Exhibit 4.A
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AMERICAN WATER CAPITAL CORP.
AND
AMERICAN WATER WORKS COMPANY, INC.
TO
FIRST UNION NATIONAL BANK
as Trustee
___________________
INDENTURE
Dated as of [ ], 2001
___________________
Providing for Issuance of Debt Securities
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TABLE OF CONTENTS
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Page
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ARTICLE ONE Definitions and Other Provisions of General Application.................... 1
SECTION 101. Definitions................................................................ 1
SECTION 102. Compliance Certificates and Opinions....................................... 8
SECTION 103. Form of Documents Delivered to Trustee..................................... 9
SECTION 104. Acts of Holders; Record Dates.............................................. 9
SECTION 105. Notices, etc., ............................................................ 12
SECTION 106. Notice to Holders of Securities; Waiver.................................... 12
SECTION 107. Language of Notices, etc................................................... 13
SECTION 108. Conflict with Trust Indenture Act.......................................... 13
SECTION 109. Effect of Headings and Table of Contents................................... 13
SECTION 110. Successors and Assigns..................................................... 13
SECTION 111. Separability Clause........................................................ 13
SECTION 112. Benefits of Indenture...................................................... 14
SECTION 113. Governing Law.............................................................. 14
SECTION 114. Legal Holidays............................................................. 14
SECTION 115. Appointment of Agent for Service........................................... 14
SECTION 116. No Adverse Interpretation of Other Agreements.............................. 15
SECTION 117. Execution in Counterparts.................................................. 15
ARTICLE TWO Security Forms............................................................. 15
SECTION 201. Forms Generally............................................................ 15
SECTION 202. Form of Trustee's Certificate of Authentication............................ 15
SECTION 203. Securities in Global Form.................................................. 16
SECTION 204. Form of Legend for Global Securities....................................... 16
SECTION 205. Form of Legend for Bearer Securities....................................... 16
ARTICLE THREE The Securities and the Support Agreement................................... 17
SECTION 301. Amount Unlimited; Issuable in Series....................................... 17
SECTION 302. Denominations.............................................................. 19
SECTION 303. Execution, Authentication, Delivery and Dating............................. 19
SECTION 304. Temporary Securities....................................................... 22
SECTION 305. Registration, Registration of Transfer and Exchange........................ 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities........................... 26
SECTION 307. Payment of Interest; Interest Rights Preserved............................. 27
SECTION 308. Persons Deemed Owners...................................................... 29
SECTION 309. Cancellation............................................................... 29
SECTION 310. Computation of Interest.................................................... 30
(i)
SECTION 311. Form of Certification by a Person Entitled to Receive a Bearer Security..... 30
SECTION 312. Support Agreement........................................................... 31
ARTICLE FOUR Satisfaction and Discharge.................................................. 31
SECTION 401. Satisfaction and Discharge of Indenture..................................... 31
SECTION 402. Application of Trust Money.................................................. 32
ARTICLE FIVE Remedies.................................................................... 33
SECTION 501. Events of Default........................................................... 33
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......................... 35
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............. 36
SECTION 504. Trustee May File Proofs of Claim............................................ 36
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons...... 37
SECTION 506. Application of Money Collected.............................................. 37
SECTION 507. Limitation on Suits......................................................... 38
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest... 38
SECTION 509. Restoration of Rights and Remedies.......................................... 39
SECTION 510. Rights and Remedies Cumulative.............................................. 39
SECTION 511. Delay or Omission Not Waiver................................................ 39
SECTION 512. Control by Holders of Securities............................................ 39
SECTION 513. Waiver of Past Defaults..................................................... 40
SECTION 514. Undertaking for Costs....................................................... 40
SECTION 515. Waiver of Stay or Extension Laws............................................ 40
ARTICLE SIX The Trustee................................................................. 41
SECTION 601. Certain Duties and Responsibilities......................................... 41
SECTION 602. Notice of Defaults.......................................................... 42
SECTION 603. Certain Rights of Trustee................................................... 42
SECTION 604. Not Responsible for Recitals or Issuance of Securities...................... 43
SECTION 605. May Hold Securities......................................................... 44
SECTION 606. Money Held in Trust......................................................... 44
SECTION 607. Compensation and Reimbursement.............................................. 44
SECTION 608. Disqualification; Conflicting Interests..................................... 44
SECTION 609. Corporate Trustee Required; Eligibility..................................... 45
SECTION 610. Resignation and Removal; Appointment of Successor........................... 45
SECTION 611. Acceptance of Appointment by Successor...................................... 47
SECTION 612. Merger, Conversion, Consolidation or Succession to Business................. 48
SECTION 613. Preferential Collection of Claims Against Company........................... 48
SECTION 614. Appointment of Authenticating Agent......................................... 48
(ii)
ARTICLE SEVEN Holders' Lists and Reports by Trustee, Company and American Water Works..... 51
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders................... 51
SECTION 702. Preservation of Information; Communications to Holders...................... 51
SECTION 703. Reports by Trustee.......................................................... 51
SECTION 704. Reports by Company and American Water Works................................. 52
ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease........................ 52
SECTION 801. Company and American Water Works May Consolidate, Etc.,..................... 52
SECTION 802. Successor Corporation Substituted........................................... 53
SECTION 803. Assumption by American Water Works or Subsidiary............................ 53
ARTICLE NINE Supplemental Indentures..................................................... 54
SECTION 901. Supplemental Indentures without Consent of Holders.......................... 54
SECTION 902. Supplemental Indentures with Consent of Holders............................. 55
SECTION 903. Execution of Supplemental Indentures........................................ 56
SECTION 904. Effect of Supplemental Indentures........................................... 57
SECTION 905. Conformity with Trust Indenture Act......................................... 57
SECTION 906. Reference in Securities to Supplemental Indentures.......................... 57
ARTICLE TEN Covenants................................................................... 57
SECTION 1001. Payment of Principal, Premium and Interest.................................. 57
SECTION 1002. Maintenance of Office or Agency............................................. 57
SECTION 1003. Money for Securities Payments to Be Held in Trust........................... 58
SECTION 1004. Corporate Existence......................................................... 60
SECTION 1005. Statement as to Default..................................................... 60
SECTION 1006. Waiver of Certain Covenants................................................. 60
SECTION 1007. Support Agreement........................................................... 60
SECTION 1008. Maintenance of Properties................................................... 61
SECTION 1009. Payment of Taxes and Other Claims........................................... 61
SECTION 1010. Restrictions on Liens....................................................... 61
ARTICLE ELEVEN Redemption of Securities.................................................... 63
SECTION 1101. Applicability of Article.................................................... 63
SECTION 1102. Election to Redeem; Notice to Trustee....................................... 63
SECTION 1103. Selection by Trustee of Securities to Be Redeemed........................... 64
SECTION 1104. Notice of Redemption........................................................ 64
SECTION 1105. Deposit of Redemption Price................................................. 65
SECTION 1106. Securities Payable on Redemption Date....................................... 65
SECTION 1107. Securities Redeemed in Part................................................. 66
ARTICLE TWELVE Sinking Funds............................................................... 66
SECTION 1201. Applicability of Article.................................................... 66
(iii)
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities........................ 66
SECTION 1203. Redemption of Securities for Sinking Fund.................................... 67
ARTICLE THIRTEEN Defeasance................................................................... 67
SECTION 1301. Applicability of Article..................................................... 67
SECTION 1302. Defeasance Upon Deposit of Moneys or U.S. Government Obligations............. 67
SECTION 1303. Deposited Moneys and U.S. Government Obligations to Be Held in Trust......... 69
SECTION 1304. Repayment to Company......................................................... 69
ARTICLE FOURTEEN Meetings of Holders of Securities............................................ 70
SECTION 1401. Purposes for Which Meetings May be Called.................................... 70
SECTION 1402. Call Notice and Place of Meeting............................................. 70
SECTION 1403. Persons Entitled to Vote at Meetings......................................... 70
SECTION 1404. Quorum; Action............................................................... 70
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings.......... 71
SECTION 1406. Counting Votes and Recording Action of Meetings.............................. 72
SECTION 1407. Action Without Meeting....................................................... 72
ARTICLE FIFTEEN Immunity of Incorporators, Stockholders, Officers, Directors and Employees... 73
SECTION 1501. Liability Solely Corporate................................................... 73
EXHIBIT A Support Agreement dated June 22, 2000 as amended as of July 26, 2000,
between American Water Works Company, Inc. and American Water Capital Corp.
