Sections of this Indenture referred to in clause (ii) of this
Section, and to have satisfied all its other obligations under such
Securities and any coupons appertaining thereto and this Indenture
insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall on
Company Order execute proper instruments acknowledging the same),
except the following which shall survive until otherwise terminated
or discharged hereunder: (i) the rights of Holders of such
Securities and any coupons appertaining thereto to receive, solely
from the trust funds described in Section 4.6(a) and as more fully
set forth in such Section, payments in respect of the principal of,
premium, if any, and interest, if any, on such Securities or any
coupons appertaining thereto when such payments are due; (ii) the
Company's obligations with respect to such Securities under Sections
3.5, 3.6, 9.2 and 9.3 and with respect to the payment of additional
amounts, if any, payable with respect to such Securities as
specified pursuant to Section 3.1(b)(18); (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this
Article 4. Subject to compliance with this Article 4, the Company
may exercise its option under this Section notwithstanding the prior
exercise of its option under Section 4.5 with respect to such
Securities and any coupons appertaining thereto. Following a
defeasance, payment of such Securities may not be accelerated
because of an Event of Default.
Section 4.5
Covenant Defeasance. Upon the Company's exercise of the option
specified in Section 4.3 applicable to this Section with respect to
any Securities of or within a series, the Company shall be released
from its obligations under Sections 7.1, 9.4, 9.5, 9.8 and 9.9 and,
if specified pursuant to Section 3.1, its obligations under any
other covenant, with respect to such Securities and any coupons
appertaining thereto on and after the date the conditions set forth
in Section 4.6 are satisfied (hereinafter, "covenant defeasance"),
and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 7.1, 9.4,
9.5, 9.8 and 9.9 or such other covenant, but shall continue to be
deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such
Securities and any coupons appertaining thereto, 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 Section or such
other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event
of Default under Section 5.1(3) or 5.1(7) or otherwise, as the case
may be, but, except as specified above, the remainder of this
Indenture and such Securities and any coupons appertaining thereto
shall be unaffected thereby.
Section 4.6
Conditions to Defeasance or Covenant Defeasance. The following
shall be the conditions to application of Section 4.4 or Section 4.5
to any Securities of or within a series and any coupons appertaining
thereto:
(a) (i) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 6.12 who shall agree to comply with, and
shall be entitled to the benefits of, the provisions of Sections
4.3 through 4.9 inclusive and the last paragraph of Section 9.3
applicable to the Trustee, for purposes of such Sections also a
"Trustee") as trust funds in trust for the purpose of making the
payments referred to in clauses (x) and (y) of this Section
4.6(a), specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities and any
coupons appertaining thereto, with instructions to the Trustee as
to the application thereof, (A) money in an amount (in such
currency in which such Securities and any coupons appertaining
thereto are then specified as payable at Maturity), or (B) if
Securities of such series are not subject to repayment at the
option of Holders, Government Obligations which through the
payment of interest and principal in respect thereof in
accordance with their terms (and without any regard to
reinvestment thereof) will provide, not later than one day before
the due date of any payment referred to in clause (x) or (y) of
this Section 4.6(a), money in an amount or (C) a combination
thereof in an amount, sufficient, in the opinion of a nationally
recognized firm of independent certified 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, (x) the principal of, premium, if
any, and interest, if any, on such Securities and any coupons
appertaining thereto on the Stated Maturity of such principal or
installment of principal or interest and (y) any mandatory
sinking fund payments applicable to such Securities on the day on
which such payments are due and payable in accordance with the
terms of this Indenture and such Securities and any coupons
appertaining thereto. Before such a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date or dates in accordance with Article
10 which shall be given effect in applying the foregoing, in
which case, notwithstanding anything in Section 4.4 or Section
4.5 to the contrary, the provisions of such Article 10 shall
survive to the extent they apply to the redemption to be made on
such Redemption Date; and (ii) ninety-one or more days shall have
elapsed from the date of the deposit referred to in clause (i).
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default
under, this Indenture or result in a breach or violation of, or
constitute a default under, any other material agreement or
instrument to which the Company is a party or by which it is bound.
(c) In the case of an election under Section 4.4, the Company
shall have delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel to the effect that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities and any coupons
appertaining thereto will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred.
(d) In the case of an election under Section 4.5, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities and any coupons appertaining
thereto will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred.
(e) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit referred to in
subparagraph (a) does not constitute an investment company under the
Investment Company Act of 1940.
(f) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 4.4 or the covenant defeasance
under Section 4.5 (as the case may be) have been complied with.
(g) Such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or
limitations which may be imposed on the Company in connection therewith as
contemplated by Section 3.1.
If each of the conditions set forth above shall have been satisfied with
respect to any Securities of or within a series, but the ninety-one day
period referenced in subparagraph (a)(ii) shall not have elapsed, such
condition shall be deemed to be satisfied if the Company shall have delivered
to the Trustee an opinion of qualified nationally recognized bankruptcy
counsel acceptable to the Trustee to the effect that the use by the Trustee
of such monies in accordance with this Indenture would not constitute an
avoidable preference or be subject to the provisions of Section 544 and 547,
would not be recoverable under Section 550 and would not be subject to the
provisions of Section 362(a), in each case of Title 11, U.S. Code or similar
federal or state laws for the relief of debtors, if a Default relating to
Section 5.1(5) or (6) were to occur.
Section 4.7 Deposited Money and Government Obligations to Be Held
in Trust. Subject to the provisions of the last
paragraph of Section 9.3, all money and Government
Obligations (or other property as may be provided
pursuant to Section 3.1) (including the proceeds
thereof) deposited with the Trustee pursuant to Section
4.6 in respect of any Securities of any series and any
coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the
provisions of such Securities and any coupons
appertaining thereto 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 Holders of such
Securities and any coupons appertaining thereto of all
sums due and to become due thereon in respect of
principal, premium, if any, and interest, if any, but
such money need not be segregated from other funds
except to the extent required by law.
Section 4.8. Repayment to Company. The Trustee (and any Paying
Agent) shall promptly pay to the Company upon Company
Request any excess money or securities held by them at
any time.
Section 4.9 Indemnity for Government Obligations. The Company
shall pay, and shall indemnify the Trustee against, any
tax, fee or other charge imposed on or assessed against
Government Obligations deposited pursuant to this
Article or the principal and interest received on such
Government Obligations.
ARTICLE 5.
DEFAULTS AND REMEDIES
Section 5.1 Events of Default. An "Event of Default" occurs with
respect to the Securities of any series if:
(1) the Company defaults in the payment of interest on any
Security of that series or any coupon appertaining thereto
or any additional amount payable with respect to any
Security of that series as specified pursuant to Section
3.1(b)(18) when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of or
any premium on any Security of that series when the same
becomes due and payable at its Maturity, or in the making of
a mandatory sinking fund payment when and as due by the
terms of the Securities of that series;
(3) the Company fails to comply in any material respect with
any of its agreements or covenants in, or any of the
provisions of, this Indenture or any supplemental indenture
or board resolution referred to therein with respect to any
Security of that series (other than an agreement, covenant
or provision for which non-compliance is elsewhere in this
Section specifically dealt with), and such non-compliance
continues for a period of 90 days after there has been
given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders
of at least 33 1/3% in principal amount of the Outstanding
Securities of the 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;
(4) an event of default as defined in any mortgage, indenture
or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness for
borrowed money of the Company (including this Indenture),
whether such indebtedness now exists or shall hereafter be
created, in a principal amount then outstanding of
$20,000,000 or more, shall happen, which default shall
constitute a failure to pay any portion of the principal of,
premium, if any, or interest on such indebtedness when due
and payable after the expiration of any applicable grace
period or shall result in such indebtedness becoming or
being declared due and payable prior to the date on which it
would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled and such
indebtedness shall not be paid in full within a period of 30
days; provided, however, that there shall have been given,
by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of
at least 33 1/3% in aggregate principal amount of the
Outstanding Securities of that series a written notice
specifying such event of default and requiring the Company
to cause such acceleration to be rescinded or annulled or to
pay in full such indebtedness and stating that such notice
is a "Notice of Default" hereunder (it being understood,
however, that the Trustee shall not be deemed to have
knowledge of such default under such agreement or instrument
unless either (A) a Responsible Officer of the Trustee shall
have actual knowledge of such default or (B) a Responsible
Officer of the Trustee shall have received written notice
thereof from the Company, from any Holder, from the holder
of any such indebtedness or from the trustee under any such
agreement or other instrument); provided, further, that if,
prior to any declaration of acceleration by the Holders of
Securities or the Trustee under Section 5.2 hereof, such
default under such agreement or instrument is remedied or
cured by the Company or waived by the holders of such
indebtedness and any acceleration is rescinded or annulled,
then the Event of Default hereunder by reason thereof shall
be deemed likewise to have been thereupon remedied, cured or
waived without further action upon the part of either the
Trustee or any of such Holders;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) accepts
in writing any petition filed against it, or otherwise
consents to the entry of an order for relief against it, in
an involuntary case, (C) consents to the appointment of a
Custodian of, or the taking of possession by, it or for all
or a substantial part of its property; (D) makes a general
assignment for the benefit of its creditors; or (E) admits
in writing of its inability to pay its debts generally as
they become due.
(6) an involuntary case within the meaning of any Bankruptcy
Law is commenced against the Company in a court of competent
jurisdiction and continues undismissed for 60 days, or such
court enters an order or decree under any Bankruptcy Law
that (A) adjudges the Company a bankrupt or insolvent, or
approves a petition filed by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment
or composition of the Company, (B) is for relief against the
Company in an involuntary case, (C) appoints a Custodian of
the Company or for a substantial part of its property, or
(D) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days; or
(7) any other Event of Default provided as contemplated by
Section 3.1 with respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors, including any other law
relating to bankruptcy, insolvency, reorganization, dissolution, arrangement,
winding-up or readjustment of debts. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 5.2 Acceleration; Rescission and Annulment. If an Event
of Default with respect to the Securities of any series
at the time Outstanding occurs and is continuing, the
Trustee or the Holders of at least 33 1/3% in aggregate
principal amount of all of the Outstanding Securities
of that series, by written notice to the Company (and,
if given by the Holders, to the Trustee), may declare
the principal (or, if the Securities of that series are
Original Issue Discount Securities or Indexed
Securities, such portion of the principal amount as may
be specified in the terms of that series) of and
accrued interest, if any, on all the Securities of that
series to be due and payable and upon any such
declaration such principal (or, in the case of Original
Issue Discount Securities or Indexed Securities, such
specified amount) and interest, if any, shall be
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal
amount of the Outstanding Securities of that series, by written notice to the
Trustee, may rescind and annul such declaration and its consequences if all
existing Defaults and Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that
series which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.7. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee. The Company covenants that if:
(1) default is made in the payment of any interest on any
Security or coupon, if any, when such interest becomes due
and payable and such default continues for a period of 30
days; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities or coupons, if any, the whole amount then due
and payable on such Securities for principal, premium, if any, and interest
and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal, premium, if any, and on any
overdue interest, at the rate or rates prescribed therefor in such Securities
or coupons, if any, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to secure any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the
claims of the Trustee and the Holders of Securities
allowed in any judicial proceedings relating to the
Company, its creditors or its property.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this
Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any
of the Securities or the production thereof in any
proceeding relating thereto.
Section 5.6 Delay or Omission Not Waiver. No delay or omission
by the Trustee or any Holder of any Securities to
exercise any right or remedy accruing upon an Event of
Default shall impair any such right or remedy or
constitute a waiver of or acquiescence in any such
Event of Default.
Section 5.7 Waiver of Past Defaults. The Holders of a majority
in aggregate principal amount of outstanding Securities
of any series by written notice to the Trustee may
waive on behalf of the Holders of all Securities of
such series a past Default or Event of Default with
respect to that series and its consequences except (i)
a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on any
Security of such series or any coupon appertaining
thereto or (ii) in respect of a covenant or provision
hereof which pursuant to Section 8.2 cannot be amended
or modified without the consent of the Holder of each
Outstanding Security of such series adversely affected.
Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this
Indenture.
