Exhibit 4.1
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INDENTURE
Dated as of June 6, 1997
BETWEEN
PUGET SOUND ENERGY, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
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TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of
June 6, 1997 between Puget Sound Energy, Inc. and The First National Bank of
Chicago, as Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1)...........................................................6.09
(a)(2)...........................................................6.09
310(a)(3)............................................................N/A
(a)(4)............................................................N/A
310(a)(5) ....................................................6.10, 6.11
310(b)...............................................................N/A
310(c)..............................................................6.13
311(a) and (b) N/A
311(c).....................................................4.01, 4.02(a)
312(a)............................................................. 4.02
312(b) and (c)......................................................4.04
313(a)..............................................................4.04
313(b)(1)...........................................................4.04
313(b)(2)...........................................................4.04
313(c)..............................................................4.04
313(d)..............................................................4.04
314(a)..............................................................4.03
314(b)...............................................................N/A
314(c)(1) and (2)...................................................6.07
314(c)(3)............................................................N/A
314(d) ..............................................................N/A
314(e)..............................................................6.07
314(f) ..............................................................N/A
315(a)(c) and (d)...................................................6.01
315(b)..............................................................5.08
315(e)..............................................................5.09
316(a)(1)...........................................................5.07
316(a)(2)............................................................N/A
316(a) last sentence................................................2.09
316(b)..............................................................9.02
317(a)..............................................................5.05
317(b)..............................................................6.05
318(a).............................................................13.08
_________________________________
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.01. Definitions
ARTICLE II SECURITIES
2.01. Forms Generally
2.02. Execution and Authentication
2.03. Form and Payment
2.04. Legends
2.05. Global Security
2.06 Interest
2.07. Transfer and Exchange
2.08. Replacement Securities
2.09. Temporary Securities
2.10. Cancellation
2.11. Defaulted Interest
2.12. CUSIP Numbers
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY
3.01. Payment of Principal, Premium and Interest
3.02. Offices for Notices and Payments, etc.
3.03. Appointments to Fill Vacancies in Trustee's Office
3.04. Provision as to Paying Agent
3.05. Certificate to Trustee
3.06. Compliance with Consolidation Provisions
3.07. Limitation on Dividends
3.08. Covenants as to Puget Sound Energy Trust
3.09. Payment of Expenses
3.10. Payment Upon Resignation or Removal
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
4.01. Securityholders' Lists
4.02. Preservation and Disclosure of Lists
4.03. Reports by Company
4.04. Reports by the Trustee
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
5.01. Events of Default
5.02. Payment of Securities on Default; Suit Therefor
5.03. Application of Moneys Collected by Trustee
5.04. Proceedings by Securityholders
5.05. Proceedings by Trustee
5.06. Remedies Cumulative and Continuing
5.07. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders
5.08. Notice of Defaults
5.09. Undertaking to Pay Costs
ARTICLE VI CONCERNING THE TRUSTEE
6.01. Duties and Responsibilities of Trustee
6.02. Reliance on Documents, Opinions, etc.
6.03. No Responsibility for Recitals, etc.
6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents
or Registrar May Own Securities
6.05. Moneys to be Held in Trust
6.06. Compensation and Expenses of Trustee
6.07. Officers' Certificate as Evidence
6.08. Conflicting Interest of Trustee
6.09. Eligibility of Trustee
6.10. Resignation or Removal of Trustee
6.11. Acceptance by Successor Trustee
6.12. Succession by Merger, etc.
6.13. Limitation on Rights of Trustee as a Creditor
6.14. Authenticating Agents
ARTICLE VII CONCERNING THE SECURITYHOLDERS
7.01. Action by Securityholders
7.02. Proof of Execution by Securityholders
7.03. Who Are Deemed Absolute Owners
7.04. Securities Owned by Company Deemed Not Outstanding
7.05. Revocation of Consents; Future Holders Bound
ARTICLE VIII SECURITYHOLDERS' MEETINGS
8.01. Purposes of Meetings
8.02. Call of Meetings by Trustee
8.03. Call of Meetings by Company or Securityholders
8.04. Qualifications for Voting
8.05. Regulations
8.06. Voting
ARTICLE IX AMENDMENTS
9.01. Without Consent of Securityholders
9.02. With Consent of Securityholders
9.03. Compliance with Trust Indenture Act; Effect of
SupplementalIndentures
9.04. Notation on Securities
9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee
ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.01. Company May Consolidate, etc., on Certain Terms
10.02. Successor Corporation to be Substituted for Company
10.03. Opinion of Counsel to be Given Trustee
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE
11.01. Discharge of Indenture
11.02. Deposited Moneys and U.S. Government Obligations to be Held in
Trust by Trustee
11.03. Paying Agent to Repay Moneys Held
11.04. Return of Unclaimed Moneys
11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations
ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.01. Indenture and Securities Solely Corporate Obligations
ARTICLE XIII MISCELLANEOUS PROVISIONS
13.01. Successors
13.02. Official Acts by Successor Corporation
13.03. Surrender of Company Powers
13.04. Addresses for Notices, etc.
13.05. Governing Law
13.06. Evidence of Compliance with Conditions Precedent
13.07. Business Days
13.08. Trust Indenture Act to Control
13.09. Table of Contents, Headings, etc.
13.10. Execution in Counterparts
13.11. Separability
13.12. Assignment
13.13. Acknowledgement of Rights
ARTICLE XIV REDEMPTION OF SECURITIES -- MANDATORY AND OPTIONAL SINKING FUND
14.01. Tax Event Redemption
14.02. Optional Redemption by Company
14.03. No Sinking Fund
14.04. Notice of Redemption; Selection of Securities
14.05. Payment of Securities Called for Redemption
ARTICLE XV SUBORDINATION OF SECURITIES
15.01. Agreement to Subordinate
15.02. Default on Senior Indebtedness
15.03. Liquidation; Dissolution; Bankruptcy
15.04. Subrogation
15.05. Trustee to Effectuate Subordination
15.06. Notice by the Company
15.07. Rights of the Trustee; Holders of Senior Indebtedness
15.08. Subordination May Not Be Impaired
ARTICLE XVI EXTENSION OF INTEREST PAYMENT PERIOD
16.01. Extension of Interest Payment Period
16.02. Notice of Extension
EXHIBIT A (FORM OF FACE OF SECURITY)
Testimonium
Signatures
Acknowledgements
THIS INDENTURE, dated as of June 6, 1997, between Puget Sound Energy,
Inc., a Washington corporation (hereinafter sometimes called the "Company"),
and The First National Bank of Chicago, a national banking association, as
trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to
time of the Securities, as follows:
ARTICLE I
DEFINITIONS
1.01. Definitions
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), or
which are by reference therein defined in the Securities Act, shall (except
as herein otherwise expressly provided or unless the context otherwise
requires) have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of this Indenture as
originally executed. The following terms have the meanings given to them in
the Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Property
Trustee; (iv) Administrative Trustees; (v) Direct Action; (vi) Purchase
Agreement; (vii) Distributions; (viii) Series A Capital Securities and
(ix) Series B Capital Securities. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles and the term
"generally accepted accounting principles" means such accounting principles
as are generally accepted at the time of any computation. The words
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision. Headings are used for convenience of reference only and do not
affect interpretation. The singular includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in
Section 2.06(c).
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Maturity Date (if no
maturity is within three months before or after the Maturity Date, yields for
the two published maturities most closely corresponding to the Maturity Date
shall be interpolated, and the Adjusted Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date plus, in
either case, (a) 1.05% if such redemption date occurs on or prior to June 1,
1998, and (b) 0.50% in all other cases.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person, (d) a partnership in which the specified Person is
a general partner, (e) any officer or director of the specified Person, and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"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.
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking
institutions in The City of New York or in The City of Seattle, Washington
are authorized or required by law or executive order to close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of Puget Sound Energy Trust which rank pari passu with the Common
Securities issued by Puget Sound Energy Trust; provided, however, that if an
Event of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the holders of the
Capital Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
References to "Capital Securities" shall include collectively any Series A
Capital Securities and Series B Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the
Company may enter into with The First National Bank of Chicago in its
capacity as trustee of the Puget Sound Energy Trust or other Persons that
operates directly or indirectly for the benefit of holders of Capital
Securities of Puget Sound Energy Trust and shall include a Series A Capital
Securities Guarantee and a Series B Capital Securities Guarantee with respect
to the Series A Capital Securities and the Series B Capital Securities,
respectively.
"Commission" shall mean the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the
assets of Puget Sound Energy Trust which rank pari passu with Capital
Securities issued by Puget Sound Energy Trust; provided, however, that if an
Event of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the holders of the
Capital Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee that the
Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of Puget Sound
Energy Trust.
"Common Stock" shall mean the Common Stock, stated value $10 per
share, of the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Puget Sound Energy, Inc., a Washington
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
"Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice President, the Treasurer or an Assistant
Treasurer, the Controller or an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to
the Maturity Date that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities with a maturity date corresponding to the Maturity
Date. If no United States Treasury security has a maturity date which is
within three months before or after the Maturity Date, the two most closely
corresponding United States Treasury securities shall be used as the
Comparable Treasury Issue, and the calculation of the Adjusted Treasury Rate
pursuant to clause (ii) of the definition thereof shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month.