(iv)
American Water Capital Corp.
American Water Works Company, Inc.
Reconciliation and Tie between Trust Indenture Act of 1939, as amended, and
Indenture, dated as of __________, 2001
Trust Indenture Indenture
Act Section Section(s)
----------- ----------
(S)310 (a) (1).............................................. 609
(a) (2).............................................. 609
(a) (3).............................................. Not Applicable
(a) (4).............................................. Not Applicable
(a) (5).............................................. 609
(b) .............................................. 608, 610
(c) .............................................. Not Applicable
(S)311 (a) .............................................. 613
(b) .............................................. 613
(c) .............................................. 613
(S)3l2 (a) .............................................. 701, 702(a)
(b) .............................................. 702(a)
(c) .............................................. 702(b)
(S)313 (a) .............................................. 703(a)
(b) .............................................. 703(b)
(c) .............................................. 703(c)
(d) .............................................. 703(c)
(S)314 (a) .............................................. 704
(a)(4)............................................... 101, 1009
(b) .............................................. Not Applicable
(c)(1)............................................... 102
(c)(2)............................................... 102
(c)(3)............................................... Not Applicable
(d) .............................................. Not Applicable
(e) .............................................. 102
(f) .............................................. Not Applicable
(S)315 (a) .............................................. 601
(b) .............................................. 602
(c) .............................................. 601
(d) .............................................. 601
(e) .............................................. 514
(S)316 (a)(1)(A)............................................ 502, 512
(a)(1)(B)............................................ 513
(a)(2)............................................... Not Applicable
(b) .............................................. 508
(c) .............................................. 104
(S)3l7 (a)(1)............................................... 503
(A)(2)............................................... 504
(v)
(b)1003.............................................. 1003
(S)318 (a) .............................................. 108
Note: This Reconciliation and Tie shall not, for any purpose, be deemed to be a
part of the Indenture.
(vi)
INDENTURE, dated as of _________________, 2001 among American Water Capital
Corp., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 0000
Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, American Water Works Company, Inc.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called "American Water Works"), having its principal office at
0000 Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and First Union National Bank,
a banking association duly organized and existing under the laws of United
States of America, having its principal corporate trust office at 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY AND AMERICAN WATER WORKS
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The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein collectively called
the "Securities," and individually called a "Security"), to be issued in one or
more series as in this Indenture provided.
American Water Works has duly authorized the execution and delivery of this
Indenture and has previously entered into a Support Agreement, dated June 22,
2000 and amended as of July 26, 2000 (as such agreement may be hereafter
amended, modified or supplemented from time to time in accordance with its terms
and the provisions of this Indenture, the "Support Agreement"), with the
Company, a copy of which (as in effect on the date of this Indenture) is
attached hereto as Exhibit A, pursuant to which American Water Works has agreed
to, among other things, ensure the timely payment of principal of and premium,
if any, and interest on Debt (as defined in the Support Agreement) issued by the
Company.
All things necessary to make this Indenture a valid agreement of the
Company and American Water Works, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United States
of America at the date of such computation;
(4) the words "herein," "hereof," "hereto" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example, the phrase
"A or B" means "A or B or both," not "either A or B but not both").
Certain terms used principally in certain Articles are defined in those
Articles.
"Act," when used with respect to any Holder of a Security, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"American Water Works" means the Person named as "American Water Works" in
the first paragraph of this instrument until a successor Corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "American Water Works" shall mean such successor Corporation.
"Authenticating Agent" means any Person or Persons authorized by the
Trustee to act on behalf of the Trustee to authenticate one or more series of
Securities.
"Authorized Newspaper" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where
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successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different newspapers in
the same city meeting the foregoing requirements and in each case on any
Business Day.
"Bearer Security" means any Security in the form for Bearer Securities set
forth in Section 203 or established pursuant to Section 201 which is payable to
bearer and shall bear the legend specified in Section 205.
"Board of Directors" means either the board of directors of the Company or
American Water Works, as the case may be, or any duly authorized committee
thereof.
"Board Resolution" means a copy of a resolution certified by the Corporate
Secretary or an Assistant Corporate Secretary of the Company or American Water
Works, as the case may be, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day," when used with respect to a particular location specified
in the Securities or this Indenture, means any day which is not a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies in such location are authorized or obligated by law or executive order
to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Corporation named as the "Company" in the first
paragraph of this instrument until a successor Corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Corporation.
"Consolidated Net Tangible Assets" means the total amount of assets
appearing on a consolidated balance sheet of the Company and its
Subsidiaries less, without duplication, the following:
(a) all current liabilities (excluding any thereof which are by their
terms extendable or renewable at the sole option of the obligor thereon
without requiring the consent of the obligee to a date more than 12 months
after the date of determination);
-3-
(b) all reserves for depreciation and other asset valuation reserves
but excluding any reserves for deferred Federal income taxes arising from
accelerated amortization or otherwise; and
(c) all intangible assets such as goodwill, trademarks, trade names,
patents and unamortized debt discount and expense carried as an asset on
said balance sheet.