Section 5.8 Control by Majority. The Holders of a majority in
aggregate principal amount of the Outstanding
Securities of each series affected (with each such
series voting as a class) 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 it with
respect to Securities of that series; provided,
however, that (i) the Trustee may refuse to follow any
direction that conflicts with law or this Indenture,
(ii) the Trustee may refuse to follow any direction
that is unduly prejudicial to the rights of the Holders
of Securities of such series not consenting, or that
would in the good faith judgment of the Trustee have a
substantial likelihood of involving the Trustee in
personal liability and (iii) the Trustee may take any
other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 5.9 Limitation on Suits by Holders. No Holder of any
Security of any series or any coupons appertaining
thereto 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) the Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series have made a
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
indemnity satisfactory to the Trustee against any loss,
liability or expense to be, or which may be, incurred by the
Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such notice,
request and the offer of indemnity has failed to institute
any such proceedings; and
(5) during such 60 day period, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of
that series have not given to the Trustee a direction
inconsistent with such written request.
No one or more 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 5.10 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, but subject to
Section 9.2, the right of any Holder of a Security or
coupon to receive payment of principal of, premium, if
any, and, subject to Sections 3.5 and 3.7, interest on
the Security, on or after the respective due dates
expressed in the Security (or, in case of redemption,
on the Redemption Dates), and the right of any Holder
of a coupon to receive payment of interest due as
provided in such coupon, or to bring suit for the
enforcement of any such payment on or after such
respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 5.11 Application of Money Collected. If the Trustee
collects any money pursuant to this Article, it shall
pay out the money 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,
premium, if any, or interest, upon presentation of the
Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully
paid:
First: to the Trustee for amounts due under Section 6.9;
Second: to Holders of Securities and coupons in respect of which or
for the benefit of which such money has been collected for amounts due and
unpaid on such Securities for principal of, premium, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any,
and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 5.11. At least 15 days before such record
date, the Trustee shall mail to each holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
Section 5.12 Restoration of Rights and Remedies. If the Trustee
or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.13 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the
last paragraph of Section 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or 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.
ARTICLE 6.
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default,
the Trustee's duties and responsibilities under this
Indenture shall be governed by Section 315(a) of the
Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture, and shall 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.
Section 6.2 Rights of Trustee. Subject to the provisions of the
Trust Indenture Act:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper party
or parties. The Trustee need not investigate any fact or matter
stated in the document.
(b) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order
(other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and
delivery pursuant to Section 3.3, which shall be sufficiently
evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution.
(c) Before the Trustee acts or refrains from acting, it may consult
with counsel or require an Officer's Certificate. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on a Board Resolution, the written advice
of counsel acceptable to the Company and the Trustee, a
certificate of an Officer delivered pursuant to Section 1.2, an
Officer's Certificate or an Opinion of Counsel.
(d) The Trustee may act through agents or attorneys and shall not
be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(e) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers.
(f) The Trustee shall not be required 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
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.
Section 6.3 Trustee May Hold Securities. The Trustee, any Paying
Agent, any Registrar or any other agent of the Company,
in its individual or any other capacity, may become the
owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Company, an Affiliate or
Subsidiary with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other
agent.
Section 6.4 Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds
except to the extent required by law. The Trustee
shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed
upon in writing with the Company.
Section 6.5 Trustee's Disclaimer. The recitals contained herein
and in the Securities, except the Trustee's certificate
of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no
representation as to the validity or adequacy of this
Indenture or the Securities or any coupon. The Trustee
shall not be accountable for the Company's use of the
proceeds from the Securities or for monies paid over to
the Company pursuant to the Indenture.
Section 6.6 Notice of Defaults. If a Default known to the
Trustee occurs and is continuing with respect to the
Securities of any series, the Trustee shall, within 90
days after it occurs, transmit by mail, in the manner
and to the extent provided in Section 313(c) of the
Trust Indenture Act, notice of all such Defaults unless
such Default shall have been cured or waived; provided,
however, that in the case of a Default in payment of
the principal of or interest on the Securities of any
series, the Trustee may withhold the notice if and so
long as the board of directors, the executive committee
or a committee of its Responsible Officers in good
faith determines that withholding such notice is in the
interests of Holders of Securities of that series; and
provided, further, that in the case of any Default of
the character specified in Section 5.1(3) with respect
to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the
occurrence thereof.
Section 6.7 Reports by Trustee to Holders. Within 60 days after
each May 15 of each year commencing with the first May
15 after the first issuance of Securities pursuant to
this Indenture, the Trustee shall transmit by mail to
all Holders of Securities as provided in Section 313(c)
of the Trust Indenture Act a brief report dated as of
such May 15 if required by and in compliance with
Section 313(a) of the Trust Indenture Act.
Section 6.8 Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most
recent list available to it of the names and addresses
of Holders of Securities of each series. If the
Trustee is not the Registrar, the Company shall furnish
to the Trustee semiannually on or before the last day
of June and December in each year, and at such other
times as the Trustee may request in writing, a list, in
such form and as of such date as the Trustee may
reasonably require, containing all the information in
the possession or control of the Registrar, the Company
or any of its Paying Agents other than the Trustee as
to the names and addresses of Holders of Securities of
each such series. If there are Bearer Securities of
any series outstanding, even if the Trustee is the
Registrar, the Company shall furnish to the Trustee
such a list containing such information with respect to
Holders of such Bearer Securities only.
Section 6.9 Compensation and Indemnity. (a) The Company shall pay
to the Trustee such compensation as the Company and the
Trustee shall from time to time agree in writing for
all services rendered by it hereunder. The Trustee's
compensation shall not be limited by any law on
compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for
all reasonable out-of-pocket expenses incurred by it in
connection with the performance of its duties under
this Indenture, except any such expense as may be
attributable to its gross negligence or bad faith.
Such expenses shall include the reasonable compensation
and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability, damage, claim or
reasonable expense including taxes (other than taxes based upon
or determined or measured by the income of the Trustee) incurred
by it arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder, including the
reasonable costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim for which it may seek
indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not pay for any
settlement made without its consent.
(c) The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through gross
negligence or bad faith.
(d) To secure the payment obligations of the Company pursuant to
this Section, the Trustee shall have a lien prior to the
Securities of any series on all money or property held or
collected by the Trustee, except that held in trust to pay
principal, premium, if any, and interest on particular
Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(5) or Section 5.1(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 6.10 Replacement of Trustee. (a) The resignation or removal
of the Trustee and the appointment of a successor
Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in
Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of any 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
competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with
respect to that series by so notifying the Trustee and the
Company and may appoint a successor Trustee for such series with
the Company's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the
Company or by any Holder who has been a bona fide Holder of
a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a
Security for at least six months; or
(3) the Trustee becomes incapable of acting, is adjudged a
bankrupt or an insolvent, or a receiver or public officer
takes charge of the Trustee or its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution
may remove the Trustee with respect to all Securities, or (ii) subject to
Section 315(e) of the Trust Indenture Act, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities
and the appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, with respect to Securities
of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee with
respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect
to the Securities of any particular series) and shall comply with
the applicable requirements of Section 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 Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner
required by Section 6.11, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may,
on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
Section 6.11 Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee
shall execute, acknowledge and deliver to the Company
and to the retiring Trustee an instrument accepting
such appointment. Thereupon, the resignation or
removal of the retiring Trustee shall become effective,
and the successor Trustee, without further act, deed or
conveyance, shall become vested with all the rights,
powers 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 Securities of one or more (but not all)
series, the Company, the retiring Trustee and such successor
Trustee shall execute and deliver an indenture supplemental
hereto wherein such successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest
in, such successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor
Trustee relates, (ii) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of
such successor Trustee relates.
(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 paragraph (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 the Trust Indenture Act.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect
to the Securities of any series in the manner provided for
notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate
Trust office.
Section 6.12 Eligibility Disqualification. There shall at all
times be a Trustee hereunder which shall be eligible to
act as Trustee under Section 310(a)(1) of the Trust
Indenture Act and shall have, at all times, a combined
capital and surplus of at least $75,000,000. If such
corporation publishes reports of condition at least
annually, pursuant to law or the requirements of
federal, state, territorial or District of Columbia
supervising or examining authority, then for the
purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published. If at any
time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it
shall resign immediately in the manner and with the
effect hereinafter specified in this Article.
Section 6.13 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may
be merged or converted or with which it may be
consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding
to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such
authentication and deliver the Securities so
authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
Section 6.14 Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon
original issue, exchange, registration of transfer or
partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.
Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer
of the Trustee, a copy of which instrument shall be
promptly furnished to the Company. Wherever reference
is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the
Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company
and, except as may otherwise be provided pursuant to
Section 3.1, shall at all times be a bank or trust
company or corporation organized and doing business and
in good standing under the laws of the United States of
America or of any state or the District of Columbia,
authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not
less than $1,500,000 and subject to supervision or
examination by federal or state authorities. If such
Authenticating Agent publishes reports of condition at
least annually, pursuant to law or the requirements of
the aforesaid 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. In case 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
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination 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 for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the
series with respect to which such Authenticating Agent will serve in the
manner set forth in Section 1.6. 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 herein. 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 including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series described in the within-mentioned
Indenture.
First Union National Bank of North Carolina,
as Trustee
By______________________________
as Authenticating Agent
By______________________________
Authorized Signatory
ARTICLE 7.
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
Section 7.1 Consolidation, Merger or Sale of Assets Permitted.
The Company shall not consolidate or merge with or
into, or transfer or lease all or substantially all of
its assets to, any Person unless:
(1) the Person formed by or surviving any such consolidation
or merger (if other than the Company), or which acquires the
Company's assets, is organized and existing under the laws
of the United States, any state thereof or the District of
Columbia;
(2) the Person formed by or surviving any such consolidation
or merger (if other than the Company), or which acquires the
Company's assets, assumes by supplemental indenture all the
obligations of the Company under the Securities and this
Indenture; and
(3) immediately after giving effect to the transaction no
Default or Event of Default shall have occurred and be
continuing.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officer's Certificate to the foregoing effect and an Opinion
of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture and that all conditions precedent to the
consummation of the transaction under this Indenture have been met.
ARTICLE 8.
SUPPLEMENTAL INDENTURES
Section 8.1 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
indentures supplemental hereto, in form reasonably
satisfactory to the Trustee, for any of the following
purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series
of Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default with respect to
all or any series of Securities; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to facilitate
the issuance of Bearer Securities (including, without
limitation, to provide that Bearer Securities may be
registrable as to principal only) or to facilitate the
issuance of Securities in global form; or
(5) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination
shall become effective only when there is no Security
Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any
of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the
requirements of Section 6.11; or
(9) if allowed without penalty under applicable laws and
regulations, to permit payment in the United States
(including any of the states and the District of Columbia),
its territories, its possessions and other areas subject to
its jurisdiction of principal, premium, if any, or interest,
if any, on Bearer Securities or coupons, if any; or
(10) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any
other provisions with respect to matters or questions
arising under this Indenture, provided such action shall not
adversely affect the interests of any Holder of Securities
of any series or the Trustee; or
(11) to cure any ambiguity or correct any mistake, provided
such action shall not adversely affect the interests of any
Holder of Securities of any series or the Trustee.
Section 8.2 Supplemental Indentures With Consent of Holders.
With the written consent of the Holders of a majority
of the aggregate principal amount of the Outstanding
Securities adversely affected by such supplemental
indenture (with the Securities of all series voting as
one class), the Company and the Trustee may enter into
an indenture or indentures supplemental hereto to add
any provisions to or to change or eliminate any
provisions of this Indenture or of any other indenture
supplemental hereto or to modify the rights of the
Holders of such Securities; provided, however, that
without the consent of the Holder of each Outstanding
Security affected thereby, an amendment under this
Section may not:
(1) change the Stated Maturity of the principal of or premium,
if any, or any installment of principal of or premium, if
any, or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change the
manner in which the amount of any principal thereof or
premium, if any, or interest thereon is determined, or
reduce the amount of the principal of any Original Issue
Discount Security or Indexed Security that would be due and
payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2, or change the currency in
which any Securities or any premium or the interest thereon
is payable, change the index, securities or commodities with
reference to which or the formula by which the amount of
principal or any premium or the interest thereon is
determined, 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);
(2) reduce the percentage in principal amount of the
Outstanding Securities affected thereby, the consent of
whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for
any waiver (or compliance with certain provisions of this
Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture;
(3) change any obligation of the Company to maintain an office
or agency in the places and for the purposes specified in
Section 9.2; or
(4) make any change in Section 5.7 or this 8.2 except to
increase any percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived
without the consent of the Holders of each Outstanding
Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities or such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
It is not necessary under this Section 8.2 for the Holders to consent
to the particular form of any proposed supplemental indenture, but it is
sufficient if they consent to the substance thereof.
