_____________________________________________________________________________
Exhibit 4-a
PUGET SOUND ENERGY, INC.
AND
STATE STREET BANK AND TRUST COMPANY
TRUSTEE
____________
INDENTURE
DATED AS OF DECEMBER 1, 1997
_____________________________________________________________________________
CONTENTS
ARTICLE ONE DEFINITIONS 1
Section 1.01 General 1
Section 1.02 Trust Indenture Act 2
Section 1.03 Definitions 2
ARTICLE TWO FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES 11
Section 2.01 Form Generally 11
Section 2.02 Form of Trustee's Certificate of Authentication 12
Section 2.03 Amount Unlimited 12
Section 2.04 Denominations, Dates, Interest Payment and Record Dates 12
Section 2.05 Execution, Authentication, Delivery and Dating 14
Section 2.06 Exchange and Registration of Transfer of Notes 18
Section 2.07 Mutilated, Destroyed, Lost or Stolen Notes 19
Section 2.08 Temporary Notes 20
Section 2.09 Cancellation of Notes paid, etc. 20
Section 2.10 Interest Rights Preserved 21
Section 2.11 Special Record Date 21
Section 2.12 Payment of Notes 21
Section 2.13 Notes Issuable in the Form of a Global Note 23
ARTICLE THREE REDEMPTION OF NOTES 25
Section 3.01 Applicability of Article 25
Section 3.02 Notice of Redemption; Selection of Notes 25
Section 3.03 Payment of Notes on Redemption; Deposit of Redemption Price 26
ARTICLE FOUR PLEDGED FIRST MORTGAGE BONDS;
PLEDGED SUBSTITUTED MORTGAGE BONDS 28
Section 4.01 Delivery of Initial Series of Pledged First Mortgage Bonds 28
Section 4.02 Receipt 28
Section 4.03 Pledged First Mortgage Bonds Held by the Trustee 28
Section 4.04 No Transfer of Pledged First Mortgage Bonds; Exception 29
Section 4.05 Delivery to the Company of All Pledged First Mortgage Bonds 29
Section 4.06 Further Assurances 29
Section 4.07 Exchange and Surrender of Pledged First Mortgage Bonds 29
Section 4.08 Acceptance of Additional Pledged First Mortgage Bonds 30
Section 4.09 Terms of Pledged First Mortgage Bonds 30
Section 4.10 Pledged First Mortgage Bonds as Security for Notes 31
Section 4.11 Pledged Substituted Mortgage Bonds 31
ARTICLE FIVE SATISFACITON AND DISCHARGE; UNCLAIMED MONEYS 32
Section 5.01 Satisfaction and Discharge 32
Section 5.02 Deposited Moneys to be Held in Trust by Trustee 35
Section 5.03 Paying Agent to Repay Moneys Held 35
Section 5.04 Return of Unclaimed Moneys 36
ARTICLE SIX PARTICULAR COVENANTS OF THE COMPANY 36
Section 6.01 Payment of Principal Premium and Interest 36
Section 6.02 Office for Notices and Payments, etc. 36
Section 6.03 Appointments to Fill Vacancies in Trustee's Office 37
Section 6.04 Provision as to Paying Agent 37
Section 6.05 Opinions of Counsel 38
Section 6.06 Certificates and Notice to Trustee 39
Section 6.07 Negative Covenants 39
ARTICLE SEVEN NOTEHOLDER LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE 41
Section 7.01 Noteholder Lists 41
Section 7.02 Securities and Exchange Commission Reports 43
Section 7.03 Reports by the Trustee 43
ARTICLE EIGHT REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS ON EVENTS OF DEFAULT 44
Section 8.01 Events of Default 44
Section 8.02 Enforcement by Trustee 47
Section 8.03 Application of Moneys Collected by Trustee 48
Section 8.04 Proceedings by Noteholders 49
Section 8.05 Proceedings by Trustee 49
Section 8.06 Remedies Cumulative and Continuing 50
Section 8.07 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders 50
Section 8.08 Notice of Default 51
Section 8.09 Undertaking to Pay Costs 51
ARTICLE NINE CONCERNING THE TRUSTEE 51
Section 9.01 Duties and Responsibilities of Trustee 51
Section 9.02 Reliance on Documents, Opinions, etc. 52
Section 9.03 No Responsibility for Recitals, etc. 54
Section 9.04 Trustee, Authenticating Agent, paying Agent or Registrar
May Own Notes 54
Section 9.05 Moneys to be Held in Trust 54
Section 9.06 Compensation and Expenses of Trustee 54
Section 9.07 Officers' Certificate as Evidence 55
Section 9.08 Conflicting Interest of Trustee 55
Section 9.09 Existence and Eligibility of Trustee 56
Section 9.10 Resignation or Removal of Trustee 56
Section 9.11 Appointment of Successor Trustee 57
Section 9.12 Acceptance by Successor Trustee 57
Section 9.13 Succession by Merger, etc. 58
Section 9.14 Limitations on Rights of Trustee as a Creditor 58
Section 9.15 Authenticating Agent 59
ARTICLE TEN CONCERNING THE NOTEHOLDERS 60
Section 10.01 Action by Noteholders 60
Section 10.02 Proof of Execution by Noteholders 60
Section 10.03 Who Deemed Absolute Owners 60
Section 10.04 Company-Owned Notes Disregarded 61
Section 10.05 Revocation of Consents; Future Holders Bound 61
Section 10.06 Record Date for Noteholder Acts 61
ARTICLE ELEVEN NOTEHOLDERS' MEETING 62
Section 11.01 Purposes of Meetings 62
Section 11.02 Call of Meetings by Trustee 62
Section 11.03 Call of Meetings by Company or Noteholders 63
Section 11.04 Qualifications for Voting 63
Section 11.05 Regulations 63
Section 11.06 Voting 64
Section 11.07 Rights of Trustee or Noteholders Not Delayed 65
ARTICLE TWELVE CONSOLIDATION, MERGER, SALE,
TRANSFER OR OTHER DISPOSITION 65
Section 12.01 Company May Consolidate, etc. Only on Certain Terms 65
Section 12.02 Successor Corporation Substituted 66
ARTICLE THIRTEEN SUPPLEMENTAL INDENTURES 66
Section 13.01 Supplemental Indentures Without Consent of Noteholders 66
Section 13.02 Supplemental Indentures With Consent of Noteholders 67
Section 13.03 Compliance With Trust Indenture Act;
Effect of Supplemental Indentures 69
Section 13.04 Notation on Notes 69
Section 13.05 Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee 69
ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS,
SHAREHOLDERS, OFFICERS AND DIRECTORS 70
Section 14.01 Indenture and Notes Solely Corporate Obligations 70
ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS 70
Section 15.01 Provisions Binding on Company's Successors 70
Section 15.02 Official Acts by Successor Corporation 70
Section 15.03 Notices 71
Section 15.04 Governing Law 71
Section 15.05 Evidence of Compliance With Conditions Precedent 71
Section 15.06 Business Days 73
Section 15.07 Trust Indenture Act to Control 73
Section 15.08 Table of Contents, Headings, Etc. 73
Section 15.09 Execution in Counterparts 73
Section 15.10 Manner of Mailing Notice to Noteholders 73
Section 15.11 Approval by Trustee of Counsel 74
CROSS REFERENCE SHEET SHOWING THE LOCATION IN THE INDENTURE
OF THE PROVISIONS INSERTED PURSUANT TO SECTIONS 310 THROUGH
318(a) INCLUSIVE OF THE TRUST INDENTURE ACT OF 1939
Section of Trust
Indenture Act Section of Indenture Page
310(a)(1) 9.09 55
310(a)(2) 9.09 55
310(a)(3) NOT APPLICABLE --
310(a)(4) NOT APPLICABLE --
310(a)(5) 9.09 55
310(b) 9.08 55
310(c) NOT APPLICABLE --
311(a) 9.14 58
311(b) 9.14 58
311(c) NOT APPLICABLE --
312(a) 7.01(a) 41
312(b) 7.01(b) 41-42
312(c) 7.01(c) 42
313(a) 7.03(a) 43
313(b) 7.03(b) 43
313(c) 7.03(d) 43-44
313(d) 7.03(c) and 7.03(d) 43-44
314(a) 7.02(a), 7.02(b), 7.02(c) and 6.06 38-39,42-43
314(b) 6.05 38
314(c)(1) Definition of Officers' Certificate,
6.06 and 15.05(a) 6,38-39,71
314(c)(2) Definition of Opinion of Counsel and 15.05 6,71-73
314(c)(3) NOT APPLICABLE --
314(d)(1) 4.06 29
314(d)(2) 4.06 29
314(d)(3) 4.06 29
314(e) 15.05(b) 71-72
314(f) NOT APPLICABLE --
315(a) 9.01 and 9.02 51-53
315(b) 8.08 50
315(c) 9.01(a) 51
315(d) 9.01(b) 51
315(e) 8.09 51
316(a) 8.07 50
10.04 60-61
13.02 67-69
316(b) 8.04 48-49
13.02 67-69
316(c) 10.06 61
317(a)(1) 8.02(b) 47
317(a)(2) 8.02(a) 46-47
317(b) 5.02 35
6.04 36-37
318(a) 15.07 73
THIS INDENTURE, dated as of December 1, 1997, between PUGET SOUND ENERGY,
INC., a corporation organized and existing under the laws of the State of
Washington (the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts bank and trust company organized and existing under the laws of
the Commonwealth of Massachusetts, as trustee (the "Trustee").
WITNESSETH
Whereas, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Senior Notes
(the "Notes"), to be issued as in this Indenture provided;
Whereas, subject to the provisions of Sections 4.10 and 4.11 hereof, upon the
issuance of Notes under this Indenture the Company will deliver Pledged First
Mortgage Bonds (as hereinafter defined) or Pledged Substituted Mortgage Bonds
(as hereinafter defined) to the Trustee in trust for the benefit of the
respective Holders (as hereinafter defined) from time to time of the related
issue of Notes;
And Whereas, all acts and things necessary to make this Indenture a valid
agreement according to its terms have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized;
Now Therefore, This Indenture Witnesseth:
That in order to declare the terms and conditions upon which the Notes are,
and are to be authenticated, issued and delivered and in consideration of the
premises and of the purchase and acceptance of the Notes by the Holders
thereof and of the sum of One Dollar duly paid to it by the Trustee at the
execution of this Indenture, the receipt whereof is hereby acknowledged, the
Company covenants and agrees with the Trustee for the equal and proportionate
benefit of the respective Holders from time to time of the Notes, as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01 General
The terms defined in this Article One (except as herein otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
PAGE 1
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Article One.
Section 1.02 Trust Indenture Act
(a) Whenever this Indenture refers to a provision of the Trust Indenture Act
of 1939, as amended (the "TIA"), such provision is incorporated by reference
in and made a part of this Indenture.
(b) Unless otherwise indicated, all terms used in this Indenture that are
defined by the TIA, by reference to another statute or defined by a rule of
the SEC (as hereinafter defined) under the TIA shall have the meanings
assigned to them in the TIA or such statute or rule as in force on the date
of execution of this Indenture.
Section 1.03 Definitions
For purposes of this Indenture, the following terms shall have the following
meanings.
Authenticating Agent:
The term "Authenticating Agent" shall mean any agent of the Trustee which
shall be appointed and acting pursuant to Section 9.15 hereof.
Authorized Agent:
The term "Authorized Agent" shall mean any agent of the Company designated as
such by an Officers' Certificate delivered to the Trustee.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors of the
Company or any other duly authorized committee of such Board of Directors.
Board Resolution:
The term "Board Resolution" shall mean a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification and delivered to the Trustee.
PAGE 2
Bondholders' Certificate:
The term "Bondholders' Certificate" shall mean a certificate signed by the
inspectors of votes, or any other party performing such duties, of the
applicable meeting of the holders of the First Mortgage Bonds issued under
the applicable First Mortgage or by the applicable Mortgage Trustee in the
case of consents of such holders that are sought without a meeting.
Business Day:
The term "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions or trust companies
in the Borough of Manhattan, The City of New York, or in the city where the
corporate trust office of the Trustee is located, are obligated or authorized
by law or executive order to close.
Company:
The term "Company" shall mean the corporation named as the "Company" in the
first paragraph of this Indenture, and its successors and assigns permitted
hereunder.
Company Order:
The term "Company Order" shall mean a written order signed in the name of the
Company by one of the Chairman, the President, any Vice President, the
Treasurer or an Assistant Treasurer, and the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
Corporate Trust Office of the Trustee:
The term "corporate trust office of the Trustee", or other similar term,
shall mean the corporate trust office of the Trustee, at which at any
particular time its corporate trust business shall be principally
administered, which office is at the date of the execution of this Indenture
located at Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx, XX 00000.
Debt:
The term "Debt" shall mean indebtedness for money borrowed, but shall exclude
indebtedness maturing by its terms in twelve months or less from the date of
determination.
PAGE 3
Depositary:
The term "Depositary" shall mean, unless otherwise specified in a Company
Order pursuant to Section 2.05 hereof, The Depositary Trust Company, New
York, New York, or any successor thereto registered and qualified under the
Securities and Exchange Act of 1934, as amended, or other applicable statute
or regulation.
Event of Default:
The term "Event of Default" shall mean any event specified in Section 8.01
hereof, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
First Mortgage:
The term "First Mortgage" shall mean, individually, each of the Fortieth
Supplemental Indenture dated as of September 1, 1954 from the Company to
State Street Bank and Trust, as successor trustee to Old Colony Trust Company
of Boston, as supplemented and amended from time to time, and the Indenture
of First Mortgage dated as of April 1, 1957 from Washington Natural Gas
Company to Xxxxxx Trust and Savings Bank, as trustee, as supplemented and
amended from time to time.
First Mortgage Bonds:
The term "First Mortgage Bonds" shall mean all first mortgage bonds issued by
the Company and outstanding under each First Mortgage, other than Pledged
First Mortgage Bonds.
Global Note:
The term "Global Note" shall mean a Note that pursuant to Section 2.05 hereof
is issued to evidence Notes, that is delivered to the Depositary or pursuant
to the instructions of the Depositary and that shall be registered in the
name of the Depositary or its nominee.
Indenture:
The term "Indenture" shall mean this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
PAGE 4
Initial Notes:
The term "Initial Notes" shall mean Notes in an aggregate principal amount of
$300,000,000 authenticated and delivered upon the execution of this
Indenture.
Interest Payment Date:
The term "Interest Payment Date" shall mean, unless otherwise specified in a
Company Order pursuant to Section 2.05 hereof, (a) each March 15 and
September 15 during the period any Note is outstanding (provided that the
first Interest Payment Date for any Note, the Original Issue Date of which is
after a Regular Record Date but prior to the respective Interest Payment
Date, shall be the Interest Payment Date following the next succeeding
Regular Record Date), (b) a date of maturity of such Note and (c) only with
respect to defaulted interest on such Note, the date established by the
Trustee for the payment of such defaulted interest pursuant to Section 2.11
hereof.
Maturity:
The term "maturity," when used with respect to any Note, shall mean the date
on which the principal of such Note becomes due and payable as therein or
herein provided, whether at the stated maturity thereof or by declaration of
acceleration, redemption or otherwise.
Mortgage:
The term "Mortgage" shall mean and include any mortgage, pledge, lien or
security interest.
Mortgage Trustee:
The term "Mortgage Trustee" shall mean the Person serving as trustee at the
time under either First Mortgage or a Substituted Mortgage.
Note or Notes:
The term "Note" or "Notes" shall mean any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.
PAGE 5
Noteholder:
The term "Noteholder," "Holder of Notes" or "Holder" shall mean any Person in
whose name at the time a particular Note is registered on the books of the
Trustee kept for that purpose in accordance with the terms hereof.
Officers' Certificate:
The term "Officers' Certificate" when used with respect to the Company, shall
mean a certificate signed by one of the Chairman, the President, any Vice
President, the Treasurer or an Assistant Treasurer, and by the Secretary or
an Assistant Secretary of the Company.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel reasonably acceptable to the Trustee, which legal counsel may
be an employee of the Company, meeting the applicable requirements of
Section 15.05 hereof. If the Indenture requires the delivery of an Opinion
of Counsel to the Trustee, the text and substance of which has been
previously delivered to the Trustee, the Company may satisfy such requirement
by the delivery by the legal counsel that delivered such previous Opinion of
Counsel of a letter to the Trustee to the effect that the Trustee may rely on
such previous Opinion of Counsel as if such Opinion of Counsel was dated and
delivered the date delivery of such Opinion of Counsel is required. Any
Opinion of Counsel may contain conditions and qualifications satisfactory to
the Trustee.
Original Issue Date:
The term "Original Issue Date" shall mean for a Note, or portions thereof,
the date upon which it, or such portion, was issued by the Company pursuant
to this Indenture and authenticated by the Trustee (other than in connection
with a transfer, exchange or substitution).
Outstanding:
The term "outstanding," when used with reference to Notes, shall, subject to
Section 10.04 hereof, mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
PAGE 6
(b) Notes, or portions thereof, for the payment or redemption of which
moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company), provided that if
such Notes are to be redeemed prior to the maturity thereof notice of such
redemption shall have been given as provided in Article Three, or provisions
satisfactory to the Trustee shall have been made for giving such notice;
(c) Notes, or portions thereof that have been paid and discharged or are
deemed to have been paid and discharged pursuant to the provisions of this
Indenture; and
(d) Notes in lieu of or in substitution for which other Notes shall have
been authenticated and delivered, or which have been paid, pursuant to
Section 2.07 hereof.
Permitted Encumbrances:
The term "Permitted Encumbrances" shall mean any of the following:
(a) Liens for taxes, assessments or governmental charges for the then
current year and taxes, assessments or governmental charges not then
delinquent; liens for worker's compensation awards and similar obligations
not then delinquent; mechanics', laborers', materialmen's and similar liens
not then delinquent; and any of such liens, whether or not delinquent, whose
validity is at the time being contested in good faith by the Company;
(b) Liens and charges incidental to construction or current operation which
have not at such time been filed or asserted or the payment of which has been
adequately secured or which are insignificant in amount;
(c) Liens, securing obligations not assumed by the Company and on account of
which it has not paid and does not expect to pay interest directly or
indirectly, existing upon real estate over or in respect of which the Company
has a right of way or other easement for transmission or distribution
purposes; provided that the loss of all such easements would not materially
adversely affect the operations of the Company;
(d) Any right which the United States of America or any municipal or
governmental body or agency may have by virtue of any franchise, license,
contract or statute to recapture or to purchase, or designate a purchaser of
or order the sale of, any property of the Company upon payment of reasonable
compensation therefor, or upon reasonable compensation or conditions to
terminate any franchise, license or other rights before the expiration date
thereof or to regulate the property and business of the Company;
PAGE 7
(e) Liens of judgments covered by insurance, or upon appeal and covered by
supersedeas bond, or if not so covered not exceeding at any one of time
$10 million in aggregate amount;
(f) Easements or reservations in respect of any property of the Company for
the purpose of transmission or distribution lines or other rights-of-way,
including overhead and underground transmission and distribution lines and
pipelines, or similar purposes, zoning ordinances, regulations, reservations,
restrictions, covenants, party wall agreements, conditions of records and
other encumbrances (other than to secure the payment of money), none of which
are such as to interfere with the proper operation and development of the
property affected thereby; and
(g) Any lien reserved as security for rent or for compliance with other
provisions of the lease in case of any leasehold estate.
Person:
The term "Person" shall mean any individual, corporation, partnership,
limited partnership, joint venture, limited liability company, limited
liability partnership, association, joint-stock company, trust,
unincorporated organization or government or any agent or political
subdivision thereof.
Pledged First Mortgage Bonds:
The term "Pledged First Mortgage Bonds" shall mean any first mortgage bonds
issued by the Company under either First Mortgage and delivered to the
Trustee pursuant to Section 4.01 or 4.08 hereof.
Pledged Substituted Mortgage Bonds:
The term "Pledged Substituted Mortgage Bonds" shall mean any mortgage bonds
issued by the Company under a Substituted Mortgage and delivered to the
Trustee pursuant to Section 4.11 hereof.
Principal Executive Office of the Company:
The term "principal executive office of the Company" shall mean 000 - 000xx
Xxxxxx X.X., Xxxxxxxx, Xxxxxxxxxx 00000-0000, or such other place where the
main corporate offices of the Company are located as designated in writing to
the Trustee by an Authorized Agent.