Consolidated Net Tangible Assets shall be determined in accordance
with generally accepted accounting principles and as of a date not more than 90
days prior to the happening of the event for which such determination is being
made.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee of a series of Securities at which at any particular time its corporate
trust business shall be administered, which office on the date of execution of
this Indenture is located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxxx X. Xxxxxxx, except that with respect to presentation of
Securities of a series for payment or for registration of transfer or exchange,
such term shall mean the office or agency of the Trustee of such series at
which, at any particular time, its corporate agency business shall be conducted,
which office or agency on the date of execution of this Indenture is located at
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Corporation" includes any corporation, association, company or business
trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, specified for that purpose as contemplated by Section 301 or any
successor clearing agency registered under such Act as contemplated by Section
305, and if at any time there is more than one such Person, "Depositary" as used
with respect to the Securities of any series shall mean the Depositary with
respect to the Securities of such series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security bearing the legend specified in Section
204 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
nominee.
-4-
"Holder," when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Corporate Secretary or
an Assistant Corporate Secretary, of the Company or American Water Works, as the
case may be, that complies with the requirements of Section 314(c) of the Trust
Indenture Act and is delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or American Water Works, as the case may be, and who shall be
reasonably acceptable to the Trustee, that complies with the requirements of
Section 314(c) of the Trust Indenture Act.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities and any coupons thereto appertaining; provided
that, if such Securities are to be redeemed, notice
-5-
of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities that have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, Securities owned by the
Company, American Water Works or any other obligor upon the Securities or any
Affiliate of the Company, American Water Works or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company, American Water Works or
any other obligor upon the Securities or any Affiliate of the Company, American
Water Works or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, Corporation, partnership, joint venture,
joint-stock company, trust, limited liability company, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
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"Registered Security" means any Security established pursuant to Section
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Request" or "Order" means a written request or order signed in the name of
the Company or American Water Works, as the case may be, by its Chairman of the
Board, its Chief Executive Officer, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its
Corporate Secretary or an Assistant Corporate Secretary, and delivered to the
Trustee.
"Responsible Officer," when used with respect to the Trustee, means 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 secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any senior trust officer, any trust officer or assistant
trust officer, the controller or any assistant controller or any other 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.
"Securities" and "Security" have the meanings stated in the first recital
of this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities," with
respect to any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a Person more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by American Water Works or by one or
more other Subsidiaries, or by American Water Works and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
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"Support Agreement" has the meaning stated in the second recital of this
Indenture.
"Support Obligations" means the obligations of American Water Works under
the Support Agreement.
"Trust Indenture Act"" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of that series.
"United States" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"Vice President," when used with respect to the Company, American Water
Works or the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company or American Water Works, as
the case may be, to the Trustee to take any action under any provision of this
Indenture, the Company or American Water Works, as the case may be, shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
-8-
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or American Water
Works may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or
American Water Works, as the case may be, stating that the information with
respect to such factual matters is in the possession of the Company or American
Water Works, as the case may be, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided in or pursuant to this Indenture to be made, given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
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waiver or other action provided in or pursuant to this Indenture to be made,
given or taken by Holders may, alternatively, be embodied in and evidenced by
the record of Holders of Securities voting in favor thereof, either in person or
by proxies duly appointed in writing, at any meeting of Holders of Securities
duly called and held in accordance with the provisions of Article Fourteen, or a
combination of such instrument or instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company and American Water
Works. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments and so voting at any
such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee, the Company and American Water Works, if
made in the manner provided in this Section. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1406.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to
be given or taken by a Depositary or impair, as between a Depositary and such
holders of beneficial interests, the operation of customary practices governing
the exercise of the rights of the Depositary (or its nominee) as Holder of any
Security.
Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depositary that
is a Holder of a Global Security, may make, give or take, by a proxy or proxies
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in or pursuant to this
Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may give its proxy or proxies to the Depositary's
participants or the beneficial owners of interests in any such Global Security,
as the case may be, through such Depositary's standing instructions and
customary practices.
Subject to the next succeeding paragraph, the Company may, in the
circumstances permitted by the Trust Indenture Act, fix any day as the record
date for the purpose of determining the Holders of Securities of any series
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders of Securities of such series. If not
set by the Company prior to the first solicitation of a Holder of Securities of
such series made by any Person in respect of any such action, or in the case of
any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day prior to such first solicitation or vote, or, if later,
the date of the most recent list of Holders required to be provided pursuant to
Section 701, as the case may be. With regard to any record date for action to be
taken by the Holders of one or more series of Securities, only the Holders of
Securities of such series on such date (or their duly designated proxies) shall
be entitled to give or take, or vote on, the relevant action.
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The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interests in any permanent Global Security
held by a Depositary and who are entitled under the procedures of such
Depositary to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in or pursuant to this Indenture to be made, given or
taken by Holders. If such a record date is fixed, the Holders on such record
date or their duly appointed proxy or proxies, and only such Persons, shall be
entitled to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other action, whether or not such Holders remain
Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient.
(c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(d) The principal amount and serial numbers of Bearer Securities held by
any Person executing any such instrument or writing as a Holder of Securities,
and the date of his holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person executing such instrument
or writing as a Holder of Securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee, the Company and American Water
Works may assume that such ownership of any Bearer Security continues until (1)
another certificate or affidavit bearing a later date issued in respect of the
same Bearer Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding.
(e) The fact and date of execution of any such instrument or writing, the
authority of the Person executing the same, the principal amount and serial
numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in any other
reasonable manner which the Trustee deems sufficient, and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.
(f) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, the
Company or American Water Works in reliance thereon, whether or not notation of
such action is made upon such Security.
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SECTION 105. Notices, etc., to Trustee, Company and American Water Works.
-----------------------------------------------------------
Any request, demand, authorization, direction, notice, consent, election,
waiver or other Act of Holders of a series of Securities or other document
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with,
(1) the Trustee of such series by any Holder of a Security of such
series or by the Company or American Water Works shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee of such series at its Corporate Trust Office, or
(2) the Company or American Water Works, as the case may be, by the
Trustee of such series or by any Holder of a Security of such series shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or American Water Works, as the case may be, addressed to
the attention of its Corporate Secretary, at 0000 Xxxxxx Xxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000, or at any other address previously furnished in
writing to the Trustee of such series by the Company or American Water
Works, as the case may be.