"Comparable Treasury Price" means, with respect to any redemption
date pursuant to Section 14.01, (i) the average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third Business Day preceding such redemption
date, as set forth in the daily statistical release (or any successor
release) published by the Federal Reserve Bank of New York and designated
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if
such release (or any successor release) is not published or does not contain
such prices on such Business Day, (A) the average of five Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in
Section 16.01.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Declaration" means the Amended and Restated Declaration of Trust of
Puget Sound Energy Trust, dated as of the Issue Date.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 16.01.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities of any series,
for which the Company shall determine that such Securities will be issued as
a Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05(d).
"Dissolution Event" means the liquidation of the Trust pursuant to
the Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice,
if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B
Securities for Series A Securities and to exchange a Series B Capital
Securities Guarantee for a Series A Capital Securities Guarantee and (ii) by
Puget Sound Energy Trust to exchange Series B Capital Securities for Series A
Capital Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Indebtedness for Money Borrowed" shall mean any obligation of, or
any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, but shall not include (i) any trade accounts payable in the
ordinary course of business, (ii) any such indebtedness that by its terms
ranks pari passu with or junior in right of payment to the Securities, (iii)
all other debt securities, and guarantees in respect of those debt
securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Company that is a financing
vehicle of the Company (a "financing entity") in connection with the issuance
by such financing entity of equity securities or other securities guaranteed
by the Company pursuant to an instrument that ranks pari passu with or junior
in right of payment to the Guarantee, and (iv) any other indebtedness that
would otherwise qualify as "Indebtedness for Money Borrowed" to the extent
that such indebtedness by its terms ranks pari passu with or junior in right
of payment to any of the indebtedness described in clauses (i), (ii) or (iii)
above.
"Indenture" shall mean this instrument as originally executed or, if amended
as herein provided, as so amended.
"Initial Optional Redemption Date" means June 1, 2007.
"Interest Payment Date" shall have the meaning set forth in
Section 2.06.
"Issue Date" means June 6, 1997.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Maturity Date" shall mean June 1, 2027.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other
similar encumbrance.
"Non Book-Entry Capital Securities" shall have the meaning set forth
in Section 2.05.
"Officers" shall mean any of the Chairman, the Chief Executive
Officer, the President, a Vice President, the Treasurer, any Assistant
Treasurer, the Controller or the Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Company, and who shall be acceptable to the Trustee.
"Optional Redemption Price" shall have the meaning set forth in
Section 14.02.
"Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to the Trust.
"Other Guarantees" means all guarantees issued by the Company with
respect to capital securities (if any) and issued to other trusts established
by the Company (if any), in each case similar to the Trust.
The term "outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.04, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities, 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)
or shall have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided that, if such
Securities, or portions thereof, are to be redeemed prior to maturity
thereof, notice of such redemption shall have been given as provided in
Article XIV or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms
of Section 2.08 unless proof satisfactory to the Company and the Trustee is
presented that any such Securities are held by bona fide holders in due
course.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.08 in
lieu of a lost, destroyed or stolen Security shall be deemed to evidence the
same debt as the lost, destroyed or stolen Security.
"Principal Office of the Trustee", or other similar term, shall mean
the office of the Trustee, at which at any particular time its corporate
trust business shall be principally administered.
"Purchase Agreement" shall mean the Purchase Agreement dated June 5,
1997 among the Company, Puget Sound Energy Trust and the initial purchasers
named therein.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Puget Sound Energy Trust" shall mean Puget Sound Energy Capital
Trust I, a Delaware business trust created for the purpose of issuing its
undivided beneficial interests in connection with the issuance of Securities
under this Indenture.
"Quotation Agent" means the Reference Treasury Dealer appointed by
the Company.
"Redemption Price" means the Tax Event Redemption Price or the
Optional Redemption Price, as the context requires.
"Reference Treasury Dealer" means (i) Xxxxx Xxxxxx Inc. and its respective
successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date pursuant to Section 14.01, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time on the third Business Day preceding
such redemption date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Puget
Sound Energy Trust and the Initial Purchasers named therein as such agreement
may be amended, modified or supplemented from time to time.
"Responsible Officer", when used with respect to the Trustee, shall
mean the chairman or any vice chairman of the board of directors, the
chairman or any vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, the cashier, any assistant cashier, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or senior trust officer,
any trust officer or assistant trust officer, the controller or any assistant
controller or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Security" shall mean Securities that bear or are required
to bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities" means, collectively, the Series A Securities and the
Series B Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms,
shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that
purpose in accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.01, and
(ii) following a Dissolution Event, any security register maintained by a
security registrar for the Securities appointed by the Company following the
execution of a supplemental indenture providing for transfer procedures as
provided for in Section 2.07(a).
"Senior Indebtedness" shall mean, all Indebtedness for Money
Borrowed, whether outstanding on the date of execution of this Indenture or
thereafter created, assumed or incurred, unless the terms thereof
specifically provide that it is not superior in right of payment to the
Securities, and any deferrals, renewals or extensions thereof.
"Series A Securities" means the Company's 8.231% Series A Junior
Subordinated Deferrable Interest Debentures due June 1, 2027, as
authenticated and issued under this Indenture.
"Series B Securities" means the Company's Series B 8.231% Junior
Subordinated Deferrable Interest Debentures due June 1, 2027, as
authenticated and issued under this Indenture.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner. For the purposes of
this definition, "voting stock" means shares, interests, participations or
other equivalents in the equity interest (however designated) in such Person
having ordinary voting power for the election of a majority of the directors
(or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the
occurrence of a contingency.
"Tax Event" shall mean the receipt by Puget Sound Energy Trust and the
Company of an opinion of counsel experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein or
any amendment to or change in an interpretation or application of such laws
or regulations by any legislative body, court, governmental agency or
regulatory agency, which amendment or change is effective or announced after
the Issue Date (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after
such date), there is more than an insubstantial risk that (i) the Puget Sound
Energy Trust would be subject to United States federal income tax with
respect to income received or accrued on the Securities (ii) interest payable
to the Puget Sound Energy Trust on the Securities would not be deductible by
the Company for United States federal income tax purposes or (iii) the Puget
Sound Energy Trust will be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption Price" shall mean, with respect to any
redemption of the Securities pursuant to Section 14.01 hereof, an amount in
cash equal to the greater of (i) 100% of the principal amount to be redeemed
or (ii) the sum, as determined by a Quotation Agent, of the present values of
the remaining scheduled payments of principal and interest on the Securities
to the Maturity Date, together with scheduled payments of interest on the
Securities from the redemption date to and including the Initial Optional
Redemption Date, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to the date of
such redemption.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.03.
"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
"U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which,
in either case under clauses (i) or (ii) are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
ARTICLE II
SECURITIES
2.01. Forms Generally
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject or usage. Each Security shall be
dated the date of its authentication. The Securities shall be issued in
denominations of $1,000 and integral multiples thereof.
2.02. Execution and Authentication
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer
whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture. The form of Trustee's certificate of authentication to
be borne by the Securities shall be substantially as set forth in Exhibit A
hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at
any time may not exceed the sum of $103,093,000 principal amount of the
Securities, except as provided in Sections 2.07, 2.08, 2.09 and 14.05. The
series of Securities to be initially issued hereunder shall be the Series A
Securities.
2.03. Form and Payment
Except as provided in Section 2.05, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of,
premium, if any, and interest on the Securities issued in certificated form
will be payable, the transfer of such Securities will be registrable and such
Securities will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.02; provided, however, that payment of interest with respect
to the Securities may be made at the option of the Company (i) by check
mailed to the holder at such address as shall appear in the Security Register
or (ii) by transfer to an account maintained by the Person entitled thereto,
provided that proper transfer instructions have been received in writing by
the relevant record date. Notwithstanding the foregoing, so long as the
holder of any Securities is the Property Trustee, the payment of the
principal of, premium, if any, and interest (including Compounded Interest
and Additional Interest, if any) on such Securities held by the Property
Trustee will be made at such place and to such account as may be designated
by the Property Trustee.
2.04. Legends
(a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on
transfer pursuant to the securities laws in substantially the form set forth
on Exhibit A hereto.
(b) The Company shall issue and the Trustee shall authenticate
Series B Securities in exchange for Series A Securities accepted for exchange
in the Exchange Offer, which Series B Securities shall not bear the legends
required by subsection (a) above, in each case unless the holder of such
Series A Securities is either (A) a broker-dealer who purchased such Series A
Securities directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Securities or (C) a Person
who is an affiliate (as defined in Rule 144 under the Securities Act) of the
Company.
2.05. Global Security
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the
related Definitive Securities shall be presented to the Trustee (if an
arrangement with the Depositary has been maintained) by the Property Trustee
in exchange for one or more Global Securities (as may be required pursuant to
Section 2.07) in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Securities, to be registered in the name
of the Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant to the
instructions of the Administrative Trustees; the Company upon any such
presentation shall execute one or more Global Securities in such aggregate
principal amount and deliver the same to the Trustee for authentication and
delivery in accordance with this Indenture; and payments on the Securities
issued as a Global Security will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated form,
the related Definitive Securities may be presented to the Trustee by the
Property Trustee and any Capital Security certificate which represents
Capital Securities other than Capital Securities in book-entry form ("Non
Book-Entry Capital Securities") will be deemed to represent beneficial
interests in Securities presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate liquidation
amount of the Non Book-Entry Capital Securities until such Capital Security
certificates are presented to the Security registrar for transfer or
reissuance, at which time such Capital Security certificates will be
cancelled and a Security, registered in the name of the holder of the Capital
Security certificate or the transferee of the holder of such Capital Security
certificate, as the case may be, with an aggregate principal amount equal to
the aggregate liquidation amount of the Capital Security certificate
cancelled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture. Upon the
issuance of such Securities, Securities with an equivalent aggregate
principal amount that were presented by the Property Trustee to the Trustee
will be deemed to have been cancelled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Securities represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee, in accordance with instructions given
by the Company as required by this Section 2.05.