Section 8.3 Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities of one or more
series shall be set forth in a supplemental indenture
that complies with the Trust Indenture Act as then in
effect.
Section 8.4 Execution of Supplemental Indentures. In executing,
or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the
modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 8.5 Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter
authenticated and delivered hereunder and of any coupon
appertaining thereto shall be bound thereby.
Section 8.6 Reference in Securities to Supplemental Indentures.
Securities, including any coupons, of any series
authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the
Company shall so determine, new Securities including
any coupons of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities
including any coupons of such series.
ARTICLE 9.
COVENANTS
Section 9.1 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly
and punctually pay the principal of, premium, if any,
and interest on the Securities of that series in
accordance with the terms of the Securities of such
series, any coupons appertaining thereto and this
Indenture. An installment of principal, premium, if
any, or interest shall be considered paid on the date
it is due if the Trustee or Paying Agent holds on that
date money designated for and sufficient to pay the
installment.
Section 9.2 Maintenance of Office or Agency. If Securities of a
series are issued as Registered Securities, the Company
will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of
that series may be presented or surrendered for
payment, where Securities of that series may be
surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in
respect of the Securities of that series and this
Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company will
maintain, (i) subject to any laws or regulations
applicable thereto, an office or agency in a Place of
Payment for that series which is located outside the
United States where Securities of that series and
related coupons may be presented and surrendered for
payment; provided, however, that if the Securities of
that series are listed on any stock exchange located
outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent
for the Securities of that series in any other required
city located outside the United States, as the case may
be, so long as the Securities of that series are listed
on such exchange, and (ii) subject to any laws or
regulations applicable thereto, an office or agency in
a Place of Payment for that series which is located
outside the United States, where Securities of that
series may be surrendered for exchange and where
notices and demands to or upon the Company in respect
of the Securities of that series and this Indenture may
be served. The Company will give prompt written notice
to the Trustee of the location, and any change in the
location, of any 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.
Unless otherwise specified as contemplated by Section 3.1, no payment
of principal, premium or interest on Bearer Securities shall be made at any
office or agency of the Company in the United States, by check mailed to any
address in the United States, by transfer to an account located in the United
States or upon presentation or surrender in the United States of a Bearer
Security or coupon for payment, even if the payment would be credited to an
account located outside the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium or interest on any such Bearer Security shall be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment in Dollars of the full amount
of such principal, premium or interest, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company
in accordance with this Indenture is illegal or effectively precluded by
exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities (including any coupons, if any) of
one or more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in each Place
of Payment for Securities (including any coupons, if any) of any series for
such purposes. The Company will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of any
such other office or agency.
Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.
Section 9.3 Money for Securities Payments to Be Held in Trust;
Unclaimed Money. If the Company shall at any time act
as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the
principal of, premium, if any, or interest on any of
the Securities of that series, segregate and hold in
trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal, premium, if any,
or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee in
writing of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities of that
series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the
making of any payment of principal, premium, if any, or
interest on the Securities; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
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 any principal, premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
and coupon, if any, 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 and at the direction 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 City of New York, or cause to be mailed to
such Holder, 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 9.4 Corporate Existence. Subject to Article 7, the
Company will at all times do or cause to be done all
things necessary to preserve and keep in full force and
effect its corporate existence and its rights and
franchises; provided that nothing in this Section 9.4
shall prevent the abandonment or termination of any
right or franchise of the Company if, in the opinion of
the Company (evidenced by a Board Resolution), such
abandonment or termination is in the best interests of
the Company and not prejudicial in any material respect
to the Holders of the Securities.
Section 9.5 Insurance. The Company covenants and agrees that it
will maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and
covering such risks as are consistent with sound
business practice for corporations engaged in the same
or similar business similarly situated against loss by
fire and the extended coverage perils. In lieu of the
foregoing or in combination therewith, in case of
itself or of any one or more of its Subsidiaries, the
Company will maintain or cause to be maintained a
system or systems of self-insurance which will accord
with the financially sound and approved practices of
companies owning or operating properties of a similar
character and maintaining such systems. The Trustee
shall not be required to see that such insurance is
effected or maintained.
Section 9.6 Reports by the Company. The Company covenants:
(a) to file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the
annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company
is not required to file information, documents or reports
pursuant to either of such Sections, then to file with the
Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a
security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture, as may be required from
time to time by such rules and regulations; and
(c) to transmit to all Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act,
such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of
this Section 9.6, as may be required by the rules and regulations
prescribed from time to time by the Commission.
Section 9.7 Annual Review Certificate; Notice of Defaults or
Events of Default. (a) The Company covenants and agrees
to deliver to the Trustee, within 120 days after the
end of each Fiscal Year of the Company, a certificate
from the principal executive officer, principal
financial officer or principal accounting officer as to
his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For
purposes of this Section 9.7, such compliance shall be
determined without regard to any period of grace or
requirement of notice provided under this Indenture.
(b) The Company covenants and agrees to deliver to the Trustee,
within a reasonable time after the Company becomes aware of the
occurrence of a Default or an Event of Default of the character
specified in (i) Section 5.1(4) hereof, or (ii) 5.1(3) hereof,
but only as it relates to a Default or Event of Default in the
observance of Sections 9.08 or 9.09 hereof) written notice of the
occurrence of such Default or Event of Default.
Section 9.8 Limitation on Liens. (a) If the Company or any of its
Subsidiaries shall incur, assume or guarantee any
indebtedness for borrowed money secured by a Lien (any
such indebtedness being herein referred to as "Secured
Debt") on any Property or assets of the Company or any
of its Subsidiaries, the Company shall secure, or cause
such Subsidiary to secure, the Securities equally and
ratably with (or, at the option of the Company, prior
to) such Secured Debt, unless after giving effect
thereto the sum, without duplication, of (i) the
aggregate principal amount of all such Secured Debt,
and (ii) all Attributable Debt in respect of Sale and
Leaseback Transactions (other than Sale and Leaseback
Transactions as to which the Company would be entitled
to incur Secured Debt, in an amount at least equal to
the Attributable Debt in respect of such Sale and
Leaseback Transaction, on the Property to be leased,
without equally and ratably securing the Securities,
pursuant to the exclusions from the computation of
Secured Debt contained below in subclauses (i)-(vii) of
Section 9.8(b) and other than Sale and Leaseback
Transactions the proceeds of which have been applied in
accordance with clause (b) of Section 9.9), would not
exceed 15% of the Consolidated Net Tangible Assets of
the Company.
(b) The restriction of Section 9.8(a) will not apply to, and there
shall be excluded in computing the aggregate amount of Secured
Debt for the purpose of such restriction, indebtedness secured
by:
(i) (A) Liens existing as of the date of this
Indenture or (B) Liens relating to a contract that
was entered into by the Company or any Subsidiary
prior to the date of this Indenture, provided that
in no case shall the liens excluded pursuant to
this clause (i) include the lien of the Indenture
dated as of January 1, 1952 between the Company
and the Marine Midland Trust Company of New York,
as trustee, as supplemented and amended;
(ii) Liens on any Property existing at the time of
acquisition thereof (whether such acquisition is
direct or by acquisition of stock, assets or
otherwise) by the Company or any of its
Subsidiaries, provided that no such Lien extends
or shall extend to or cover any Property other
than the Property being acquired and fixed
improvements then or thereafter erected thereon;
(iii) Liens upon or with respect to any Property
(including any contract rights relating thereto)
acquired, constructed, refurbished or improved by
the Company or any of its Subsidiaries (including,
but not limited to, Liens to secure all or any
part of the cost of construction, alteration or
repair of any building, equipment, facility or
other improvement on, all or any part of such
property, including any pipeline financing) after
the date of this Indenture which are created,
incurred or assumed contemporaneously with, or
within 360 days after, the latest to occur of the
acquisition (whether by acquisition of stock,
assets or otherwise), completion of construction,
refurbishment or improvement, or the commencement
of commercial operation, of such Property (or, in
the case of Liens on contract rights, the
completion of construction or the commencement of
commercial operation of the facility to which such
contract rights relate, regardless of the date
when such contract was entered into) to secure or
provide for the payment of any part of the
purchase price of such Property or the cost of
such construction, refurbishment or improvement;
provided, however, that in the case of any such
acquisition, construction, refurbishment or
improvement, the Lien shall relate only to
indebtedness reasonably incurred to finance such
acquisition, construction, refurbishment or
improvement, and shall not extend to or cover any
other Property other than fixed improvements then
or thereafter existing thereon;
(iv) Liens securing indebtedness owing by any
Subsidiary to the Company or to any other
Subsidiary;
(v) Liens in connection with the sale or other
transfer in the ordinary course of business of (A)
crude oil, natural gas, other petroleum
hydrocarbons or other minerals in place for a
period of time until, or in an amount such that,
the purchaser or other transferee will realize
therefrom a specified amount of money (however
determined) or a specified amount of such
minerals, or (B) any other interest in property of
the character commonly referred to as a
"production payment";
(vi) Liens on current assets to secure any
indebtedness maturing (including any extensions or
renewals thereof) not more than one year from the
date of the creation of such Lien; and
(vii) Liens for the sole purpose of extending,
renewing or replacing in whole or in part the
indebtedness secured thereby referred to in the
foregoing subclauses (i) to (vi), inclusive, or in
this clause (vii); provided, however, that the
Liens excluded pursuant to this clause (vii) shall
be excluded only in an amount not to exceed the
principal amount of indebtedness so secured at the
time of such extension, renewal or replacement,
and that such extension, renewal or replacement
shall be limited to all or part of the Property
subject to the lien so extended, renewed or
replaced (plus refurbishment of or improvements on
or to such Property).
Section 9.9 Limitation on Sale and Leaseback Transactions.
Neither the Company nor any of its Subsidiaries may
enter into, assume, guarantee or otherwise become
liable with respect to any Sale and Leaseback
Transaction involving any Property, if the latest to
occur of the acquisition, the completion of
construction or the commencement of commercial
operation of such Property shall have occurred more
than 180 days prior thereto, unless (a) the Company or
such Subsidiary could create Secured Debt secured by
such Property under the restrictions described in
Section 9.8 in an amount equal to the Attributable Debt
with respect to the Sale and Leaseback Transaction
without equally and ratably securing the Securities or
(b) the Company or such Subsidiary, within 180 days
from the effective date of such Sale and Leaseback
Transaction, applies an amount not less than the
greater of (i) the net proceeds of the sale of such
Property leased pursuant to such arrangement or (ii)
the fair value, in the opinion of the Board of
Directors, of such Property (as of the time of entering
into such Sale and Leaseback Transaction) to (x) the
retirement of its Funded Debt, including, for this
purpose, any currently maturing portion of such Funded
Debt, or (y) the purchase of other property having a
fair value (as of the time of such purchase), in the
opinion of the Board of Directors, at least equal to
the fair value, in the opinion of the Board of
Directors, of the Property leased in such Sale and
Leaseback Transaction (as of the time of entering into
such Sale and Leaseback Transaction). This restriction
will not apply to any Sale and Leaseback Transaction
(1) between the Company and any Subsidiary or between
any Subsidiaries, (2) entered into prior to the date of
this Indenture or (3) for which, at the time the
transaction is entered into, the term of the related
lease to the Company or such Subsidiary of the Property
sold pursuant to such transaction is three years or
less.
Section 9.10 Books of Record and Account; Compliance with Law.
(a) The Company will keep, and will cause each Subsidiary
to keep, proper books of record and account, either on
a consolidated or individual basis. The Company shall
cause its books of record and account to be examined by
one or more firms of independent public accountants not
less frequently than annually. The Company shall
prepare its financial statements in accordance with
GAAP.
(b) The Company shall, and shall cause each of its Subsidiaries
to, comply with all statutes, laws, ordinances, or government
rules and regulations to which it is subject, non-compliance with
which would materially adversely affect the business, prospects,
earnings, properties, assets or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole.
Section 9.11 Taxes. The Company shall, and shall cause each of
its Subsidiaries to, pay or discharge or cause to be
paid or discharged prior to delinquency all taxes,
assessments and governmental levies the non-payment of
which could materially adversely affect the business,
prospects, earnings, properties, assets or condition,
financial or otherwise, of the Company and its
Subsidiaries taken as a whole except those taxes,
assessments and governmental levies whose amount,
applicability or validity is being contested in good
faith and by appropriate proceedings.