SECTION 106. Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities (of any series) of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities of such series if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security of such series affected by
such event, at his address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such Notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities of such series if published in an Authorized Newspaper in London
and Luxembourg, and, if the Securities of such series are then listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland and
such stock exchange shall so require, in London and, if the Securities of
such series are then listed on the Luxembourg Stock Exchange and such stock
exchange shall so require, in Luxembourg and, if the Securities of such
series are then listed on any other stock exchange outside the United
States and such stock exchange shall so require, in any other required city
outside the United States or, if not practicable, in Europe, on a Business
Day at least twice, the first such publication to be not earlier than the
earliest date and not later than the latest date prescribed for the giving
of such notice.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case where notice
to Holders of Registered Securities is given by mail, neither
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the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Registered Security shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice by publication to Holders of Bearer Securities given as provided
above.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities of any
series as provided above, then such notification to Holders of such Bearer
Securities as shall be given with the approval of the Trustee for such series
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither failure to give notice by publication to Holders of Bearer Securities as
provided above, nor any defect in any notice so published, shall affect the
sufficiency of any notice mailed to Holders of Registered Securities as provided
above.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. Language of Notices, etc.
------------------------
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
SECTION 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and American
Water Works shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 111. Separability Clause.
-------------------
In case any provision in this Indenture or the Securities or coupons shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
-13-
SECTION 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or the Securities or coupons, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders of Securities and coupons, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 113. Governing Law.
-------------
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
or coupons) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 115. Appointment of Agent for Service.
--------------------------------
By the execution and delivery of this Indenture, the Company and American
Water Works hereby appoint the Trustee as their agent upon which process may be
served in any legal action or proceeding which may be instituted in any Federal
or State court in Philadelphia, Pennsylvania, arising out of or relating to the
Securities, the coupons or this Indenture. Service of process upon such agent at
the office of such agent at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxxx X. Xxxxxxx (or such other address in [Philadelphia,
Pennsylvania], as may be the Corporate Trust Office of the Trustee), and written
notice of said service to the Company and American Water Works by the Person
serving the same addressed as provided in Section 105, shall be deemed in every
respect effective service of process upon the Company and American Water Works
in any such legal action or proceeding, and the Company and American Water Works
hereby submit to the jurisdiction of any such court in which any such legal
action or proceeding is so instituted. Such appointment shall be irrevocable so
long as the Holders of Securities or coupons shall have any rights pursuant to
the terms thereof or of this Indenture or the Support Agreement until the
appointment of a successor by the Company and American Water Works with the
consent of the Trustee and such successor's acceptance of such appointment. The
Company and American Water Works further agree to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
such agent or successor.
By the execution and delivery of this Indenture, the Trustee hereby agrees
to act as such agent and undertakes promptly to notify the Company and American
Water Works of receipt by it of service of process in accordance with this
Section.
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SECTION 116. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, American Water Works or any Affiliate of either of
them. No such indenture, loan or debt agreement may be used to interpret this
Indenture.
SECTION 117. Execution in Counterparts.
-------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
---------------
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons and the Global
Securities, if any, issued pursuant to this Indenture shall be in such form as
shall be established by or pursuant to a Board Resolution of the Company or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or coupons, as evidenced by their execution of the Securities or coupons. If the
forms of Securities or coupons of any series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate record
of such action shall be certified by the Corporate Secretary or an Assistant
Corporate Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Order of the Company contemplated by Section 303 for the
authentication and delivery of such Securities or coupons.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article or Article Six.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
global and registered form without coupons. If so provided as contemplated by
Section 301, the Securities of a series also shall be issuable in bearer form,
with or without interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
-15-
Subject to Section 614, the Trustee's certificate of authentication shall
be in substantially the following form:
This is one of the Securities of the series referred to in the within
mentioned Indenture.
FIRST UNION NATIONAL BANK, as Trustee
By:_________________________________
Authorized Officer
SECTION 203. Securities in Global Form.
-------------------------
If Securities of a series are issuable in global form, any such Security
may provide that it or any number of such Securities shall represent the
aggregate amount of all Outstanding Securities of such series (or such lesser
amount as is permitted by the terms thereof) from time to time endorsed thereon
and may also provide that the aggregate amount of Outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
exchanges. Any endorsement of any Security in global form to reflect the amount,
or any increase or decrease in the amount, or any changes in the rights of
Holders, of Outstanding Securities represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Order of the Company to be delivered pursuant to Sections 303 or 304 with
respect thereto. Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Order of the Company. If the Order of the
Company pursuant to Sections 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to a Security in global
form shall be in writing but need not be accompanied by or contained in an
Officers' Certificate and need not be accompanied by an Opinion of Counsel.
SECTION 204. Form of Legend for Global Securities.
------------------------------------
Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form, or in such other form that is
acceptable to the Depositary and the Trustee:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY."
SECTION 205. Form of Legend for Bearer Securities.
------------------------------------
-16-
Any Bearer Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"ANY UNITED STATES PERSON WHO HOLDS THIS
SECURITY WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS, INCLUDING
THE LIMITATIONS PROVIDED IN SECTIONS 165(J) AND
1287(A) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED."
ARTICLE THREE
The Securities and the Support Agreement
SECTION 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution of the Company, and set forth
in an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of all other series issued by
the Company);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or any method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable and the
Regular Record Date for the interest payable on Registered Securities on
any Interest Payment Date;
(5) the place or places where the principal of (and premium, if any)
and interest, if any, on Securities of the series shall be payable;
(6) whether Securities of such series may be redeemed, and if so, the
period or periods within which, the price or prices at which and the terms
and conditions upon
-17-
which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(8) whether Bearer Securities of the series are to be issuable;
(9) if Bearer Securities of the series are to be issuable, whether
interest in respect of any portion of a temporary Bearer Security in global
form (representing all of the Outstanding Bearer Securities of the series)
payable in respect of an Interest Payment Date prior to the exchange of
such temporary Bearer Security for definitive Securities of the series
shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date;
(10) the date as of which any Bearer Securities of the series, any
temporary Bearer Security in global form and any Global Securities shall be
dated if other than the date of original issuance of the first Security of
the series to be issued;
(11) the denominations in which Registered Securities of the series,
if any, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities
of the series, if any, shall be issuable if other than the denomination of
$5,000;
(12) the currency or currencies, including composite currencies, in
which payment of the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable (if other than the
currency of the United States of America);
(13) if the amount of payments of principal of (and premium, if any)
or interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(14) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(15) any Events of Default or covenants of the Company or American
Water Works pertaining to the Securities of the series in addition or
different from those in this Indenture;
-18-
(16) whether and under what circumstances the Company will pay
additional amounts on the Securities of the series held by a Person who is
a United States Alien in respect of taxes or similar charges withheld or
deducted and, if so, whether the Company will have the option to redeem
such Securities rather than pay such additional amounts;
(17) whether any Securities of the series are to be issuable in whole
or in part in the form of one or more Global Securities and, if so, (a) the
Depositary with respect to such Global Security or Securities and (b) the
circumstances under which beneficial owners of interests in any such Global
Security may exchange such interest for Securities of the same series and
of like tenor and of any authorized form and denomination, and the
circumstances under which any such exchange may occur, if other than as set
forth in Section 305;
(18) if any of such Securities are to be issued in global form and are
to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, then the form and
terms of such certificates, documents or conditions; and
(19) any other terms of the series (which terms shall not be
inconsistent with the terms of this Indenture).