(c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of
such successor Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
the Company will execute, and the Trustee, upon written notice from the
Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such
Global Security. If there is an Event of Default, the Depositary shall have
the right to exchange the Global Securities for Definitive Securities. In
addition, the Company may at any time determine that the Securities shall no
longer be represented by a Global Security. In the event of such an Event of
Default or such a determination, the Company shall execute, and subject to
Section 2.07, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security, in exchange for such Global Security. Upon
the exchange of the Global Security for such Definitive Securities, in
authorized denominations, the Global Security shall be cancelled by the
Trustee. Such Definitive Securities issued in exchange for the Global
Security shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Securities to the Depositary for delivery to
the Persons in whose names such Definitive Securities are so registered.
2.06. Interest
(a) Each Security will bear interest at the rate of 8.231% per annum
from the most recent date to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for, from the Issue
Date, until the principal thereof becomes due and payable, and at the rate of
8.231% per annum on any overdue principal (and premium, if any) and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest, compounded semi-annually, payable
(subject to the provisions of Article XVI) semi-annually in arrears on June 1
and December 1 of each year (each, an "Interest Payment Date") commencing on
December 1, 1997, to the Person in whose name such Security or any
predecessor Security is registered, at the close of business on the regular
record date for such interest installment, which shall be the fifteenth day
of the month immediately preceding the month in which the relevant Interest
Payment Date occurs.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days lapsed in such month. In the event that
any Interest Payment Date falls on a day that is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), with the same force and effect as if made on such
date.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and
payable by the Puget Sound Energy Trust on the outstanding Capital Securities
shall not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Puget Sound Energy Trust has become subject
as a result of a Tax Event ("Additional Interest").
(d) Notwithstanding Section 2.06(c) above, neither the Company nor
the Trust will be responsible for, nor will the Company or the Trust be
required to compensate holders of or investors in the Capital Securities (or
Securities that may be distributed by the Trust) for, any withholding taxes
that are imposed on interest payments on the Securities or on distributions
with respect to the Capital Securities.
2.07. Transfer and Exchange
(a) Transfer Restrictions. The Series A Securities, and those
Series B Securities with respect to which any Person described in
Section 2.04(b)(A), (B) or (C) is the beneficial owner, may not be
transferred except in compliance with the legend contained in Exhibit A
unless otherwise determined by the Company in accordance with applicable law.
Upon any distribution of the Securities following a Dissolution Event, the
Company and the Trustee shall enter into a supplemental indenture pursuant to
Section 9.01 to provide for the transfer restrictions and procedures with
respect to the Securities substantially similar to those contained in the
Declaration to the extent applicable in the circumstances existing at such
time.
(b) General Provisions Relating to Transfers and Exchanges. Upon
surrender for registration of transfer of any Security at the office or
agency of the Company maintained for the purpose pursuant to Section 3.02,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount.
At the option of the holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the holder making the
exchange is entitled to receive.
Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Definitive Securities or Global Securities surrendered upon such registration
of transfer or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Company shall not be required to (i) issue, register the transfer
of or exchange Securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption or any
notice of selection of Securities for redemption under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register
the transfer of or exchange any Security so selected for redemption in whole
or in part, except the unredeemed portion of any Security being redeemed in
part.
(c) Exchange of Series A Securities for Series B Securities. The
Series A Securities may be exchanged for Series B Securities pursuant to the
terms of the Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Securities properly
tendered in the Exchange Offer that are represented by a Global Security and
the principal amount of Series A Securities properly tendered in the Exchange
Offer that are represented by Definitive Securities, the name of each holder
of such Definitive Securities, the principal amount properly tendered in the
Exchange Offer by each such holder and the name and address to which
Definitive Securities for Series B Securities shall be registered and sent
for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters
set forth in Section 3(p) of the Registration Rights Agreement and (iii) a
Company Order, shall authenticate (A) a Global Security for Series B
Securities in aggregate principal amount equal to the aggregate principal
amount of Series A Securities represented by a Global Security indicated in
such Officers' Certificate as having been properly tendered and
(B) Definitive Securities representing Series B Securities registered in the
names of, and in the principal amounts indicated in, such Officers'
Certificate.
If the principal amount of the Global Security for the Series B
Securities is less than the principal amount of the Global Security for the
Series A Securities, the Trustee shall make an endorsement on such Global
Security for Series A Securities indicating a reduction in the principal
amount represented thereby.
The Trustee shall deliver such Definitive Securities for Series B
Securities to the holders thereof as indicated in such Officers' Certificate.
2.08. Replacement Securities
If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's
requirements for replacements of Securities are met. An indemnity bond must
be supplied by the holder that is sufficient in the judgment of the Trustee
and the Company to protect the Company, the Trustee, any agent thereof or any
authenticating agent from any loss that any of them may suffer if a Security
is replaced. The Company or the Trustee may charge for its expenses in
replacing a Security.
Every replacement Security is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
2.09. Temporary Securities
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the Definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such
Securities.
If temporary Securities are issued, the Company shall cause
Definitive Securities to be prepared without unreasonable delay. The
Definitive Securities shall be printed, lithographed or engraved, or provided
by any combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the
office or agency maintained by the Company for such purpose pursuant to
Section 3.02 hereof, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
in exchange therefor the same aggregate principal amount of Definitive
Securities of authorized denominations. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as Definitive Securities.
2.10. Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Securities in
accordance with its normal practices (subject to the record retention
requirement of the Exchange Act) unless the Company directs them to be
returned to it. The Company may not issue new Securities to replace
Securities that have been redeemed or paid or that have been delivered to the
Trustee for cancellation.
2.11. Defaulted Interest
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder on
the relevant regular record date by virtue of having been such holder; and
such Defaulted Interest shall be paid by the Company, at its election, as
provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed
in the following manner: the Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such Security
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security Register,
not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date and shall
be no longer payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
2.12. CUSIP Numbers
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The
Company will promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
3.01. Payment of Principal, Premium and Interest
The Company covenants and agrees for the benefit of the holders of
the Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the
place, at the respective times and in the manner provided herein. Except as
provided in Section 2.03, each installment of interest on the Securities may
be paid by mailing checks for such interest payable to the order of the
holders of the Securities entitled thereto as they appear in the Security
Register. The Company further covenants to pay any and all amounts
including, without limitation, Liquidated Damages, if any, on the dates and
in the manner required under the Registration Rights Agreement.
3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where the Securities may be presented for payment, an office or agency
where the Securities may be presented for registration of transfer and for
exchange as in this Indenture provided and an office or agency where notices
and demands to or upon the Company in respect of the Securities or of this
Indenture may be served. The Company will give to the Trustee written notice
of the location of any such office or agency and of any change of location
thereof. Until otherwise designated from time to time by the Company in a
notice to the Trustee, any such office or agency for all of the above
purposes shall be the Principal Office of the Trustee. In case the Company
shall fail to maintain any such office or agency in the Borough of Manhattan,
The City of New York, or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to time
designate one or more offices or agencies outside the Borough of Manhattan,
The City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will
give to the Trustee prompt written notice of any such designation or
rescission thereof.
3.03. 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 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
3.04. Provision as to Paying Agent
(a) If the Company shall appoint a paying agent other than the
Trustee with respect to the Securities, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provision of this Section 3.04,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Securities (whether such sums have been paid to it by the Company or by any
other obligor on the Securities of such series) in trust for the benefit of
the holders of the Securities;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of
the principal of and premium or interest on the Securities 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 it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of and premium, if any, or interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee of any failure to take
such action and of any failure by the Company (or by any other obligor under
the Securities) to make any payment of the principal of and premium, if any,
or interest on the Securities when the same shall become due and payable.
(c) Anything in this Section 3.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust for any such
series by the Trustee or any paying agent hereunder, as required by this
Section 3.04, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 3.04 is
subject to Sections 11.03 and 11.04.
3.05. Certificate to Trustee
The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year, commencing with the first fiscal year ending
after the date hereof, so long as Securities are outstanding hereunder, an
Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company
stating that in the course of the performance by the signers of their duties
as officers of the Company they would normally have knowledge of any default
by the Company in the performance of any covenants contained herein, stating
whether or not they have knowledge of any such default and, if so, specifying
each such default of which the signers have knowledge and the nature thereof.
3.06. Compliance with Consolidation Provisions
The Company will not, while any of the Securities remain
outstanding, consolidate with, or merge into, or merge into itself, or sell
or convey all or substantially all of its property to any other Person
unless the provisions of Article X hereof are complied with.