PAGE 8
Principal Property:
The term "Principal Property" shall mean (i) any interest in real property
owned by the Company, and (ii) any asset owned by the Company that is
depreciable in accordance with generally accepted accounting principles,
provided that such real property interest or other depreciable asset is
Utility Property.
Regular Record Date:
The term "Regular Record Date" shall mean, unless otherwise specified in a
Company Order pursuant to Section 2.05, for an Interest Payment Date for a
particular Note the last day of the calendar month next preceding such
Interest Payment Date unless such Interest Payment Date is the date of
maturity of such Note, in which event, the Regular Record Date shall be the
date of maturity of such Note.
Related Issue of Notes:
The term "related issue of Notes," when used in reference to an issue of
Pledged First Mortgage Bonds, shall mean the issue of Notes in respect of
which such Pledged First Mortgage Bonds were delivered to the Trustee
pursuant to Section 4.01 or 4.08 hereof upon the initial authentication and
issuance of such Notes pursuant to Section 2.05 hereof and when used in
reference to an issue of Pledged Substituted Mortgage Bonds shall mean the
issue of Notes in respect of which such Pledged Substituted Mortgage Bonds
were delivered to the Trustee pursuant to Section 4.11 hereof.
Related Issue of Pledged First Mortgage Bonds:
The term "related issue of Pledged First Mortgage Bonds," when used in
reference to an issue of Notes, shall mean the issue of Pledged First
Mortgage Bonds delivered to the Trustee pursuant to Section 4.01 or 4.08
hereof in connection with the initial authentication and issuance of such
Notes pursuant to Section 2.05 hereof.
Related Issue of Pledged Substituted Mortgage Bonds:
The term "related issue of Pledged Substituted Mortgage Bonds," when used in
reference to an issue of Notes, shall mean the issue of Pledged Substituted
Mortgage Bonds delivered to the Trustee pursuant to Section 4.11 hereof.
Responsible Officer:
The term "responsible officer" or "responsible officers" when used with
respect to the Trustee shall mean any officer in the Corporate Trust
PAGE 9
Administration department of the Trustee, or any other officer or assistant
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 or her knowledge of and familiarity with the particular subject.
SEC:
The term "SEC" shall mean the United States Securities and Exchange
Commission or, if at any time hereafter the SEC is not existing or performing
the duties now assigned to it under the TIA, then the body performing such
duties.
Special Record Date:
The term "Special Record Date" shall mean, with respect to any Note, the date
established by the Trustee in connection with the payment of defaulted
interest on such Note pursuant to Section 2.11 hereof.
Stated Maturity:
The term "stated maturity" shall mean, with respect to any Note, the last
date on which principal on such Note becomes due and payable as therein or
herein provided, other than by declaration of acceleration or by redemption.
Substituted Mortgage:
The term "Substituted Mortgage" shall mean a mortgage indenture of the
Company designated by the Company to the Trustee as a Substituted Mortgage
pursuant to Section 4.11 hereof.
Substitution Date:
The term "Substitution Date" shall mean the date as of which all First
Mortgage Bonds have been retired through payment, redemption, or otherwise
(including those First Mortgage Bonds the payment for which has been provided
for in accordance with the applicable First Mortgage) at, before or after the
maturity thereof.
Trustee:
The term "Trustee" shall mean State Street Bank and Trust Company and,
subject to Article Nine, shall also include any successor Trustee.
PAGE 10
U.S. Government Obligations:
The term "U.S. Government Obligations" shall mean (i) direct non-callable
obligations of, or noncallable obligations guaranteed as to timely payment of
principal and interest by, the United States of America or an agency thereof
for the payment of which obligations or guarantee the full faith and credit
of the United States is pledged or (ii) certificates or receipts representing
direct ownership interests in obligations or specified portions (such as
principal or interest) of obligations described in clause (i) above, which
obligations are held by a custodian in safekeeping in a manner satisfactory
to the Trustee.
Utility Property:
The term "Utility Property" shall mean and comprise property of the Company,
located in the State of Washington or in any state contiguous thereto which
(except as provided below) is used by or useful to the Company in the
business of (a) generating, transmitting, distributing, utilizing,
purchasing, furnishing and/or disposing of electricity, for heat, light,
power, or refrigeration or any other uses, or in any business which is
incidental thereto, or (b) furnishing, purchasing, storing, processing,
manufacturing, utilizing, transmitting, supplying, liquefying, distributing
and/or disposing of gas, whether manufactured, natural or liquefied petroleum
gases or a mixture of any thereof, for heat, light, power, or refrigeration
or any other uses, or in any business which is incidental thereto.
ARTICLE TWO
FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01 Form Generally
(a) If the Notes are in the form of a Global Note they shall be in
substantially the form set forth in Exhibit A (or, following the Substitution
Date, Exhibit C) to this Indenture, and, if the Notes are not in the form of
a Global Note, they shall be in substantially the form set forth in Exhibit B
(or, following the Substitution Date, Exhibit D) to this Indenture, or, in
any case, in such other form as shall be established by a Board Resolution,
or a Company Order 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 applicable rules of any securities exchange or
of the Depositary or with applicable law or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their
execution of such Notes.
PAGE 11
(b) The definitive Notes shall be typed, printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Notes, as evidenced by their
execution of such Notes.
Section 2.02 Form of Trustee's Certificate of Authentication
The Trustee's certificate of authentication on all Notes shall be in
substantially the following form:
Trustee's Certificate of Authentication
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
_______________________________
as Trustee
By: __________________________
Authorized Officer
Section 2.03 Amount Unlimited
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited, subject to compliance with the
provisions of this Indenture.
Section 2.04 Denominations, Dates, Interest Payment and Record Dates
(a) The Notes shall be issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof or such other amount
or amounts as may be authorized by the Board of Directors or a Company Order
pursuant to a Board Resolution or in one or more indentures supplemental
hereto.
(b) Each Note shall be dated and issued as of the date of its authentication
by the Trustee and shall bear an Original Issue Date or, as provided in
Section 2.13(e) hereof, two or more Original Issue Dates; each Note issued
upon transfer, exchange or substitution of a Note shall bear the Original
Issue Date or Dates of such transferred, exchanged or substituted Note,
subject to the provisions of Section 2.13(e) hereof.
PAGE 12
(c) Each Note shall bear interest from the later of (1) its Original Issue
Date (or, if pursuant to Section 2.13 hereof, a Global Note has two or more
Original Issue Dates, interest shall, beginning on each such Original Issue
Date, begin to accrue for that part of the principal amount of such Global
Note to which that Original Issue Date is applicable), or (2) the most recent
date to which interest has been paid or duly provided for with respect to
such Note until the principal of such Note is paid or made available for
payment, and interest on each Note shall be payable on each Interest Payment
Date after the Original Issue Date.
(d) Each Note shall mature on a stated maturity specified in the Note. The
principal amount of each outstanding Note shall be payable on the maturity
date or dates specified therein.
(e) Unless otherwise specified in a Company Order pursuant to Section 2.05
hereof, interest on each of the Notes shall be calculated on the basis of a
360-day year of twelve 30-day months and shall be computed at a fixed rate
until the maturity of such Notes. The method of computing interest on any
Notes not bearing a fixed rate of interest shall be set forth in a Company
Order pursuant to Section 2.05 hereof. Unless otherwise specified in a
Company Order pursuant to Section 2.05 hereof, principal, interest and
premium on the Notes shall be payable in the currency of the United States.
(f) Except as provided in the following sentence, the Person in whose name
any Note is registered at the close of business on any Regular Record Date or
Special Record Date with respect to an Interest Payment Date for such Note
shall be entitled to receive the interest payable on such Interest Payment
Date notwithstanding the cancellation of such Note upon any registration of
transfer, exchange or substitution of such Note subsequent to such Regular
Record Date or Special Record Date and prior to such Interest Payment Date.
Any interest payable at maturity shall be paid to the Person to whom the
principal of such Note is payable.
(g) Promptly after each Regular Record Date that is not a date of maturity,
the Trustee shall furnish to the Company a notice setting forth the total
amount of the interest payments to be made on the applicable Interest Payment
Date, and to the Depositary a notice setting forth the total amount of
interest payments to be made on Global Notes on such Interest Payment Date.
The Trustee (or any duly selected paying agent) shall provide to the Company
during each month that precedes an Interest Payment Date a list of the
principal, interest and premium, if any, to be paid on Notes on such Interest
Payment Date and to the Depositary a list of the principal, interest and
premium, if any, to be paid on Global Notes on such Interest Payment Date.
Promptly after the first Business Day of each month, the Trustee shall
furnish to the Company a written notice setting forth the aggregate principal
amount of the Global Notes. The Trustee, as long as it is paying agent,
shall assume responsibility for withholding taxes on interest paid as
required by law except with respect to any Global Note.
PAGE 13
Section 2.05 Execution, Authentication, Delivery and Dating
(a) The Notes shall be executed on behalf of the Company by one of the
Chairman, the President, any Vice President, the Treasurer or an Assistant
Treasurer of the Company and attested by the Secretary or an Assistant
Secretary of the Company. The signature of any of these officers on the
Notes may be manual or facsimile.
(b) Notes bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall continue to be valid
obligations of the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Notes or did not hold such offices at the date of such
Notes.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with or preceded by one or more Company
Orders for the authentication and delivery of such Notes, and the Trustee in
accordance with any such Company Order shall authenticate and deliver such
Notes. The Notes shall be issued in series. Such Company Order shall
specify the following with respect to each issue of Notes: (i) any
limitations on the aggregate principal amount of the Notes to be issued as
part of such series, (ii) the Original Issue Date or Dates for such Notes,
(iii) the stated maturity of such Notes, (iv) the interest rate or rates, or
method of calculation of such rate or rates, for such Notes, (v) the terms,
if any, regarding the optional or mandatory redemption of such Notes,
including the redemption date or dates, if any, and the price or prices
applicable to such redemption (including any premium), (vi) whether or not
such Notes shall be entitled to the benefit of any sinking fund, and the
terms, if any, of such sinking fund, (vii) whether or not such Notes shall be
issued in whole or in part in the form of a Global Note and, if so, the
Depositary for such Global Note, (viii) the designation of such Notes,
(ix) if the form of such Notes is not as described in Exhibit A, Exhibit B,
Exhibit C, or Exhibit D hereto, the form of such Notes, (x) the maximum
annual interest rate, if any, of the Notes permitted for such issue, (xi) any
other information necessary to complete the Notes of such issue, (xii) if
prior to the Substitution Date, the designation of the related issue of
Pledged First Mortgage Bonds being delivered to the Trustee in connection
with the issuance of such Notes, (xiii) if on or after the Substitution Date,
the designation of the related issue of Pledged Substituted Mortgage Bonds,
if any, (xiv) the establishment of any office or agency pursuant to
Section 6.02 hereof and (xv) any other terms of such issue not inconsistent
with this Indenture. Prior to authenticating any Notes, and in accepting the
additional responsibilities under this Indenture in relation to such Notes,
the Trustee shall receive from the Company the following at or before the
PAGE 14
issuance of such Notes, and (subject to Section 9.01 hereof) shall be fully
protected in relying upon:
(1) A Board Resolution authorizing such Company Order or Orders and, if the
form of Notes is established by a Board Resolution or a Company Order
pursuant to a Board Resolution, a copy of such Board Resolution;
(2) an Opinion of Counsel stating substantially the following, subject to
customary qualifications and exceptions:
(A) if the form of Notes has been established by or pursuant to a Board
Resolution, a Company Order pursuant to a Board Resolution or in a
supplemental indenture as permitted by Section 2.01 hereof, that such form
has been established in conformity with this Indenture;
(B) that this Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except as
enforcement of provisions of the Indenture may be limited by state laws
affecting the remedies for the enforcement of the security provided for in
the Indenture;
(C) if prior to the Substitution Date, that the related issue of Pledged
First Mortgage Bonds being delivered to the Trustee in connection with the
issuance of such Notes has been duly authorized, executed and delivered, and
that such Pledged First Mortgage Bonds and the applicable First Mortgage are
valid and binding obligations of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of creditors'
rights and the application of general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except
as enforcement of provisions thereof may be limited by state laws affecting
the remedies for the enforcement of the security provided for in the First
Mortgage; and that such Pledged First Mortgage Bonds are entitled to the
benefit of the applicable First Mortgage, equally and ratably, with all First
Mortgage Bonds and other Pledged First Mortgage Bonds (if any) outstanding
under the applicable First Mortgage, except as to sinking fund provisions;
PAGE 15
(D) that the Indenture and, if any Pledged First Mortgage Bonds are, or are
to be, outstanding, the applicable First Mortgage are qualified to the extent
necessary under the TIA;
(E) if any Pledged Substituted Mortgage Bonds are to be delivered, that the
related issue of Pledged Substituted Mortgage Bonds being delivered to the
Trustee in connection with the issuance of such Notes has been duly
authorized, executed and delivered, and that such Pledged Substituted
Mortgage Bonds and the Substituted Mortgage are valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the
extent that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except as
enforcement of provisions thereof may be limited by state laws affecting the
remedies for the enforcement of the security provided for in the Substituted
Mortgage; and that such Pledged Substituted Mortgage Bonds are entitled to
the benefit of the Substituted Mortgage, equally and ratably, with all
Pledged Substituted Mortgage Bonds (if any) outstanding thereunder, except as
to sinking fund provisions;
(F) that the Indenture and, if any Pledged Substituted Mortgage Bonds are,
or are to be, outstanding, the Substituted Mortgage are qualified to the
extent necessary under the TIA;
(G) that such Notes have been duly authorized and executed by the Company,
and when authenticated 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 binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting
the enforcement of creditors' rights and the application of general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except as enforcement of provisions of
this Indenture may be limited by state laws affecting the remedies for the
enforcement of the security provided for in this Indenture;
PAGE 16
(H) that the issuance of the Notes and, if applicable, the delivery by the
Company of the related issue of Pledged First Mortgage Bonds or Pledged
Substituted Mortgage Bonds in connection therewith will not result in any
default under this Indenture, the First Mortgage or the Substituted Mortgage
(if applicable), or any other contract, indenture, loan agreement or other
instrument to which the Company is a party or by which it or any of its
property is bound;
(I) that all consents or approvals of the Washington Utilities and
Transportation Commission (or any successor agency) and of any other federal
or state regulatory agency required in connection with the Company's
execution and delivery of this Indenture, such Notes and any Pledged First
Mortgage Bonds or Pledged Substituted Mortgage Bonds have been obtained and
are not withdrawn (except that no statement need be made with respect to
state securities laws); and
(J) if applicable, that the First Mortgage or the Substituted Mortgage and
all financing statements have been duly filed and recorded in all places
where such filing or recording is necessary for the perfection or
preservation of the lien of the First Mortgage or the Substituted Mortgage,
and the First Mortgage or the Substituted Mortgage constitutes a valid and
perfected first lien upon the property purported to be covered thereby,
subject only to permitted encumbrances (as defined in the First Mortgage or
the Substituted Mortgage).
(3) an Officers' Certificate stating that (i) the Company is not, and upon
the authentication by the Trustee of such Notes will not be, in default under
any of the terms or covenants contained in this Indenture, (ii) all
conditions that must be met by the Company to issue Notes under this
Indenture have been met, and (iii) if applicable, the related issue of
Pledged First Mortgage Bonds or the related issue of Pledged Substituted
Mortgage Bonds being delivered to the Trustee meets the requirements of
Section 4.10 or Section 4.11, as applicable, hereof.
(d) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of an authorized officer, and
such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
(e) If all Notes having identical terms (but which may have differing
Original Issue Dates) are not to be authenticated and issued at one time, the
Company shall not be required to deliver the Company Order, Board
Resolutions, Pledged First Mortgage Bonds or Pledged Substituted Mortgage
Bonds, if applicable, Officers' Certificate and Opinion of Counsel (including
any such that would be otherwise required pursuant to Section 15.05 hereof)
PAGE 17
described in Section 2.05(c) hereof at or prior to the authentication of each
such Note, if such items are delivered at or prior to the time of
authentication of the first such Note to be authenticated and issued. If all
of such Notes are not authenticated and issued at one time, for each issuance
of Notes after the initial issuance of Notes, the Company shall be required
only to deliver to the Trustee such Notes and a written request (executed by
one of the Chairman, the President, any Vice President, the Treasurer, or an
Assistant Treasurer, and by the Secretary or an Assistant Secretary of the
Company) to the Trustee to authenticate such Notes and to deliver such Notes
in accordance with the instructions specified by such request. Any such
request shall constitute a representation and warranty by the Company that
the statements made in the Officers' Certificate delivered to the Trustee
prior to the authentication and issuance of the first such Note are true and
correct on the date thereof as if made on and as of the date thereof.
Section 2.06 Exchange and Registration of Transfer of Notes
(a) Subject to Section 2.13 hereof, Notes may be exchanged for one or more
new Notes of any authorized denominations and of a like aggregate principal
amount, series and stated maturity and having the same terms and Original
Issue Date or Dates. Notes to be exchanged shall be surrendered at any of
the offices or agencies to be maintained pursuant to Section 6.02 hereof and
the Trustee shall deliver in exchange therefor the Note or Notes which the
Noteholder making the exchange shall be entitled to receive.
(b) The Company hereby appoints the Trustee registrar for the Notes. The
Trustee shall keep, at one of said offices or agencies, a register or
registers in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall register or cause to be registered Notes and
shall register or cause to be registered the transfer of Notes as in this
Article Two provided. Such register shall be in written form or in any other
form capable of being converted into written form within a reasonable time.
At all reasonable times, such register shall be open for inspection by the
Company. Upon due presentment for registration of transfer of any Note at
any such office or agency, the Company shall execute and the Trustee shall
register, authenticate and deliver in the name of the transferee or
transferees one or more new Notes of any authorized denominations and of a
like aggregate principal amount, series and stated maturity and having the
same terms and Original Issue Date or Dates.
(c) All Notes presented for registration of transfer or for exchange,
redemption or payment shall be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee and duly executed by the Holder or the attorney in
fact of such Holder duly authorized in writing.
PAGE 18
(d) No service charge shall be made for any exchange or registration of
transfer of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
(e) The Trustee shall not be required to exchange or register a transfer of
any Notes selected, called or being called for redemption (including Notes,
if any, redeemable at the option of the Holder, provided such Notes are then
redeemable at such Holder's option), except, in the case of any Note to be
redeemed in part, the portion thereof not to be so redeemed.
(f) If the principal amount, and applicable premium, if any, of part, but
not all, of a Global Note is paid, then upon surrender to the Trustee of such
Global Note, the Company shall execute, and the Trustee shall authenticate,
deliver and register, a Global Note in an authorized denomination in
aggregate principal amount equal to, and having the same terms, Original
Issue Date or Dates and series as, the unpaid portion of such Global Note.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Notes
(a) If any temporary or definitive Note shall become mutilated or be
destroyed, lost or stolen, the Company shall execute, and upon its request
the Trustee shall authenticate and deliver, a new Note of like form and
principal amount and having the same terms and Original Issue Date or Dates
and bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for
the Note so destroyed, lost or stolen. In every case the applicant for a
substituted Note shall furnish to the Company, the Trustee and any paying
agent or Authenticating Agent such security or indemnity as may be required
by them to save each of them harmless, and, in every case of destruction,
loss or theft of a Note, the applicant shall also furnish to the Company and
to the Trustee evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
(b) The Trustee shall authenticate any such substituted Note and deliver the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Note, 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 connected
therewith. If any Note which has matured, is about to mature, has been
redeemed or called for redemption shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substituted Note, pay
or authorize the payment of the same (without surrender thereof except in the
case of a mutilated Note) if the applicant for such payment shall furnish to
PAGE 19
the Company, the Trustee and any paying agent or Authenticating Agent such
security or indemnity as may be required by them to save each of them
harmless and, in case of destruction, loss or theft, evidence satisfactory to
the Company and the Trustee of the destruction, loss or theft of such Note
and of the ownership thereof.
(c) Every substituted Note issued pursuant to this Section 2.07 by virtue of
the fact that any Note is mutilated, destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or
not such destroyed, lost or stolen Note shall be found at any time, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder. All Notes shall be held
and owned upon the express condition that, to the extent permitted by law,
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their
surrender.