ARTICLE 10.
REDEMPTION
Section 10.1 Applicability of Article. Securities (including
coupons, if any) of any series which are redeemable
before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities
of any series) in accordance with this Article.
Section 10.2 Election to Redeem; Notice to Trustee. The election
of the Company to redeem any Securities, including
coupons, if any, shall be evidenced by or pursuant to a
Board Resolution. In the case of any redemption at the
election of the Company of less than all the Securities
or coupons, if any, of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by
the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be
redeemed. In the case of any redemption of Securities
(i) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or
elsewhere in this Indenture or (ii) pursuant to an
election of the Company which is subject to a condition
specified in the terms of such Securities, the Company
shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction or
condition.
Section 10.3 Selection of Securities to Be Redeemed. Unless
otherwise specified as contemplated by Section 3.1, if
less than all the Securities (including coupons, if
any) of a series with the same terms are to be
redeemed, the Trustee, not more than 45 days prior to
the redemption date, shall select the Securities of the
series to be redeemed pro rata or by lot or by any
other method utilized by the Trustee. The Trustee
shall make the selection from Securities of the series
that are Outstanding and that have not previously been
called for redemption and may provide for the selection
for redemption of portions (equal to the minimum
authorized denomination for Securities, including
coupons, if any, of that series or any integral
multiple thereof) of the principal amount of
Securities, including coupons, if any, of such series
of a denomination larger than the minimum authorized
denomination for Securities of that series. The
Trustee shall promptly notify the Company in writing of
the Securities selected by the Trustee for redemption
and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be
redeemed.
For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities (including coupons,
if any) shall relate, in the case of any Securities (including coupons, if
any) redeemed or to be redeemed only in part, to the portion of the principal
amount of such Securities (including coupons, if any) which has been or is to
be redeemed.
Section 10.4 Notice of Redemption. Unless otherwise specified as
contemplated by Section 3.1, notice of redemption shall
be given in the manner provided in Section 1.6 not less
than 30 days nor more than 60 days prior to the
Redemption Date to the Holders of the Securities to be
redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of a series
are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that
on and after the Redemption Date, upon surrender of such
Security, the holder will receive, without a charge, a new
Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(5) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons
appertaining thereto, if any, maturing after the Redemption
Date, are to be surrendered for payment for the Redemption
Price;
(6) that Securities of the series called for redemption and
all unmatured coupons, if any, appertaining thereto must be
surrendered to the Paying Agent to collect the Redemption
Price;
(7) that, on the Redemption Date, the Redemption Price will
become due and payable upon each such Security, or the
portion thereof, to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said
date;
(8) that the redemption is for a sinking fund, if such is
the case;
(9) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption
must be accompanied by all coupons maturing subsequent to
the Redemption Date or the amount of any such missing coupon
or coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company,
the Trustee and any Paying Agent is furnished; and
(10) the CUSIP number, if any, of the Securities.
Notice of redemption of Securities to be redeemed 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.
Section 10.5 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, which it may not do in
the case of a sinking fund payment under Article 11,
segregate and hold in trust as provided in Section 9.3)
an amount of money in the currency in which the
Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the
Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (unless
the Redemption Date shall be an Interest Payment Date)
interest accrued to the Redemption Date on, all
Securities or portions thereof which are to be redeemed
on that date.
Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
Section 10.6 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless
the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities
shall cease to bear interest and the coupons for any
such interest appertaining to any Bearer Security so to
be redeemed, except to the extent provided below, shall
be void. Except as provided in the next succeeding
paragraph, upon surrender of any such Security,
including coupons, if any, for redemption in accordance
with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however,
that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption
Date shall be payable only at an office or agency
located outside the United States and its possessions
(except as otherwise provided in Section 9.2) and,
unless otherwise specified as contemplated by Section
3.1, only upon presentation and surrender of coupons
for such interest; and provided, further, that, unless
otherwise specified as contemplated by Section 3.1,
installments of interest on Registered Securities whose
Stated Maturity is on or prior to the Redemption Date
shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such
at the close of business on the relevant Record Dates
according to their terms and the provisions of Section
3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date,
such Bearer Security may be paid after deducting from the Redemption Price an
amount equal to the face amount of all such missing coupons, or the surrender
of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Bearer Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall
have been made from the Redemption Price, such Holder shall be entitled to
receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside of
the United States (except as otherwise provided pursuant to Section 9.2) and,
unless otherwise specified as contemplated by Section 3.1, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 10.7 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part at any Place of
Payment therefor (with, if the Company or the Trustee
so required, 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),
the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of that
Security, without service charge, a new Security or
securities of the same series, having the same form,
terms and Stated Maturity, in any authorized
denomination equal in aggregate principal amount to the
unredeemed portion of the principal amount of the
Security surrendered.
ARTICLE 11.
SINKING FUNDS
Section 11.1 Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the
retirement of Securities of a series except as
otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series 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 Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 11.2 Satisfaction of Sinking Fund Payments with
Securities. The Company (i) may deliver Outstanding
Securities of a series (other than any previously
called for redemption) together, in the case of Bearer
Securities of such series, with all unmatured coupons
appertaining thereto and (ii) may apply as a credit
Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of
such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of
such Securities, in each case in satisfaction of all or
any part of any sinking fund payment with respect to
the Securities of such series required to be made
pursuant to the terms of such Securities as provided
for by the terms of such series; provided that such
Securities have not been previously so credited. Such
Securities shall be received and credited for such
purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through
operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
Section 11.3 Redemption of Securities for Sinking Fund. Not less
than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver
to the Trustee an Officer's Certificate specifying the
amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 11.2 and
will also deliver to the Trustee any Securities to be
so delivered. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 10.3
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 10.4. Such notice having
been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated
in Sections 10.6 and 10.7. This Indenture may be
executed in any number of counterparts, each of which
shall be an original, but such counterparts shall
together constitute but one 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 NORTH
CAROLINA, INCORPORATED
By:/s/ Charles E. Zeigler, Jr.
Title: Chairman, President and Chief Executive
Officer
[Seal]
Attest:
/s/ J. Paul Douglas
Secretary
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Trustee
By: /s/ Karen Atkinson
Title:
[Seal]
Attest:
_____________________
Title:
Reconciliation and tie between Indenture, dated as of January 1, 1996 and the
Trust Indenture Act of 1939, as amended.
Trust Indenture Act
of 1939 Section
Indenture
Section
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.12
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.12
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.10; TIA
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.8
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.6; 9.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2; TIA
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1
(d)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(d)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(d)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2; 5.8
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9; 5.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.11; TIA
_____________________________
This reconciliation and tie section does not constitute part
of the Indenture.
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Trustee
INDENTURE
Dated as of January 1, 1996
Providing for Issuance of
Debt Securities in Series
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . 9
1.3. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . 9
1.4. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.5. Notices, etc., to Trustee and Company. . . . . . . . . . . . . . . . . 11
1.6. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . 12
1.7. Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . 12
1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 12
1.9. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . 13
1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.12. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2
SECURITY FORMS
2.1. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . 14
2.3. Securities in Global Form. . . . . . . . . . . . . . . . . . . . . . . 14
2.4. Form of Legend for Securities in Global Form . . . . . . . . . . . . . 15
ARTICLE 3
THE SECURITIES
3.1. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . 15
3.2. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . 18
3.4. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5. Registration, Transfer and Exchange. . . . . . . . . . . . . . . . . . 21
3.6. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . 25
3.7. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . 26
3.8. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . 27
3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . 28
3.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.12. Currency of Payment in Respect of Securities. . . . . . . . . . . . . 28
ARTICLE 4
SATISFACTION, DISCHARGE AND DEFEASANCE
4.1. Termination of Company's Obligations Under
the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . 30
4.3. Applicability of Defeasance Provisions;
Company's Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.4. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . 30
4.5. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.6. Conditions to Defeasance or Covenant Defeasance. . . . . . . . . . . . 31
4.7. Deposited Money and Government Obligations to Be Held in Trust . . . . 33
4.8. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.9. Indemnity for Government Obligations . . . . . . . . . . . . . . . . . 33
ARTICLE 5
DEFAULTS AND REMEDIES
5.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.2. Acceleration; Rescission and Annulment . . . . . . . . . . . . . . . . 35
5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . 36
5.5. Trustee May Enforce Claims Without Possession
of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.6. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . 36
5.7. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . 37
5.8. Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.9. Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . 37
5.10. Rights of Holders to Receive Payment. . . . . . . . . . . . . . . . . 38
5.11. Application of Money Collected. . . . . . . . . . . . . . . . . . . . 38
5.12. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . 38
5.13. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . 38
ARTICLE 6
THE TRUSTEE
6.1. Certain Duties and Responsibilities of the Trustee . . . . . . . . . . 39
6.2. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.3. Trustee May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 40
6.4. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.5. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.6. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.7. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . . . 40
6.8. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.9. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . 41
6.10. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . . 41
6.11. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . 43
6.12. Eligibility Disqualification. . . . . . . . . . . . . . . . . . . . . 44
6.13. Merger, Conversion, Consolidation or Succession to Business . . . . . 44
6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . 44
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
7.1. Consolidation, Merger or Sale of Assets Permitted. . . . . . . . . . . 46
ARTICLE 8
SUPPLEMENTAL INDENTURES
8.1. Supplemental Indentures Without Consent of Holders . . . . . . . . . . 46
8.2. Supplemental Indentures With Consent of Holders. . . . . . . . . . . . 48
8.3. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . 49
8.4. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . 49
8.5. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . 49
8.6. Reference in Securities to Supplemental Indentures . . . . . . . . . . 49
ARTICLE 9
COVENANTS
9.1. Payment of Principal, Premium, if any, and Interest. . . . . . . . . . 49
9.2. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . 49
9.3. Money for Securities Payments to Be Held in Trust;
Unclaimed Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.4. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.5. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.6. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . 52
9.7. Annual Review Certificate; Notice of Defaults or
Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.8. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.9. Limitation on Sale and Leaseback Transactions. . . . . . . . . . . . . 54
9.10. Books of Record and Account; Compliance with Law. . . . . . . . . . . 55
9.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 10
REDEMPTION
10.1. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . 56
10.2. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . 56
10.3. Selection of Securities to Be Redeemed. . . . . . . . . . . . . . . . 56
10.4. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . 56
10.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . 57
10.6. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . 58
10.7. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 11
SINKING FUNDS
11.1. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . 59
11.2. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . 59
11.3. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . 59
[DESCRIPTION] EXHIBIT 4-E-1
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Trustee
_____________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 1, 1996
to
INDENTURE
Dated as of January 1, 1996
_____________________
6.99% Senior Debentures Due 2026
FIRST SUPPLEMENTAL INDENTURE dated as of JANUARY 1, 1996 (this
"Supplemental Indenture") between PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED, a corporation duly organized and existing under the laws of the
State of North Carolina (the "Company"), and FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as trustee (the "Trustee") under the Indenture dated as of
JANUARY 1, 1996 between the Company and the Trustee (as such Indenture may
heretofore have been amended and supplemented, the "Indenture"). Except as
otherwise expressly provided in this Supplemental Indenture or in the form of
Debenture set forth herein or otherwise clearly required by the context
hereof or thereof, all terms used herein or in said form of Debenture that
are defined in the Indenture shall have the several meanings respectively
assigned to them thereby.
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of Securities, to be issued from
time to time in one or more series as might be determined by the Company
under the Indenture, in an unlimited aggregate principal amount that may be
authenticated and delivered thereunder as in the Indenture provided;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of Securities to be known
as its 6.99% Senior Debentures Due 2026 (the "Debentures"), the form and
substance thereof, and the terms, provisions and conditions thereof, to be
set forth as provided in the Indenture and this Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to join
with it in the execution and delivery of this Supplemental Indenture and
all requirements necessary to make this Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and
the execution and delivery hereof have been in all respects duly
authorized.
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees
with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of the Debentures
SECTION 1.01. There shall be and is hereby authorized a series of
Securities designated the "6.99% Senior Debentures Due 2026", the aggregate
principal amount of which shall be limited to $50,000,000, which amount shall
be as set forth in any written order of the Company for the authentication
and delivery of Debentures. Debentures may, upon execution of this
Supplemental Indenture or from time to time thereafter, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver such Debentures to or upon the
written order of the Company, signed by its Chairman of the Board, its
President, or any Vice President and its Treasurer or an Assistant Treasurer,
without any further action by the Company. The Debentures shall mature and
the principal thereof shall be due and payable together with all accrued and
unpaid interest thereon, on January 15, 2026.