3.07. Limitation on Dividends
The Company will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common
and preferred stock) or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of
the Company (including any Other Debentures) that rank pari passu with or
junior in right of payment to the Securities or (iii) make any guarantee
payments with respect to any guarantee by the Company of any securities of
any Subsidiary of the Company (including any Other Guarantees) if such
guarantee ranks pari passu or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Common Stock of the
Company; (b) any declaration of a dividend in connection with the
implementation of a shareholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto; (c) payments under the Capital Securities Guarantee;
(d) as a direct result of, and only to the extent required in order to avoid
the issuance of fractional shares of capital stock, following a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock; and (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted
or exchanged) if at such time (i) an Event of Default shall have occurred and
be continuing, (ii) there shall have occurred any event of which the Company
has actual knowledge that (a) is, or with the giving of notice or the lapse
of time, or both, would constitute an Event of Default and (b) in respect of
which the Company shall not have taken reasonable steps to cure, (iii) the
Company shall be in default with respect to its payment obligations under the
Capital Securities Guarantee or (iv) the Company shall have given notice of
its election of the exercise of its right to extend the interest payment
period, or any extension thereof, pursuant to Section 16.01 and shall not
have rescinded such notice, and such exercise of its right to extend the
interest payment period, or any extension thereof, shall have commenced.
3.08. Covenants as to Puget Sound Energy Trust
In the event Securities are issued to Puget Sound Energy Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
Puget Sound Energy Trust, for so long as such Trust Securities remain
outstanding, the Company will (i) maintain 100% direct ownership of the
Common Securities of Puget Sound Energy Trust; provided, however, that any
successor of the Company, permitted pursuant to Article X, may succeed to the
Company's ownership of such Common Securities, (ii) not cause, as sponsor of
Puget Sound Energy Trust or permit, as a holder of Common Securities, the
dissolution, winding up or termination of the Trust, except in connection
with a distribution of the Securities to holders of Trust Securities, as
provided in the Declaration; (iii) use its reasonable efforts to cause Puget
Sound Energy Trust (a) to remain a business trust, except in connection with
a distribution of Securities, the redemption of all of the Trust Securities
or certain mergers, consolidations or amalgamations, each as permitted by the
Declaration and (b) to otherwise continue to be treated as a grantor trust
and not an association taxable as a corporation for United States federal
income tax purposes and (iv) use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an undivided beneficial interest
in the Securities.
3.09. Payment of Expenses
In connection with the offering, sale and issuance of the Securities
to the Puget Sound Energy Trust and in connection with the sale of the Trust
Securities by the Puget Sound Energy Trust, the Company, in its capacity as
borrower with respect to the Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the initial purchasers
payable pursuant to the Purchase Agreement, fees and expenses in connection
with any exchange offer or other action to be taken pursuant to the
Registration Rights Agreement and compensation of the Trustee in accordance
with the provisions of Section 6.06;
(b) pay all costs and expenses of the Puget Sound Energy Trust
(including, but not limited to, costs and expenses relating to the
organization of the Puget Sound Energy Trust, the offering, sale and issuance
of the Trust Securities (including commissions to the initial purchasers
payable pursuant to the Purchase Agreement), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs and expenses relating to
the operation of the Puget Sound Energy Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of assets of the Puget Sound Energy Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Puget Sound Energy Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Puget Sound
Energy Trust; and
(e) pay all other fees, expenses, debts and obligations (other than
payments of principal of, premium, if any, or interest on the Trust
Securities) related to the Puget Sound Energy Trust.
3.10. Payment Upon Resignation or Removal
Upon termination of this Indenture or the removal or resignation of
the Trustee, unless otherwise stated, the Company shall pay to the Trustee
all amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may
be, pursuant to Section 5.7 of the Declaration, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
4.01. Securityholders' Lists
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company, of any such request, a list
of similar form and content with respect to the Securityholders as of a date
not more than 15 days prior to the time such list is furnished,
except that, no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
4.02. Preservation and Disclosure of Lists
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to
it as provided in Section 4.01 or (2) received by it in the capacity of
Securities registrar (if so acting) hereunder. The Trustee may destroy any
list furnished to it as provided in Section 4.01 upon receipt of a new list
so furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other holders of Securities or with holders of all Securities with respect
to their rights under this Indenture and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall within 5 Business Days after the receipt of
such application, at its election, either:
(1) afford such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, or
(2) inform such applicants as to the approximate number of
holders of all Securities, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02, and as to the approximate
cost of mailing to such Securityholders 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 Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02 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 mailing, unless within five days after such tender, the Trustee
shall mail to such applicants and file with the Commission, together with a
copy of the material to be mailed, a written statement to the effect that,
in the opinion of the Trustee, such mailing would be contrary to the best
interests of the holders of Securities of such series or all Securities, as
the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such material to all
such Securityholders 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) Each and every holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any paying agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with the provisions of subsection (b) of
this Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
4.03. Reports by Company
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the date on which the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as said Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
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) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to
time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
holders of Securities, as the names and addresses of such holders appear
upon the Security 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 subsections (a) and (b) of this
Section 4.03 as may be required by rules and regulations prescribed from
time to time by the Commission.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities
to qualify for an exemption under Rule 144A under the Securities Act, the
Company shall, upon request, provide the information required by clause
(d)(4) thereunder to each Holder and to each beneficial owner and
prospective purchaser of Securities identified by any holder of Restricted
Securities, unless such information is furnished to the Commission pursuant
to Section 13 or 15(d) of the Exchange Act.
4.04. Reports by the Trustee
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within 60 days after each December 31
following the date of this Indenture, commencing December 31, 1997, deliver
to Securityholders a brief report which complies with the provisions of such
Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission
and with the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
5.01. Events of Default
One or more of the following events of default shall constitute an
Event of Default hereunder (whatever the reason for such Event of Default
and whether it shall be voluntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security or any Other
Debentures when it becomes due and payable, and continuance of such default
for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms hereof
shall not constitute a default in the payment of interest for this purpose;
or
(b) default in the payment of all or any part of the principal of
(or premium, if any, on) any Security or any Other Debentures as and when
the same shall become due and payable either at maturity, upon redemption,
by declaration or otherwise; or
(c) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or breach
for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of the
outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or for
any substantial part of its property, or ordering the winding-up or
liquidation of its affairs and such decree or order shall remain unstayed
and in effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent 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 shall make any general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the holders of the outstanding
Securities), and upon any such declaration the same shall become immediately
due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities 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, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay (A) all matured installments of interest upon all the
Securities and the principal of and premium, if any, on any and all
Securities which shall have become due otherwise than by acceleration (with
interest upon such principal and premium, if any, and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest specified
in the Securities to the date of such payment or deposit) and (B) such
amount as shall be sufficient to cover reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and (ii) any and all Events of Default under the
Indenture, other than the non-payment of the principal of the Securities
which shall have become due solely by such declaration of acceleration,
shall have been cured, waived or otherwise remedied as provided herein,
then, in every such case, the holders of a majority in aggregate principal
amount of the Securities then outstanding, by written notice to the Company
and to the Trustee, may rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or
abandoned because of 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, the Trustee and the holders of the Securities shall be
restored respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Company, the Trustee and the holders
of the Securities shall continue as though no such proceeding had been
taken.
5.02. Payment of Securities on Default; Suit Therefor
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in
the payment of the principal of or premium, if any, on any of the Securities
as and when the same shall have become due and payable, whether at maturity
of the Securities or upon redemption or by declaration or otherwise, then,
upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Securities, the whole amount that then shall
have become due and payable on all such Securities for principal and
premium, if any, or interest, or both, as the case may be, with interest
upon the overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law and, if the
Securities are held by Puget Sound Energy Trust or a trustee of such trust,
without duplication of any other amounts paid by Puget Sound Energy Trust or
a trustee in respect thereof) upon the overdue installments of interest at
the rate borne by the Securities; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys
and counsel, and any expenses or liabilities incurred by the Trustee
hereunder other than through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the
Company or any other obligor on the Securities and collect in the manner
provided by law out of the property of the Company or any other obligor on
the Securities wherever situated the moneys adjudged or decreed to be
payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities
under Xxxxx 00, Xxxxxx Xxxxxx 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 other similar judicial
proceedings relative to the Company or other obligor upon the Securities, or
to the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section 5.02, 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 interest owing and unpaid in
respect of the Securities 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 any claim
for reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of negligence or bad faith) and
of the Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Securities, or to the creditors or
property of the Company or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings, 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; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or
to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
5.03. Application of Moneys Collected by Trustee
Any moneys collected by the Trustee 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 Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection
applicable to the Securities and reasonable compensation to the Trustee, its
agents, attorneys and counsel, and of all other expenses and liabilities
incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith;
Second: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of (and premium, if any) and interest on the
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference of priority of any kind, according to
the amounts due on such Securities for principal (and premium, if any) and
interest, respectively; and
Fourth: To the Company.
5.04. Proceedings by Securityholders
No holder of any Security 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 and of the continuance thereof
with respect to the Securities specifying such Event of Default, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Securities then outstanding 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 failed to institute any such action, suit or proceeding, it being
understood and intended, and being expressly covenanted by the taker and
holder of every Security with every other taker and holder and the Trustee,
that no one or more holders of Securities shall have any right in any manner
whatever by virtue of or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Securities,
or to obtain or seek to obtain priority over or preference to any other such
holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders
of Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of
(premium, if any) and interest on such Security, on or after the same shall
have become due and payable, or to institute suit for the enforcement of any
such payment, shall not be impaired or affected without the consent of such
holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice
the rights of the holders of any other Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal, ratable and common benefit of all holders of Securities. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence
a Direct Action with respect to any Event of Default under this Indenture
and the Securities.
5.05. Proceedings by Trustee
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either 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 in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
5.06. Remedies Cumulative and Continuing
All powers and remedies given by this Article V to the Trustee or to
the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to
the Trustee or the holders of the Securities, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect
to the Securities, and no delay or omission of the Trustee or of any holder
of any of the Securities to exercise any right or power accruing upon any
Event of 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 the provisions of Section 5.04,
every power and remedy given by this Article V or by law to the Trustee or
to the Securityholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Securityholders.