Section 2.08 Temporary Notes
Pending the preparation of definitive Notes, the Company may execute and the
Trustee shall authenticate and deliver temporary Notes (printed, lithographed
or otherwise reproduced). Temporary Notes shall be issuable in any
authorized denomination and substantially in the form of the definitive Notes
but with such omissions, insertions and variations as may be appropriate for
temporary Notes, all as may be determined by the Company. Every such
temporary Note shall be authenticated by the Trustee upon the same conditions
and in substantially the same manner, and with the same effect, as the
definitive Notes. Without unreasonable delay the Company shall execute and
shall deliver to the Trustee definitive Notes and thereupon any or all
temporary Notes shall be surrendered in exchange therefor at the corporate
trust office of the Trustee, and the Trustee shall authenticate, deliver and
register in exchange for such temporary Notes an equal aggregate principal
amount of definitive Notes. Such exchange shall be made by the Company at
its own expense and without any charge therefor to the Noteholders. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes authenticated and delivered
hereunder.
Section 2.09 Cancellation of Notes Paid, etc.
All Notes surrendered for the purpose of payment, redemption, exchange or
registration of transfer shall be surrendered to the Trustee for cancellation
and promptly canceled by it and no Notes shall be issued in lieu thereof
PAGE 20
except as expressly permitted by this Indenture. The Company's acquisition
of any Notes shall operate as a redemption or satisfaction of the
indebtedness represented by such Notes and such Notes shall be surrendered by
the Company to and canceled by the Trustee.
Section 2.10 Interest Rights Preserved
Each Note delivered under this Indenture upon transfer of or in exchange for
or in lieu of any other Note shall carry all the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note, and each
such Note shall be so dated that neither gain nor loss of interest shall
result from such transfer, exchange or substitution.
Section 2.11 Special Record Date
If and to the extent that the Company fails to make timely payment or
provision for timely payment of interest on any issue of Notes (other than on
an Interest Payment Date that is a maturity date), that interest shall cease
to be payable to the Persons who were the Noteholders of such issue at the
applicable Regular Record Date. In that event, when moneys become available
for payment of that interest, the Trustee shall (a) establish a date of
payment of such interest and a Special Record Date for the payment of that
interest, which Special Record Date shall be not more than 15 or fewer than
10 days prior to the date of the proposed payment and (b) mail notice of the
date of payment and of the Special Record Date not fewer than 10 days
preceding the Special Record Date to each Noteholder of such issue at the
close of business on the 15th day preceding the mailing at the address of
such Noteholder, as it appears on the register for the Notes. On the day so
established by the Trustee the interest shall be payable to the Holders of
the applicable Notes at the close of business on the Special Record Date.
Section 2.12 Payment of Notes
Payment of the principal, interest and premium on all Notes shall be payable
as follows:
(a) On or before 11:00 a.m., New York City time, of the day on which payment
of principal, interest and premium, if any, is due on any Global Note
pursuant to the terms thereof, the Company shall deliver to the Trustee funds
available on such date sufficient to make such payment, by wire transfer of
immediately available funds or by instructing the Trustee to withdraw
sufficient funds from an account maintained by the Company with the Trustee
or such other method as is acceptable to the Trustee and, if applicable, the
Depositary. On or before 2:00 p.m., New York City time, or such other time
as shall be agreed upon between the Trustee and, if applicable, the
PAGE 21
Depositary, of the day on which any payment of interest is due on any Global
Note (other than at maturity), the Trustee shall pay to the Depositary such
interest in same day funds. On or before 2:00 p.m., New York City time or
such other time as shall be agreed upon between the Trustee and the
Depositary, of the day on which principal, interest payable at maturity and
premium, if any, is due on any Global Note, the Trustee shall deposit with
the Depositary the amount equal to the principal, interest payable at
maturity and premium, if any, by wire transfer into the account specified by
the Depositary.
(b) With respect to any Note that is not a Global Note, principal,
applicable premium and interest due at the maturity of the Note shall be
payable in immediately available funds when due upon presentation and
surrender of such Note at the corporate trust office of the Trustee or at the
authorized office of any paying agent. Interest on any Note that is not a
Global Note (other than interest payable at maturity) shall be paid to the
Holder thereof as its name appears on the register by check or wire transfer
payable in clearinghouse funds; provided that if the Trustee receives a
written request from any Holder of Notes, the aggregate principal amount of
which having the same Interest Payment Date equals or exceeds $10,000,000, on
or before the applicable Regular Record Date for such Interest Payment Date,
interest shall be paid by wire transfer of immediately available funds to a
bank designated by such Holder in its request or by direct deposit into the
account of such Holder designated by such Holder in its request if such
account is maintained with the Trustee or any paying agent.
(c) The Trustee shall receive the Pledged First Mortgage Bonds or Pledged
Substituted Mortgage Bonds from the Company as provided in this Indenture and
shall hold the Pledged First Mortgage Bonds or Pledged Substituted Mortgage
Bonds, and any and all sums payable thereon or with respect thereto or
realized therefrom, in trust for the benefit of the Holders of the Notes, as
herein provided. Subject to Article Eight hereof, the Company's obligations
to make payments with respect to the principal of, premium or interest on
Pledged First Mortgage Bonds or Pledged Substituted Mortgage Bonds will be
fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time that any such payment shall be due, the then due
principal of, premium or interest on the related issue of Notes shall have
been fully or partially paid or there shall have been deposited with the
Trustee pursuant to this Section 2.12 sufficient available funds to fully or
partially pay the then due principal of, premium, if any, or interest on such
related issue of Notes.
PAGE 22
Section 2.13 Notes Issuable in the Form of a Global Note
(a) If the Company shall establish pursuant to Section 2.05 hereof that the
Notes of a particular series are to be issued in whole or in part in the form
of one or more Global Notes, then the Company shall execute and the Trustee
shall, in accordance with Section 2.05 hereof and the Company Order delivered
to the Trustee thereunder, authenticate and deliver such Global Note or
Notes, which (i) shall represent, shall be denominated in an amount equal to
the aggregate principal amount of, and shall have the same terms as, the
outstanding Notes to be represented by such Global Note or Notes, (ii) shall
be registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following
effect: "This Note is a Global Note registered in the name of the Depositary
(referred to herein) or a nominee thereof and, unless and until it is
exchanged in whole or in part for the individual Notes represented hereby,
this Global Note may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this Global Note is presented by an authorized
representative of The Depositary Trust Company, to the trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depositary Trust Company and any payment is
made to Cede & Co., any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful since the registered owner hereof,
Cede & Co., has an interest herein" or such other legend as may be required
by the rules and regulations of the Depositary.
(b) Notwithstanding any other provision of Section 2.06 hereof or of this
Section 2.13, unless the terms of a Global Note expressly permit such Global
Note to be exchanged in whole or in part for individual Notes, a Global Note
may be transferred, in whole but not in part, only as described in the legend
thereto.
(c) (i) If at any time the Depositary for a Global Note notifies the
Company that it is unwilling or unable to continue as Depositary for such
Global Note or if at any time the Depositary for the Global Note shall no
longer be eligible or in good standing under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or other applicable statute or
regulation, the Company shall appoint a successor Depositary, with respect to
such Global Note. If a successor Depositary for such Global Note 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 2.05(c)(vii) hereof shall no longer be effective with
respect to the series of Notes evidenced by such Global Note and the Company
shall execute, and the Trustee, upon receipt of a Company Order for the
PAGE 23
authentication and delivery of individual Notes of such series in exchange
for such Global Note, shall authenticate and deliver, individual Notes of
such series of like tenor and terms in definitive form in an aggregate
principal amount equal to the amount of the Global Note in exchange for such
Global Note. The Trustee shall not be charged with knowledge or notice of
the ineligibility of a Depositary unless a responsible officer assigned to
and working in its corporate trustee administration department shall have
actual knowledge thereof.
(ii) The Company may at any time and in its sole discretion determine that
all (but not less than all) outstanding Notes of a series issued or issuable
in the form of one or more Global Notes shall no longer be represented by
such Global Note or Notes. In such event the Company shall execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery
of individual Notes in exchange for such Global Note, shall authenticate and
deliver individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note
or Notes in exchange for such Global Note or Notes.
(iii) In any exchange provided for in any of the preceding two paragraphs,
the Company will execute and the Trustee will authenticate and deliver
individual Notes in definitive registered form in authorized denominations.
Upon the exchange of a Global Note for individual Notes, such Global Note
shall be canceled by the Trustee. Notes issued in exchange for a Global Note
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary for such Global Note, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Notes to the Depositary
for delivery to the persons in whose names such Notes are so registered, or
if the Depositary shall refuse or be unable to deliver such Notes, the
Trustee shall deliver such Notes to the persons in whose names such Notes are
registered, unless otherwise agreed upon between the Trustee and the Company,
in which event the Company shall cause the Notes to be delivered to the
persons in whose names such Notes are registered.
(d) Neither the Company, the Trustee, any Authenticating Agent nor any
paying agent 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 Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest.
(e) Pursuant to the provisions of this subsection, at the option of the
Trustee and upon 30 days' written notice to the Depositary but not prior to
the first Interest Payment Date of the respective Global Notes, the
Depositary shall be required to surrender any two or more Global Notes which
have identical terms, including, without limitation, identical maturities,
PAGE 24
interest rates and redemption provisions (but which may have differing
Original Issue Dates) to the Trustee, and the Company shall execute, and the
Trustee shall authenticate and deliver to, or at the direction of, the
Depositary, a Global Note in principal amount equal to the aggregate
principal amount of, and with all terms identical to, the Global Notes
surrendered thereto and that shall indicate each applicable Original Issue
Date and the principal amount applicable to each such Original Issue Date.
The exchange contemplated in this subsection shall be consummated at least 30
days prior to any Interest Payment Date applicable to any of the Global Notes
surrendered to the Trustee. Upon any exchange of any Global Note with two or
more Original Issue Dates, whether pursuant to this Section or pursuant to
Section 2.06 or Section 3.03 hereof, the aggregate principal amount of the
Notes with a particular Original Issue Date shall be the same before and
after such exchange, after giving effect to any retirement of Notes and the
Original Issue Dates applicable to such Notes occurring in connection with
such exchange.
ARTICLE THREE REDEMPTION OF NOTES
Section 3.01 Applicability of Article
Such of the Notes as are, by their terms, redeemable prior to their stated
maturity date at the option of the Company, may be redeemed by the Company at
such times, in such amounts and at such prices as may be specified therein
and in accordance with the provisions of this Article Three.
Section 3.02 Notice of Redemption; Selection of Notes
(a) The election of the Company to redeem any Notes shall be evidenced by a
Board Resolution or a Company Order which shall be given with notice of
redemption to the Trustee at least 45 days (or such shorter period acceptable
to the Trustee in its sole discretion) prior to the redemption date specified
in such notice.
(b) Following receipt of the Company's notice pursuant to Section 3.02(a)
hereof, notice of redemption to each Holder of Notes to be redeemed as a
whole or in part shall be given by the Trustee, at the expense of the
Company, in the manner provided in Section 15.10 hereof, no less than 30 or
more than 60 days prior to the date fixed for redemption. Any notice which
is given in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Noteholder receives the notice. In any
case, failure duly to give such notice, or any defect in such notice, to the
Holder of any Note designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any Note.
PAGE 25
(c) Each such notice shall specify the date fixed for redemption, the places
of redemption and the redemption price at which such Notes are to be
redeemed, and shall state that payment of the redemption price of such Notes
or portion thereof to be redeemed will be made upon surrender of such Notes
at such places of redemption, that interest accrued to the date fixed for
redemption will be paid as specified in such notice, and that from and after
such date interest thereon shall cease to accrue. If less than all of a
series of Notes having the same terms are to be redeemed, the notice shall
specify the Notes or portions thereof to be redeemed. If any Note is to be
redeemed in part only, the notice which relates to such Note shall state the
portion of the principal amount thereof to be redeemed, and shall state that,
upon surrender of such Note, a new Note or Notes having the same terms in
aggregate principal amount equal to the unredeemed portion thereof will be
issued.
(d) Unless otherwise provided by a supplemental indenture or Company Order
under Section 2.05 hereof, if less than all of a series of Notes having the
same terms are to be redeemed, the Trustee shall select pro rata or by lot,
or in such other manner as it shall deem appropriate and fair in its
discretion the particular Notes to be redeemed in whole or in part and shall
thereafter promptly notify the Company in writing of the Notes so to be
redeemed. If less than all of a series of Notes represented by a Global Note
are to be redeemed, the particular Notes or portions thereof of such series
to be redeemed shall be selected by the Depositary for such series of Notes
in such manner as the Depositary shall determine. Notes shall be redeemed
only in denominations of $1,000, provided that any remaining principal amount
of a Note redeemed in part shall be a denomination authorized under this
Indenture.
(e) If at the time of the mailing of any notice of redemption the Company
shall not have irrevocably directed the Trustee to apply funds deposited with
the Trustee or held by it and available to be used for the redemption of
Notes to redeem all the Notes called for redemption, such notice, at the
election of the Company, may state that it is subject to the receipt of the
redemption moneys by the Trustee before the date fixed for redemption and
that such notice shall be of no effect unless such moneys are so received
before such date.
Section 3.03 Payment of Notes on Redemption; Deposit of Redemption Price
(a) If notice of redemption for any Notes shall have been given as provided
in Section 3.02 hereof and such notice shall not contain the language
permitted at the Company's option under Section 3.02(e) hereof, such Notes or
portions of Notes called for redemption shall become due and payable on the
date and at the places stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption of
PAGE 26
such Notes. Interest on the Notes or portions thereof so called for
redemption shall cease to accrue and such Notes or portions thereof shall be
deemed not to be entitled to any benefit under this Indenture except to
receive payment of the redemption price together with interest accrued
thereon to the date fixed for redemption. Upon presentation and surrender of
such Notes at such a place of payment in such notice specified, such Notes or
the specified portions thereof shall be paid and redeemed at the applicable
redemption price, together with interest accrued thereon to the date fixed
for redemption.
(b) If notice of redemption shall have been given as provided in
Section 3.02 hereof and such notice shall contain the language permitted at
the Company's option under Section 3.02(e) hereof, such Notes or portions of
Notes called for redemption shall become due and payable on the date and at
the places stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption of such Notes, and
interest on the Notes or portions thereof so called for redemption shall
cease to accrue and such Notes or portions thereof shall be deemed not to be
entitled to any benefit under this Indenture except to receive payment of the
redemption price together with interest accrued thereon to the date fixed for
redemption; provided that, in each case, the Company shall have deposited
with the Trustee or a paying agent on or prior to such redemption date an
amount sufficient to pay the redemption price together with interest accrued
to the date fixed for redemption. Upon the Company making such deposit and
upon presentation and surrender of such Notes at the place of payment in such
notice specified, such Notes or the specified portions thereof shall be paid
and redeemed at the applicable redemption price, together with interest
accrued thereon to the date fixed for redemption. If the Company shall not
make such deposit on or prior to the redemption date, the notice of
redemption shall be of no force and effect and the principal on such Notes or
specified portions thereof shall continue to bear interest as if the notice
of redemption had not been given.
(c) No notice of redemption of Notes shall be mailed during the continuance
of any Event of Default, except (1) that, when notice of redemption of any
Notes has been mailed, the Company shall redeem such Notes but only if funds
sufficient for that purpose have prior to the occurrence of such Event of
Default been deposited with the Trustee or a paying agent for such purpose,
and (2) that notices of redemption of all outstanding Notes may be given
during the continuance of an Event of Default.
PAGE 27
(d) Upon surrender of any Note redeemed in part only, the Company shall
execute, and the Trustee shall authenticate, deliver and register, a new Note
or Notes of authorized denominations in aggregate principal amount equal to,
and having the same terms, Original Issue Date or Dates and series as, the
unredeemed portion of the Note so surrendered.
ARTICLE FOUR PLEDGED FIRST MORTGAGE BONDS; PLEDGED SUBSTITUTED MORTGAGE
BONDS
Section 4.01 Delivery of Initial Series of Pledged First Mortgage Bonds
Subject to the provisions of Section 4.10 and Article Five hereof, the
Company hereby delivers to the Trustee, in connection with the initial
issuance of the Initial Notes, Pledged First Mortgage Bonds bearing the
designation "First Mortgage Bonds, Pledged Series A" in the aggregate
principal amount of $300,000,000, fully registered in the name of the
Trustee, in trust for the benefit of the Holders from time to time of the
Initial Notes as security for any and all obligations of the Company under
the Initial Notes, including but not limited to, (1) the full and prompt
payment of the principal of and premium, if any, on the Initial Notes when
and as the same shall become due and payable in accordance with the terms and
provisions of this Indenture or the Initial Notes, either at the stated
maturity thereof, upon acceleration of the maturity thereof or upon
redemption, and (2) the full and prompt payment of any interest on the
Initial Notes when and as the same shall become due and payable in accordance
with the terms and provisions of this Indenture or the Initial Notes.
Section 4.02 Receipt
The Trustee acknowledges receipt of the Pledged First Mortgage Bonds
described in Section 4.01 hereof.
Section 4.03 Pledged First Mortgage Bonds Held by the Trustee
The Trustee, as a Holder of Pledged First Mortgage Bonds, shall attend any
meeting of Bondholders under the applicable First Mortgage as to which it
receives due notice, or, at its option, shall deliver its proxy in connection
therewith. Either at such meeting, or otherwise where consent of Holders of
First Mortgage Bonds issued under the applicable First Mortgage is sought
without a meeting, the Trustee shall vote all of the Pledged First Mortgage
Bonds held by it, or shall consent or withhold its consent with respect
thereto, as directed by the Holders of not less than a majority in the
aggregate principal amount of the outstanding Notes; provided, however, that
the Trustee shall not be required to vote as such Holder of any particular
issue of Pledged First Mortgage Bonds in favor of, or give its consent to,
any action except upon notification by the Trustee to the Noteholders of the
related issue of Notes of such proposal and consent thereto of the Holders of
PAGE 28
not less than a majority in aggregate principal amount of the outstanding
Notes of such issue.
Section 4.04 No Transfer of Pledged First Mortgage Bonds; Exception
Except as required to effect an assignment to a successor trustee under this
Indenture or pursuant to Section 4.05 or Section 4.07 hereof, the Trustee
shall not sell, assign or transfer the Pledged First Mortgage Bonds and the
Company shall issue stop transfer instructions to the Mortgage Trustee and
any transfer agent under the First Mortgage to effect compliance with this
Section 4.04.
Section 4.05 Delivery to the Company of All Pledged First Mortgage Bonds
When the obligation of the Company to make payment with respect to the
principal of and premium, if any, and interest on any Pledged First Mortgage
Bonds shall be satisfied or deemed satisfied pursuant to Section 4.10 or
Section 5.01 hereof, the Trustee shall, upon written request of the Company,
deliver to the Company all of such Pledged First Mortgage Bonds, together
with such appropriate instruments of transfer or release as may be reasonably
requested by the Company. All Pledged First Mortgage Bonds delivered to the
Company in accordance with this Section 4.05 shall be delivered by the
Company to the Mortgage Trustee for cancellation.
Section 4.06 Further Assurances
The Company, at its own expense, shall do such further lawful acts and
things, and execute and deliver such additional conveyances, assignments,
assurances, agreements and instruments, as may be necessary in order to
better assign, assure and confirm to the Trustee its interest in the Pledged
First Mortgage Bonds and for maintaining, protecting and preserving such
interest.
Section 4.07 Exchange and Surrender of Pledged First Mortgage Bonds
At any time at the written direction of the Company, the Trustee shall
surrender to the Company all or part of the Pledged First Mortgage Bonds in
exchange for Pledged First Mortgage Bonds equal in aggregate outstanding
PAGE 29
principal amounts to, in different denominations than, but of the same series
and with all other terms identical to, the Pledged First Mortgage Bonds so
surrendered to the Company. In addition, at any time a Note shall cease to
be entitled to any lien, benefit or security under this Indenture pursuant to
Section 5.01(e) hereof, the Trustee shall surrender an equal principal amount
of the related issue of Pledged First Mortgage Bonds, subject to the
limitations of this Section 4.07, to the Company for cancellation. The
Trustee shall, together with such Pledged First Mortgage Bonds, deliver to
the Company such appropriate instruments of transfer or release as the
Company may reasonably request. Prior to the surrender required by this
paragraph, the Trustee shall receive from the Company, and (subject to
Section 9.01 hereof) shall be fully protected in relying upon, an Officers'
Certificate stating (i) the aggregate outstanding principal amount of the
Pledged First Mortgage Bonds of the issue surrendered by the Trustee, after
giving effect to such surrender, (ii) the aggregate outstanding principal
amount of the related issue of Notes, (iii) that the surrender of the Pledged
First Mortgage Bonds will not result in any default under this Indenture, and
(iv) that any Pledged First Mortgage Bonds to be received in exchange for the
Pledged First Mortgage Bonds being surrendered comply with the provisions of
this Section.