All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set forth in
such Officers' Certificate or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time, and unless
otherwise provided, a series may be reopened for issuance of additional
Securities of such series.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution of the Company, a copy of an appropriate record of such
action shall be certified by the Corporate Secretary or an Assistant Corporate
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate of the Company setting forth the terms of
the series. Such Board Resolution may provide general terms or parameters for
Securities of such series and may provide that the specific terms of particular
Securities of such series, and the Persons authorized to determine such terms or
parameters, may be determined in accordance with or pursuant to the Order of the
Company referred to in the third paragraph of Section 303.
SECTION 302. Denominations.
-------------
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Registered Securities of each series shall be
issuable in denominations of $1,000 or any integral multiple thereof and the
Bearer Securities of each series, if any, shall be issuable in the denomination
of $5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
-19-
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Corporate Secretary or one of its
Assistant Corporate Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile. Coupons shall bear the facsimile
signature of the Treasurer or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time relevant to the authorization thereof the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed on behalf
of the Company to the Trustee for authentication by the Trustee together with an
Order of the Company for the authentication and delivery of such Securities, and
the Trustee in accordance with such Order shall authenticate and deliver such
Securities; provided, however, that, in connection with its original issuance, a
Bearer Security may be delivered only outside the United States and only if the
Trustee shall have received from the Person entitled to receive such Bearer
Security a certificate in the form required by Section 311; provided, further,
that, with respect to Securities of a series constituting a medium term note
program, the Trustee shall authenticate and deliver Securities of such series
for original issue from time to time in the aggregate principal amount
established for such series pursuant to such procedures acceptable to the
Trustee and to such recipients as may be specified from time to time by an Order
of the Company. The maturity dates, original issue dates, interest rates and
any other terms of the Securities of such series shall be determined by or
pursuant to such Order of the Company and such procedures. If provided for in
such procedures, such Order of the Company may authorize authentication and
delivery pursuant to oral instructions from the Company or its duly authorized
agent, which instructions shall be promptly confirmed in writing.
In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Sections 315(a) through
315(d) of the Trust Indenture Act) shall be fully protected in relying upon:
(a) the Board Resolution of the Company or indenture supplemental
hereto establishing the form of the Securities of that series pursuant to
Section 201 and the terms of the Securities of that series pursuant to
Section 301 (or, in the case of a Board Resolution, pursuant to which such
form and terms are established);
(b) an Officer's Certificate pursuant to Sections 201 and 301 and
complying with Section 102; and
(c) an Opinion of Counsel complying with Section 102 stating,
(i) that the forms of such Securities and coupons, if any,
have been established by or pursuant to a Board Resolution of the
Company or
-20-
by an indenture supplemental hereto, as permitted by Section 201
and in conformity with the provisions of this Indenture;
(ii) that the terms of such Securities have been
established by or pursuant to a Board Resolution of the Company
or by an indenture supplemental hereto, as permitted by Sections
201 and 301 and in conformity with the provisions of this
Indenture;
(iii) that such Securities, together with the coupons, if
any, appertaining thereto, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Support Agreement and
the Indenture, enforceable in accordance with their respective
terms, except to the extent that the enforcement of such
obligations may be subject to bankruptcy laws or insolvency laws
or other similar laws, general principles of equity and such
other qualifications as such counsel shall conclude are customary
or do not materially affect the rights of the Holders of such
Securities;
(iv) that all laws and requirements in respect of the
execution and delivery of the Securities have been complied with;
and
(v) such other matters as the Trustee may reasonably
request.
With respect to Securities of a series constituting a medium term note
program, the Trustee may conclusively rely on the documents and opinion
delivered pursuant to Sections 201 and 301 and this Section 303, as applicable
(unless revoked by superseding comparable documents or opinions) as to the
authorization of the Board of Directors of any Securities delivered hereunder,
the form thereof and the legality, validity, binding effect and enforceability
thereof.
Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if not all the Securities of any series are to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the documents otherwise required pursuant to
the preceding clauses (a), (b) or (c) prior to or at the time of issuance of
each Security, but such documents shall be delivered prior to or at the time of
issuance of the first Security of such series. After any such first delivery,
any separate Request by the Company that the Trustee authenticate Securities of
such series for original issue will be deemed to be a certification by the
Company that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Securities continue to have been complied
with.
If such forms or terms have been so established by or pursuant to a Board
Resolution of the Company or by an indenture supplemental hereto as permitted by
Sections 201 and 301, the Trustee shall have the right to decline to
authenticate and deliver any Securities of such series:
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(i) if the Trustee, being advised by counsel, determines that such
action may not lawfully be taken;
(ii) if the Trustee in good faith by its board of directors,
executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determines that such action would
expose the Trustee to personal liability to Holders of any Outstanding
series of Securities; or
(iii) if the issue of such Securities pursuant to this Indenture
will affect the Trustee's own rights, duties and immunities under the
Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
If the Company shall establish pursuant to Section 301 that the Securities
of a series are to be issued in whole or in part in the form of one or more
Global Securities, then the Company shall execute and the Trustee shall, in
accordance with this Section and the Order of the Company with respect to such
series, authenticate and deliver one or more Global Securities in permanent form
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of the Outstanding Securities of such series to be
represented by such Global Security or Securities, (ii) shall be registered, if
in registered form, in the name of the Depositary for such Global Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear a legend as required by Section 204.
Each Registered Security shall be dated the date of its authentication.
Each Global Security, each Bearer Security and any temporary Bearer Security in
global form shall be dated as of the date specified as contemplated by Section
301.
No Security or related coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Except as permitted by Section 306 or 307, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured and paid or payment duly provided
for have been detached and canceled.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon an Order of the Company the Trustee shall authenticate and
deliver, temporary Securities that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities. In
the case of Bearer Securities of any series, such temporary
-22-
Securities may be in global form, representing all of the outstanding Bearer
Securities of such series.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
(accompanied by any unmatured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor (at
an office or agency of the Company in the case of Bearer Securities) a like
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor; provided, however, that no definitive Bearer
Security shall be delivered in exchange for a temporary Registered Security; and
provided, further, that no definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security unless the Trustee shall have received
from the Person entitled to receive the definitive Bearer Security a certificate
in the form required by Section 311. Until so exchanged, the temporary
Securities of any series, including temporary Securities in global form, shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at one of its offices or agencies
designated pursuant to Section 1002 a register (referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Registered Securities of each
series and of transfers and exchanges of Registered Securities of such series.