5.07. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders
The holders of a majority in aggregate principal amount of the
Securities 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, however, that (subject to the provisions of Section 6.01) the
Trustee shall have the right to decline to follow any such direction if the
Trustee shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or 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 and/or Responsible Officers shall determine that the
action or proceedings so directed would involve the Trustee in personal
liability. Prior to any declaration accelerating the maturity of the
Securities, the holders of a majority in aggregate principal amount of the
Securities at the time outstanding may on behalf of the holders of all of
the Securities waive any past default or Event of Default and its
consequences except a default (a) in the payment of principal of or premium,
if any, or interest on any of the Securities or (b) in respect of covenants
or provisions hereof which cannot be modified or amended without the consent
of the holder of each Security affected; provided, however, that if the
Securities are held by the Property Trustee, such waiver or modification to
such waiver shall not be effective until the holders of a majority in
aggregate liquidation amount of Trust Securities shall have consented to
such waiver or modification to such waiver; provided further, that if the
consent of the holder of each outstanding Security is required, such waiver
shall not be effective until each holder of the Trust Securities shall have
consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Securities shall be restored to
their former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this Section 5.07, said default or
Event of Default shall for all purposes of the Securities and this Indenture
be deemed to have been cured and to be not continuing.
5.08. Notice of Defaults
The Trustee shall, within 90 days after the occurrence of a default
with respect to the Securities mail to all Securityholders, as the names and
addresses of such holders appear upon the Security register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured
before the giving of such notice (the term "defaults" for the purpose of
this Section 5.08 being hereby defined to be the events specified in clauses
(a), (b), (c), (d) and (e) of Section 5.01, not including periods of grace,
if any, provided for therein, and irrespective of the giving of written
notice specified in clause (c) of Section 5.01); and provided that, except
in the case of default in the payment of the principal of or premium, if
any, or interest on any of the Securities, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of
such notice is in the interests of the Securityholders; and provided
further, that in the case of any default of the character specified in
Section 5.01(c) no such notice to Securityholders shall be given until at
least 60 days after the occurrence thereof but shall be given within 90 days
after such occurrence.
5.09. Undertaking to Pay Costs
All parties to this Indenture agree, and each holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken 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 and expenses, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 5.09 shall
not apply to any suit instituted by the Trustee, to any suit instituted by
any Securityholder, or group of Securityholders, holding in the aggregate
more than 10% in aggregate principal amount of the Securities outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security
against the Company on or after the same shall have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
6.01. Duties and Responsibilities of Trustee
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing
or waiving 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. In case 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.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred
(1) 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
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) 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
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture 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 may be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be 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 of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered to be taken 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 Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default (that has not been cured or waived),
to exercise such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a prudent
man would exercise or use under the circumstances in the conduct of his own
affairs;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, coupon or other paper or document, unless requested in
writing to do so by the holders of a majority in aggregate principal amount
of the outstanding Securities; provided, however, 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 the terms of this Indenture, the Trustee may
require reasonable indemnity against such expense or liability as a
condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care.
6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the
same. The Trustee and the Authenticating Agent make no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee and the Authenticating Agent shall not be accountable for the use or
application by the Company of any Securities or the proceeds of any
Securities authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture.
6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
Registrar May Own Securities
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights
it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Security registrar.
6.05. Moneys to be Held in Trust
Subject to the provisions of Section 11.04, all moneys received by
the Trustee or any paying agent shall, until used or applied as herein
provided, be held in trust for the purpose for which they were received, but
need not be segregated from other funds except to the extent required by
law. The Trustee and any paying agent shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed in
writing with the Company. So long as no Event of Default shall have
occurred and be continuing, all interest allowed on any such moneys shall be
paid from time to time upon the written order of the Company, signed by the
Chairman of the Board of Directors, the President or a Vice President or the
Treasurer or an Assistant Treasurer of the Company.
6.06. Compensation and Expenses of Trustee
The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation
as shall be agreed to in writing between the Company and the Trustee (which
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust), and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel 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
each of the Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and all
loss, damage, claim, liability or expense including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad faith
on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 6.06 to compensate and
indemnify 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 Securities 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 particular Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or
Section 5.01(e), the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
6.07. Officers' Certificate as Evidence
Except as otherwise provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior
to taking or omitting 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 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 or omitted by it under the provisions of this Indenture
upon the faith thereof.
6.08. Conflicting Interest of Trustee
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
6.09. Eligibility of Trustee
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any
state or territory thereof or of the District of Columbia or a corporation
or other Person permitted to act as trustee by the Commission authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000) and
subject to supervision or examination by federal, state, territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.09 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
6.10. Resignation or Removal of Trustee
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of the Securities at
their addresses as they shall appear on the Security register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Trustee and one copy
to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the Securityholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide holder of
a Security for at least six months may, subject to the provisions of
Section 5.09, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
Section 6.08 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities
for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.09 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy
to the successor trustee, or, subject to the provisions of Section 5.09, any
Securityholder who has been a bona fide holder of a Security for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects
thereto or if no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after such removal, in which case
the Trustee so removed or any Securityholder, upon the terms and conditions
and otherwise as in subsection (a) of this Section 6.10 provided, may
petition any court of competent jurisdiction for an appointment of a
successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
6.11. Acceptance by Successor Trustee
Any successor trustee appointed as provided in Section 6.10 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 retiring trustee shall become effective
and such successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, duties and 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 the provisions of Section 6.06, execute
and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act and shall duly assign,
transfer and deliver to such successor trustee all property and money held
by such retiring trustee thereunder. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for
more fully and certainly vesting in and confirming 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 the provisions of
Section 6.06.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.08 and eligible under
the provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they
shall appear on the Security Register. If the Company fails to mail such
notice within 10 days after the acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all 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.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any Securities 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 Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee
may authenticate such Securities 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 the Securities or this
Indenture elsewhere provides that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication
of any predecessor Trustee or authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
6.13. Limitation on Rights of Trustee as a Creditor
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
6.14. Authenticating Agents
There may be one or more Authenticating Agents appointed by the Trustee upon
the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Securities issued upon
exchange or transfer thereof as fully to all intents and purposes as though
any such Authenticating Agent had been expressly authorized to authenticate
and deliver Securities; provided, that the Trustee shall have no liability
to the Company for any acts or omissions of the Authenticating Agent with
respect to the authentication and delivery of Securities. Any such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States or of any state or territory
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$5,000,000 and being subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 6.14
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect herein specified in
this Section.
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, consolidation or conversion to which any Authenticating
Agent shall be a party, or any corporation succeeding to all or
substantially all of 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 6.14
without the execution or filing of any paper or any further act on the part
of the parties hereto or such Authenticating Agent.
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 6.14, the Trustee may, and upon the request of the Company
shall, promptly appoint a successor Authenticating Agent eligible under this
Section 6.14, shall give written notice of such appointment to the Company
and shall mail notice of such appointment to all Securityholders as the
names and addresses of such holders appear on the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability for any
action taken by it as such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
7.01. Action by Securityholders
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other 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 Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article VIII, or
(c) by a combination of such instrument or instruments and any such record of
such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action,
the Company may, at its option, as evidenced by an Officers' Certificate, fix
in advance a record date for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other action or to revoke any such action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action or
revocation may be given before or after the record date, but only the
Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
7.02. Proof of Execution by Securityholders
Subject to the provisions of Section 6.01, 6.02 and 8.05, proof of
the execution of any instrument by a Securityholder or his agent or proxy
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 Securities shall be proved by
the Security Register or by a certificate of the Security registrar. The
Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.
7.03. Who Are Deemed Absolute Owners
Prior to due presentment for registration of transfer of any
Security, the Company, the Trustee, any Authenticating Agent, any paying
agent, any transfer agent and any Security registrar may deem the person in
whose name such Security shall be registered upon the Security Register to
be, and may treat him as, the absolute owner of such Security (whether or not
such Security shall be overdue) for the purpose of receiving payment of or on
account of the principal of and premium, if any, and (subject to
Section 2.06) interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any Authenticating Agent nor any
paying agent nor any transfer agent nor any Security registrar shall be
affected by any notice to the contrary. All such payments so made to any
holder for the time being or upon his order shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
7.04. Securities Owned by Company Deemed Not Outstanding
In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities 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 Securities 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
Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.04 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Securities and that the pledgee is not the Company or any
such other obligor or 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.
7.05. Revocation of Consents; Future Holders Bound
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 7.01, of the taking of any action by the holders of
the percentage in aggregate principal amount of the Securities specified in
this Indenture in connection with such action, any holder of a Security (or
any Security issued in whole or in part in exchange or substitution
therefor), subject to Section 7.01, the serial number of which is shown by
the evidence to be included in the Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at
its principal office and upon proof of holding as provided in Section 7.02,
revoke such action so far as concerns such Security (or so far as concerns
the principal amount represented by any exchanged or substituted Security).
Except as aforesaid any such action taken by the holder of any Security shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Security or any Security issued in exchange or
substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
8.01. Purposes of Meetings
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII 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 default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
8.02. Call of Meetings by Trustee
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.01, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, 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 mailed to holders of Securities at
their addresses as they shall appear on the Securities Register. Such notice
shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
8.03. Call of Meetings by Company or Securityholders
In case at any time the Company pursuant to a resolution of the Board
of Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, 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 Securityholders may determine the time
and the place in said Borough of Manhattan for such meeting and may call such
meeting to take any action authorized in Section 8.01, by mailing notice
thereof as provided in Section 8.02.