The Company shall not be permitted to cause the surrender or exchange of all
or any part of an issue of Pledged First Mortgage Bonds contemplated in this
Section, if after such surrender or exchange, the aggregate outstanding
principal amount of the related issue of Notes would exceed the aggregate
outstanding principal amount of such issue of Pledged First Mortgage Bonds
held by the Trustee. Any Pledged First Mortgage Bonds received by the
Company pursuant to this Section 4.07 shall be delivered to the Mortgage
Trustee for cancellation.
Section 4.08 Acceptance of Additional Pledged First Mortgage Bonds
Upon the issuance of Notes hereunder (other than the Initial Notes referred
to in Section 4.01 hereof) at any time prior to the Substitution Date, the
Company shall deliver to the Trustee in trust for the benefit of the Holders
of the Notes as described in Section 4.10 hereof, and the Trustee shall
accept therefor, a related issue of Pledged First Mortgage Bonds registered
in the name of the Trustee conforming to the requirements of Section 4.09
hereof.
Section 4.09 Terms of Pledged First Mortgage Bonds
Each issue of Pledged First Mortgage Bonds delivered to the Trustee pursuant
to Section 4.01 or Section 4.08 hereof shall have the same stated rate or
rates of interest (or interest calculated in the same manner), Interest
PAGE 30
Payment Dates, stated maturity date and redemption provisions, and shall be
in the same aggregate principal amount, as the related issue of Notes.
Section 4.10 Pledged First Mortgage Bonds as Security for Notes
Until the Substitution Date and subject to Article Five hereof, Pledged First
Mortgage Bonds delivered to the Trustee, in trust for the benefit of the
Holders of the related issue of Notes, shall serve as security for any and
all obligations of the Company under the related issue of Notes, including,
but not limited to (1) the full and prompt payment of the principal of and
premium, if any, on such related issue of Notes when and as the same shall
become due and payable in accordance with the terms and provisions of this
Indenture or such related issue of Notes, either at the stated maturity
thereof upon acceleration of the maturity thereof or upon redemption, and
(2) the full and prompt payment of any interest on such related issue of
Notes when and as the same shall become due and payable in accordance with
the terms and provisions of this Indenture or such related issue of Notes.
Notwithstanding anything in this Indenture to the contrary, from and after
the Substitution Date, the obligation of the Company to make payment with
respect to the principal of and premium, if any, and interest on the Pledged
First Mortgage Bonds shall be deemed satisfied and discharged as provided in
the supplemental trust indenture or indentures to the First Mortgage creating
such Pledged Mortgage Bonds and the Pledged First Mortgage Bonds shall cease
to secure in any manner Notes theretofore or subsequently issued. From and
after the Substitution Date, any conditions to the issuance of Notes that
refer or relate to Pledged First Mortgage Bonds or the First Mortgage shall
be inapplicable. Following the Substitution Date, the Company shall cause
each First Mortgage to be closed and the Company shall not issue any
additional First Mortgage Bonds or Pledged First Mortgage Bonds under either
First Mortgage. Notice of the occurrence of the Substitution Date shall be
given by the Trustee to the Holders of the Notes in the manner provided in
Section 15.10 hereof not later than 30 days after the Company notifies the
Trustee of the occurrence of the Substitution Date.
Section 4.11 Pledged Substituted Mortgage Bonds
(a) The Company shall notify the Trustee not less than 90 days prior to the
Substitution Date that the Company has determined to deliver to the Trustee
on the Substitution Date Pledged Substituted Mortgage Bonds in an aggregate
principal amount equal to the aggregate principal amount of Notes outstanding
on the Substitution Date in trust for the benefit of the Holders from time to
PAGE 31
time of the Notes issued under this Indenture as security for any and all
obligations of the Company under the Notes, including but not limited to,
(1) the full and prompt payment of the principal of and premium, if any, on
the Notes when and as the same shall become due and payable in accordance
with the terms and provisions of this Indenture or the Notes, either at the
stated maturity thereof, upon acceleration of the maturity thereof or upon
redemption, and (2) the full and prompt payment of any interest on the Notes
when and as the same shall become due and payable in accordance with the
terms and provisions of this Indenture or the Notes.
(b) The Pledged Substituted Mortgage Bonds to be delivered pursuant to the
notice described in Section 4.11(a) shall be delivered in separate series and
issues corresponding to the series and issues of Notes outstanding on the
Substitution Date, each issue of Pledged Substituted Mortgage Bonds having
the same stated rate or rates of interest (or interest calculated in the same
manner), Interest Payment Dates, stated maturity date and redemption
provisions, and in the same aggregate principal amount, as the related issue
of Notes outstanding on the Substitution Date.
(c) The notice described in Section 4.11(a), shall also state that on the
Substitution Date the Company shall deliver to the Trustee a supplemental
indenture to this Indenture that will provide, among other things, that upon
the issuance of Notes hereunder on or after the Substitution Date, the
Company shall deliver to the Trustee in trust for the benefit of the Holders
as described in Section 4.11(a) hereof, and the Trustee shall accept
therefor, a related issue of Pledged Substituted Mortgage Bonds registered in
the name of the Trustee and conforming to the requirements therein specified.
(d) The determination whether to deliver Pledged Substituted Mortgage Bonds
shall be made in the Company's sole discretion and without any obligation to
do so.
(e) In the event that the Company does not deliver the notice described in
Section 4.11(a), the Notes outstanding on the Substitution Date shall, as of
the Substitution Date, no longer be entitled to the benefit of the pledge of
the Pledged Mortgage Bonds and shall thereafter be general unsecured
obligations of the Company.
ARTICLE FIVE SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS
Section 5.01 Satisfaction and Discharge
(a) If at any time:
PAGE 32
(1) the Company shall have paid or caused to be paid the principal of and
premium, if any, and interest on all the outstanding Notes, as and when the
same shall have become due and payable,
(2) the Company shall have delivered to the Trustee for cancellation all
outstanding Notes, or
(3) the Company shall have irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds the entire amount in (A) cash,
(B) U.S. Government Obligations maturing as to principal and interest in such
amounts and at such times as will insure the availability of cash, or (C) a
combination of cash and U.S. Government Obligations, in any case sufficient,
without reinvestment, as certified by an independent public accounting firm
of national reputation in a written certification delivered to the Trustee,
to pay at maturity or the applicable redemption date (provided that notice of
redemption shall have been duly given or irrevocable provision satisfactory
to the Trustee shall have been duly made for the giving of any notice of
redemption) all outstanding Notes, including principal and any premium and
interest due or to become due to such date of maturity, as the case may be,
and, unless all outstanding Notes are to be due within 90 days of such
deposit by redemption or otherwise, shall also deliver to the Trustee an
Opinion of Counsel to the effect that the Holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or discharge, and if, in any such case, the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to
(i) rights of registration of transfer and exchange of Notes,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes,
(iii) rights of Noteholders to receive payments of principal thereof and any
premium and interest thereon, upon the original stated due dates therefor or
upon the applicable redemption date (but not upon acceleration of maturity)
from the moneys and U.S. Government Obligations held by the Trustee pursuant
to Section 5.02 hereof, (iv) the rights and immunities of the Trustee
hereunder, (v) the rights of the Holders of Notes as beneficiaries hereof
with respect to the property so deposited with the Trustee payable to all or
any of them, (vi) the obligations and rights of the Trustee and the Company
under Section 5.04 hereof, and (vii) the duties of the Trustee with respect
to any of the foregoing), and the Company shall be deemed to have paid and
PAGE 33
discharged the entire indebtedness represented by, and its obligations under,
the Notes, and the Trustee, on demand of the Company and at the cost and
expense of the Company, shall execute proper instruments acknowledging such
satisfaction of and discharging this Indenture and the Trustee shall at the
request of the Company return to the Company all Pledged First Mortgage Bonds
and all Pledged Substituted Mortgage Bonds and all other property and money
held by it under this Indenture and determined by it from time to time in
accordance with the certification pursuant to this Section 5.01(a) to be in
excess of the amount required to be held under this Section.
(b) If the Notes are deemed to be paid and discharged pursuant to Section
5.01(a)(3) hereof, within 15 days after those Notes are so deemed to be paid
and discharged, the Trustee shall cause a written notice to be given to each
Holder in the manner provided by Section 15.10 hereof. The notice shall:
(i) state that the Notes are deemed to be paid and discharged;
(ii) set forth a description of any U.S. Government Obligations and cash
held by the Trustee as described above;
(iii) if any Notes will be called for redemption, specify the date or dates
on which those Notes are to be called for redemption.
(c) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 9.06 hereof shall
survive.
(d) If the Notes are deemed paid and discharged pursuant to this
Section 5.01, the obligation of the Company to make payment with respect to
the principal of and premium, if any, and interest on the related issue of
Pledged First Mortgage Bonds or the related issue of Pledged Substituted
Mortgage Bonds shall be satisfied and discharged and the related issue of
Pledged First Mortgage Bonds or the related issue of Pledged Substituted
Mortgage Bonds shall cease to secure the Notes in any manner.
(e) If at any time:
(1) the Company shall have paid or caused to be paid the principal of and
premium, if any, and interest on any Note, as and when the same shall have
become due and payable,
(2) the Company shall have delivered to the Trustee for cancellation any
outstanding Note, or
(3) the Company shall have irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds the entire amount in (A) cash,
(B) U.S. Government Obligations maturing as to principal and interest in such
amounts and at such times as will insure the availability of cash, or (C) a
combination of cash and U.S. Government Obligations, in any case sufficient,
PAGE 34
without reinvestment, as certified by an independent public accounting firm
of national reputation in a written certification delivered to the Trustee,
to pay at maturity or the applicable redemption date (provided that notice of
redemption shall have been duly given or irrevocable provision satisfactory
to the Trustee shall have been duly made for the giving of any notice of
redemption) any outstanding Note, including principal and any premium and
interest due or to become due to such date of maturity, as the case may be,
and, unless such Note is to be due within 90 days of such deposit by
redemption or otherwise, shall also deliver to the Trustee an Opinion of
Counsel to the effect that the Holders of such Note will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance or discharge, such Note shall cease to be entitled to any lien,
benefit or security under this Indenture. Upon a Note ceasing to be entitled
to any lien, benefit or security under this Indenture, the obligation of the
Company to make payment with respect to principal of and premium, if any, and
interest on a principal amount of the related issue of Pledged First Mortgage
Bonds or the related issue of Pledged Substituted Mortgage Bonds equal to the
principal amount of such Note shall be satisfied and discharged and such
portion of the principal amount of such Pledged First Mortgage Bonds or
Pledged Substituted Mortgage Bonds shall cease to secure the Notes in any
manner.
Section 5.02 Deposited Moneys to Be Held in Trust by Trustee
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 5.01 hereof shall be held in trust and applied by it to
the payment, either directly or through any paying agent (including the
Company if acting as its own paying agent), to the Holders of the particular
Notes for the payment or redemption of which such moneys and U.S. Government
Obligations have been deposited with the Trustee of all sums due and to
become due thereon for principal and premium, if any, and interest.
Section 5.03 Paying Agent to Repay Moneys Held
Upon the satisfaction and discharge of this Indenture all moneys then held by
any paying agent for the Notes (other than the Trustee) shall, upon written
demand by an Authorized Agent, be repaid to the Company or paid to the
Trustee, and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
PAGE 35
Section 5.04 Return of Unclaimed Moneys
Any moneys deposited with or paid to the Trustee for payment of the principal
of or any premium or interest on any Notes and not applied but remaining
unclaimed by the Holders of such Notes for one year after the date upon which
the principal of or any premium or interest on such Notes, as the case may
be, shall have become due and payable, shall be repaid to the Company by the
Trustee on written demand by an Authorized Agent, and all liability of the
Trustee shall thereupon cease; and any Holder of any of such Notes shall
thereafter look only to the Company for any payment which such Holder may be
entitled to collect.
ARTICLE SIX PARTICULAR COVENANTS OF THE COMPANY
Section 6.01 Payment of Principal Premium and Interest
The Company covenants and agrees for the benefit of the Holders of the Notes
that it will duly and punctually pay or cause to be paid the principal of and
any premium and interest on each of the Notes at the places, at the
respective times and in the manner provided in such Notes or in this
Indenture.
Section 6.02 Office for Notices and Payments, etc.
So long as any of the Notes remain outstanding, the Company at its option may
cause to be maintained in the Borough of Manhattan, The City of New York, or
elsewhere, an office or agency where the Notes may be presented for
registration of transfer and for exchange as in this Indenture provided, and
where, at any time when the Company is obligated to make a payment of
principal and premium upon Notes, the Notes may be surrendered for payment,
and may maintain at any such office or agency and at its principal office an
office or agency where notices and demands to or upon the Company in respect
of the Notes or of this Indenture may be served. The designation of any such
office or agency shall be made by Company Order pursuant to Section 2.05
hereof or at any subsequent time pursuant to this Section 6.02. The Company
will give to the Trustee written notice of the location of each such office
or agency and of any change of location thereof. If the Company shall fail
to give such notice of the location or of any change in the location of any
such office or agency, presentations may be made and notices and demands may
be served at the corporate trust office of the Trustee.
PAGE 36
Section 6.03 Appointments to Fill Vacancies in Trustee's Office
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 9.11 hereof, a
Trustee so that there shall at all times be a Trustee hereunder.
Section 6.04 Provision as to Paying Agent
The Trustee shall be the paying agent for the Notes and, at the option of the
Company, the Company may appoint additional paying agents (including without
limitation itself). Whenever the Company shall appoint an additional paying
agent, it shall cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to
this Section 6.04:
(1) that it will hold in trust for the benefit of the Holders and the
Trustee all sums held by it as such agent for the payment of the principal of
and any premium or interest on the Notes (whether such sums have been paid to
it by the Company or by any other obligor on such Notes) in trust for the
benefit of the Holders of such Notes;
(2) that it will give to the Trustee notice of any failure by the Company
(or by any other obligor on such Notes) to make any payment of the principal
of and any premium or interest on such Notes when the same shall be due and
payable; and
(3) that it will at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such paying agent.
If the Company shall act as its own paying agent with respect to any Notes,
it will, on or before each due date of the principal of and any premium or
interest on such Notes, set aside, segregate and hold in trust for the
benefit of the Holders of such Notes a sum sufficient to pay such principal
and any premium or interest so becoming due and will notify the Trustee of
any failure by it to take such action and of any failure by the Company (or
by any other obligor on such Notes) to make any payment of the principal of
and any premium or interest on such Notes when the same shall become due and
payable.
Whenever the Company shall have one or more paying agents, it will, on or
prior to each due date of the principal of (and premium, if any) or interest,
if any, on any Notes, deposit with such paying agent a sum sufficient to pay
the principal (and premium, if any) or interest, if any, so becoming due,
PAGE 37
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, if any, and (unless such paying agent is the
Trustee) the Company shall promptly notify the Trustee of any failure on its
part to so act.
Anything in this Section 6.04 to the contrary notwithstanding, the Company
may, at any time, for the purpose of obtaining a satisfaction and discharge
of this Indenture, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust by it or any paying agent hereunder, as
required by this Section 6.04, such sums to be held by the Trustee upon the
trusts herein contained.
Anything in this Section 6.04 to the contrary notwithstanding, the agreement
to hold sums in trust as provided in this Section 6.04 is subject to Sections
5.03 and 5.04 hereof.
Section 6.05 Opinions of Counsel
The Company will cause this Indenture, any indentures supplemental to this
Indenture, and any financing or continuation statements to be promptly
recorded and filed and rerecorded and refiled in such manner and in such
places, as may be required by law in order fully to preserve, protect and
perfect the security of the Noteholders and all rights of the Trustee, and
shall deliver to the Trustee:
(a) promptly after the execution and delivery of this Indenture and of any
indenture supplemental to this Indenture, an Opinion of Counsel either
stating that, in the opinion of such counsel, this Indenture or such
supplemental indenture and any financing or continuation statements have been
properly recorded and filed so as to make effective and to perfect the
interest of the Trustee intended to be created by this Indenture for the
benefit of the Holders from time to time of the Notes in the Pledged First
Mortgage Bonds or the Pledged Substituted Mortgage Bonds, and reciting the
details of such action, or stating that, in the opinion of such counsel, no
such action is necessary to perfect or make such interest effective and
stating what, if any, action of the foregoing character may reasonably be
expected to become necessary prior to the next succeeding May 1 to maintain,
perfect and make such interest effective; and
(b) on or before May 1 of each year, beginning in 1998, and prior to the
Substitution Date, an Opinion of Counsel either stating that in the opinion
of such counsel such action has been taken, since the date of the most recent
Opinion of Counsel furnished pursuant to this Section 6.05(b) or the first
Opinion of Counsel furnished pursuant to Section 6.05(a) hereof, with respect
PAGE 38
to the recording, filing, rerecording, or refiling of this Indenture, each
supplemental indenture and any financing or continuation statements, as is
necessary to maintain and perfect the interest of the Trustee intended to be
created by this Indenture for the benefit of the Holders from time to time of
the Notes in the Pledged First Mortgage Bonds or the Pledged Substituted
Mortgage Bonds, and reciting the details of such action, or stating that in
the opinion of such counsel no such action is necessary to maintain and
perfect such interest and stating what, if any, action of the foregoing
character may reasonably be expected to become necessary prior to the next
succeeding May 1 to maintain, perfect and make such security interest
effective.
Section 6.06 Certificates and Notice to Trustee
The Company shall, on or before May 1 of each year, beginning in 1998,
deliver to the Trustee a certificate from its principal executive officer,
principal financial officer or principal accounting officer covering the
preceding calendar year and stating whether or not, to the knowledge of such
party, the Company has complied with all conditions and covenants under this
Indenture, and, if not, describing in reasonable detail any failure by the
Company to comply with any such conditions or covenants. For purposes of
this Section, compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture.
Section 6.07 Negative Covenants
(a) The Company will not issue any additional series of first mortgage bonds
under either First Mortgage, other than Pledged First Mortgage Bonds.
(b) On and after the Substitution Date, if and only if no Pledged
Substituted Mortgage Bonds have been delivered to the Trustee, the Company
will not create, assume, incur or suffer to exist any Mortgage upon any
Principal Property, whether owned or leased on the Substitution Date or
thereafter acquired, to secure any Debt of the Company or any other Person
(other than the Notes), without in any such case making effective provision
whereby all of the Notes outstanding hereunder (other than such Notes, if
any, which shall by their terms be expressly excluded from the operation of
this Section 6.07) shall be directly secured equally and ratably with such
Debt, excluding, however, from the operation of the foregoing provisions:
(i) any Mortgage upon property existing at the time of acquisition thereof
(but excluding any extension thereof or addition thereto unless the terms of
the Mortgage as of the date of the acquisition of such property provide that
such Mortgage shall be secured by such extensions or additions);
(ii) any Mortgage to secure the payment of all or any part of the purchase
price of property or to secure any Debt incurred prior to, at the time of or
within 180 days after the acquisition of such property for the purpose of
financing all or any part of the purchase price thereof;
PAGE 39
(iii) any Mortgage secured by property used in the generation of
electricity;
(iv) any Mortgage existing at the date of this Indenture;
(v) any Permitted Encumbrance; and
(vi) any extension, renewal of replacement (or successive extensions,
renewals or replacements) in whole or in part of any Mortgage referred to in
any of the foregoing clauses (i) to (v), inclusive; provided, however, that
the principal amount of Debt secured thereby shall not exceed the principal
amount of Debt (plus any premium or fee payable in connection with such
extension, renewal or replacement) so secured at the time of such extension,
renewal or replacement; and provided, further, that such Mortgage shall be
limited to all or such part of the property which was subject to the Mortgage
so extended, renewed or replaced (plus improvements on such property).