The Company shall designate one Person to maintain the Security Register for the
Securities of each series (such Person being referred to, with respect to such
series, as the "Security Registrar") for the purpose of registering Registered
Securities of each series and transfers and exchanges of Registered Securities
of such series as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency in a Place of Payment maintained for such
purpose for such series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, Stated
Maturity and original issue date, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Registered Securities of any series (except a
Global Security representing all or a portion of such series) may be exchanged
for Registered Securities of the same series, Stated Maturity and original issue
date, of any authorized denominations and of like tenor and aggregate principal
amount, upon surrender of the Securities to be exchanged at any such office or
agency.
-23-
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series, Stated Maturity and
original issue date, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default appertaining thereto. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to the Company and the
Trustee in an amount equal to the face amount of such missing coupon or coupons,
or the surrender of such missing coupon or coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as they
may require to hold each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
that, except as otherwise provided in Section 1002, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series after
the close of business at such office or agency on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date of payment, as the case may be.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities that the
Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company 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.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Sections 304, 906 or 1107 not involving any transfer.
The Company shall not be required to (i) issue, register the transfer of or
exchange Securities of any series during a period of 15 Business Days
immediately preceding the date
-24-
notice is given identifying the serial numbers of the Securities of that series
called for redemption, (ii) issue, register the transfer of or exchange any
Registered Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part, or (iii) exchange any
Bearer Security so selected for redemption except that such a Bearer Security
may be exchanged for a Registered Security of that series, provided that such
Registered Security shall be immediately surrendered for redemption with written
instruction for payment consistent with the provisions of this Indenture.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any Global Security shall be exchangeable pursuant
to this Section 305 or Sections 304, 306, 906 or 1107 for Securities registered
in the name of, and a transfer of a Global Security of any series may be
registered to, any Person other than the Depositary for such Global Security or
its nominee only if:
(i) such Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time
such Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and a successor Depositary is
not appointed by the Company within 90 days;
(ii) the Company executes and delivers to the Trustee an Order of the
Company that such Global Security shall be so exchangeable and the transfer
thereof so registrable; or
(iii) there shall have occurred and be continuing an Event of Default
or an event which, with the giving of notice or lapse of time, would
constitute an Event of Default with respect to the Securities of such
series.
Upon the occurrence in respect of any Global Security of any series of any one
or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be specified as contemplated
by Section 301 for such series, then without unnecessary delay, but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee definitive Securities of that series in
aggregate principal amount equal to the principal amount of such Global
Security, executed by the Company.
On or after the earliest date on which such interests may be so exchanged,
such Global Securities shall be surrendered from time to time by the Depositary
and in accordance with instructions given to the Trustee and the Depositary
(which instructions shall be in writing but need not be contained in or
accompanied by an Officers' Certificate or be accompanied by an Opinion of
Counsel), as shall be specified in the Order of the Company with respect thereto
to the Trustee, as the Company's agent for such purpose, to be exchanged, in
whole or in part, for definitive Securities of the same series without service
charge. The Trustee shall authenticate and make available for delivery, in
exchange for each portion of such surrendered Global Security, a like aggregate
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such Global Security to be
exchanged which (unless the Securities of the series are not issuable both as
Bearer Securities and as Registered Securities, in which case the definitive
Securities exchanged for the Global
-25-
Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 301) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15
Business Days before any selection of Securities of that series to be redeemed
and ending on the relevant Redemption Date; and provided, further, that (unless
otherwise specified as contemplated by Section 301) no Bearer Security delivered
in exchange for a portion of a Global Security shall be mailed or otherwise
delivered to any location in the United States.
Promptly following any such exchange in part, such Global Security shall be
returned by the Trustee to the Depositary in accordance with the instructions of
the Company referred to above. If a Registered Security is issued in exchange
for any portion of a Global Security after the close of business at the office
or agency where such exchange occurs on (i) any Regular Record Date for such
Security and before the opening of business at such office or agency on the next
Interest Payment Date, or (ii) any Special Record Date for such Security and
before the opening of business at such office or agency on the related proposed
date for payment of interest or Defaulted Interest, as the case may be, interest
shall not be payable on such Interest Payment Date or proposed date for payment,
as the case may be, in respect of such Registered Security, but shall be payable
on such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such Global
Security is payable in accordance with the provisions of this Indenture.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series, Stated Maturity and original issue date, and of like tenor
and principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to the
surrendered Security.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or coupon
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute, and upon its Request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security or in exchange for the Security to which a destroyed, lost or stolen
coupon appertains (with all appurtenant coupons not destroyed, lost or stolen),
a new Security of the same series, Stated Maturity and original issue date, and
of like tenor and principal amount and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new
-26-
Security, pay such Security or coupon; provided, however, that payment of
principal of (and premium, if any) and any interest on Bearer Securities shall,
except as otherwise provided in Section 1002, be payable only at an office or
agency located outside the United States; and provided, further, that, with
respect to any such coupons, interest represented thereby shall be payable only
upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any mutilated, destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the mutilated, destroyed, lost or stolen Security
and its coupons, if any, or the mutilated, destroyed, lost or stolen coupon
shall be at any time enforceable by anyone, and any such new Security and
coupons, if any, shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Registered Security that is payable
and which is punctually paid or duly provided for on any Interest Payment Date
shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. Interest, if any, is paid on Bearer Securities to
Holders of coupons. In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date, and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Any interest on any Registered Security of any series that is payable but
which is not punctually paid or duly provided for on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
-27-
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series (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 Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as provided in
this clause. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at the address of
such Holder as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in each Place of
Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for such series
in exchange for a Registered Security of such series after the close of
business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series 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.
-28-
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the Person in whose name such Registered Security is
registered as the absolute owner of such Registered Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to Section
307) interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by any notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominee) shall have any rights under this
Indenture with respect to such Global Security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the owner of such Global Security or any
Security represented thereby for all purposes whatsoever. None of the Company,
the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 309. Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by the Trustee. The Company may at
any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities and coupons held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Company, unless an Order of the Company shall direct that canceled
Securities be returned to the Company.
-29-
The repayment of any principal amount of Securities pursuant to such option
of the Holder to require repayment of Securities before their Stated Maturity,
for purposes of this Section 309, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the Company, at its option, shall deliver or surrender the same to the Trustee
with an Order that such Securities be canceled.
SECTION 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
SECTION 311. Form of Certification by a Person Entitled to Receive a Bearer
--------------------------------------------------------------
Security.