8.04. Qualifications for Voting
To be entitled to vote at any meeting of Securityholders a person
shall (a) be a holder of one or more Securities or (b) a person appointed by
an instrument in writing as proxy by a holder of one or more Securities. The
only persons who shall be entitled to be present or to speak at any meeting
of Securityholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
8.05. Regulations
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Securityholders, in regard to proof of the holding of Securities 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.
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 Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders 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 majority vote of the
meeting.
Subject to the provisions of Section 8.04, at any meeting each holder
of Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Securities held by him or instruments
in writing as aforesaid duly designating him as the person to vote on behalf
of other Securityholders. Any meeting of Securityholders duly called
pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from time
to time by a majority of those present, whether or not constituting a quorum,
and the meeting may be held as so adjourned without further notice.
8.06. Voting
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities 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 triplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Securityholders 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 mailed as provided in Section 8.02. The record shall show the
serial numbers of the Securities 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, the latter to have attached thereto the ballots
voted at the meeting. The holders of the Series A Securities and the
Series B Securities shall vote for all purposes as a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
9.01. Without Consent of Securityholders
The Company and the Trustee may from time to time and at any time
amend the Indenture, without the consent of the Securityholders, for one or
more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to
Article X hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as the
Board of Directors and the Trustee shall consider to be for the protection of
the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions
or conditions a default or an Event of Default permitting the enforcement of
all or any of the remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities
in coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture; provided that any such action shall not
materially adversely affect the interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
(f) to make provision for transfer procedures, certification, book-
entry provisions, the form of restricted securities legends, if any, to be
placed on Securities, minimum denominations and all other matters required
pursuant to Section 2.07 or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to holders of Capital Securities
in the event of a distribution of Securities by Puget Sound Energy Trust
following a Dissolution Event;
(g) to qualify or maintain qualification of this Indenture under
the Trust Indenture Act; or
(h) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, 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, but may in
its discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
9.02. With Consent of Securityholders
With the consent (evidenced as provided in Section 7.01) of the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time amend the Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the holders of the Securities; provided, however, that no such
amendment shall without the consent of the holders of each Security then
outstanding and affected thereby (i) extend the Maturity Date of any
Security, or reduce the rate or extend the time of payment of interest
thereon (except as contemplated by Article XVI), or reduce the principal
amount thereof, or reduce any amount payable on redemption thereof, or make
the principal thereof or any interest or premium thereon payable in any coin
or currency other than that provided in the Securities, or impair or affect
the right of any Securityholder to institute suit for payment thereof, or
(ii) reduce the aforesaid percentage of Securities the holders of which are
required to consent to any such amendment to the Indenture, provided,
however, that if the Securities are held by Puget Sound Energy Trust, such
amendment shall not be effective until the holders of a majority in
liquidation amount of Trust Securities shall have consented to such
amendment; provided, further, that if the consent of the holder of each
outstanding Security is required, such amendment shall not be effective until
each holder of the Trust Securities shall have consented to such amendment.
Upon the request of the Company accompanied by a copy of a resolution
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders 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.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice,
prepared by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
9.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures
Any supplemental indenture executed pursuant to the provisions of
this Article IX shall comply with the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article IX, this Indenture shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities 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.
9.04. Notation on Securities
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of
this Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
and executed by the Company, authenticated by the Trustee or the
Authenticating Agent and delivered in exchange for the Securities then
outstanding.
9.05. Evidence of Compliance of Supplemental Indenture to be Furnished
Trustee
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies
with the requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is
proper for the Trustee under the provisions of this Article to join in the
execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.01. Company May Consolidate, etc., on Certain Terms
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
Person (whether or not affiliated with the Company, as the case may be), or
successive consolidations or mergers in which the Company, or its successor
or successors, as the case may be, shall be a party or parties, or shall
prevent any sale, conveyance, transfer or lease of the property of the
Company, or its successor or successors, as the case may be, as an entirety,
or substantially as an entirety, to any other Person (whether or not
affiliated with the Company, or its successor or successors, as the case may
be) authorized to acquire and operate the same; provided, that (a) the
Company is the surviving Person, or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such
sale, conveyance, transfer or lease of property is made is a Person organized
and existing under the laws of the United States or any State thereof or the
District of Columbia, and (b) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal
of (and premium, if any) and interest on the Securities according to their
tenor and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be kept or performed by the
Company shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by
the Person formed by such consolidation, or into which the Company, shall
have been merged, or by the Person which shall have acquired such property,
as the case may be, and (c) after giving effect to such consolidation,
merger, sale, conveyance, transfer or lease, no Default or Event of Default
shall have occurred and be continuing.
10.02. Successor Corporation to be Substituted for Company
In case of any such consolidation, merger, conveyance or transfer and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and premium, if
any, and interest on all of the Securities and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Company, such successor Person
shall succeed to and be substituted for the Company, with the same effect as
if it had been named herein as the party of the first part, and the Company
thereupon shall be relieved of any further liability or obligation hereunder
or upon the Securities. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of Puget Sound
Energy, Inc., any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee or the Authenticating Agent; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and deliver any Securities which previously shall
have been signed and delivered by the officers of the Company to the Trustee
or the Authenticating Agent for authentication, and any Securities which such
successor Person thereafter shall cause to be signed and delivered to the
Trustee or the Authenticating Agent for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Indentures had been
issued at the date of the execution hereof.
10.03. Opinion of Counsel to be Given Trustee
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
11.01. Discharge of Indenture
When (a) the Company shall deliver to the Trustee for cancellation
all Securities theretofore authenticated (other than any Securities which
shall have been destroyed, lost or stolen and which shall have been replaced
or paid as provided in Section 2.08) and not theretofore cancelled, or
(b) all the Securities not theretofore cancelled or delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and the Company shall deposit with the Trustee, in
trust, funds sufficient to pay on the Maturity Date or upon redemption all of
the Securities (other than any Securities which shall have been destroyed,
lost or stolen and which shall have been replaced as provided in
Section 2.08) not theretofore cancelled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to the Maturity Date or redemption date, as the case may be, but
excluding, however, the amount of any moneys for the payment of principal of
or premium, if any, or interest on the Securities (1) theretofore repaid to
the Company in accordance with the provisions of Section 11.04, or (2) paid
to any State or to the District of Columbia pursuant to its unclaimed
property or similar laws, and if in either 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 for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof,
which shall survive until such Securities shall mature and be paid.
Thereafter, Sections 6.06, 6.10 and 11.04 shall survive, and the Trustee, on
demand of the Company accompanied by any Officers' Certificate and an Opinion
of Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Securities.
11.02. Deposited Moneys and U.S. Government Obligations to be Held in Trust
by Trustee
Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.05 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 Securities for the
payment of which such moneys or U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal, premium, if any, and interest.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 11.05 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the holders of outstanding Securities.
11.03. Paying Agent to Repay Moneys Held
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall,
upon written demand of the Company, be repaid to it or paid to the Trustee,
and thereupon such paying agent shall be released from all further liability
with respect to such moneys.
11.04. Return of Unclaimed Moneys
Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of or premium, if any, or interest on Securities
and not applied but remaining unclaimed by the holders of Securities for two
years after the date upon which the principal of or premium, if any, or
interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee or such paying agent
on Company Request; and the holder of any of the Securities shall thereafter
look only to the Company for any payment which such holder may be entitled to
collect and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.
11.05. Defeasance Upon Deposit of Moneys or U.S. Government Obligations
The Company shall be deemed to have been Discharged (as defined
below) from its obligations with respect to the Securities on the 91st day
after the conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as
trust funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities (i) money in an
amount, or (ii) U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in
an amount, or (iii) a combination of (i) and (ii), sufficient, in the opinion
(with respect to (ii) and (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee and the Defeasance Agent, if any, to pay and
discharge each installment of principal of and interest and premium, if any,
on the outstanding Securities on the dates such installments of principal,
interest or premium are due;
(2) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that the exercise of the
option under this Section 11.05 would not cause such Securities to be
delisted from such exchange;
(3) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that holders of
the Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option under
this Section 11.05 and will be subject to United States federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised, and such opinion shall
be based on a statute so providing or be accompanied by a private letter
ruling to that effect received from the United States Internal Revenue
Service or a revenue ruling pertaining to a comparable form of transaction to
that effect published by the United States Internal Revenue Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the
rights of holders of Securities to receive, from the trust fund described in
clause (1) above, payment of the principal of and the interest and premium,
if any, on the Securities when such payments are due; (B) the Company's
obligations with respect to the Securities under Sections 2.02, 2.07, 2.08,
3.02, 3.04, 6.10 and 11.04; and (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act under this Article. In
the event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(1) The Trustee shall have approval rights over the document
appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government Obligations
to meet the applicable conditions set forth in this Section 11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.01. Indenture and Securities Solely Corporate Obligations
No recourse for the payment of the principal of or premium, if any,
or interest on any Security, 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 in this Indenture, or in any Security, 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 of any successor Person to the Company, either
directly or through the Company or any successor Person to the Company,
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 issue of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01. Successors
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
13.02. 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 sole successor of the Company.
13.03. Surrender of Company Powers
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company, as the case may be,
and as to any successor Person.