Notwithstanding the foregoing provisions of this Section 6.07(b), the Company
may create, assume, incur or suffer to exist any Mortgage upon any Principal
Property which is not excepted by any of clauses (i) through (vi) above
without equally and ratably securing the Notes, provided that the aggregate
amount of all Debt then outstanding secured by such Mortgage and all similar
Mortgages, together with all net sale proceeds from Sale-Leaseback
Transactions (as defined in Section 6.07(c)) which are not permitted pursuant
to clauses (i) or (ii) of Section 6.07(c), does not exceed 15% of the total
consolidated capitalization of the Company as shown on the audited
consolidated balance sheet contained in the latest annual report to
shareholders of the Company. For the purposes of this Section 6.07(b), any
Mortgage in favor of the United States of America or any States thereof, or
any other country, or any political subdivision of any of the foregoing, to
secure partial, progress, advance or other payments pursuant to the
provisions of any contract or statute, or any Mortgage securing industrial
development, pollution control or similar revenue bonds shall not be deemed
to create a Mortgage to secure any Debt.
(c) On and after the Substitution Date, if and only if no Pledged
Substituted Mortgage Bonds have been delivered to the Trustee, the Company
will not sell or transfer any Principal Property, with the Company taking
back a lease of such Principal Property (a "Sale-Leaseback Transaction"),
unless (i) such Sale-Leaseback Transaction occurs within 180 days from the
date of acquisition of such Principal Property or the date of the completion
of construction or commencement of full operations on such Principal
Property, whichever is later, or (ii) the Company, within 120 days after such
Sale-Leaseback Transaction, applies or causes to be applied to the retirement
of Debt of the Company (other than Debt of the Company which by its terms or
PAGE 40
the terms of the instrument pursuant to which it was issued is subordinate in
right of payment to the Notes) an amount not less than the net proceeds of
the sale of such Principal Property.
Notwithstanding the foregoing provisions of this Section 6.07(c), the Company
may effect any Sale-Leaseback Transaction involving any Principal Property,
provided that the net sale proceeds from such Sale-Leaseback Transaction,
together with all other Sale-Leaseback Transactions which are not permitted
pursuant to clauses (i) or (ii) of the foregoing paragraph and all Debt
secured by Mortgages not specifically excluded pursuant to any of clauses (i)
through (vi) of Section 6.07(b) from the operation of Section 6.07(b), does
not exceed 15% of the total capitalization of the Company as shown on the
audited consolidated balance sheet contained in the latest Annual Report on
Form 10-K filed with the SEC. The provisions of this Section 6.07(c) shall
also not prevent any Sale-Leaseback Transaction involving a lease for a
period, including renewals, of not more than 36 months.
ARTICLE SEVEN NOTEHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01 Noteholder Lists
(a) The Company shall furnish or cause to be furnished to the Trustee
semiannually, not later than 15 days after each Regular Record Date for each
Interest Payment Date that is not a maturity date and at such other times as
such Trustee may request in writing, within 30 days after receipt by the
Company of any such request, a list in such form as the Trustee may
reasonably require containing all the information in the possession or
control of the Company, or any paying agents other than the Trustee, as to
the names and addresses of the Holders of Notes, obtained since the date as
of which the next previous list, if any, was furnished. Any such list may be
dated as of a date not more than 15 days prior to the time such information
is furnished or caused to be furnished and need not include information
received after such date; provided that as long as the Trustee is the
registrar for the Notes, no such list shall be required to be furnished. The
Trustee shall preserve any list provided to it pursuant to this Section until
such time as the Company or any paying agent, as applicable, shall provide it
with a more recent list.
(b) Within five Business Days after the receipt by the Trustee of a written
application by any three or more Holders stating that the applicants desire
to communicate with other Holders with respect to their rights under the
Indenture or under the Notes, and accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, and by
PAGE 41
reasonable proof that each such applicant has owned a Note for a period of at
least six months preceding the date of such application, the Trustee shall,
at its election, either:
(i) afford to such applicants access to all information furnished to or
received by the Trustee pursuant to Section 7.01(a) hereof or, if applicable,
in its capacity as registrar for the Notes; or
(ii) inform such applicants as to the approximate number of Holders
according to the most recent information furnished to or received by the
Trustee under Section 7.01(a) hereof or if applicable in its capacity as
registrar for the Notes, and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Notes a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing, unless
within five days after such tender the Trustee shall mail to such applicants
and file with the SEC, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the Holders or would be in
violation of applicable law. Such written statement shall specify the basis
of such opinion. If the SEC, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice
and opportunity for hearing, that all the objections so sustained have been
met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of a Note, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
paying agent nor any Authenticating Agent shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders in accordance with this Section, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under this Section.
PAGE 42
Section 7.02 Securities and Exchange Commission Reports
The Company shall:
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the SEC, 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 SEC may from time to time by rules and regulations
prescribe) which the Company may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of said
Sections, then it will file with the Trustee and the SEC, in accordance with
rules and regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act 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) file with the Trustee and the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations, including, in the case of annual
reports, if required by such rules and regulations, certificates or opinions
of independent public accountants, conforming to the requirements of
Section 15.05 hereof, as to compliance with conditions or covenants,
compliance with which is subject to verification by accountants; and
(c) transmit by mail to all Holders, as their names and addresses appear in
the register, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed by
the Company pursuant to paragraphs (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the SEC.
Section 7.03 Reports by the Trustee
(a) Within 60 days after May 15 of each year, beginning with the May 15
after the first issuance of Notes hereunder, the Trustee shall transmit by
mail a brief report dated as of such date that complies with Section 313(a)
of the TIA (to the extent required by such Section).
PAGE 43
(b) The Trustee shall from time to time transmit by mail brief reports that
comply, both in content and date of delivery, with Section 313(b) of the TIA
(to the extent required by such Section).
(c) A copy of each such report filed pursuant to this section shall, at the
time of such transmission to such Holders, be filed by the Trustee with each
stock exchange upon which any Notes are listed and also with the SEC. The
Company will notify the Trustee promptly upon the listing of such Notes on
any stock exchange.
(d) Reports pursuant to this Section shall be transmitted
(1) by mail to all Holders of Notes, as their names and addresses appear in
the register for the Notes;
(2) by mail to such Holders of Notes as have, within the two years preceding
such transmission, filed their names and addresses with the Trustee for such
purpose;
(3) by mail, except in the case of reports pursuant to Section 7.03(b) and
(c) hereof, to all Holders of Notes whose names and addresses have been
furnished to or received by the Trustee pursuant to Section 7.01 hereof; and
(4) at the time such report is transmitted to the Holders of the Notes, to
each exchange on which Notes are listed and also with the SEC.
ARTICLE EIGHT REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENTS OF DEFAULT
Section 8.01 Events of Default
(a) If one or more of the following Events of Default shall have occurred
and be continuing:
(1) default in the payment of any installment of interest upon any of the
Notes as and when the same shall become due and payable, and continuance of
such default for a period of 30 days;
(2) default in the payment of the principal of or premium, if any, on any of
the Notes as and when the same shall become due and payable and continuance
of such default for five days;
PAGE 44
(3) failure on the part of the Company duly to observe or perform any other
of the covenants or agreements on the part of the Company contained in the
Notes or in this Indenture for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default" hereunder, shall have been given to
the Company by the Trustee by registered mail, or to the Company and the
Trustee by the Holders of at least a majority in aggregate principal amount
of the Notes at the time outstanding;
(4) prior to the Substitution Date, a default (as defined in either of the
First Mortgages under which Pledged First Mortgage Bonds are outstanding) has
occurred and is continuing, and the applicable Mortgage Trustee or Holders of
at least a majority in aggregate principal amount of the Notes at the time
outstanding shall have given written notice thereof to the Trustee;
(5) if any Pledged Substituted Mortgage Bonds are outstanding, a default (as
defined in the Substituted Mortgage) has occurred and is continuing, and the
Mortgage Trustee or Holders of at least a majority in aggregate principal
amount of the Notes at the time outstanding shall have given written notice
thereof to the Trustee;
(6) the entry of a decree or order by a court having jurisdiction over the
Company for relief in respect of the Company under the United States
Bankruptcy Code, 11 U.S.C. 101-1330, as now constituted or hereafter
amended (the "Bankruptcy Code"), or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official of
the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(7) the filing by the Company with respect to itself or its property of a
petition or answer or consent seeking relief under the Bankruptcy Code, or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or the consent by it to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Company or of any substantial part of its
property, or the failure of the Company generally to pay its debts as such
debts become due, or the taking of corporate action by the Company to
effectuate any such action;
then and in each and every such case, unless the principal of all of the
Notes shall have already become due and payable, either the Trustee or the
PAGE 45
Holders of a majority in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if given
by Noteholders), may declare the principal of all the Notes to be due and
payable immediately and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding and, upon the Notes being
declared to be due and payable, the Trustee shall immediately file with the
Mortgage Trustee a written demand for redemption of all Pledged First
Mortgage Bonds pursuant to the applicable provisions of the First Mortgage
or, if applicable, a written demand for redemption of all Pledged Substituted
Mortgage Bonds pursuant to the applicable provisions of the Substituted
Mortgage. This provision, however, is subject to the condition that if, at
any time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided and prior to the
mailing to the Trustee by the Mortgage Trustee of a firm, valid and
unconditional notice to the Trustee of the acceleration of all of the first
mortgage bonds issued and outstanding under the First Mortgage or the
Substituted Mortgage, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured installments of interest upon all of the
Notes and the principal of and any premium on any and all Notes which shall
have become due otherwise than by acceleration (with interest on overdue
installments of interest, to the extent that payment of such interest is
enforceable under applicable law, and on such principal and applicable
premium at the rate borne by the Notes to the date of such payment or
deposit) and all sums paid or advanced by the Trustee hereunder, the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 9.06 hereof and any and all defaults under this Indenture, other than
the non-payment of principal of and accrued interest on Notes which shall
have become due solely by acceleration of maturity, shall have been cured or
waived (including any defaults under the First Mortgage, as evidenced by
notice thereof from the Mortgage Trustee to the Trustee), then and in every
such case such payment or deposit shall cause an automatic waiver of the
Event of Default and its consequences (including, if given, the written
demand for redemption of all Pledged First Mortgage Bonds or, if applicable,
all Pledged Substituted Mortgage Bonds) and shall cause an automatic
rescission and annulment of the acceleration of the Notes; but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon.
(b) If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceeding had been
taken.
PAGE 46
Section 8.02 Enforcement by Trustee
(a) If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under the
Bankruptcy Code or any other applicable law, or in case a receiver or trustee
shall have been appointed for the property of the Company or such other
obligor, or in the case of any similar judicial proceedings relative to the
Company or other obligor on the Notes, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or
by declaration or otherwise, shall be entitled and empowered, by intervention
in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of principal and any premium and interest owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings, to 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 (including, prior to the
Substitution Date, any claims of the Trustee as holder of Pledged First
Mortgage Bonds or, if applicable, on and after the Substitution Date, any
claims of the Trustee as holder of Pledged Substituted Mortgage Bonds, and
including any amounts due to the Trustee under Section 9.06 hereof) and of
the Holders of Notes allowed in such judicial proceedings relative to the
Company or any other obligor on the Notes, its or their creditors, or its or
their property, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the same after
the deduction of its charges and expenses.
(b) All claims and rights of action under this Indenture, or under any of
the Notes, may be enforced by the Trustee without the possession of any of
the Notes, or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the Holders of the
Notes in respect of which such action was taken.
(c) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or to accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Trustee to vote
in respect of the claim of any Noteholder in any such proceeding.
PAGE 47
Section 8.03 Application of Moneys Collected by Trustee
Any moneys collected by the Trustee with respect to any of the Notes pursuant
to this Article shall be applied in the order following, at the date or dates
fixed by the Trustee for the distribution of such moneys, upon presentation
of the several Notes, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid.
FIRST: To the payment of all amounts due to the Trustee pursuant to
Section 9.06 hereof;
SECOND: If the principal of the outstanding Notes in respect of which such
moneys have been collected shall not have become due and be unpaid, to the
payment of interest on the Notes, in the order of the maturity of the
installments of such interest, with interest (to the extent allowed by law
and to the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably to the persons entitled thereto, and then to the
payment to the Holders entitled thereto of the unpaid principal of and
applicable premium on any of the Notes which shall have become due (other
than Notes previously called for redemption for the payment of which moneys
are held pursuant to the provisions of this Indenture), whether at stated
maturity or by redemption, in the order of their due dates, beginning with
the earliest due date, and if the amount available is not sufficient to pay
in full all Notes due on any particular date, then to the payment thereof
ratably, according to the amounts of principal and applicable premium due on
that date, to the Holders entitled thereto, without any discrimination or
privilege;
THIRD: If the principal of the outstanding Notes in respect of which such
moneys have been collected shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid upon the
Notes for principal and premium, if any, and interest thereon, with interest
on the overdue principal and any premium and (to the extent allowed by law
and to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the Notes; and in case
such moneys shall be insufficient to pay in full the whole amount so due and
unpaid upon the Notes, then to the payment of such principal and any premium
and interest without preference or priority of principal and any premium over
interest, or of interest over principal and any premium or of any installment
of interest over any other installment of interest, or of any Note over any
other Note, ratably to the aggregate of such principal and premium, if any,
and accrued and unpaid interest; and
PAGE 48
FOURTH: to the payment of the remainder, if any, to the Company or its
successors or assigns, or to whomsoever may lawfully be entitled to the same,
or as a court of competent jurisdiction may determine.
Section 8.04 Proceedings by Noteholders
(a) No Holder of any Note shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default with respect to such Note and
of the continuance thereof, as hereinabove provided, and unless also
Noteholders of a majority in aggregate principal amount of the Notes then
outstanding affected by such Event of Default shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding.
(b) Notwithstanding any other provision in this Indenture, however, the
rights of any Holder of any Note to receive payment of the principal of and
any premium and interest on such Note, on or after the respective due dates
expressed in such Note or on the applicable redemption date, or to institute
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 8.05 Proceedings by Trustee
In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture,
including its rights as holder of the Pledged First Mortgage Bonds or the
Pledged Substituted Mortgage Bonds, by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted to it under this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
PAGE 49
Section 8.06 Remedies Cumulative and Continuing
All powers and remedies given by this Article Eight to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any powers and remedies hereof or of any other powers and
remedies available to the Trustee or the Holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or
omission of the Trustee or of any Holder of any of the Notes in exercising
any right or power accruing upon any default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to
Section 8.04 hereof, every power and remedy given by this Article Eight or by
law to the Trustee or to the Noteholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Noteholders.
Section 8.07 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders
The Holders of a majority in aggregate principal amount of the Notes at the
time outstanding shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, that
(subject to Section 9.01 hereof) the Trustee shall have the right to decline
to follow any such direction if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith by its board of directors or trustees,
executive committee, or a trust committee of directors or trustees or
responsible officers shall determine that the action or proceeding so
directed would involve the Trustee in personal liability or would be unduly
prejudicial to the rights of Noteholders not joining in such directions. The
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may on behalf of all of the Holders of the Notes waive any past
default or Event of Default hereunder and its consequences except a default
in the payment of principal of or any premium or interest on the Notes. Upon
any such waiver the Company, the Trustee and the Holders of the Notes shall
be restored to their former positions and rights hereunder, respectively, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 8.07, said default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be not
continuing.
PAGE 50
Section 8.08 Notice of Default
The Trustee shall within 90 days after the occurrence of a default known to
it, give to all Holders of the Notes, in the manner provided in Section 15.10
hereof, notice of such default, unless such default shall have been cured
before the giving of such notice, the term "default" for the purpose of this
Section 8.08 being hereby defined to be any event which is or after notice or
lapse of time or both would become an Event of Default; provided that, except
in the case of default in the payment of the principal of or any premium or
interest on any of the Notes, or in the payment of any sinking or purchase
fund installments, the Trustee shall be protected in withholding such notice
if and so long as its board of directors or trustees, executive committee, or
a trust committee of directors or trustees or responsible officers in good
faith determines that the withholding of such notice is in the interests of
the Holders of the Notes. The Trustee shall not be charged with knowledge of
any Event of Default unless a responsible officer of the Trustee assigned to
the corporate trustee department of the Trustee shall have actual knowledge
of such Event of Default.
Section 8.09 Undertaking to Pay Costs
All parties to this Indenture agree, and each Holder of any Note by
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but this
Section 8.09 shall not apply to any suit instituted by the Trustee, or to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than 10% in principal amount of the Notes outstanding, or to
any suit instituted by any Noteholder for the enforcement of the payment of
the principal of or any premium or interest on any Note on or after the due
date expressed in such Note or the applicable redemption date.
ARTICLE NINE CONCERNING THE TRUSTEE
Section 9.01 Duties and Responsibilities of Trustee
PAGE 51
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Indenture. If an Event of Default has occurred (which has not been
cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(1) prior to the occurrence of any Event of Default and after the curing or
waiving of all Events of Default which may have occurred
(A) the duties and obligations of the Trustee shall be determined solely by
the express provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but, in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture as to form;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a responsible officer or officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with Section 8.07
hereof relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture.
Section 9.02 Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 9.01 hereof:
PAGE 52
(a) the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, note or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof is herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction
of any of the Noteholders, pursuant to this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
by such exercise;
(e) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, note or other paper or document, unless requested
in writing to do so by the Holders of at least a majority in principal amount
of the then outstanding Notes; provided that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by this Indenture, the Trustee may require reasonable
indemnity against such expense or liability as a condition to so proceeding;
(g) no provision of this Indenture shall require the Trustee to extend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it; and
PAGE 53
(h) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or through agents or attorneys; provided
that the Trustee shall not be liable for the conduct or acts of any such
agent or attorney that shall have been appointed in accordance herewith with
due care.
Section 9.03 No Responsibility for Recitals, etc.
The recitals contained herein and in the Notes (except in the certificate of
authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use
or application by the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in conformity with this Indenture.
The Trustee shall not be responsible for recording or filing this Indenture,
any supplemental indenture, or any financing or continuation statement in any
public office at any time or times.
Section 9.04 Trustee, Authenticating Agent, Paying Agent or Registrar May
Own Notes
The Trustee and any Authenticating Agent, paying agent or registrar, in its
individual or other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not Trustee, Authenticating Agent,
paying agent or registrar.
Section 9.05 Moneys to Be Held in Trust
Subject to Section 5.04 hereof all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds
except to the extent required by law. The Trustee may allow and credit to
the Company interest on any money received hereunder at such rate, if any, as
may be agreed upon by the Company and the Trustee from time to time as may be
permitted by law.
Section 9.06 Compensation and Expenses of Trustee
The Company covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any law in regard to the compensation of a trustee of an express
trust), and the Company shall pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with this Indenture (including the reasonable
PAGE 54
compensation and the reasonable expenses and disbursements of its counsel and
agents, including any Authenticating Agents, and of all persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify
the Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim or liability. The obligations of the Company under this Section 9.06
to compensate the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
any particular Notes.
Section 9.07 Officers' Certificate as Evidence
Whenever in the administration of this Indenture, the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to the
taking, suffering or omitting of any action hereunder, such matter (unless
other evidence in respect thereof is herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed
to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee, and such Officers' Certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken, suffered or omitted by it under this
Indenture in reliance thereon.
Section 9.08 Conflicting Interest of Trustee
The Trustee shall be subject to and shall comply with the provisions of
Section 310 of the TIA; provided that, to the extent permitted by law, State
Street Bank and Trust Company shall not be deemed to have a conflicting
interest for purposes of Section 310(b) of the TIA because of its capacity as
trustee under the First Mortgage or the Substituted Mortgage. Nothing in
this Indenture shall be deemed to prohibit the Trustee or the Company from
making any application permitted pursuant to such section.
PAGE 55
Section 9.09 Existence and Eligibility of Trustee
There shall at all times be a Trustee hereunder which Trustee shall at all
times be a corporation organized and doing business under the laws of the
United States or any State thereof or of the District of Columbia (or a
corporation or other Person permitted to act as trustee by the SEC), subject
to supervision or examination by such bodies and authorized under such laws
to exercise corporate trust powers and having a combined capital and surplus
of at least $150,000,000. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
authority, then for the purposes of this Section 9.09, the combined capital
and surplus shall be deemed to be as set forth in its most recent report of
condition so published. No obligor upon the Notes or Person directly or
indirectly controlling, controlled by, or under common control with such
obligor shall serve as Trustee. If at any time the Trustee shall cease to be
eligible in accordance with this Section 9.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 9.10
hereof.