SECTION 1.02. (a) The Debentures shall be issued as Registered
Securities in global form (a "Global Debenture") in an aggregate principal
amount equal to the principal amount of the Debentures, to be registered in
the name of The Depository Trust Company, New York, New York or any successor
registered as a clearing agency under the Exchange Act or other applicable
statute or regulation, as the Depository, or its nominee, and delivered by
the Trustee to the Depository for crediting to the accounts of its
participants pursuant to the instructions of the Company. Payments on the
Debentures issued as a Global Debenture will be made to the Depository.
(b) Pursuant to the provisions of Section 3.5 of the Indenture, the
Global Debenture may be transferred, in whole but not in part, in the manner
provided in Section 3.5 of the Indenture, only by the Depository for such
series to a nominee of the Depository, by a nominee of the Depository to the
Depository or to another nominee of the Depository, or by the Depository or
such nominee to a successor Depository selected or approved by the Company or
to a nominee of such successor Depository.
(c) If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Debentures or if at any
time the Depository for the Debentures shall no longer be a clearing agency
registered under the Exchange Act, or other applicable statute or regulation,
and a successor Depository for the Debentures is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of
such condition, as the case may be, this Section 1.02 shall no longer be
applicable to the Debentures and the Company will execute and, subject to
Section 3.5 of the Indenture, the Trustee will, upon receipt of a Company
Order for the authentication and delivery of certificated Securities of like
tenor, authenticate and deliver Debentures of like tenor in certificated
form, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture in exchange for such Global
Debenture. In addition, the Company may at any time determine in its sole
discretion that the Debentures shall no longer be represented by a Global
Debenture, and that the provisions of this Section 1.02 shall no longer apply
to the Debentures. In such event, the Company will execute and, subject to
Section 3.5 of the Indenture, the Trustee, upon receipt of a Company Order
evidencing such determination by the Company, will authenticate and deliver
certificated Debentures in authorized denominations, and in aggregate
principal amount equal to the principal amount of the Global Debenture in
exchange for such Global Debenture. Upon exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be canceled by the
Trustee. Such Debentures in definitive registered form issued in exchange
for the Global Debenture pursuant to this Section 1.02(c) shall be registered
in such names and authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Debentures to the
Depository for delivery to the persons in whose names such Debentures are so
registered.
SECTION 1.03. If, pursuant to the provisions of Section 1.02(c)
hereof, the Debentures are issued in certificated form, principal of and
premium, if any, and interest thereon will be payable, the transfer thereof
will be registrable, and Debentures will be exchangeable for Debentures
bearing identical terms and provisions, at the office or agency of the
Company in the Borough of Manhattan, the City of New York, in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that
payment of interest on any of the Debentures may be made at the option of the
Company (i) by check mailed to the Holder thereof at such address as shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the person entitled thereto as specified in the Register.
SECTION 1.04. Each Debenture will bear interest at the rate of 6.99%
per annum from its original date of issuance or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly
provided for until the principal thereof becomes due and payable, and any
overdue principal thereof and (to the extent that payment of such interest is
enforceable under applicable law) any overdue installment of interest thereon
will bear interest at the same rate per annum, payable in semi-annually in
arrears on January 15th and July 15th of each year (each, an "Interest
Payment Date"), commencing on July 15, 1996, and at Maturity to the person in
whose name such Debenture or any Predecessor Security thereof is registered,
at the close of business on the Regular Record Date for such interest
installment, which shall be the close of business on the Business Day 15 days
preceding an Interest Payment Date; provided, however, that (i) if any
Debenture is authenticated after a Regular Record Date and before the
Interest Payment Date therefor, such interest installment shall be paid on
the next succeeding Interest Payment Date to the Holder thereof on the
Regular Record Date therefor and (ii) interest payable at Maturity shall be
paid to the Person to whom principal is paid. Any such interest installment
not punctually paid or duly provided for shall forthwith cease to be payable
to such Holder on such Regular Record Date by virtue of having been such
Holder, and such defaulted interest may be paid by the Company, at its
election, to the person in whose name the Debenture (or one or more
Predecessor Securities thereof) is registered at the close of business on a
Special Record Date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the Holders of the
Debentures not less than 10 days prior to such Special Record Date, or in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture.
ARTICLE TWO
Form of Debenture
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
[FORM OF FACE OF DEBENTURE]
[If the Debenture is to be a Global Debenture, insert: This Debenture
is in global form within the meaning of the Indenture hereinafter referred to
and is registered in the name of the Depository or a nominee of the
Depository. Unless and until it is exchanged in whole or in part for
Securities in certificated form, this Security may not be transferred except
as a whole by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository or
by the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to the Company or
its agent for registration of transfer, exchange or payment, and any
certificate to be issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
6.99% Senior Debenture Due 2026
No. ________________ CUSIP No. 744516AA3
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED, a corporation
duly organized and existing under the laws of the State of North Carolina
(herein referred to as the "Company," which term includes any successor
corporation under the Indenture referred to hereinafter), for value received,
hereby promises to pay to ___________________________________, or registered
assigns, the principal sum of _____________________________ Dollars on
January 15, 2026, and to pay interest thereon from January 16, 1996 or from
the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, semi-annually in
arrears on January 15 and July 15 of each year, commencing July 15, 1996, and
when the principal hereof shall have become due and payable, whether at
maturity, upon call for redemption, by declaration of acceleration or
otherwise ("Maturity"), at the rate of 6.99% per annum until the principal
hereof shall have become so due and payable, and on any overdue principal and
premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-
day months. In the event that any date on which interest is payable on the
Securities of this series is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Securities of
the same series) is registered at the close of business on the Regular Record
Date for such interest installment, which shall be the close of business on
the Business Day 15 days preceding an Interest Payment Date; provided
further, however, that (i) if this Debenture is authenticated after a Regular
Record Date and before the Interest Payment Date therefor, such interest
installment shall be paid on the next succeeding Interest Payment Date to the
registered holder thereof on the Regular Record Date therefor and (ii)
interest payable at Maturity shall be paid to the Person to whom principal is
paid. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holders on such Regular
Record Date, and may be paid to the person in whose name this Debenture (or
one or more Predecessor Securities of the same series) is registered at the
close of business on a Special Record Date to be fixed by the Trustee for the
payment of such defaulted interest, notice whereof shall be given to the
registered holders of Securities of this series not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture
hereinafter referred to. If at any time this Debenture is not in global
form, the principal of and premium, if any, and interest on this Debenture
shall be payable at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, the City of New York, in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that
payment of interest on this Debenture may be made at the option of the
Company (i) by check mailed to the registered holder hereof at such address
as shall appear in the Security Register or (ii) by wire transfer to an
account maintained by the person entitled thereto as specified in the
Security Register.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
The provisions of this Debenture are contained on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
Dated:__________________
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
By:_____________________________
Its:
Attest:
_______________________________
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series described in the within-
mentioned Indenture.
First Union National Bank of North Carolina,
as Trustee
By:______________________________
Authorized Signatory
[FORM OF REVERSE OF DEBENTURE]
This 6.99% Senior Debenture Due 2026 (herein sometimes referred to as
this "Debenture") is one of a duly authorized series of Securities of the
Company, specified in the Indenture (as defined below), all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
January 1, 1996 duly executed and delivered between the Company and First
Union National Bank of North Carolina, as trustee (herein referred to as the
"Trustee"), as amended and supplemented by the First Supplemental Indenture
dated as of January 1, 1996 between the Company and the Trustee (said
Indenture as so supplemented being hereinafter referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities of this series. By the terms of
the Indenture, the Securities are issuable in series that may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. The Securities of this series are limited in aggregate
principal amount as specified in said Supplemental Indenture.
If an Event of Default with respect to the Securities of this series
shall have occurred and be continuing, the principal of all of such
Securities may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying
in any manner the rights of the holders of Securities; provided, however,
that no such supplemental indenture shall, among other things, (i) change the
Stated Maturity of any Securities of any series, or reduce the principal
amount thereof, or reduce the rate of interest thereon, or reduce any premium
payable upon the redemption thereof or the amount of any installment of
interest thereon, without the consent of the holder of each Security so
affected or (ii) reduce the aforesaid percentage in principal amount of
Securities that is required to consent to any such supplemental indenture,
without the consent of the holders of each Security then outstanding and
affected thereby. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Securities of all
series at the time outstanding affected thereby, on behalf of the holders of
the Securities of such series, to waive any past default in the performance
of any of the covenants contained in the Indenture, or established pursuant
to the Indenture with respect to such series, and its consequences, except
(x) a default in the payment of the principal of or premium, if any, or
interest on any of the Securities of such series, or (y) a default in respect
of any other covenant or provision that cannot be modified without the
consent of the holder of each Security of such series adversely affected
thereby, in each case which default may be waived by the unanimous consent of
the holders affected. Any such consent or waiver by the registered holder of
this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and
owners of this Debenture and of any Security of the same series issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the Corporate Trust Office of the
Trustee (or, if at any time this Debenture is not in global form, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City of New York), accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee
duly executed by the registered holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Securities of the same
series of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No
service charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of this Debenture, the
Company, the Trustee and any agent of the Company or the Trustee may deem and
treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue) for the purpose of receiving payment of
or on account of the principal hereof and premium, if any, and (subject to
the provisions of the Indenture) interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
premium, if any, or the interest on this Debenture, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or director, past,
present or future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
[Form of Assignment]
For value received, the undersigned hereby sells, assigns and
transfers unto __________________ the within Debenture, and all rights
thereunder, and hereby irrevocably constitutes and appoints ___________,
attorney to transfer the said Debenture on the Security Register, with full
power of substitution in the premises.
Dated: __________________________
Signature of Assignor
Social Security Number
or Tax Identification
Number of Transferee: ____________________________
Signature guaranteed by
bank, trust company or
member of New York
Stock Exchange: _____________________________
NOTICE: Signature must be guaranteed by an institution
which is a participant in the securities transfer agent
medallion stamp program ("STAMP") or similar program.
Signature Guaranteed:
____________________________
NOTICE: Signature must be
guaranteed by an institution
which is a participant in the
securities transfer agent medallion
stamp program ("STAMP") or similar
program.
ARTICLE THREE
Other Matters
SECTION 3.01. (a) The Company designates the Trustee as Paying Agent
and Registrar with respect to the Debentures, and designates the Corporate
Trust Office of the Trustee as an office at which (i) the principal of and
premium, if any, and interest on the Debentures shall be payable, (ii)
registration of transfers and exchanges of the Debentures may be effected and
(iii) notices and demands to or upon the Company in respect of the Debentures
and the Indenture may be served.
(b) The Company reserves the right to change, by one or more
supplemental indentures, any such designation made pursuant to this Section
3.01.
.
SECTION 3.02. The proper officers of the Company may execute, with
the Paying Agent and any Authenticating Agent for the Debentures, one or
more letters of representations and other customary documentation to the
Depository and any supplements or amendments thereto necessary or desirable
to make the Debentures eligible for deposit at the Depository; provided,
however, that the Company reserves the right to terminate any such letter of
representations or other agreement by one or more Officer's Certificates;
provided further, however, that the Company reserves the right to enter into
similar agreements with any other Depository with respect to the Debentures
by one or more Officer's Certificates.
SECTION 3.03. Subject to the provisions of the Indenture (including,
without limitation, Section 4.6 thereof), the provisions of Sections 4.4 and
4.5 of the Indenture shall be applicable to the Debentures.
SECTION 3.04. The Debentures shall not be subject to redemption
prior to final maturity.
ARTICLE FOUR
Miscellaneous Provisions
SECTION 4.01. The Indenture, as supplemented by this Supplemental
Indenture, is in all respects ratified and confirmed, and this Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the
extent herein and therein provided.
SECTION 4.02. The recitals herein contained are made by the Company
and not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture.
SECTION 4.03. This Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
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 NORTH CAROLINA,
INCORPORATED
[Seal]
By:/s/ Charles E. Zeigler, Jr.