13.04. Addresses for Notices, etc.
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 holders
of Securities on the Company may be given or served by being deposited
postage prepaid by registered or certified mail in a post office letter box
addressed (until another address is filed by the Company with the Trustee for
the purpose) to the Company, 000 - 000xx Xxxxxx X.X., Xxxxxxxx, Xxxxxxxxxx
00000-0000, Attention: Vice President, Treasurer or Secretary. Any notice,
direction, request or demand by any Securityholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the office of the Trustee, Xxx Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000, Attention: Corporate Trust
Services Division (unless another address is provided by the Trustee to the
Company for the purpose).
Any notice or communication to a Holder shall be mailed by first
class mail to his or her address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
13.05. Governing Law
This Indenture and each Security shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State, without
regard to conflicts of laws principles thereof.
13.06. Evidence of Compliance with Conditions Precedent
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion
of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
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 (except pursuant to Section 3.05) shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in
the opinion of such person, he has made such examination or investigation as
is necessary to enable him to express an informed opinion 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 such person, such condition or covenant
has been complied with.
13.07. Business Days
In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities 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 payment and no
interest shall accrue for the period from and after such date.
13.08. 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 Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such imposed duties shall
control.
13.09. 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.
13.10. 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.
13.11. Separability
In case any one or more of the provisions contained in this Indenture
or in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
13.12. Assignment
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any
such assignment, the Company will remain primarily liable for all its
obligations. Subject to the foregoing, the Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties
thereto.
13.13. Acknowledgement of Rights
The Company acknowledges that, with respect to any Securities held by
Puget Sound Energy Trust or a trustee of such trust, if the Property Trustee
of such Trust fails to enforce its rights under this Indenture as the holder
of the Securities held as the assets of Puget Sound Energy Trust any holder
of Capital Securities may institute legal proceedings directly against the
Company to enforce such Property Trustee's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee
or any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of or premium, if any, or interest on
the Securities when due, the Company acknowledges that a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or premium, if any, or interest on the
Securities having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such holder on or after the respective
due date specified in the Securities.
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND OPTIONAL SINKING FUND
14.01. Tax Event Redemption
If a Tax Event has occurred and is continuing then, notwithstanding
Section 14.02(a) , the Company shall have the right at any time prior to the
Initial Optional Redemption Date, upon (i) not less than 45 days written
notice to the Trustee, which notice shall be accompanied by an Officers'
Certificate certifying that a Tax Event entitling the Company to redeem the
Securities pursuant to this Section, has occurred and (ii) not less than 30
days nor more than 60 days written notice to the Securityholders, to redeem
the Securities, in whole (but not in part), within 90 days following the
occurrence of such Tax Event at the Tax Event Redemption Price. Following a
Tax Event, the Company shall take such action as is necessary to promptly
determine the Tax Event Redemption Price, including without limitation the
appointment by the Company of a Quotation Agent. The Tax Event Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the Tax
Event Redemption Price by 10:00 a.m., New York time, on the date such Tax
Event Prepayment Price is to be paid. The Company shall provide the Trustee
with written notice of the Tax Event Redemption Price promptly after the
calculation thereof, which notice shall include any calculation made by the
Quotation Agent in connection with the determination of the Tax Event
Redemption Price.
14.02. Optional Redemption by Company
Subject to the provisions of this Article XIV, the Company shall have
the right to redeem the Securities, in whole or in part, from time to time,
on or after the Initial Optional Redemption Date at a redemption price (the
"Optional Redemption Price") equal to the percentage of the outstanding
principal amount of the Securities specified below, plus, in each case,
accrued interest thereon to the date of redemption if redeemed during the 12-
month period beginning June 1 of the years indicated below.
YEAR PERCENTAGE
2007 104.116%
2008 103.704%
2009 103.292%
2010 102.881%
2011 102.469%
2012 102.058%
2013 101.646%
2014 101.235%
2015 100.823%
2016 100.412%
2017 and thereafter 100.00%
If the Securities are only partially redeemed pursuant to this
Section 14.02, the Securities will be redeemed pro rata or by lot or by any
other method utilized by the Trustee; provided, that if at the time of
redemption the Securities are registered as a Global Security, the Depositary
shall determine, in accordance with its procedures, the principal amount of
such Securities held for the account of its participants to be redeemed. The
Optional Redemption Price shall be paid prior to 12:00 noon, New York time,
on the date of such redemption or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Optional Redemption Price by 10:00 a.m., New
York time, on the date such Optional Redemption Price is to be paid.
14.03. No Sinking Fund
The Securities are not entitled to the benefit of any sinking fund.
14.04. Notice of Redemption; Selection of Securities
In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Securities so to be redeemed as a whole or in
part at their last addresses as the same appear on the Security Register.
Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Security designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the redemption
price at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified
in said notice, and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. If less than all the
Securities are to be redeemed the notice of redemption shall specify the
numbers of the Securities to be redeemed. In case any Security is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Security, a new
Security or Securities in principal amount equal to the unredeemed portion
thereof will be issued.
By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to redeem on the redemption date all the Securities so called for
redemption at the appropriate Redemption Price, together with accrued
interest to the date fixed for redemption.
The Company will give the Trustee notice not less than 45 days prior
to the redemption date as to the aggregate principal amount of Securities to
be redeemed and the Trustee shall select, in such manner as in its sole
discretion it shall deem appropriate and fair, the Securities or portions
thereof (in integral multiples of $1,000, except as otherwise set forth in
the applicable form of Security) to be redeemed.
14.05. Payment of Securities Called for Redemption
If notice of redemption has been given as provided in Section 14.04,
the Securities or portions of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption Price, together
with interest accrued to the date fixed for redemption (subject to the rights
of holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the redemption
date), and on and after said date (unless the Company shall default in the
payment of such Securities at the Redemption Price, together with interest
accrued to said date) interest on the Securities or portions of Securities so
called for redemption shall cease to accrue. On presentation and surrender
of such Securities at a place of payment specified in said notice, the said
Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable Redemption Price, together with interest
accrued thereon to the date fixed for redemption (subject to the rights of
holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the redemption
date).
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
ARTICLE XV
SUBORDINATION OF SECURITIES
15.01. Agreement to Subordinate
The Company covenants and agrees, and each holder of Securities
issued hereunder likewise covenants and agrees, that the Securities shall be
issued subject to the provisions of this Article XV; and each holder of a
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of (including redemption
payments), premium, if any, and interest on all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to all Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
15.02. Default on Senior Indebtedness
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness, in the event that any applicable grace period
with respect to such default has ended and such default has not been cured or
waived or ceased to exist, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in any of these
cases, no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Securities.
In the event of the acceleration of the maturity of the Securities,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the
time of such acceleration shall receive payment in full.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraphs of this Section 15.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in
writing, within 90 days of such payment of the amounts then due and owing on
such Senior Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of such Senior Indebtedness.
15.03. Liquidation; Dissolution; Bankruptcy
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, all
Senior Indebtedness of the Company must first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any
payment is made by the Company on account of the principal (and premium, if
any) or interest on the Securities; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Securityholders or the Trustee
would be entitled to receive from the Company, except for the provisions of
this Article XV, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Trustee under the Indenture
if received by them or it, directly to the holders of Senior Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay all such Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee before all Senior Indebtedness is paid in full, or provision
is made for such payment in money in accordance with its terms, such payment
or distribution shall be held in trust for the benefit of and shall be paid
over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full in money in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XV with respect to the Securities to the payment of Senior
Indebtedness that may at the time be outstanding, provided that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders
of such Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale, conveyance,
transfer or lease of its property as an entirety, or substantially as an
entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale,
conveyance, transfer or lease, comply with the conditions stated in Article X
of this Indenture.
15.04. Subrogation
Subject to the payment in full of all Senior Indebtedness, the rights
of the Securityholders shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest
on the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders
or the Trustee would be entitled except for the provisions of this
Article XV, and no payment over pursuant to the provisions of this Article XV
to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of
the Securities, be deemed to be a payment by the Company to or on account of
such Senior Indebtedness. It is understood that the provisions of this
Article XV are and are intended solely for the purposes of defining the
relative rights of the holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness of the Company,
and the holders of the Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the
Securities and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Trustee or the holder of any Security
from exercising all remedies otherwise permitted by applicable law upon
default under the Indenture, subject to the rights, if any, under this
Article XV of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, as the case may be, received upon the
exercise of any such remedy.
15.05. Trustee to Effectuate Subordination
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
15.06. Notice by the Company
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV. Notwithstanding
the provisions of this Article XV or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by the Trustee
in respect of the Securities pursuant to the provisions of this Article XV,
unless and until a Responsible Officer of the Trustee assigned to its
Principal Office shall have received written notice thereof from the Company
or a holder or holders of Senior Indebtedness or from any trustee therefor;
and before the receipt of any such written notice, the Trustee, subject to
the provisions of Article VI of this Indenture, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 15.06
at least two Business Days prior to the date (i) upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest
on any Security), or (ii) moneys and/or U.S. Government Obligations are
deposited in trust pursuant to Article XI, then anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and U.S. Government Obligations and to apply the same
to the purposes for which they were received, and shall not be affected by
any notice to the contrary that may be received by it within two Business
Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder), as the case may be, to establish that such notice has been given by
a holder of such Senior Indebtedness or a trustee or representative on behalf
of any such holder or holders. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment
or distribution pursuant to this Article XV, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this
Article XV, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee and the Securityholders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to
the Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XV.