Section 9.10 Resignation or Removal of Trustee
(a) Pursuant to the provisions of this Article, the Trustee may at any time
resign and be discharged of the trusts created by this Indenture by giving
written notice to the Company specifying the day upon which such resignation
shall take effect, and such resignation shall take effect immediately upon
the later of the appointment of a successor trustee and such day.
(b) Any Trustee may be removed at any time by an instrument or concurrent
instruments in writing filed with such Trustee and signed and acknowledged by
the Holders of a majority in principal amount of the then outstanding Notes
or by their attorneys in fact duly authorized.
(c) If at any time (1) the Trustee shall cease to be eligible in accordance
with Section 9.09 hereof and shall fail to resign after written request
therefor by the Company or by any Holder who has been a bona fide Holder for
at least six months, (2) the Trustee shall fail to comply with Section 9.08
hereof after written request therefor by the Company or any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or its property shall be
appointed or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation
or liquidation, then the Trustee may be removed forthwith by an instrument or
concurrent instruments in writing filed with the Trustee and either:
PAGE 56
(1) signed by the President, any Vice President, the Treasurer or any
Assistant Treasurer of the Company and attested by the Secretary or an
Assistant Secretary of the Company; or
(2) signed and acknowledged by the Holders of a majority in principal amount
of outstanding Notes or by their attorneys in fact duly authorized.
(d) Any resignation or removal of the Trustee shall not become effective
until acceptance of appointment by the successor Trustee as provided in
Section 9.11 hereof.
Section 9.11 Appointment of Successor Trustee
(a) If at any time the Trustee shall resign or be removed, the Company shall
promptly appoint a successor Trustee.
(b) The successor Trustee shall provide written notice of its appointment to
the Holder of each Note outstanding following any such appointment.
(c) If no appointment of a successor Trustee shall be made pursuant to
Section 9.11(a) hereof within 60 days after appointment shall be required,
any Noteholder or the resigning Trustee may apply to any court of competent
jurisdiction to appoint a successor Trustee. Said court may thereupon after
such notice, if any, as such court may deem proper and prescribe, appoint a
successor Trustee.
(d) Any Trustee appointed under this Section 9.11 as a successor Trustee
shall be a bank or trust company eligible under Section 9.09 hereof and
qualified under Section 9.08 hereof.
Section 9.12 Acceptance by Successor Trustee
(a) Any successor Trustee appointed as provided in Section 9.11 hereof shall
execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee
herein; but nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to Section 9.06 hereof execute and deliver an
instrument transferring to such successor Trustee all the rights and powers
of the Trustee so ceasing to act, including all right, title and interest, if
any, in the Pledged First Mortgage Bonds or Pledged Substituted Mortgage
Bonds. Upon request of any such successor Trustee, the Company shall execute
PAGE 57
any and all instruments in writing in order more fully and certainly to vest
in and confirm to such successor Trustee all such rights and powers. Any
Trustee ceasing to act shall, nevertheless, retain a lien upon all property
or funds held or collected by such Trustee to secure any amounts then due it
pursuant to Section 9.06 hereof.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.12 unless at the time of such acceptance such successor Trustee
shall be qualified under Section 9.08 hereof and eligible under Section 9.09
hereof.
(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.12, the successor Trustee shall mail notice of its succession
hereunder to all Holders of Notes as the names and addresses of such Holders
appear on the registry books.
Section 9.13 Succession by Merger, etc.
(a) Any corporation into which the Trustee may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided such corporation shall be otherwise qualified and
eligible under this Article.
(b) If at the time such successor to the Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but
not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided
that the certificates of the Trustee shall have; provided that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 9.14 Limitations on Rights of Trustee as a Creditor
The Trustee shall be subject to, and shall comply with, the provisions of
Section 311 of the TIA.
PAGE 58
Section 9.15 Authenticating Agent
(a) There may be one or more Authenticating Agents appointed by the Trustee
with the written consent of the Company, with power to act on its behalf and
subject to the direction of the Trustee in the authentication and delivery of
Notes in connection with transfers and exchanges under Sections 2.06, 2.07,
2.08, 2.13, 3.03, and 13.04 hereof as fully to all intents and purposes as
though such Authenticating Agents had been expressly authorized by those
Sections to authenticate and deliver Notes. For all purposes of this
Indenture, the authentication and delivery of Notes by any Authenticating
Agent pursuant to this Section 9.15 shall be deemed to be the authentication
and delivery of such Notes "by the Trustee." Any such Authenticating Agent
shall be a bank or trust company or other Person of the character and
qualifications set forth in Section 9.09 hereof.
(b) Any corporation into which any 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 any Authenticating
Agent shall be a party, or any corporation succeeding to the corporate trust
business of any Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 9.15, without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any 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 any Authenticating Agent shall cease to be eligible under this
Section 9.15, the Trustee may, with the written consent of the Company,
appoint a successor Authenticating Agent, and upon so doing shall give
written notice of such appointment to the Company and shall mail, in the
manner provided in Section 15.10, notice of such appointment to the Holders
of Notes.
(d) The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services.
(e) Sections 9.02, 9.03, 9.06, 9.07 and 9.09 hereof shall be applicable to
any Authenticating Agent.
PAGE 59
ARTICLE TEN CONCERNING THE NOTEHOLDERS
Section 10.01 Action by Noteholders
Whenever in this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Notes may take any action,
the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by such
Noteholders in person or by agent or proxy appointed in writing, (b) by the
record of such Noteholders voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with Article Eleven hereof or
(c) by a combination of such instrument or instruments and any such record of
such a meeting of Noteholders.
Section 10.02 Proof of Execution by Noteholders
(a) Subject to Sections 9.01, 9.02 and 11.05 hereof, proof of the execution
of any instruments by a Noteholder or the agent or proxy for such Noteholder
shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Notes shall be proved by the
register for the Notes maintained by the Trustee.
(b) The record of any Noteholders' meeting shall be proven in the manner
provided in Section 11.06 hereof.
Section 10.03 Who Deemed Absolute Owners
Subject to Sections 2.04(f) and 10.01 hereof, the Company, the Trustee, any
paying agent and any Authenticating Agent shall deem the person in whose name
any Note shall be registered upon the register for the Notes to be, and shall
treat such person as, the absolute owner of such Note (whether or not such
Note shall be overdue) for the purpose of receiving payment of or on account
of the principal and premium, if any, and interest on such Note, and for all
other purposes; and neither the Company nor the Trustee nor any paying agent
nor any Authenticating Agent shall be affected by any notice to the contrary.
All such payments shall be valid and effectual to satisfy and discharge the
liability upon any such Note to the extent of the sum or sums so paid.
PAGE 60
Section 10.04 Company-Owned Notes Disregarded
In determining whether the Holders of the requisite aggregate principal
amount of outstanding Notes have concurred in any direction, consent or
waiver under this Indenture, Notes which are owned by the Company or any
other obligor on the Notes or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Notes shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided
that, for the purposes of determining whether the Trustee shall be protected
in relying on any such direction, consent or waiver, only Notes which the
Trustee knows are so owned shall be so disregarded. Notes so owned which
have been pledged in good faith to third parties may be regarded as
outstanding for the purposes of this Section 10.04 if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right to take
action with respect to such Notes and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In the
case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
Section 10.05 Revocation of Consents; Future Holders Bound
Except as may be otherwise required in the case of a Global Note by the
applicable rules and regulations of the Depositary, at any time prior to the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such
action, any Holder of a Note, which has been included in the Notes the
Holders of which have consented to such action may, by filing written notice
with the Trustee at the corporate trust office of the Trustee and upon proof
of ownership as provided in Section 10.02(a) hereof, revoke such action so
far as it concerns such Note. Except as aforesaid any such action taken by
the Holder of any Note shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Note and of any Notes issued in
exchange, substitution or upon registration of transfer therefor,
irrespective of whether or not any notation thereof is made upon such Note or
such other Notes.
Section 10.06 Record Date for Noteholder Acts
If the Company shall solicit from the Noteholders any request, demand,
authorization, direction, notice, consent, waiver or other act, the Company
may, at its option, by Board Resolution, fix in advance a record date for the
determination of Noteholders 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,
PAGE 61
such request, demand, authorization, direction, notice, consent, waiver or
other act may be given before or after the record date, but only the
Noteholders of record at the close of business on the record date shall be
deemed to be Noteholders for the purpose of determining whether Holders of
the requisite aggregate principal amount of outstanding Notes have authorized
or agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other act, and for that purpose the outstanding
Notes shall be computed as of the record date; provided that no such request,
demand, authorization, direction, notice, consent, waiver or other act by the
Noteholders on the record date shall be deemed effective unless it shall
become effective pursuant to this Indenture not later than six months after
the record date. Any such record date shall be at least 30 days prior to the
date of the solicitation to the Noteholders by the Company.
ARTICLE ELEVEN NOTEHOLDERS' MEETING
Section 11.01 Purposes of Meetings
A meeting of Noteholders may be called at any time and from time to time
pursuant to this Article Eleven for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Noteholders pursuant to Article Eight;
(b) to remove the Trustee pursuant to Article Nine;
(c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to Section 13.02 hereof; or
(d) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes, as the case
may be, under any other provision of this Indenture or under applicable law.
Section 11.02 Call of Meetings by Trustee
The Trustee may at any time call a meeting of Holders of Notes to take any
action specified in Section 11.01 hereof, to be held at such time and at such
place as the Trustee shall determine. Notice of every such meeting of
Noteholders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given
PAGE 62
to Holders of the Notes that may be affected by the action proposed to be
taken at such meeting in the manner provided in Section 15.10 hereof. Such
notice shall be given not less than 20 nor more than 90 days prior to the
date fixed for such meeting.
Section 11.03 Call of Meetings by Company or Noteholders
If at any time the Company, pursuant to a Board Resolution, or the Holders of
at least 10% in aggregate principal amount of the Notes then outstanding,
shall have requested the Trustee to call a meeting of Noteholders, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may
call such meeting to take any action authorized in Section 11.01 hereof by
giving notice thereof as provided in Section 11.02 hereof.
Section 11.04 Qualifications for Voting
To be entitled to vote at any meetings of Noteholders a Person shall (a) be a
Holder of one or more Notes affected by the action proposed to be taken or
(b) be a Person appointed by an instrument in writing as proxy by a Holder of
one or more such Notes. The only Persons who shall be entitled to be present
or to speak at any meeting of Noteholders shall be the Persons entitled to
vote at such meeting and their counsel and any representatives (including
employees) of the Trustee and its counsel and any representatives (including
employees) of the Company and its counsel.
Section 11.05 Regulations
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Noteholders in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct
of the meeting as it shall think fit.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by the Noteholders as provided in Section 11.03 hereof in which
case the Company or Noteholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by the Holders of a
majority in aggregate principal amount of the Notes present in person or by
proxy at the meeting.
PAGE 63
(c) Subject to Section 10.04 hereof, at any meeting each Noteholder or proxy
shall be entitled to one vote for each $1,000 principal amount of Notes held
or represented by such Noteholder; provided that no vote shall be cast or
counted at any meeting in respect of any Note ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Notes held by such chairman or
instruments in writing as aforesaid duly designating such chairman as the
person to vote on behalf of other Noteholders. At any meeting of Noteholders
duly called pursuant to Section 11.02 or 11.03 hereof, the presence of
persons holding or representing Notes in an aggregate principal amount
sufficient to take action on any business for the transaction for which such
meeting was called shall constitute a quorum. Any meeting of Noteholders
duly called pursuant to Section 11.02 or 11.03 hereof may be adjourned from
time to time by the Holders of a majority in aggregate principal amount of
the Notes present in person or by proxy at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.
Section 11.06 Voting
The vote upon any resolution submitted to any meeting of Noteholders shall be
by written ballots on which shall be subscribed the signatures of the Holders
of Notes or of their representatives by proxy and the principal amount of
Notes held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of such
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in
Section 11.02 hereof. The record shall show the aggregate principal amount
of the Notes voting in favor of or against any resolution. The record shall
be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee and the
Trustee shall have the ballots taken at the meeting attached to such
duplicate. Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
PAGE 64
Section 11.07 Rights of Trustee or Noteholders Not Delayed
Nothing in this Article Eleven shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Noteholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance
or delay in the exercise of any right or rights conferred upon or reserved to
the Trustee or to the Holders of Notes under any of the provisions of this
Indenture or of the Notes.
ARTICLE TWELVE CONSOLIDATION, MERGER, SALE, TRANSFER OR OTHER DISPOSITION
Section 12.01 Company May Consolidate, etc. Only on Certain Terms
The Company shall not consolidate with or merge into any other corporation or
sell, or otherwise of dispose all or substantially all of its assets unless
the corporation formed by such consolidation or into which the Company is
merged or the Person which receives all or substantially all of the assets
pursuant to such sale, transfer or other disposition (a) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and premium and interest on all of the Notes and the
performance of every covenant of this Indenture on the part of the Company to
be performed or observed, (b) if such consolidation, merger, sale, transfer
or other disposition occurs prior to the Substitution Date, shall expressly
assume, by an indenture supplemental to the First Mortgage, executed and
delivered to the Trustee and the Mortgage Trustee, in form satisfactory to
the Trustee and the Mortgage Trustee, the due and punctual payment of the
principal of, premium, if any, and interest on all of the Pledged First
Mortgage Bonds and the performance of every covenant of the First Mortgage on
the part of the Company to be performed or observed and (c) if such
consolidation, merger, sale, transfer or other disposition occurs on and
after the Substitution Date and Pledged Substituted Mortgage Bonds are
outstanding, shall expressly assume, by an indenture supplemental to the
Substituted Mortgage, executed and delivered to the Trustee and the Mortgage
Trustee, the due and punctual payment of the principal of, premium, if any,
and interest on all of the Pledged Substituted Mortgage Bonds and the
performance of every covenant of the Substituted Mortgage on the part of the
Company to be performed or observed. For purposes of this Article Twelve,
the phrase "all or substantially all of its assets" shall mean 50% or more of
the total assets of the Company as shown on the balance sheet of the Company
as of the end of the calendar year immediately preceding the day of the year
in which such determination is made and nothing in this Indenture shall
PAGE 65
prevent or hinder the Company from selling, transferring or otherwise
disposing during any calendar year (in one transaction or a series of
transactions) less than 50% of the amount of its total assets as shown on the
balance sheet of the Company as of the end of the immediately preceding
calendar year.
Section 12.02 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, transfer or other disposition
of all or substantially all of the assets of the Company in accordance with
Section 12.01 hereof, the successor corporation formed by such consolidation
or into which the Company is merged or to which such sale, transfer or other
disposition is made shall succeed to, and be substituted for and may exercise
every right and power of, the Company under this Indenture with the same
effect as if such successor corporation had been named as the Company herein
and the Company shall be released from all obligations hereunder.
ARTICLE THIRTEEN SUPPLEMENTAL INDENTURES
Section 13.01 Supplemental Indentures Without Consent of Noteholders
(a) The Company and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto without the consent of
any Noteholder for one or more of the following purposes:
(1) to make such provision in regard to matters or questions arising under
this Indenture as may be necessary or desirable, and not inconsistent with
this Indenture or prejudicial to the interests of the Holders, for the
purpose of supplying any omission, curing any ambiguity, or curing,
correcting or supplementing any defective or inconsistent provision;
(2) 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 Note outstanding created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision or such change
or elimination is applicable only to Notes issued after the effective date of
such change or elimination;
PAGE 66
(3) to establish the form of Notes as permitted by Section 2.01 hereof or to
establish or reflect any terms of any Note determined pursuant to
Section 2.05 hereof;
(4) to evidence the succession of another corporation to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Notes;
(5) to grant to or confer upon the Trustee for the benefit of the Holders
any additional rights, remedies, powers or authority;
(6) to permit the Trustee to comply with any duties imposed upon it by law;
(7) to specify further the duties and responsibilities of and to define
further the relationships among the Trustee, any Authenticating Agent and any
paying agent;
(8) to add to the covenants of the Company for the benefit of the Holders,
to add to the security for the Notes or to surrender a right or power
conferred on the Company herein; and
(9) to make any other change that is not prejudicial to the Trustee or the
Holders.
(b) The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which adversely affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
(c) Any supplemental indenture authorized by this Section 13.01 may be
executed by the Company and the Trustee without the consent of the Holders of
any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 13.02 hereof.
Section 13.02 Supplemental Indentures With Consent of Noteholders
PAGE 67
(a) With the consent (evidenced as provided in Section 10.01 hereof) of the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner the rights of
the Noteholders; provided that no such supplemental indenture shall:
(1) change the maturity date of any Note, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof
or any premium thereon, or change the coin or currency in which the principal
of any Note or any premium or interest thereon is payable, or change the date
on which any Note may be redeemed or adversely affect the rights of the
Noteholders to institute suit for the enforcement of any payment of principal
of or any premium or interest on any Note, or impair the interest hereunder
of the Trustee in the Pledged First Mortgage Bonds or Pledged Substituted
Mortgage Bonds, or reduce the principal amount of any issue of Pledged First
Mortgage Bonds (except, as provided in this Indenture, upon the Substitution
Date) or Pledged Substituted Mortgage Bonds to an amount less than the
principal amount of the related issue of Notes or alter the payment
provisions of such Pledged First Mortgage Bonds or Pledged Substituted
Mortgage Bonds in a manner adverse to the Holders of the Notes, in each case
without the consent of the Holder of each Note so affected; or
(2) modify this Section 13.02(a) or reduce the aforesaid percentage of
Notes, the Holders of which are required to consent to any such supplemental
indenture or to reduce the percentage of Notes, the Holders of which are
required to waive Events of Default, in each case, without the consent of the
Holders of all of the Notes then outstanding.
(b) Upon the request of the Company, accompanied by a copy of the Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated
to, enter into such supplemental indenture.
(c) It shall not be necessary for the consent of the Holders of Notes under
this Section 13.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
(d) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section 13.02, the Trustee shall give
notice in the manner provided in Section 15.10 hereof, setting forth in
general terms the substance of such supplemental indenture, to all
Noteholders. Any failure of the Trustee to give such notice or any defect
therein shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
PAGE 68
(e) Notwithstanding anything to the contrary in this Section 13.02, if any
proposed supplemental indenture would affect only a limited number of series
or issues of Notes, only the Holders of the Notes so affected shall be
entitled to consent to such supplemental indenture, and, subject to
Sections 13.02(a)(1) and (2), such supplemental indenture may be approved
with the consent of the Holders of a majority in aggregate principal amount
of the Notes so affected.
Section 13.03 Compliance With Trust Indenture Act; Effect of Supplemental
Indentures
Any supplemental indenture executed pursuant to this Article Thirteen shall
comply with the TIA. Upon the execution of any supplemental indenture
pursuant to this Article Thirteen, the Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 13.04 Notation on Notes
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article Thirteen may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Notes so modified as
approved by the Trustee and the Board of Directors with respect to any
modification of this Indenture contained in any such supplemental indenture
may be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Notes then outstanding.
Section 13.05 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee
The Trustee, subject to Sections 9.01 and 9.02 hereof, shall receive an
Officers' Certificate and an Opinion of Counsel pursuant to Section 15.05
hereof as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article Thirteen.
PAGE 69
ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND
DIRECTORS
Section 14.01 Indenture and Notes Solely Corporate Obligations
No recourse for the payment of the principal of or any premium or interest on
any Note, any Pledged First Mortgage Bond or any Pledged Substituted Mortgage
Bond, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company,
contained in this Indenture, the First Mortgage, the Substituted Mortgage or
in any supplemental indenture, or in any Note or in any Pledged First
Mortgage Bond or any Pledged Substituted Mortgage Bond, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of the
Notes.
ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS
Section 15.01 Provisions Binding on Company's Successors
All the covenants, stipulations, promises and agreements made by the Company
in this Indenture shall bind its successors and assigns whether so expressed
or not.
Section 15.02 Official Acts by Successor Corporation
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful successor of the Company.
PAGE 70
Section 15.03 Notices
(a) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the
Noteholders on the Company may be given or served by confirmed facsimile
transmission, by delivery to an overnight courier providing evidence of
receipt or by being deposited postage prepaid in a post office letter box, in
each case sent or transmitted to the facsimile number or address (until
another facsimile number or address is filed by the Company with the Trustee)
of the principal executive offices of the Company, to the attention of the
Secretary or Treasurer. Any notice, direction, request or demand by any
Noteholder, the Company or the Mortgage Trustee to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given
or made in writing, by any type of delivery described above, at the corporate
trust office of the Trustee, Attention: Manager, Corporate Trust Department.