Attest:
/s/ J. Paul Douglas
Secretary
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Trustee
[Seal]
By:/s/ Karen Atkinson
Attest: Title:
______________________________
Title:
[DESCRIPTION] EXHIBIT 4-E-2
This Debenture is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository or a
nominee of the Depository. Unless and until it is exchanged in whole or in
part for Securities in certificated form, this Security may not be
transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to the Company or
its agent for registration of transfer, exchange or payment, and any
certificate to be issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
6.99% Senior Debenture Due 2026
No. 1 CUSIP No. 744516AA3
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED, a corporation
duly organized and existing under the laws of the State of North Carolina
(herein referred to as the "Company," which term includes any successor
corporation under the Indenture referred to hereinafter), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of Fifty Million Dollars on January 15, 2026, and to pay
interest thereon from January 16, 1996 or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest
has been paid or duly provided for, semi-annually in arrears on January 15
and July 15 of each year, commencing July 15, 1996, and when the principal
hereof shall have become due and payable, whether at maturity, upon call for
redemption, by declaration of acceleration or otherwise ("Maturity"), at the
rate of 6.99% per annum until the principal hereof shall have become so due
and payable, and on any overdue principal and premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum. The amount
of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Securities of this series is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), with the same force and effect
as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this
Debenture (or one or more Predecessor Securities of the same series) is
registered at the close of business on the Regular Record Date for such
interest installment, which shall be the close of business on the Business
Day 15 days preceding an Interest Payment Date; provided further, however,
that (i) if this Debenture is authenticated after a Regular Record Date and
before the Interest Payment Date therefor, such interest installment shall
be paid on the next succeeding Interest Payment Date to the registered
holder thereof on the Regular Record Date therefor and (ii) interest payable
at Maturity shall be paid to the Person to whom principal is paid. Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such Regular
Record Date, and may be paid to the person in whose name this Debenture (or
one or more Predecessor Securities of the same series) is registered at the
close of business on a Special Record Date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered holders of Securities of this series not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the
Indenture hereinafter referred to. If at any time this Debenture is not in
global form, the principal of and premium, if any, and interest on this
Debenture shall be payable at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City of New York, in any
coin or currency of the United States of America that at the time of payment
is legal tender for payment of public and private debts; provided, however,
that payment of interest on this Debenture may be made at the option of the
Company (i) by check mailed to the registered holder hereof at such address
as shall appear in the Security Register or (ii) by wire transfer to an
account maintained by the person entitled thereto as specified in the
Security Register.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
The provisions of this Debenture are contained on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
Dated: January 16, 1996
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
By:/s/ Charles E. Zeigler
Its: Chairman, President and CEO
Attest:
/s/ J. Paul Douglas
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series described in the within-
mentioned Indenture.
First Union National Bank of North Carolina,
as Trustee
By:/s/ Karen Atkinson
Authorized Signatory
This 6.99% Senior Debenture Due 2026 (herein sometimes referred to as
this "Debenture") is one of a duly authorized series of Securities of the
Company, specified in the Indenture (as defined below), all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
January 1, 1996 duly executed and delivered between the Company and First
Union National Bank of North Carolina, as trustee (herein referred to as the
"Trustee"), as amended and supplemented by the First Supplemental Indenture
dated as of January 1, 1996 between the Company and the Trustee (said
Indenture as so supplemented being hereinafter referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities of this series. By the terms of
the Indenture, the Securities are issuable in series that may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. The Securities of this series are limited in aggregate
principal amount as specified in said Supplemental Indenture.
If an Event of Default with respect to the Securities of this series
shall have occurred and be continuing, the principal of all of such
Securities may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying
in any manner the rights of the holders of Securities; provided, however,
that no such supplemental indenture shall, among other things, (i) change
the Stated Maturity of any Securities of any series, or reduce the principal
amount thereof, or reduce the rate of interest thereon, or reduce any
premium payable upon the redemption thereof or the amount of any installment
of interest thereon, without the consent of the holder of each Security so
affected or (ii) reduce the aforesaid percentage in principal amount of
Securities that is required to consent to any such supplemental indenture,
without the consent of the holders of each Security then outstanding and
affected thereby. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Securities of all
series at the time outstanding affected thereby, on behalf of the holders of
the Securities of such series, to waive any past default in the performance
of any of the covenants contained in the Indenture, or established pursuant
to the Indenture with respect to such series, and its consequences, except
(x) a default in the payment of the principal of or premium, if any, or
interest on any of the Securities of such series, or (y) a default in
respect of any other covenant or provision that cannot be modified without
the consent of the holder of each Security of such series adversely affected
thereby, in each case which default may be waived by the unanimous consent
of the holders affected. Any such consent or waiver by the registered
holder of this Debenture (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Debenture and of any Security of the same series issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the Corporate Trust Office of the
Trustee (or, if at any time this Debenture is not in global form, at the
office or agency of the Company maintained for that purpose in the Borough
of Manhattan, the City of New York), accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee
duly executed by the registered holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Securities of the same
series of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No
service charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of this Debenture, the
Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the registered holder hereof as the absolute owner hereof (whether
or not this Debenture shall be overdue) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and (subject
to the provisions of the Indenture) interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
premium, if any, or the interest on this Debenture, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or director, past,
present or future, as such, of the Company or of any predecessor or
successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issuance hereof, expressly waived and released.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
herein and therein set forth, Securities of this series are exchangeable for
a like aggregate principal amount of Securities of this series of a
different authorized denomination, as requested by the holder surrendering
the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
[Form of Assignment]
For value received, the undersigned hereby sells, assigns and
transfers unto __________________ the within Debenture, and all rights
thereunder, and hereby irrevocably constitutes and appoints ___________,
attorney to transfer the said Debenture on the Security Register, with full
power of substitution in the premises.
Dated: __________________________
Signature of Assignor
Social Security Number
or Tax Identification
Number of Transferee: ____________________________
Signature guaranteed by
bank, trust company or
member of New York
Stock Exchange: _____________________________
NOTICE: Signature must be guaranteed by an
institution which is a participant in the securities
transfer agent medallion stamp program ("STAMP") or
similar program.
Signature Guaranteed:
____________________________
NOTICE: Signature must be
guaranteed by an institution
which is a participant in the
securities transfer agent medallion
stamp program ("STAMP") or similar
program.
[DESCRIPTION] EXHIBIT 10-E
DEBT SECURITIES
UNDERWRITING AGREEMENT
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
P.O. Box 1398
Gastonia, North Carolina 28053-1398
[400 Cox Road, Gastonia, North Carolina 28054]
January 10, 1996
Ladies and Gentlemen:
We (the "Representative") are acting on behalf of the underwriter or
underwriters (including ourselves) named in Schedule I (the "Underwriters"),
and we understand that Public Service Company of North Carolina, Incorporated,
a North Carolina corporation (the "Company"), proposes to issue and sell to the
Underwriters $50,000,000 aggregate principal amount of its 6.99% Senior
Debentures due 2026 (the "Offered Securities"). The Offered Securities will
be issued pursuant to the provisions of the Indenture dated as of January 1,
1996 between the Company and First Union National Bank of North Carolina, as
trustee (the "Trustee"), as it will be supplemented by a supplemental indenture
relating to the Offered Securities (said Indenture, as so supplemented, the
"Indenture").
If Schedule I names one person, firm or corporation, the term
"Underwriters" and the term "Representative," as used in this agreement (this
"Agreement" or the "Underwriting Agreement"), shall mean that person, firm or
corporation. All obligations of the Underwriters are several and not joint.
The use of the term "Underwriter" herein shall not be deemed to establish or
admit that a purchaser of the Offered Securities is an "underwriter" of the
Offered Securities as such term is defined in and used under the Securities Act
of 1933, as amended (the "Securities Act").
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a
registration statement on Form S-3 (Registration
Statement No. 33-65205), including a prospectus,
relating to the Offered Securities, and has filed
with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing
to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to
the Offered Securities pursuant to Rule 424 under
the Securities Act. The term "Registration
Statement" means the registration statement,
including the exhibits thereto, as amended to the
date of this Agreement. The term "Basic
Prospectus" means the prospectus included in the
Registration Statement, as amended and supplemented
to the date of this Agreement (exclusive of any
supplement to the prospectus relating solely to
securities other than the Offered Securities). The
term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term
"preliminary prospectus" means a preliminary
prospectus supplement specifically relating to the
Offered Securities, together with the Basic
Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary
prospectus" shall include in each case the
documents, if any, incorporated by reference
therein. The terms "supplement", "amendment" and
"amend" as used herein shall include all documents
deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of
the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) The Registration Statement has become
effective; no stop order suspending the
effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are
pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be
filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus
complied or will comply when so filed in all
material respects with the Exchange Act and
the applicable rules and regulations of the
Commission thereunder or pursuant to said
rules and regulations will be deemed to comply
therewith; (ii) each part of the Registration
Statement, when such part became effective,
did not contain, and each such part, as
amended or supplemented, if applicable, will
not contain any untrue statement of a material
fact or omit to state a material fact required
to be stated therein or necessary to make the
statements therein not misleading; (iii) the
Registration Statement, when it became
effective, complied and the Prospectus, when
it is first filed with the Commission pursuant
to Rule 424 and when it is amended or
supplemented, if applicable, will comply in
all material respects with the Securities Act
and the applicable rules and regulations of
the Commission thereunder or pursuant to said
rules and regulations will be deemed to comply
therewith; and (iv) the Prospectus does not,
and when it is first filed with the Commission
pursuant to Rule 424 under the Securities Act
and, as amended or supplemented, if
applicable, as of the Closing Date, will not,
contain any untrue statement of a material
fact or omit to state a material fact
necessary to make the statements therein, in
the light of the circumstances under which
they were made, not misleading, except that
the representations and warranties set forth
in this Section 1(c) do not apply (A) to
statements or omissions in the Registration
Statement or the Prospectus based upon
information relating to any Underwriter
furnished to the Company in writing by such
Underwriter expressly for use therein or (B)
to that part of the Registration Statement
that constitutes the Statement of Eligibility
(Form T-l) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"),
of the Trustee.
(d) The Company has been duly incorporated, is
validly existing as a corporation in good standing
under the laws of the State of North Carolina, has
the corporate power and authority to own its
property and to conduct its business as described
in the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the
Indenture and the Offered Securities. The Company
is duly qualified to transact business and is in
good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing
of property requires such qualification, except to
the extent that the failure to be so qualified or
be in good standing would not have a material
adverse effect on the Company and its subsidiaries,
taken as a whole.
(e) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and
authority to own its property and to conduct its
business as described in the Prospectus and is duly
qualified to transact business and is in good
standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of
property requires such qualification, except to the
extent that the failure to be so qualified or be in
good standing would not have a material adverse
effect on the Company and its subsidiaries, taken
as a whole.
(f) The Indenture has been duly qualified under
the Trust Indenture Act and has been duly
authorized, executed and delivered by the Company
and is a valid and binding agreement of the
Company, enforceable in accordance with its terms,
except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws
affecting creditors' rights generally and by
equitable principles of general applicability
(whether considered in a proceeding at law or in
equity).
(g) The Offered Securities have been duly
authorized and, when executed and
authenticated in accordance with the
provisions of the Indenture and delivered to
and paid for by the Underwriters in accordance
with the terms of the Underwriting Agreement,
will be entitled to the benefits of the
Indenture, and will be valid and binding
obligations of the Company, enforceable in
accordance with their terms, except as the
enforceability thereof may be limited by
bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other
laws affecting creditors' rights generally and
by equitable principles of general
applicability (whether considered in a
proceeding at law or in equity).
(h) This Agreement has been duly authorized,
executed and delivered by the Company.
(i) The execution and delivery by the Company of,
and the performance by the Company of its
obligations under, the Underwriting Agreement, the
Indenture and the Offered Securities will not
contravene, conflict with, result in a breach of or
constitute a default under any provision of (A)
applicable law, (B) the amended and restated
charter or the by-laws of the Company, (C) any
indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any
of its subsidiaries is a party that is material to
the Company and its subsidiaries, taken as a whole
or (D) any judgment, order or decree of any
governmental body, agency or court applicable to
the Company or any subsidiary.