15.07. Rights of the Trustee; Holders of Senior Indebtedness
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness
and, subject to the provisions of Article VI of this Indenture, the Trustee
shall not be liable to any holder of Senior Indebtedness if it shall pay over
or deliver to Securityholders, the Company or any other Person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.
15.08. Subordination May Not Be Impaired
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV
or the obligations hereunder of the holders of the Securities to the holders
of Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew
or alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable
in any manner for the collection of such Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against the Company and
any other Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
16.01. Extension of Interest Payment Period
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the
interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period (the "Extended Interest Payment Period"), during
which Extended Interest Payment Period no interest shall be due and payable;
provided that no Extended Interest Payment Period shall end on a date other
than an Interest Payment Date or extend beyond the Maturity Date. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 16.01, will bear interest thereon at the annual rate of 8.231%
compounded semi-annually for each semi-annual period of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Securities, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the holders of the
Securities in whose names the Securities are registered in the Security
Register on the first record date preceding the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further defer payments of interest by further
extending such period, provided that such period, together with all such
previous and further extensions within such Extended Interest Payment Period,
shall not exceed 10 consecutive semi-annual periods, including the first such
semi-annual period during such Extended Interest Payment Period, or extend
beyond the Maturity Date. Upon the termination of any Extended Interest
Payment Period and the payment of all Deferred Interest then due, the Company
may commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may
prepay at any time all or any portion of the interest accrued during an
Extended Interest Payment Period.
16.02. Notice of Extension
(a) If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment
Period, the Company shall give written notice to the Administrative Trustees,
the Property Trustee and the Trustee of its selection of such Extended
Interest Payment Period five Business Days before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by
Puget Sound Energy Trust are payable, or (ii) the date Puget Sound Energy
Trust is required to give notice of the record date, or the date such
Distributions are payable, to any national securities exchange or to holders
of the Capital Securities issued by Puget Sound Energy Trust, but in any
event at least five Business Days before such record date.
(b) If the Property Trustee is not the only holder of the Securities
at the time the Company selects an Extended Interest Payment Period, the
Company shall give the holders of the Securities and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record
or payment date of such interest payment to any national securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
The First National Bank of Chicago, as Trustee, hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as
of the day and year first above written.
PUGET SOUND ENERGY, INC.
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY,
AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEREE TO THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
No. ___________ CUSIP No. ______________
PUGET SOUND ENERGY, INC.
8.231% SERIES JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JUNE 1, 2027
Puget Sound Energy, Inc., a Washington corporation (the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Puget Sound Energy Capital
Trust I, or registered assigns, the principal sum of One Hundred Three
Million Ninety Three Thousand Dollars on June 1, 2027 (the "Maturity Date"),
unless previously redeemed, and to pay interest on the outstanding principal
amount hereof from June 6, 1997, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, semi-annually (subject to deferral as set forth
herein) in arrears on June 1 and December 1 of each year, commencing
December 1, 1997 at the rate of 8.231% per annum until the principal hereof
shall have become due and payable, and at the same rate per annum on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum compounded
semi-annually. The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day months and,
for any period less than a full calendar month, the number of days elapsed in
such month. In the event that any date on which the principal of (or
premium, if any) or interest on this Security is payable is not a Business
Day, then the payment payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on such date. Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Company will be required to pay Liquidated Damages
(as defined in the Registration Rights Agreement) with respect to this
Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the May 15 or November 15 immediately preceding the relevant
interest payment date. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the holders on such
regular record date and may be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the holders of
Securities not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
The principal of (and premium, if any) and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, payment of interest may be made at the option of the
Company by (i) check mailed to the holder at such address as shall appear in
the Security Register or (ii) by transfer to an account maintained by the
Person entitled thereto, provided that proper written transfer instructions
have been received by the relevant record date. Notwithstanding the
foregoing, so long as the Holder of this Security is the Property Trustee,
the payment of the principal of (and premium, if any) and interest on this
Security will be made at such place and to such account as may be designated
by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each holder hereof, by
his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or
on behalf of the Trustee.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
PUGET SOUND ENERGY, INC.
By __________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
Dated ______________
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By____________________
Authorized Officer
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or
to be issued under and pursuant to an Indenture, dated as of June 6, 1997
(the "Indenture"), duly executed and delivered between the Company and The
First National Bank of Chicago, as Trustee (the "Trustee"), to which
Indenture reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Securities.
Upon the occurrence and continuation of a Tax Event, the Company shall
have the right at any time, within 90 days following the occurrence of a Tax
Event, prior to June 1, 2007 (the "Initial Optional Redemption Date"), to
redeem this Security in whole (but not in part) at the Tax Event Redemption
Price. "Tax Event Redemption Price" shall mean, with respect to any
redemption of the Securities following a Tax Event, an amount in cash equal
to the greater of (i) 100% of the principal amount to be redeemed or (ii) the
sum, as determined by a Quotation Agent, of the present values of the
remaining scheduled payments of principal and interest on the Securities to
Maturity Date, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, any accrued and unpaid interest thereon,
including Compounded Interest and Additional Interest, if any, to the date of
such redemption.
In addition, the Company shall have the right to redeem this Security,
in whole or in part, at any time on or after the Initial Optional Redemption
Date (an "Optional Redemption"), at a redemption price (the "Optional
Redemption Price") equal to the percentage of the outstanding principal
amount of the Debentures specified below, plus, in each case, accrued
interest thereon to the date of redemption if redeemed during the 12-month
period beginning June 1 of the years indicated below.
YEAR PERCENTAGE
2007 104.116%
2008 103.704%
2009 103.292%
2010 102.881%
2011 102.469%
2012 102.058%
2013 101.646%
2014 101.235%
2015 100.823%
2016 100.412%
2017 and thereafter 100.00%
The Optional Redemption Price or the Tax Event Redemption Price, as the
case requires, shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or at such earlier time as the Company determines,
provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Redemption Price by 10:00 a.m., New York
City time, on the date such Redemption Price is to be paid. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days notice. If the Securities are only partially redeemed by the
Company pursuant to an Optional Redemption, the Securities will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; provided
that if, at the time of redemption, the Securities are registered as a Global
Security, the Depositary shall determine in accordance with its procedures
the principal amount of such Securities held for the account of its
participants to be redeemed.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt by the Company of any required
regulatory approval.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of modifying in any manner the rights of the holders of
the Securities; provided, however, that no such supplemental indenture shall,
without the consent of each holder of Securities then outstanding and
affected thereby, (i) extend the Maturity Date of any Securities, or reduce
the principal amount thereof, or reduce any amount payable on redemption
thereof, or reduce the rate or extend the time of payment of interest thereon
(subject to Article XVI of the Indenture), or make the principal of, or
interest or premium on, the Securities payable in any coin or currency other
than U.S. dollars, or impair or affect the right of any holder of Securities
to institute suit for the payment thereof, or (ii) reduce the aforesaid
percentage of Securities, the holders of which are required to consent to any
such supplemental indenture. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Securities at the time outstanding, on behalf of all of the holders of the
Securities, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of
this Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future holders and
owners of this Security and of any Security issued in exchange herefor or in
place hereof (whether by registration of transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Security at the time and place and at the rate and
in the money herein prescribed.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not to extend beyond the Maturity Date of
the Securities (an "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest then accrued and unpaid (together
with interest thereon at the rate specified for the Securities to the extent
that payment of such interest is enforceable under applicable law). Before
the termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended
Interest Payment Period, provided that such Extended Interest Payment Period,
together with all such previous and further extensions within such Extended
Interest Payment Period, shall not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extended Interest Payment
Period shall not end on any date other than an Interest Payment Date, or
extend beyond the Maturity Date of the Securities. Upon the termination of
any such Extended Interest Payment Period and the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence
a new Extended Interest Payment Period, subject to the foregoing
requirements.
The Company has agreed that it will not (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation
payment with respect to, any of the Company's capital stock (which includes
common and preferred stock) or (ii) make any payment of principal, interest
or premium, if any, on or repay or repurchase or redeem any debt securities
of the Company that rank pari passu with or junior in right of payment to the
Securities or (iii) make any guarantee payments with respect to any guarantee
by the Company of any securities or any Subsidiary of the Company (including
any Other Guarantees) if such guarantee ranks pari passu or junior in right
of payment to the Securities (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Common Stock of the Company; (b) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (c) payments under the
Capital Securities Guarantee; (d) as a direct result of, and only to the
extent required in order to avoid the issuance of fractional shares of
capital stock, following a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock; and (e) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the exchange or conversion of such capital stock or the security
being exchanged or converted) if at such time (i) an Event of Default shall
have occurred and be continuing, (ii) there shall have occurred any event of
which the Company has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would be, an Event of Default and
(b) in respect of which the Company shall not have taken reasonable steps to
cure, (iii) the Company shall be in default with respect to its payment
obligations under the Capital Securities Guarantee or (iv) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period, or any extension thereof, pursuant to Section 16.01
of the Indenture and shall not have rescinded such notice, and such exercise
of its right to extend the interest payment period, or any extension thereof,
shall have commenced.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable
by the holder hereof on the Security Register of the Company, upon surrender
of this Security for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company or the
Security registrar duly executed by the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee, any authenticating agent, any paying agent, any
transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone
other than the Security registrar) for the purpose of receiving payment of or
on account of the principal hereof and premium, if any, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or premium,
if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor Person,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