(b) The Company shall provide any notices required under this Indenture by
publication, but only to the extent that such publication is required by the
TIA, the rules and regulations of the SEC or any securities exchange upon
which any of the Notes are listed.
Section 15.04 Governing Law
This Indenture and each Note shall be deemed to be a contract made under the
laws of the State of Washington, and for all purposes shall be construed in
accordance with the laws of said State.
Section 15.05 Evidence of Compliance With Conditions Precedent
(a) Upon any application or demand by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenants compliance with which
constitutes a condition precedent) 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 have been complied with.
(b) Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (other than the certificates delivered
pursuant to Section 6.06 hereof) shall include (1) a statement that each
Person making such certificate or opinion has read such covenant or condition
PAGE 71
and the definitions 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 Person, such Person has made such
examination or investigation as is necessary to enable such Person to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied with.
(c) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
(d) 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 such certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
delivered under the Indenture 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 person
knows, or in the exercise of reasonable care should know, that the
certificate or opinion of representations with respect to such matters are
erroneous. Any opinion of counsel delivered hereunder may contain standard
exceptions and qualifications satisfactory to the Trustee.
(e) Any certificate, statement or opinion of any officer of the Company, or
of counsel, may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an independent public
accountant or firm of accountants, unless such officer or counsel, as the
case may be, knows that the certificate or opinions or representations with
respect to the accounting matters upon which the certificate, statement or
opinion of such officer or counsel may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any firm of independent public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
PAGE 72
(f) 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 15.06 Business Days
Unless otherwise provided pursuant to Section 2.05(c) hereof, in any case
where the date of maturity of the principal of or any premium or interest on
any Note or the date fixed for redemption of any Note is not a Business Day,
then payment of such principal or any premium or interest need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and, in the case of timely payment thereof, no interest shall
accrue for the period from and after such Interest Payment Date or the date
on which the principal of the Note is required to be paid.
Section 15.07 Trust Indenture Act to Control
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by any of Sections 310 to 317,
inclusive, of the TIA, such required provision of the TIA shall govern.
Section 15.08 Table of Contents, Headings, Etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 15.09 Execution in Counterparts
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
and the same instrument.
Section 15.10 Manner of Mailing Notice to Noteholders
Any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or the Company to or on the
Holders of Notes, as the case may be, shall be given or served by confirmed
facsimile transmission, by delivery to an overnight courier providing
evidence of receipt or by first-class mail, postage prepaid, in each case
sent or transmitted to the Holders of such Notes at their last facsimile
numbers or addresses as the same appear on the register for the Notes
referred to in Section 2.06, and any such notice shall be deemed to be given
PAGE 73
or served by being deposited in a post office letter box (or by any other
form of delivery described above) in the form and manner provided in this
Section 15.10. In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give notice to
any Holder by mail, then such notification to such Holder as shall be made
with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Section 15.11 Approval by Trustee of Counsel
Whenever the Trustee is required to approve counsel who is to furnish
evidence of compliance with conditions precedent in this Indenture, such
approval by the Trustee shall be deemed to have been given upon the taking of
any action by the Trustee pursuant to and in accordance with the certificate
or opinion so furnished by such counsel.
PAGE 74
IN WITNESS WHEREOF, PUGET SOUND ENERGY, INC. has caused this Indenture to be
signed and acknowledged by one of its Vice Presidents, and attested by its
Secretary, and STATE STREET BANK AND TRUST COMPANY has caused this Indenture
to be signed and acknowledged by one of its Vice Presidents, and attested by
one of its Vice Presidents, as of the day and year first written above.
PUGET SOUND ENERGY, INC.
By /s/ Xxxxx X. Xxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxx
Vice President and Chief
Financial Officer
ATTEST: /s/ Xxxxx X. Xxxxxxxx
----------------------
Secretary
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name:
Its:
ATTEST: /s/ [signature unintelligible]
-------------------------------
Authorized Officer
PAGE 75
EXHIBIT A
FORM OF GLOBAL NOTE
PRIOR TO SUBSTITUTION DATE
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY (REFERRED
TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TRUST COMPANY (55 XXXXX XXXXXX XXX XXXX, XXX XXXX), TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: Number: Principal Amount:
______________________ __________________ ___________________
Original Issue Date: Interest Rate: Maturity Date:
______________________ _________________% ___________________
Initial Redemption Date: Initial Redemption Annual Redemption
Percentage: Percentage Reduction:
______________________ __________________ ___________________
PAGE A-1
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue
Date is applicable) set forth above or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually in
arrears on the ____________ and ____________ in each year (each, an "Interest
Payment Date"), commencing on the first such Interest Payment Date succeeding
the applicable Original Issue Date set forth above, at the per annum Interest
Rate set forth above, until the principal hereof is paid or made available
for payment. No interest shall accrue on the Maturity Date, so long as the
principal amount of this Global Note is paid on the Maturity Date. The
interest so payable and punctually paid or duly provided for on any such
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note is registered at the close of business on the
Regular Record Date for such interest, which shall be the ___________ or
____________, as the case may be, next preceding such Interest Payment Date;
provided that the first Interest Payment Date for any part of this Note, the
Original Issue Date of which is after a Regular Record Date but prior to the
applicable Interest Payment Date, shall be the Interest Payment Date
following the next succeeding Regular Record Date; and provided that interest
payable on the Maturity Date set forth above or, if applicable, upon
redemption or acceleration, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture (as defined
below), any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Note is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to
Noteholders not more than 15 days or fewer than 10 days prior to such Special
Record Date. On or before __________, New York City time, or such other time
as shall be agreed upon between the Trustee and the Depositary, of the day on
which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before _________, New York City time, or such other time as
shall be agreed upon between the Trustee and the Depositary, of the day on
which principal, interest payable at maturity and premium, if any, is due on
this Global Note, the Trustee shall deposit with the Depositary the amount
equal to the principal, interest payable at maturity and premium, if any, by
PAGE A-2
wire transfer into the account specified by the Depositary. As a condition
to the payment, on the Maturity Date or upon redemption or acceleration, of
any part of the principal and applicable premium of this Global Note, the
Depositary shall surrender, or cause to be surrendered, this Global Note to
the Trustee, whereupon a new Global Note shall be issued to the Depositary.
This Global Note is a global security in respect of a duly authorized issue
of Senior Notes, Series ____ (the "Notes of this Series," which term includes
any Global Notes representing such Notes) of the Company issued and to be
issued under an Indenture dated as of _____________, 1997 between the Company
and State Street Bank and Trust, Boston, Massachusetts, as trustee (the
"Trustee," which term includes any successor Trustee under the Indenture) and
indentures supplemental thereto (collectively, the "Indenture"). Under the
Indenture, one or more series of notes may be issued and, as used herein, the
term "Notes" refers to the Notes of this series and any other outstanding
series of Notes. Reference is hereby made to the Indenture for a more
complete statement of the respective rights, limitations of rights, duties
and immunities under the Indenture of the Company, the Trustee and the
Noteholders and of the terms upon which the Notes are and are to be
authenticated and delivered. This Global Note has been issued in respect of
the series designated on the first page hereof limited in aggregate principal
amount to $__________.
Prior to the Substitution Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds")
delivered by the Company to the Trustee for the benefit of the Holders of the
Notes, issued under either (a) the Fortieth Supplemental Indenture, dated
September 1, 1954, from the Company to State Street Bank and Trust, Boston,
Massachusetts, as successor trustee (the "Electric Mortgage Trustee"), as
supplemented and amended (the "Electric Mortgage"), or (b) the Indenture of
First Mortgage, dated April 1, 1957, from the Company, as successor to
Washington Natural Gas Company, to Xxxxxx Trust and Savings Bank, Chicago,
Illinois, as trustee (the "Gas Mortgage Trustee" and, together with the
Electric Mortgage Trustee, the "Mortgage Trustee"), as supplemented and
amended (the "Gas Mortgage" and, together with the Electric Mortgage, the
"First Mortgages"). Reference is made to the First Mortgages and the
Indenture for a description of the rights of the Trustee as holder of the
Pledged First Mortgage Bonds, the property mortgaged and pledged under each
of the First Mortgages, the rights of the Company and of the applicable
Mortgage Trustee in respect thereof, the duties and immunities of the
applicable Mortgage Trustee, the terms and conditions upon which the Pledged
First Mortgage Bonds are secured and the circumstances under which additional
first mortgage bonds may be issued.
PAGE A-3
From and after such time as all first mortgage bonds (other than Pledged
First Mortgage Bonds) issued under either of the First Mortgages have been
retired through payment, redemption or otherwise (including those first
mortgage bonds the payment for which has been provided for in accordance with
the applicable First Mortgage) at, before or after the maturity thereof (the
"Substitution Date"), the Pledged First Mortgage Bonds shall cease to secure
the Notes in any manner, and, at the option of the Company, the Notes either
(a) will become unsecured general obligations of the Company or (b) will be
secured by first mortgage bonds issued under an indenture other than the
First Mortgages. In certain circumstances prior to the Substitution Date as
provided in the Indenture, the Company is permitted to reduce the aggregate
principal amount of an issue of Pledged First Mortgage Bonds held by the
Trustee, but in no event prior to the Substitution Date to an amount less
than the aggregate principal amount of the related issue of Notes initially
issued contemporaneously with such Pledged First Mortgage Bonds.
Each Note shall be dated and issued as of the date of its authentication by
the Trustee and shall bear an Original Issue Date or Dates. Each Note or
Global Note issued upon transfer, exchange or substitution of such Note or
Global Note shall bear the Original Issue Date or Dates of such transferred,
exchanged or substituted Note or Global Note, as the case may be.
This Global Note is subject to redemption at the option of the Company on any
date on and after the Initial Redemption Date, if any, specified on the face
hereof (any date fixed for redemption shall hereafter be referred to as a
"Redemption Date"). If no Initial Redemption Date is set forth on the face
hereof, this Global Note may not be redeemed at the option of the Company
prior to the Maturity Date specified on the face hereof. On and after the
Initial Redemption Date, if any, this Global Note may be redeemed at any time
in whole or from time to time in part at the option of the Company at the
applicable Redemption Price (as defined below) together with interest thereon
payable to the Redemption Date, on notice given not less than 30 days nor
more than 60 days prior to the Redemption Date. In the event of redemption
of this Global Note in part only, a new Global Note or Notes of like tenor
and series for the unredeemed portion hereof shall be issued in the name of
the Noteholder hereof upon the surrender hereof.
If this Global Note is redeemable in the foregoing manner at the option of
the Company, the "Redemption Price" shall initially be the Initial Redemption
Percentage, specified on the face hereof, of the principal amount of this
Global Note to be redeemed and shall decline at each anniversary of the
Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal amount to be redeemed
until the Redemption Price is 100% of such principal amount.
PAGE A-4
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment
Date or the date on which the principal of this Global Note is required to be
paid is not a Business Day, then payment of principal, premium or interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on such Interest Payment Date
or date on which the principal of this Global Note is required to be paid
and, in the case of timely payment thereof no interest shall accrue for the
period from and after such Interest Payment Date or the date on which the
principal of this Global Note is required to be paid.
The Company, at its option, and subject to the terms and conditions provided
in the Indenture, will be discharged from any and all obligations in respect
of the Notes (except for certain obligations as specifically set forth in the
Indenture) if the Company deposits with the Trustee money, U.S. Government
Obligations which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, or a combination
of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered
to the Trustee, to pay at maturity or the applicable redemption date
(provided that notice of redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the
giving of any notice of redemption) all outstanding Notes, including
principal and any premium and interest due or to become due to such date of
maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture and, upon such declaration, the Trustee can demand
the redemption of the Pledged First Mortgage Bonds as provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than
a majority in principal amount of the outstanding Notes affected by such
amendment or modifications. Any such consent or waiver by the Holder of this
Global Note shall be conclusive and binding upon such Holder and upon all
future Holders of this Global Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu thereof
whether or not notation of such consent or waiver is made upon the Note.
PAGE A-5
As set forth in and subject to the provisions of the Indenture, no Holder of
any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default with respect to such Notes, the Holders of not less than a majority
in principal amount of the outstanding Notes affected by such Event of
Default shall have made written request and offered reasonable indemnity to
the Trustee to institute such proceeding as Trustee and the Trustee shall
have failed to institute such proceeding within 60 days; provided that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Global Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
If at any time the Depositary for this Global Note notifies the Company that
it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint
a successor Depositary with respect to this Global Note. If a successor
Depositary for this Global Note 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 to issue this Note in global form shall
no longer be effective with respect to this Global Note and the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Notes in exchange for this Global
Note, will authenticate and deliver individual Notes of like tenor and terms
in definitive form in an aggregate principal amount equal to the principal
amount of this Global Note.
The Company may at any time and in its sole discretion determine that all
Notes of this series (but not less than all) issued or issuable in the form
of one or more Global Notes shall no longer be represented by such Global
Note or Notes. In such event, the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
individual Notes in exchange for such Global Note, shall authenticate and
deliver, individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note
or Notes in exchange for such Global Note or Notes.
PAGE A-6
Under certain circumstances specified in the Indenture, the Depositary may be
required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or
at the direction of, the Depositary a Global Note in principal or amount
equal to the aggregate principal amount of, and with all terms identical to,
the Global Notes surrendered thereto and that shall indicate all Original
Issue Dates and the principal amount applicable to each such Original Issue
Date.
The Indenture and the Notes shall be governed by, and construed in accordance
with, the laws of the state of Washington.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of
an authorized officer, this Global Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
All capitalized terms used but not otherwise defined in this Global Note
shall have the respective meanings assigned to them in the Indenture unless
otherwise indicated herein.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
By: ________________________
Title: _____________________
Attest: ____________________
Title: _____________________
PAGE A-7
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
XXXXX XXXXXX XXXX XXX XXXXX, XXXXXX, XXXXXXXXXXXXX, as Trustee
By: ______________________________
Authorized Officer
PAGE A-8
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right
of survivorship and not as tenants
in common _____________________________
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said note on the books of the Company,
with full power of substitution in the premises.
Dated: _______________________
PAGE A-9
______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
PAGE A-10
EXHIBIT B
FORM OF NOTE
PRIOR TO SUBSTITUTION DATE
REGISTERED REGISTERED
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: Number: Principal Amount:
______________________ ____________________ _________________
Original Issue Date: Interest Rate: Maturity Date:
______________________ ___________________% _________________
Initial Redemption Date: Initial Redemption Annual Redemption
Percentage Percentage Reduction:
______________________ ____________________ _________________
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to
DOLLARS
or registered assigns, the principal sum of
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears on
__________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the Original
Issue Date set forth above, at the per annum Interest Rate set forth above,
until the principal hereof is paid or made available for payment. No
interest shall accrue on the Maturity Date, so long as the principal amount
of this Note is paid in full on the Maturity Date. The interest so payable
and punctually paid or duly provided for on any such Interest Payment Date
will, as provided in the Indenture (as defined below), be paid to the Person
in whose name this Note is registered at the close of business on the Regular
Record Date for such interest, which shall be the ___________ or ___________,
as the case may be, next preceding such Interest Payment Date; provided that
PAGE B-1
the first Interest Payment Date for any Note, the Original Issue Date of
which is after a Regular Record Date but prior to the applicable Interest
Payment Date, shall be the Interest Payment Date following the next
succeeding Regular Record Date; and provided, further, that interest payable
on the Maturity Date set forth above or, if applicable, upon redemption or
acceleration, shall be payable to the Person to whom principal shall be
payable. Except as otherwise provided in the Indenture (referred to on the
reverse hereof), any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record
Date and shall be paid to the Person in whose name this Note is registered at
the close of business on a Special Record Date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given
to Noteholders not more than 15 days nor fewer than 10 days prior to such
Special Record Date. Principal, applicable premium and interest due at the
maturity of this Note shall be payable in immediately available funds when
due upon presentation and surrender of this Note at the corporate trust
office of the Trustee or at the authorized office of any paying agent.
Interest on this Note (other than interest payable at maturity) shall be paid
by check or wire transfer payable in clearinghouse funds to the Holder as its
name appears on the register; provided that if the Trustee receives a written
request from any Holder of Notes, the aggregate principal amount of which
having the same Interest Payment Date as this Note equals or exceeds
$10,000,000, on or before the applicable Regular Record Date, interest on
this Note shall be paid by wire transfer of immediately available funds to a
bank designated by such Holder in its request or by direct deposit into the
account of such Holder designated by such Holder in its request if such
account is maintained with the Trustee or any paying agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH IN
FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof directly or through an
Authenticating Agent by manual signature of an authorized officer, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
By: ____________________
PAGE B-2
Title: _________________
PAGE B-3
Attest: ________________
Title: _________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
XXXXX XXXXXX XXXX XXX XXXXX, XXXXXX, XXXXXXXXXXXXX, as Trustee
By: _______________________
Authorized Officer
PAGE B-4
[FORM OF REVERSE OF NOTE]
PUGET SOUND ENERGY, INC.
SENIOR NOTES SERIES
This Note is one of a duly authorized issue of Senior Notes, Series ____ (the
"Notes of this Series") of the Company issued and to be issued under an
Indenture dated as of _____________, 1997 between the Company and State
Street Bank and Trust, Boston, Massachusetts, as trustee (the "Trustee",
which term includes any successor Trustee under the Indenture) and indentures
supplemental thereto (collectively, the "Indenture"). Under the Indenture,
one or more series of notes may be issued and, as used herein, the term
"Notes" refers to the Notes of this series and any other outstanding series
of Notes. Reference is hereby made for a more complete statement of the
respective rights, limitations of rights, duties and immunities under the
Indenture of the Company, the Trustee and the Noteholders and of the terms
upon which the Notes are and are to be authenticated and delivered. This
Note is one of the series designated on the face hereof limited in aggregate
principal amount to $___________.
Prior to the Substitution Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds" delivered
by the Company to the Trustee for the benefit of the Holders of the Notes,
issued under either (a) the Fortieth Supplemental Indenture, dated
September 1, 1954, from the Company to State Street Bank and Trust, Boston,
Massachusetts, as successor trustee (the "Electric Mortgage Trustee"), as
supplemented and amended (the "Electric Mortgage"), or (b) the Indenture of
First Mortgage, dated April 1, 1957, from the Company, as successor to
Washington Natural Gas Company, to Xxxxxx Trust and Savings Bank, Chicago,
Illinois, as trustee (the "Gas Mortgage Trustee" and, together with the
Electric Mortgage Trustee, the "Mortgage Trustee"), as supplemented and
amended (the "Gas Mortgage" and, together with the Electric Mortgage, the
"First Mortgages"). Reference is made to the First Mortgages and the
Indenture for a description of the rights of the Trustee as holder of the
Pledged First Mortgage Bonds, the property mortgaged and pledged under each
of the First Mortgages, the rights of the Company and of the applicable
Mortgage Trustee in respect thereof, the duties and immunities of the
applicable Mortgage Trustee, the terms and conditions upon which the Pledged
First Mortgage Bonds are secured and the circumstances under which additional
first mortgage bonds may be issued.
From and after such time as all first mortgage bonds (other than Pledged
First Mortgage Bonds) issued under either of the First Mortgages have been
PAGE B-5
retired through payment, redemption or otherwise (including those first
mortgage bonds the payment for which has been provided for in accordance with
the applicable First Mortgage) at, before or after the maturity thereof (the
"Substitution Date"), the Pledged First Mortgage Bonds shall cease to secure
the Notes in any manner, and, at the option of the Company, the Notes either
(a) will become unsecured general obligations of the Company or (b) will be
secured by first mortgage bonds issued under an indenture other than the
First Mortgages. In certain circumstances prior to the Substitution Date as
provided in the Indenture, the Company is permitted to reduce the aggregate
principal amount of a series of Pledged First Mortgage Bonds held by the
Trustee, but in no event prior to the Substitution Date to an amount less
than the aggregate outstanding principal amount of the related issue of Notes
initially issued contemporaneously with such Pledged First Mortgage Bonds.