--------
Whenever any provision of this Indenture or the form of Security
contemplates that certification be given by a Person entitled to receive a
Bearer Security, such certification shall be provided substantially in the form
of the following certificate, with only such changes as shall be approved by the
Company:
[Form of Certificate to Be Given By
Person Entitled to Receive Bearer Security]
Certificate
[Name of Security]
This is to certify that the above-captioned Security is not being acquired
by or on behalf of a United States person, or for offer to resell or for resale
to a United States person, or, if a beneficial interest in the Security is being
acquired by a United States person, that such person is a financial institution
or is acquiring through a financial institution and that the Security is held by
a financial institution that has agreed in writing to comply with the
requirements of Section 165(j) (3) (A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder and that such person or
financial institution is not purchasing for offer to resell or for resale within
the United States. If this certificate is being provided by a clearing
organization, it is based on statements provided to it by its member
organizations. As used herein, "United States" means the United States of
America (including the States and the District of Columbia), its territories and
possessions and other areas subject to its jurisdiction, and "United States
person" means any citizen or resident of the United States, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source. If the undersigned is a dealer, the undersigned agrees to obtain
a similar certificate from each person entitled to delivery of any of the above-
captioned Securities in bearer form purchased from it; provided, however, that,
if the undersigned has actual knowledge that the information contained in such a
certificate is false, the undersigned will not deliver a Security in temporary
or definitive bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the undersigned.
-30-
We undertake to advise you by telecopy if the above statement as to
beneficial ownership is not correct on the date of delivery of the above-
captioned Securities in bearer form as to all of such Securities.
We understand that this certificate is required in connection with certain
tax legislation in the United States. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: __________, 20_
SECTION 312. Support Agreement.
-----------------
Holders of Securities and coupons and the Trustee are entitled to the
benefits of the Support Agreement available to Lenders (as defined in the
Support Agreement), it being understood and agreed that the Securities and
coupons constitute Debt (as defined in the Support Agreement) for purposes of
the Support Agreement.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture, with respect to the Securities of any series (if all series
issued under this Indenture are not to be affected), shall upon a Request of the
Company cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when:
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons appertaining thereto (other than (i) coupons
appertaining to Bearer Securities of such series surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived as provided in
Xxxxxxx 000, (xx) Securities and coupons of such series that have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Xxxxxxx 000, (xxx) coupons appertaining to Securities of
such series called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
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(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (B) (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust dedicated solely
for such purpose an amount, in cash, sufficient, without reinvestment, to pay
and discharge the entire indebtedness on such Securities and coupons not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal (and premium, if any) or interest (1)
theretofore deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as provided
in Section 1003 or (2) paid to any state pursuant to its unclaimed property or
similar laws;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
of the Company and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture with respect to such Securities have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and American Water Works to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Sections 305, 306, 402, 1002 and 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provision of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, the coupons
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
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ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
-----------------
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the Company defaults in the payment of any interest upon any
Security of that series when it becomes due and payable and continuance of
such default for a period of 30 days; or
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity and
continuance of such default for a period of three Business Days thereafter;
or
(3) the Company defaults in the deposit of any sinking fund payment
when and as due by the terms of a Security of that series and continuance
of such default for a period of three Business Days thereafter; or
(4) the Company or American Water Works defaults in the performance
of or breaches any covenant or warranty of the Company or American Water
Works, as the case may be, in this Indenture or the Support Agreement
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in or pursuant to this Indenture solely for the
benefit of one or more series of Securities other than that series), and
continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company and
American Water Works by the Trustee, or to the Company, American Water
Works and the Trustee by the Holders of at least 33% in aggregate principal
amount of the Outstanding Securities of that series, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder, provided
however, that, except with respect to defaults under or breaches of the
covenants contained in Section 1009 or Section 1010, the Trustee, or the
Trustee and the Holder of such principal amount of Securities of such
series, as the case may be, shall be deemed to have agreed to an extension
of such period if corrective action is initiated by the Company or American
Water Works within such period and is being diligently pursued; or
(5) the Company or American Water Works defaults under any bond,
debenture, note or other evidence of indebtedness for money borrowed
(including a default with respect to Securities of any series other than
that series) or under any
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mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company (including this Indenture) or American Water Works, whether
such indebtedness now exists or shall hereafter be created, which default
shall constitute a failure to pay in excess of $20,000,000 of the principal
or interest of such indebtedness when due and payable after the expiration
of any applicable grace period with respect thereto or shall have resulted
in such indebtedness in any amount in excess of $20,000,000 becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged or such acceleration having been rescinded or annulled
within a period of 60 days after there shall have been given, by registered
or certified mail, to the Company and American Water Works by the Trustee
or to the Company, American Water Works and the Trustee by the Holders of
at least 33% in aggregate principal amount of the Outstanding Securities of
that series a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; provided, that subject to the provisions of
Sections 601 and 602, the Trustee shall not be deemed to have knowledge of
such default unless either (A) a Responsible Officer of the Trustee shall
have actual knowledge of such default or (B) the Trustee shall have
received written notice thereof from the Company, from any Holder, from the
holder of any such indebtedness or from the trustee under any such
mortgage, indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of any of the Company or American
Water Works in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging any of the Company or American Water
Works a bankrupt or insolvent, or approving as properly filed a petition by
one or more Persons other than the Company, American Water Works, or any of
their Affiliates seeking reorganization, arrangement, adjustment or
composition of or in respect of any of the Company or American Water Works
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for any of the Company or American Water Works or for any
substantial part of the property of any of the Company or American Water
Works or ordering the liquidation or winding up of the affairs of any of
the Company or American Water Works and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in
effect for a period of 90 consecutive days; or
(7) the commencement by the Company or American Water Works of a case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of it in a case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or
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answer or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official in respect
of it or any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or its admission in writing of its
inability to pay its debts generally as they become due, or its taking of
corporate action in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 33% in aggregate principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
of the Securities of that series to be due and payable immediately, by a notice
in writing to the Company and American Water Works (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company,
American Water Works and the Trustee, may rescind and annul such declaration and
its consequences if:
(1) the Company or American Water Works has paid or deposited with
the Trustee a sum sufficient to pay:
(A) all overdue interest on all Securities of that series;
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities;
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities; and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due to the
Trustee under Section 607;
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and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
that have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission and annulment shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof and such default continues
for a period of three Business Days,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and payable on
such Securities and coupons for principal (and premium, if any) and interest,
with interest on any overdue principal (and premium, if any) and on any overdue
interest, to the extent that payment of any such interest shall be legally
enforceable, at the rate or rates prescribed therefor in such Securities, and,
in addition thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company, American Water Works (pursuant to its Support Obligations)
or any other obligor upon such Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company, American Water Works or any other obligor upon such Securities,
wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or the
Support Agreement, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the
-36-
Company, American Water Works or any other obligor upon the Securities or the
property of the Company, American Water Works or of such other obligor or their
creditors, 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 on
the Company, American Water Works or any other obligor for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due to the Trustee
under Section 607) and of the Holders of Securities and coupons allowed in
such judicial proceeding; and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
--------------------------------------------------------------
Coupons.