(j) The North Carolina Utilities Commission (the
"NCUC") has issued an appropriate order or orders
with respect to the issuance and sale of the
Offered Securities in accordance with the
Underwriting Agreement; such order or orders are in
full force and effect; the issuance and sale of the
Offered Securities are in conformity with the terms
of such order or orders; and no other
authorization, approval or consent of any other
governmental body or agency is legally required for
the issuance and sale of the Offered Securities as
contemplated by the Underwriting Agreement, except
as may be required under the state securities or
Blue Sky laws in connection with the purchase and
distribution of the Offered Securities by the
Underwriters.
(k) There has not occurred any material adverse
change, or any development involving a prospective
material adverse change, in the condition,
financial or otherwise, or in the earnings,
business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth
in the Prospectus.
(l) All legal or governmental proceedings
pending or threatened to which the Company or
any of its subsidiaries is a party or to which
any of the properties of the Company or any of
its subsidiaries is subject that are required
to be described in the Registration Statement
or the Prospectus are so described, and all
statutes, regulations, contracts or other
documents that are required to be described in
the Registration Statement or the Prospectus,
or to be filed or incorporated by reference as
exhibits to the Registration Statement, are
described, filed or incorporated as required.
(m) The Company is not an "investment
company" or an entity "controlled" by an
"investment company," as such terms are
defined in the Investment Company Act of
1940, as amended (the "Investment Company
Act") and is not a "holding company," as such
term is defined in the Public Utility Holding
Company Act of 1935, as amended ("PUHCA").
(n) The Company and its subsidiaries are (i)
in compliance with any and all applicable
foreign, federal, state and local laws and
regulations relating to the protection of
human health and safety, the environment or
hazardous or toxic substances or water,
pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits,
licenses or other approvals required of them
under applicable Environmental Laws to conduct
their respective businesses and (iii) are in
compliance with all terms and conditions of
any such permit, license or approval, except
where such noncompliance with Environmental
Laws, failure to receive required permits,
licenses or other approvals or failure to
comply with the terms and conditions of such
permits, licenses or approvals would not,
singly or in the aggregate, have a material
adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) In the ordinary course of its business, the
Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in
the course of which it identifies and evaluates
associated costs and liabilities (including,
without limitation, any capital or operating
expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or
any permit, license or approval, any related
constraints on operating activities and any
potential liabilities to third parties). On the
basis of such review, the Company has reasonably
concluded that such associated costs and
liabilities would not, singly or in the aggregate,
have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(p) The Company has complied with all
provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida).
(q) Except as disclosed in Schedule III, as of the date hereof, there
are no Liens (as defined in the Indenture) on any property or assets of the
Company or its subsidiaries.
2. Public Offering. The Company is advised by the Representative
that the Underwriters propose to make a public offering of their
respective portions of the Offered Securities as soon after the
Underwriting Agreement has been entered into as in the
Representative's judgment is advisable. The terms of the public
offering of the Offered Securities are set forth in the
Prospectus.
3. Purchase and Delivery. Subject to the terms and conditions
herein set forth, the Company hereby agrees to sell and the
Underwriters agree to purchase, severally and not jointly, the
respective principal amounts of Offered Securities set forth
opposite the name of such Underwriter in Schedule I hereto at the
purchase price set forth in Schedule II in the type of funds and
method of payment specified in Schedule II.
Delivery of the Offered Securities and payment of the purchase price
shall be made at the time, date and place indicated in Schedule II. The time
and date of such payment and delivery are hereinafter referred to as the
Closing Date.
The Offered Securities shall be delivered to the Underwriters in such
authorized denominations and registered in such names as the Representative
shall request in writing not less than one full business day prior to the date
of delivery. The Company agrees to make the Offered Securities available to
the Underwriters for checking not later than 2:30 P.M., New York time, on the
last business day preceding the Closing Date at such place as may be agreed
upon between the Representative and the Company.
4. Conditions to Closing. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of
the Underwriting Agreement and prior to the Closing
Date,
(i) no downgrading shall have occurred and no notice shall have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of a possible change,
in the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) no change, and no development involving a prospective change,
shall have occurred in the condition, financial or otherwise, or in the
earnings, business or operations, of the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus, that, in the judgment of
Morgan Stanley & Co. Incorporated, is material and adverse and that makes
it, in the judgment of Morgan Stanley & Co. Incorporated, impracticable to
market the Offered Securities on the terms and in the manner contemplated in
the Prospectus; and
(iii) the Company shall have obtained an appropriate order or orders
of the NCUC authorizing the issuance, sale and delivery of the Offered
Securities as contemplated by this Agreement, which order or orders at the
Closing Date shall be in full force and effect and shall not be contested or
the subject of review or appeal.
(b) The Underwriters shall have received on the
Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company
to the effect set forth in clause (a)(i) and (iii)
above and that the representations and warranties
of the Company contained in this Agreement are true
and correct as of the Closing Date and that the
Company has complied with all of the agreements and
satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing
Date.
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Fennebresque, Clark, Swindell & Hay, counsel
to the Company, to the effect that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the
laws of the State of North Carolina, has the corporate
power and authority to own its property and to conduct
its business as described in the Prospectus and is duly
qualified and in good standing in each jurisdiction in
which the conduct of its business or its ownership or
leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be
in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a
whole;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether considered in a proceeding at law or in equity);
(iv) the Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with the
terms of the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, in each
case enforceable in accordance with their respective terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other laws affecting the enforcement of creditors' rights generally and
by general equitable principles (whether considered in a proceeding at law
or in equity);
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Indenture and the Offered Securities will not contravene,
conflict with, result in a breach of or constitute a default under any
provision of (A) applicable law (assuming compliance with all applicable
state securities or Blue Sky laws), (B) the amended and restated charter or
the by-laws of the Company, (C) to the best of such counsel's knowledge after
due inquiry, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party that
is material to the Company and its subsidiaries, taken as a whole or (D) to
the best of such counsel's knowledge after due inquiry, any judgment, order
or decree of any governmental body, agency or court applicable to the Company
or any subsidiary;
(vi) the NCUC has issued an appropriate order or orders with
respect to the issuance and sale of the Offered Securities in accordance with
the Underwriting Agreement; such order or orders are in full force and effect
and are sufficient to authorize such issuance and sale as contemplated by the
Agreement; the issuance and sale of the Offered Securities are in conformity
with the terms of such order or orders; no challenge to or appeal of such
order or orders after the date of issuance of the Offered Securities can
affect the validity of the Offered Securities; and no other authorization,
approval or consent of any other governmental body or agency is legally
required for the issuance and sale of the Offered Securities as contemplated
by the Underwriting Agreement, except (A) as may be required under the state
securities or Blue Sky laws in connection with the purchase and distribution
of the Offered Securities by the Underwriters, (B) registration of the
Offered Securities under the Securities Act and (C) as may be required by any
securities exchange on which the Offered Securities may be listed;
(vii) the statements in the Prospectus under the captions
"Description of Debentures," "Description of Debt Securities," "Underwriting"
and "Plan of Distribution," in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein;
(viii) to the best of such counsel's knowledge after due inquiry,
such counsel does not know of any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or
the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required;
(ix) the Company is not (A) an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act or (B) a "holding company," as such term is defined
in PUHCA;
(x) the Registration Statement has become and is effective under
the Securities Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for a stop order with respect thereto are pending
or threatened under Section 8(d) of the Securities Act; and
(xi) such counsel (A) is of the opinion that (except for financial
statements and schedules and other financial and statistical data contained
or incorporated by reference therein, as to which such counsel need not
express any opinion) each document, if any, filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied when so filed
as to form in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (B) believes that (except
for financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such counsel
need not express any belief and except for that part of the Registration
Statement that constitutes the Form T-l heretofore referred to) each part of
the Registration Statement, when such part became effective did not, and, as
of the date such opinion is delivered, does not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (C) is
of the opinion that the Registration Statement, when it became effective, and
the Prospectus, when it was first filed with the Commission pursuant to Rule
424 under the Securities Act (in each case, except for financial statements
and schedules and other financial and statistical data included or
incorporated by reference therein, as to which such counsel need not express
any opinion), complied as to form in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (D) believes that (except for financial statements and
schedules and other financial or statistical data contained or incorporated
by reference therein, as to which such counsel need not express any belief)
the Prospectus, when it was first filed with the Commission pursuant to Rule
424 under the Securities Act, did not and as of the date such opinion is
delivered, does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
As to matters of New York law, Fennebresque, Clark, Swindell & Hay may
rely upon the opinion of even date herewith of Winthrop, Stimson, Putnam &
Roberts. For purposes of clause (A) of paragraph (v), paragraph (vi) and
paragraph (viii), as to matters of North Carolina law relating to the
regulation of public utilities, Fennebresque, Clark, Swindell & Hay may rely
upon the opinion of even date herewith of J. Paul Douglas, Esq.
(d) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of J. Paul Douglas, Esq., Vice-President--
Corporate Counsel and Secretary of the Company,
(i) to the effect that each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(ii) to the effect that to the best of such counsel's knowledge after
due inquiry, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described;
(iii) to the effect that the statements (A) in the Registration
Statement under Item 15, (B) in "Item 3 - Legal Proceedings" of the Company's
most recent annual report on Form 10-K incorporated by reference in the
Prospectus and (C) in "Item 1 - Legal Proceedings" of Part II of the Company's
quarterly reports on Form 10-Q filed since such annual report, in each case
insofar as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein; and
(iv) covering the matters referred to in subparagraphs (v)(but only as
to the matters referred to in clause (A) thereof), (vi) and (viii) of paragraph
(c) above.
(e) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Winthrop, Stimson, Putnam & Roberts, counsel
for the Underwriters, covering the matters referred to in subparagraphs (ii),
(iv), (vii), (x) and (xi) (but only as to the matters referred to in clauses
(B), (C) and (D) thereof) of paragraph (c) above.
As to matters of North Carolina law, Winthrop, Stimson, Putnam & Roberts
may rely upon the opinions of even date herewith of Fennebresque, Clark,
Swindell & Hay and J. Paul Douglas.
With respect to the subparagraph (xi) of paragraph (c) above,
Fennebresque, Clark, Swindell & Hay, counsel to the Company, may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof (including the
documents incorporated by reference therein), but are without independent check
or verification, except as specified. With respect to clauses (B), (C) and (D)
of subparagraph (xi) of paragraph (c) above, Winthrop, Stimson, Putnam &
Roberts may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (but not including documents
incorporated therein by reference) and review and discussion of the contents
thereof (including documents incorporated therein by reference) but are without
independent check or verification, except as specified.
The opinions of Fennebresque, Clark, Swindell & Hay, counsel to the
Company, described in paragraph (c) above and of J. Paul Douglas, Esq., Vice-
President--Corporate Counsel and Secretary, described in paragraph (d) above,
shall be rendered to the Representative at the request of the Company and shall
so state therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Arthur Andersen LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
(g) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(e), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(h) On the Closing Date, Standard & Poor's Ratings Group and Moody's
Investors Service, Inc. shall have publicly assigned to the Offered Securities
ratings of A- and A2, respectively, which ratings shall be in full force and
effect on the Closing Date.
(i) The Representative shall have received on the Closing Date (i)
satisfactory evidence of the satisfaction and discharge of the Company's First
Mortgage dated as of January 1, 1952 (as heretofore amended and supplemented,
the "First Mortgage") or (ii) executed copies of such deeds of release, if on
the Closing Date such satisfaction and discharge is subject only to the filing
and recording of deeds of release in one or more jurisdictions; provided that,
in the case of clause (ii), the Company hereby agrees promptly (and in no case
later than 20 business days following the Closing Date) (x) to file and record,
or cause to be filed and recorded, such deeds of release in the appropriate
jurisdictions, and to take all other actions necessary or appropriate in order
to cause the satisfaction and discharge of the First Mortgage and (y) to
deliver or cause to be delivered to the Representative an opinion of counsel
to the effect that the First Mortgage has been satisfied and discharged.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company
covenants as follows:
(a) To furnish the Representative, without charge,
a signed copy of the Registration Statement
(including exhibits thereto) and to deliver to each
other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto)
and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any
documents incorporated by reference therein and any
supplements and amendments thereto or to the
Registration Statement as the Underwriters may
reasonably request.
(b) To cause the Prospectus to be filed with the
Commission pursuant to and in compliance with Rule
424 under the Act.
(c) Before amending or supplementing the
Registration Statement or the Prospectus, to
furnish to the Representative a copy of each
such proposed amendment or supplement and not
to file any such proposed amendment or
supplement to which the Representative
reasonably objects.