This Note is subject to redemption at the option of the Company on any date
on and after the Initial Redemption Date, if any, specified on the face
hereof (any date fixed for redemption shall hereafter be referred to as a
"Redemption Date"). If no Initial Redemption Date is set forth on the face
hereof, this Note may not be redeemed at the option of the Company prior to
the Maturity Date specified on the face hereof. On and after the Initial
Redemption Date, if any, this Note may be redeemed at any time in whole or
from time to time in part at the option of the Company at the applicable
Redemption Price (as defined below) together with interest thereon payable to
the Redemption Date, on notice given not less than 30 days nor more than 60
days prior to the Redemption Date. In the event of redemption of this Note
in part only, a new Note or Notes of like tenor and series for the unredeemed
portion hereof shall be issued in the name of the Noteholder hereof upon the
surrender hereof.
If this Note is redeemable in the foregoing manner at the option of the
Company, the "Redemption Price" shall initially be the Initial Redemption
Percentage, specified on the face hereof, of the principal amount of this
Note to be redeemed and shall decline at each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction, if any,
specified on the face hereof, of the principal amount to be redeemed until
the Redemption Price is 100% of such principal amount.
Interest payments for this Note shall be computed and paid on the basis of a
360-day year of twelve 30-day months. If any Interest Payment Date or the
date on which the principal of this Note is required to paid is not a
Business Day, then payment of principal, premium or interest need not be made
on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date or the date on
which the principal of this Note is required to be paid, and, in the case of
timely payment thereof, no interest shall accrue for the period from and
after such Interest Payment Date or the date on which the principal of this
Note is required to be paid.
PAGE B-6
The Company, at its option, and subject to the terms and conditions provided
in the Indenture, will be discharged from any and all obligations in respect
of the Notes (except for certain obligations as specifically set forth in the
Indenture) if the Company deposits with the Trustee money, U.S. Government
Obligations which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, or a combination
of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered
to the Trustee, to pay at maturity or the applicable redemption date
(provided that notice of redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the
giving of any notice of redemption) all outstanding Notes, including
principal and any premium and interest due or to become due to such date of
maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture and, upon such declaration, the Trustee can demand
the redemption of the Pledged First Mortgage Bonds as provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than
a majority in principal amount of the outstanding Notes affected by such
amendment or modifications. Any such consent or waiver by the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange therefor in lieu thereof whether or not notation of
such consent or waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder of
any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default with respect to such Notes, the Holders of not less than a majority
in principal amount of the outstanding Notes affected by such Event of
Default shall have made written request and offered reasonable indemnity to
the Trustee to institute such proceeding as Trustee and the Trustee shall
have failed to institute such proceeding within 60 days; provided that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.
PAGE B-7
No reference herein to the Indenture and to provisions of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the times, places and rates and the coin or currency
prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note register. Upon
surrender of this Note for registration or transfer at the corporate trust
office of the Trustee or such other office or agency as may be designated by
the Company in the Borough of Manhattan, the City and State of New York,
endorsed by or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note registrar, duly executed by the
Holder hereof or the attorney in fact of such Holder duly authorized in
writing, one or more new Notes of like tenor and of authorized denominations
and for the same aggregate principal amount will be issued to the designated
transferee or transferees.
The Notes of this series are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Notes are exchangeable for a like aggregate principal amount of Notes
of like tenor and of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in accordance
with, the laws of the state of Washington.
All capitalized terms used but not otherwise defined in this Note shall have
the respective meanings assigned to them in the Indenture.
PAGE B-8
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right
of survivorship and not as tenants
in common _____________________________
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said note on the books of the Company,
with full power of substitution in the premises.
Dated: _______________________
PAGE B-9
______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
PAGE B-10
EXHIBIT C
FORM OF GLOBAL NOTE FOLLOWING SUBSTITUTION DATE
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY (REFERRED
TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TRUST COMPANY (55 XXXXX XXXXXX XXX XXXX, XXX XXXX), TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: Number: Principal Amount:
______________________ __________________ ___________________
Original Issue Date: Interest Rate: Maturity Date:
______________________ __________________ ___________________
Initial Redemption Date: Initial Redemption Annual Redemption
Percentage: Percentage Reduction:
______________________ __________________ ___________________
PAGE C-1
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue
Date is applicable) set forth above or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually in
arrears on the __________ and __________ in each year (each, an "Interest
Payment Date"), commencing on the first such Interest Payment Date succeeding
the applicable Original Issue Date set forth above, at the per annum Interest
Rate set forth above, until the principal hereof is paid or made available
for payment. No interest shall accrue on the Maturity Date, so long as the
principal amount of this Global Note is paid on the Maturity Date. The
interest so payable and punctually paid or duly provided for on any such
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note is registered at the close of business on the
Regular Record Date for such interest, which shall be the ___________ or
____________, as the case may be, next preceding such Interest Payment Date;
provided that the first Interest Payment Date for any part of this Note, the
Original Issue Date of which is after a Regular Record Date but prior to the
applicable Interest Payment Date, shall be the Interest Payment Date
following the next succeeding Regular Record Date; and provided that interest
payable on the Maturity Date set forth above or, if applicable, upon
redemption or acceleration, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture (as defined
below), any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Note is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to
Noteholders not more than fifteen days or fewer than ten days prior to such
Special Record Date. On or before ______, New York City time, or such other
time as shall be agreed upon between the Trustee and the Depositary, of the
day on which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before _______, New York City time, or such other time as shall
be agreed upon between the Trustee and the Depositary, of the day on which
principal, interest payable at maturity and premium, if any, is due on this
Global Note, the Trustee shall deposit with the Depositary the amount equal
PAGE C-2
to the principal, interest payable at maturity and premium, if any, by wire
transfer into the account specified by the Depositary. As a condition to the
payment, on the Maturity Date or upon redemption or acceleration, of any part
of the principal and applicable premium of this Global Note, the Depositary
shall surrender, or cause to be surrendered, this Global Note to the Trustee,
whereupon a new Global Note shall be issued to the Depositary.
This Global Note is a global security in respect of a duly authorized issue
of Senior Notes, Series ___ (the "Notes of this Series," which term includes
any Global Notes representing such Notes) of the Company issued and to be
issued under an Indenture dated as of ________, 1997 between the Company and
State Street Bank and Trust, Boston, Massachusetts, as trustee (the
"Trustee," which term includes any successor Trustee under the Indenture) and
indentures supplemental thereto (collectively, the "Indenture"). Under the
Indenture, one or more series of notes may be issued and, as used herein, the
term "Notes" refers to the Notes of this series and any other outstanding
series of Notes. Reference is hereby made to the Indenture for a more
complete statement of the respective rights, limitations of rights, duties
and immunities under the Indenture of the Company, the Trustee and the
Noteholders and of the terms upon which the Notes are and are to be
authenticated and delivered. This Global Note has been issued in respect of
the series designated on the first page hereof limited in aggregate principal
amount to $__________.
[Include the following paragraph if the Company elects to issue Pledged
Substituted Mortgage Bonds (as defined in the Indenture): The Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds")
delivered by the Company to the Trustee for the benefit of the Holders of the
Notes, issued under [the Substituted Mortgage (as defined in the Indenture)]
from the Company to ________________, as trustee (the "Mortgage Trustee"), as
supplemented and amended (the "First Mortgage"). Reference is made to the
First Mortgage and the Indenture for a description of the rights of the
Trustee as holder of the Pledged First Mortgage Bonds, the property mortgaged
and pledged under the First Mortgage, the rights of the Company and of the
Mortgage Trustee in respect thereof, the duties and immunities of the
Mortgage Trustee, the terms and conditions upon which the Pledged First
Mortgage Bonds are secured and the circumstances under which additional first
mortgage bonds may be issued.]
Each Note shall be dated and issued as of the date of its authentication by
the Trustee and shall bear an Original Issue Date or Dates. Each Note or
Global Note issued upon transfer, exchange or substitution of such Note or
Global Note shall bear the Original Issue Date or Dates of such transferred,
exchanged or substituted Note or Global Note, as the case may be.
PAGE C-3
This Global Note is subject to redemption at the option of the Company on any
date on and after the Initial Redemption Date, if any, specified on the face
hereof (any date fixed for redemption shall hereafter be referred to as a
"Redemption Date"). If no Initial Redemption Date is set forth on the face
hereof, this Global Note may not be redeemed at the option of the Company
prior to the Maturity Date specified on the face hereof. On and after the
Initial Redemption Date, if any, this Global Note may be redeemed at any time
in whole or from time to time in part at the option of the Company at the
applicable Redemption Price (as defined below) together with interest thereon
payable to the Redemption Date, on notice given not less than 30 days nor
more than 60 days prior to the Redemption Date. In the event of redemption
of this Global Note in part only, a new Global Note or Notes of like tenor
and series for the unredeemed portion hereof shall be issued in the name of
the Noteholder hereof upon the surrender hereof.
If this Global Note is redeemable in the foregoing manner at the option of
the Company, the "Redemption Price" shall initially be the Initial Redemption
Percentage, specified on the face hereof, of the principal amount of this
Global Note to be redeemed and shall decline at each anniversary of the
Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal amount to be redeemed
until the Redemption Price is 100% of such principal amount.
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment
Date or the date on which the principal of this Global Note is required to be
paid is not a Business Day, then payment of principal, premium or interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on such Interest Payment Date
or date on which the principal of this Global Note is required to be paid
and, in the case of timely payment thereof no interest shall accrue for the
period from and after such Interest Payment Date or the date on which the
principal of this Global Note is required to be paid.
The Company, at its option, and subject to the terms and conditions provided
in the Indenture, will be discharged from any and all obligations in respect
of the Notes (except for certain obligations specifically as set forth in the
Indenture) if the Company deposits with the Trustee money, U.S. Government
Obligations which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, or a combination
of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered
to the Trustee, to pay at maturity or the applicable redemption date
(provided that notice of redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the
giving of any notice of redemption) all outstanding Notes, including
principal and any premium and interest due or to become due to such date of
maturity, as the case may be.
PAGE C-4
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than
a majority in principal amount of the outstanding Notes affected by such
amendment or modifications. Any such consent or waiver by the Holder of this
Global Note shall be conclusive and binding upon such Holder and upon all
future Holders of this Global Note and of any Note issued upon the
registration of transfer hereof or in exchange therefor or in lieu thereof
whether or not notation of such consent or waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder of
any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default with respect to such Notes, the Holders of not less than a majority
in principal amount of the outstanding Notes affected by such Event of
Default shall have made written request and offered reasonable indemnity to
the Trustee to institute such proceeding as Trustee and the Trustee shall
have failed to institute such proceeding within 60 days; provided that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Global Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
PAGE C-5
If at any time the Depositary for this Global Note notifies the Company that
it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint
a successor Depositary with respect to this Global Note. If a successor
Depositary for this Global Note 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 to issue this Note in global form shall
no longer be effective with respect to this Global Note and the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Notes in exchange for this Global
Note, will authenticate and deliver individual Notes of like tenor and terms
in definitive form in an aggregate principal amount equal to the principal
amount of this Global Note.
The Company may at any time and in its sole discretion determine that all
Notes (but not less than all) issued or issuable in the form of one or more
Global Notes shall no longer be represented by such Global Note or Notes. In
such event, the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual Notes in
exchange for such Global Note, shall authenticate and deliver, individual
Notes of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Note or Notes in exchange
for such Global Note or Notes.
Under certain circumstances specified in the Indenture, the Depositary may be
required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or
at the direction of, the Depositary a Global Note in principal or amount
equal to the aggregate principal amount of, and with all terms identical to,
the Global Notes surrendered thereto and that shall indicate all Original
Issue Dates and the principal amount applicable to each such Original Issue
Date.
The Indenture and the Notes shall be governed by, and construed in accordance
with, the laws of the state of Washington.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of
an authorized officer, this Global Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
PAGE C-6
All capitalized terms used but not otherwise defined in this Global Note
shall have the respective meanings assigned to them in the Indenture unless
otherwise indicated herein.
PAGE C-7
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
By: ________________________
Title: _____________________
Attest: ____________________
Title: _____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
XXXXX XXXXXX XXXX XXX XXXXX, XXXXXX, XXXXXXXXXXXXX, as Trustee
By: ______________________________
Authorized Officer
PAGE C-8
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right
of survivorship and not as tenants
in common _____________________________
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said note on the books of the Company,
with full power of substitution in the premises.
Dated: _______________________
PAGE C-9
______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
PAGE C-10
EXHIBIT D
FORM OF NOTE
FOLLOWING SUBSTITUTION DATE
REGISTERED REGISTERED
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: Number: Principal Amount:
______________________ ____________________ _________________
Original Issue Date: Interest Rate: Maturity Date:
______________________ ___________________% _________________
Initial Redemption Date: Initial Redemption Annual Redemption
Percentage Percentage Reduction:
______________________ ____________________ _________________
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to
or registered assigns, the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears on
__________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the Original
Issue Date set forth above, at the per annum Interest Rate set forth above,
until the principal hereof is paid or made available for payment. No
interest shall accrue on the Maturity Date, so long as the principal amount
of this Note is paid in full on the Maturity Date. The interest so payable
and punctually paid or duly provided, further, for on any such Interest
Payment Date will, as provided in the Indenture (as defined below), be paid
to the Person in whose name this Note is registered at the close of business
on the Regular Record Date for such interest, which shall be the __________
or __________ , as the case may be, next preceding such Interest Payment
Date; provided that the first Interest Payment Date for any Note, the
PAGE D-1
Original Issue Date of which is after a Regular Record Date but prior to the
applicable Interest Payment Date, shall be the Interest Payment Date
following the next succeeding Regular Record Date; and provided, further,
that interest payable on the Maturity Date set forth above or, if applicable,
upon redemption or acceleration, shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Indenture
(referred to on the reverse hereof), any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and shall be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee, notice whereof
shall be given to Noteholders not more than 15 days nor fewer than 10 days
prior to such Special Record Date. Principal, applicable premium and
interest due at the maturity of this Note shall be payable in immediately
available funds when due upon presentation and surrender of this Note at the
corporate trust office of the Trustee or at the authorized office of any
paying agent. Interest on this Note (other than interest payable at
maturity) shall be paid by check or wire transfer payable in clearinghouse
funds to the Holder as its name appears on the register; provided, that if
the Trustee receives a written request from any Holder of Notes, the
aggregate principal amount of which having the same Interest Payment Date as
this Note equals or exceeds $10,000,000, on or before the applicable Regular
Record Date, interest on the Note shall be paid by wire transfer of
immediately available funds to a bank designated by such Holder in its
request or by direct deposit into the account of such Holder designated by
such Holder in its request if such account is maintained with the Trustee or
any Paying agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH IN
FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof directly or through an
Authenticating Agent by manual signature of an authorized officer, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
PAGE D-2
By: _________________________
Title: ______________________
Attest: _____________________
Title: ______________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
XXXXX XXXXXX XXXX XXX XXXXX, XXXXXX, XXXXXXXXXXXXX, as Trustee
By: ______________________________
Authorized Officer
PAGE D-3
[FORM OF REVERSE OF NOTE]
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
This Note is one of a duly authorized issue of Senior Notes, Series ___ (the
"Notes of this Series") of the Company issued and to be issued under an
Indenture dated as of ________, 1997, between the Company and State Street
Bank and Trust, Boston, Massachusetts, as trustee (herein called the
"Trustee"), which term includes any successor Trustee under the Indenture)
and indentures supplemental thereto (collectively, the "Indenture"). Under
the Indenture, one or more series of notes may be issued and, as used herein,
the term "Notes" refers to the Notes of this series and any other outstanding
series of Notes. Reference is hereby made for a more complete statement of
the respective rights, limitations of rights, duties and immunities under the
Indenture of the Company, the Trustee and the Noteholders and of the terms
upon which the Notes are and are to be authenticated and delivered. This
Note is one of the series designated on the face hereof limited in aggregate
principal amount to $__________.
[Include the following paragraph if the Company elects to issue Pledged
Substituted Mortgage Bonds (as defined in the Indenture): The Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds")
delivered by the Company to the Trustee for the benefit of the Holders of the
Notes, issued under [the Substituted Mortgage (as defined in the Indenture)]
from the Company to ________________, as trustee (the "Mortgage Trustee"), as
supplemented and amended (the "First Mortgage"). Reference is made to the
First Mortgage and the Indenture for a description of the rights of the
Trustee as holder of the Pledged First Mortgage Bonds, the property mortgaged
and pledged under the First Mortgage, the rights of the Company and of the
Mortgage Trustee in respect thereof, the duties and immunities of the
Mortgage Trustee, the terms and conditions upon which the Pledged First
Mortgage Bonds are secured and the circumstances under which additional first
mortgage bonds may be issued.]
This Note is subject to redemption at the option of the Company on any date
on and after the Initial Redemption Date, if any, specified on the face
hereof (any date fixed for redemption shall hereafter be referred to as a
"Redemption Date"). If no Initial Redemption Date is set forth on the face
hereof, this Note may not be redeemed at the option of the Company prior to
the Maturity Date specified on the face hereof. On and after the Initial
Redemption Date, if any, this Note may be redeemed at any time in whole or
from time to time in part at the option of the Company at the applicable
Redemption Price (as defined below) together with interest thereon payable to
the Redemption Date, on notice given not less than 30 days nor more than 60
days prior to the Redemption Date. In the event of redemption of this Note
in part only, a new Note or Notes of like tenor and series for the unredeemed
portion hereof shall be issued in the name of the Noteholder hereof upon the
surrender hereof.
PAGE D-4
If this Note is redeemable in the foregoing manner at the option of the
Company, the "Redemption Price" shall initially be the Initial Redemption
Percentage, specified on the face hereof, of the principal amount of this
Note to be redeemed and shall decline at each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction, if any,
specified on the face hereof, of the principal amount to be redeemed until
the Redemption Price is 100% of such principal amount.
Interest payments for this Note shall be computed and paid on the basis of a
360-day year of twelve 30-day months. If any Interest Payment Date or the
date on which the principal of this Note is required to paid is not a
Business Day, then payment of principal, premium or interest need not be made
on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date or the date on
which the principal of this Note is required to be paid, and, in the case of
timely payment thereof, no interest shall accrue for the period from and
after such Interest Payment Date or the date on which the principal of this
Note is required to be paid.
The Company, at its option, and subject to the terms and conditions provided
in the Indenture, will be discharged from any and all obligations in respect
of the Notes (except for certain obligations as specifically set forth in the
Indenture) if the Company deposits with the Trustee money, U.S. Government
Obligations which through the payment of interest thereon and principal
thereof in accordance with their terms will provide money, or a combination
of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered
to the Trustee, to pay at maturity or the applicable redemption date
(provided that notice of redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the
giving of any notice of redemption) all outstanding Notes, including
principal and any premium and interest due or to become due to such date of
maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect
provided in the Indenture and, upon such declaration, the Trustee can demand
the redemption of the Pledged First Mortgage Bonds as provided in the
Indenture.
PAGE D-5
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than
a majority in principal amount of the outstanding Notes affected by such
amendment or modification. Any such consent or waiver by the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange therefor in lieu thereof whether or not notation of
such consent or waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder of
any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default with respect to such Notes, the Holders of not less than a majority
in principal amount of the outstanding Notes affected by such Event of
Default shall have made written request and offered reasonable indemnity to
the Trustee to institute such proceeding as Trustee and the Trustee shall
have failed to institute such proceeding within 60 days; provided that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the times, places and rates and the coin or currency
prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note register. Upon
surrender of this Note for registration or transfer at the corporate trust
office of the Trustee or such other office or agency as may be designated by
the Company in the Borough of Manhattan, the City and State of New York,
endorsed by or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note registrar, duly executed by the
Holder hereof or the attorney in fact of such Holder duly authorized in
writing, one or more new Notes of like tenor and of authorized denominations
and for the same aggregate principal amount will be issued to the designated
transferee or transferees.
The Notes of this series are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Notes are exchangeable for a like aggregate principal amount of Notes
of like tenor and of a different authorized denomination, as requested by the
Holder surrendering the same.
PAGE D-6
No service charge shall be made for any such registration of transfer or
exchange but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in accordance
with, the laws of the state of Washington.
All capitalized terms used but not otherwise defined in this Note shall have
the respective meanings assigned to them in the Indenture.
PAGE D-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right
of survivorship and not as tenants
in common _____________________________
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said note on the books of the Company,
with full power of substitution in the premises.
Dated: _______________________
PAGE D-8
______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
PAGE D-9