(d) If, during such period after the first date of
the public offering of the Offered Securities as in
the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer,
any event shall occur or condition exist as a
result of which it is necessary to amend or
supplement the Prospectus in order to make the
statements therein, in the light of the
circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion
of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with
law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the
Underwriters, and to the dealers (whose names and
addresses the Representative will furnish to the
Company) to which Offered Securities may have been
sold by the Representative on behalf of the
Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so
amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered
to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply
with law.
(e) To endeavor to qualify the Offered Securities
for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Representative
shall reasonably request and to maintain such
qualification for as long as the Representative
shall reasonably request.
(f) To make generally available to the Company's
security holders and to the Representative as soon
as practicable an earning statement covering a
twelve month period beginning on the first day of
the first full fiscal quarter after the date of the
Underwriting Agreement, which earning statement
shall satisfy the provisions of Section 11(a) of
the Securities Act and the rules and regulations of
the Commission thereunder. If such fiscal quarter
is the last fiscal quarter of the Company's fiscal
year, such earning statement shall be made
available not later than 90 days after the close of
the period covered thereby and in all other cases
shall be made available not later than 45 days
after the close of the period covered thereby.
(g) During the period beginning on the date
of this Agreement and continuing to and
including the Closing Date, without the prior
written consent of Morgan Stanley & Co.
Incorporated, not to (1) offer, pledge, sell,
contract to sell, sell any option or contract
to purchase, purchase any option or contract
to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of,
directly or indirectly, any debt securities of
the Company or warrants to purchase debt
securities of the Company substantially
similar to the Offered Securities or any
securities convertible into or exercisable or
exchangeable therefor (other than (i) the
Offered Securities, (ii) commercial paper
issued in the ordinary course of business and
(iii) other debt securities evidencing
commercial bank loans) or (2) enter into any
swap or similar arrangement that transfers, in
whole or part, the economic risk of ownership
of any of the foregoing, whether any such
transaction described in clause (1) or (2)
above is to be settled by delivery of the
Offered Securities or such other securities,
in cash or otherwise.
(h) Whether or not any sale of the Offered
Securities is consummated, to pay all expenses
incident to the performance of its obligations
under the Underwriting Agreement, including:
(i) the preparation and filing of the
Registration Statement and the Prospectus and
all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the
Offered Securities, (iii) the fees and
disbursements of the Company's counsel and
accountants and of the Trustee and its
counsel, (iv) the qualification of the Offered
Securities under securities or Blue Sky laws
in accordance with the provisions of Section
5(e), including filing fees and the fees and
disbursements of counsel for the Underwriters
in connection therewith and in connection with
the preparation of any Blue Sky Memoranda, (v)
the printing and delivery to the Underwriters
in quantities as hereinabove stated of copies
of the Registration Statement and all
amendments thereto and of the Prospectus and
any amendments or supplements thereto, (vi)
any fees charged by rating agencies for the
rating of the Offered Securities, (vii) the
fees and expenses, if any, incurred with
respect to any filing with the National
Association of Securities Dealers, Inc. and
(viii) all document production charges and
expenses of counsel to the Underwriters (but
not including their fees for professional
services) in connection with the preparation
of this Agreement.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if
any, who controls such Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending
any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through
the Representative expressly for use therein.
(b) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the
Company, its directors, its officers who sign the
Registration Statement and each person, if any, who
controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the
foregoing indemnity from the Company to such
Underwriter, but only with reference to information
relating to such Underwriter furnished to the
Company in writing by such Underwriter through the
Representative expressly for use in the
Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any
governmental investigation) shall be instituted
involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or
(b) above, such person (the "indemnified party")
shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request
of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the
indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any
impleaded parties) include both the indemnifying
party and the indemnified party and representation
of both parties by the same counsel would be
inappropriate due to actual or potential differing
interests between them. It is understood that the
indemnifying party shall not, in respect of the
legal expenses of any indemnified party in
connection with any proceeding or related
proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate
firm (in addition to any local counsel) for all
such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by the
Representative, in the case of parties indemnified
pursuant to paragraph (a) above, and by the
Company, in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any
proceeding effected without its written consent,
but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party
from and against any loss or liability by reason of
such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to
reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second
and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected
without its written consent if (i) such settlement
is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with
such request prior to the date of such settlement.
No indemnifying party shall, without the prior
written consent of the indemnified party, effect
any settlement of any pending or threatened
proceeding in respect of which any indemnified
party is or could have been a party and indemnity
could have been sought hereunder by such
indemnified party, unless such settlement includes
an unconditional release of such indemnified party
from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification
provided for in paragraph (a) or (b) of this
Section 6 is unavailable to an indemnified
party or insufficient in respect of any
losses, claims, damages or liabilities
referred to therein, then each indemnifying
party under such paragraph, in lieu of
indemnifying such indemnified party
thereunder, shall contribute to the amount
paid or payable by such indemnified party as
a result of such losses, claims, damages or
liabilities (i) in such proportion as is
appropriate to reflect the relative benefits
received by the Company on the one hand and
the Underwriters on the other hand from the
offering of the Offered Securities or (ii) if
the allocation provided by clause (i) above is
not permitted by applicable law, in such
proportion as is appropriate to reflect not
only the relative benefits referred to in
clause (i) above but also the relative fault
of the Company on the one hand and of the
Underwriters on the other hand in connection
with the statements or omissions that resulted
in such losses, claims, damages or
liabilities, as well as any other relevant
equitable considerations. The relative
benefits received by the Company on the one
hand and the Underwriters on the other hand in
connection with the offering of the Offered
Securities shall be deemed to be in the same
respective proportions as the net proceeds
from the offering of such Offered Securities
(before deducting expenses) received by the
Company and the total underwriting discounts
and commissions received by the Underwriters,
in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to
the aggregate public offering price of the
Offered Securities. The relative fault of the
Company on the one hand and of the
Underwriters on the other hand shall be
determined by reference to, among other
things, whether the untrue or alleged untrue
statement of a material fact or the omission
or alleged omission to state a material fact
relates to information supplied by the Company
or by the Underwriters and the parties'
relative intent, knowledge, access to
information and opportunity to correct or
prevent such statement or omission. The
Underwriters' respective obligations to
contribute pursuant to this Section 6 are
several in proportion to the respective
principal amounts of the Offered Securities
they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it
would not be just or equitable if contribution
pursuant to this Section 6 were determined by pro
rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any
other method of allocation that does not take
account of the equitable considerations referred to
in paragraph (d) above. The amount paid or payable
by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth
above, any legal or other expenses reasonably
incurred by such indemnified party in connection
with investigating or defending any such action or
claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to
contribute any amount in excess of the amount by
which the total price at which the Offered
Securities underwritten by it and distributed to
the public were offered to the public exceeds the
amount of any damages that such Underwriter has
otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies
provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which
may otherwise be available to any indemnified party
at law or in equity.
7. Termination. This Agreement shall be subject to termination,
by notice given by the Representative to the Company, if (a) after
the execution and delivery of the Underwriting Agreement and prior
to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Nasdaq
National Market, the Chicago Board of Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended
on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities or
(iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of Morgan Stanley & Co. Incorporated,
is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event, singly or
together with any other such event, makes it, in the judgment of
Morgan Stanley & Co. Incorporated, impracticable to market the
Offered Securities on the terms and in the manner contemplated in
the Prospectus. This Agreement may also be terminated at any time
prior to the Closing Date if in the judgment of Morgan Stanley &
Co. Incorporated the subject matter of any amendment or supplement
to the Registration Statement or Prospectus prepared and furnished
by the Company reflects a material adverse change in the business,
properties or financial condition of the Company which renders it
either inadvisable to proceed with such offering, if any, or
inadvisable to proceed with the delivery of the Offered Securities
to be purchased hereunder.
8. Defaulting Underwriters. If, on the Closing Date, any
one or more of the Underwriters shall fail or refuse to
purchase the Offered Securities that it has or they have
agreed to purchase hereunder on such date, and the aggregate
amount of Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate amount
of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the
proportions that the amount of Offered Securities set forth
opposite their respective names in the Underwriting Agreement
bears to the aggregate amount of the Offered Securities set
forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the
Representative may specify, to purchase the Offered
Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date;
provided that in no event shall the amount of the Offered
Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this
Section 8 by an amount in excess of one-ninth of such amount
of the Offered Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase the Offered
Securities that it has or they have agreed to purchase and
the aggregate amount of the Offered Securities with respect
to which such default occurs is more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on
such date, and arrangements satisfactory to the
Representative and the Company for the purchase of such
Offered Securities are not made within 36 hours after such
default, the Underwriting Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representative or
the Company shall have the right to postpone the Closing Date
but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements
may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under the
Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of the
Underwriting Agreement, or if for any reason the Company shall be unable to
perform its obligations under the Underwriting Agreement, the Company will
reimburse the Underwriters or such Underwriters as have so terminated the
Underwriting Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with the Underwriting
Agreement or the offering of the Offered Securities.
9. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements and the representations,
warranties and other statements of the Company, its officers and
the Underwriters set forth in the Underwriting Agreement will
remain in full force and effect, regardless of any termination of
the Underwriting Agreement, any investigation made by or on behalf
of any Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Section 6 and
delivery of and payment for the Offered Securities.
10. Successors. This Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective successors
and the officers, directors and controlling persons referred to in
Section 6, and no other person will have any right or obligation
hereunder.
11. Counterparts. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon
the same instrument.
12. Applicable Law. The Underwriting Agreement shall be governed
by and construed in accordance with the internal laws of the State
of New York.
13. Headings. The headings of the sections of the
Underwriting Agreement have been inserted for convenience of
reference only and shall not be deemed a part of the
Underwriting Agreement.
14. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or
telecopied and confirmed to Morgan Stanley & Co. Incorporated at
1585 Broadway, 2nd Floor, New York, New York 10036, Attn: Managing
Director - Debt Syndicate, Telecopy No: (212) 761-0783, or, if
sent to the Company, will be mailed, delivered or telecopied and
confirmed to it at P.O. Box 1398, Gastonia, North Carolina 28053-
1398 [400 Cox Road, Gastonia, North Carolina 28054], Attn: Mr.
Jack G. Mason, Treasurer, Telecopy No: (704) 834-6538.
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ James D. Glascott _
Name: James D. Glascott
Title: Principal
Accepted, January 10, 1996
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
By: /s/ Charles E. Zeigler, Jr.
Name: Charles E. Zeigler, Jr.
Title: Chairman, President and Chief Executive Officer
Schedule I
Principal Amount
Name of Underwriter of Offered Securities
Morgan Stanley & Co. Incorporated. . . . . . . . . . . . . . . . . . . . . .
. . . . .$50,000,000
Schedule II
Underwriting Agreement dated January 10, 1996
Registration Statement No. 33-6502
Representative and Address:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Securities: Senior Debentures
Designation: 6.99% Senior Debentures due 2026
Principal Amount: $50,000,000
Supplemental Indenture
dated as of: January 1, 1996
Date of Maturity: January 15, 2026
Interest Rate: 6.99%
Purchase Price: 99.125% plus accrued interest, if any, from January 16,
1996
Public Offering Price: 100% plus accrued interest, if any, from January 16,
1996
Type of Funds/Method
of Payment: Same Day Funds/Wire Transfer
Closing Date
and Location: January 16, 1996, at the offices of Fennebresque, Clark,
Swindell & Hay, Charlotte, North Carolina
Schedule III
The properties owned by Public Service Company of North Carolina Incorporated
("Company") are subject to the lien of the Indenture dated as of January 1,
1952, between Public Service Company of North Carolina, Incorporated, and The
Marine Midland Trust Company of New York (now known as Marine Midland Bank),
Trustee, as supplemented by the First through Twelfth Supplemental Indentures
(collectively "1952 Indenture"). By letter dated December 21, 1995, the
Trustee acknowledged that no bonds remain outstanding under the 1952 Indenture,
as all such bonds have either matured or been redeemed in full with funds
provided by the Company. The Company has forwarded a separate "Deed of
Release" for each county in North Carolina in which the 1952 Indenture was
recorded to the Trustee for execution and return to the Company. Upon receipt,
the Company will file, or cause to be filed, in the appropriate county of North
Carolina, each separate Deed of Release, and upon receipt of the filed Deeds
of Release, provide copies of each with the recording information to the
Representative and the Trustee, as each such term is defined in the
Underwriting Agreement.