-------
All rights of action and claims under this Indenture, the Support Agreement
or the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
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Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities and
coupons in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities and coupons for principal
(and premium, if any) and interest, respectively; and
THIRD: To the Company or American Water Works, as the case may be.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Security of any series or any related coupons shall have
any right to institute any proceeding, judicial or otherwise with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 33% in aggregate principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or the Support Agreement to affect, disturb or prejudice the
rights of any other of such Holders or to obtain or to seek to obtain priority
or preference over any other of such Holders or to enforce any right under this
Indenture or the Support Agreement, except in the manner herein or therein
provided and for the equal and ratable benefit of all of such Holders.
-38-
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest.
--------
Notwithstanding any other provision in this Indenture, (1) the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security or payment of such coupon on
the Stated Maturity or Maturities expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder; and (2) the Holder of any Security or coupon shall
be considered a Lender (as defined in the Support Agreement) and shall have all
rights of a Lender set forth therein.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture or the Support
Agreement and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
American Water Works, the Trustee and the Holders of Securities and coupons
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
--------------------------------
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any
-39-
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, expose the Trustee to personal liability or be unduly
prejudicial to Holders not joined therein; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default:
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series; or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 514 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder of any Security or coupon
for the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security or the payment of any coupon on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
--------------------------------
-40-
Each of the Company and American Water Works covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force which may
affect the covenants or the performance of this Indenture; and each of the
Company and American Water Works (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every power
as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default with
respect to Securities of any series:
(1) the Trustee undertakes to perform, with respect to
Securities of such series, such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Securities of such series, conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Securities of any
series has occurred and is continuing, the Trustee shall exercise, with
respect to Securities of such series, such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this subsection shall not be construed to limit the effect
of subsection (a) of this Section;
-41-
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series;
and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act, notice of
all such defaults hereunder known to the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest on any
Security of such series or in the payment of any sinking fund installment with
respect to Securities of such series, 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 or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of Securities of such series; and provided, further,
that in the case of any default of the character specified in Section 501(4)
with respect to Securities of such series, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(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, direction, consent, order, bond, debenture, note,
coupon, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) any request or direction of the Company or American Water Works
mentioned herein shall be sufficiently evidenced by a Request or Order and any
resolution of the Board of Directors of the Company or American Water Works
shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities of any series pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company or American Water Works, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) except as otherwise provided in Section 501(5), the Trustee shall not
be charged with knowledge of any Event of Default with respect to the Securities
of any series for which it is acting as Trustee unless written notice of such
Event of Default shall have been given to the Trustee by the Company, any other
obligor on such Securities or by any Holder of such Securities.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture, the Support Agreement or of
the Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its
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obligations hereunder and that the statements made by it in a Statement of
Eligibility and Qualification on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company, American Water Works or an Affiliate of either with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company and American Water Works agree:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel and any Authenticating Agent),
except any such expense, disbursement or advance as may be attributable to
its negligence, willful misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
As security for the performance of the obligations of the Company and
American Water Works under this Section 607, the Trustee shall have a claim
prior to the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of,
premium, if any, or interest, if any, on particular Securities.
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SECTION 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee shall have or acquired any conflicting interest within the
meaning of the Trust Indenture Act, it shall either eliminate such conflicting
interest or resign to the extent, in the manner and with the effect, and subject
to the conditions, provided in the Trust Indenture Act and this Indenture. For
purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent
permitted thereby, the Trustee, in its capacity as trustee in respect of the
Securities of any series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities of any other
series.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, or any other Person permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000, is subject to supervision or examination by Federal, State or
District of Columbia authority and is not otherwise ineligible under Section
310(a)(5) of the Trust Indenture Act. If such Corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company and American
Water Works. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee, the Company and
American Water Works.
(d) If at any time:
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(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company and American Water Works or by any Holder
of a Security who has been a bona fide Holder of a Security for at least
six months; or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company and American
Water Works or by any such Holder; or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company and American Water Works by Board
Resolutions may remove the Trustee with respect to all Securities, or (ii)
subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security
who has been a bona fide Holder of a Security for at least six months may, on
behalf of him or herself and all other similarly situated Holders, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company and American Water Works,
by Board Resolutions, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company, American Water
Works and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company and American Water Works. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company and American Water Works or the Holders of
Securities and accepted appointment in the manner required by Section 611, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of him or herself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Registered Securities, if any, of such series as their
-46-
names and addresses appear in the Security Register and, if Securities of such
Series are issuable as Bearer Securities, by publishing notice of such event
once in an Authorized Newspaper in each Place of Payment located outside the
United States. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company, American Water Works and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company and American Water Works or on the request of
the successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
American Water Works, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company and American Water Works or on the request of any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim provided for in Section 607, with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.
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(c) Upon request of any such successor Trustee, the Company and American
Water Works shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company or
American Water Works (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of Section 311 and any other provision of the
Trust Indenture Act regarding the collection of claims against the Company or
American Water Works (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Securities remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus (computed in accordance with Section
310(a) (2) of the Trust Indenture Act) of not less than $50,000,000 and subject
to supervision or examination by Federal, State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
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examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall (i) mail written notice of such appointment
by first-class mail, postage prepaid, to all Holders of Registered Securities,
if any, of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register, and (ii) if
Securities of the series are issuable as Bearer Securities, publish notice of
such appointment at least once in an Authorized Newspaper in the place where
such successor Authenticating Agent has its principal office if such office is
located outside the United States. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments in accordance with the
provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series referred to in the within-
mentioned Indenture.
-49-
FIRST UNION NATIONAL BANK,
as Trustee
By________________________________
As Authenticating Agent
By________________________________
Authorized Signatory
-50-
ARTICLE SEVEN
Holders' Lists and Reports by Trustee, Company and American Water Works
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
In accordance with Section 312(a) of the Trust Indenture Act, the Company
will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than June 1 and December 1, in each
year, a list, in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the Company,
or any of its Paying Agents other than the Trustee, as to the names and
addresses of the Holders of Securities as of the preceding May 15 or
November 15, as the case may be, 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 as of a date not more than 15 days prior to the
time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall comply with the obligations imposed upon it pursuant
to Section 312 of the Trust Indenture Act.
(b) Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company, American
Water Works, the Trustee or any agent of any of them shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Holders of Securities in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 312 of the Trust Indenture
Act.
SECTION 703. Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year commencing with the first May
15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.
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(c) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
SECTION 704. Reports by Company and American Water Works.
-------------------------------------------
The Company and American Water Works, pursuant to Section 314(a) of the
Trust Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company or
American Water Works is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company or American Water Works may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended; or, if the Company or American Water
Works is not required to file information, documents or reports pursuant to
either of said sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time
to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, in respect
of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company and American Water Works with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit, within 30 days after the filing thereof with the
Trustee, to the Holders of Securities, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company and American Water Works May Consolidate, Etc., Only
------------------------------------------------------------
on Certain Terms.
----------------
Neither the Company nor American Water Works shall consolidate with or
merge into any other Corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:
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(1) the Corporation formed by any such consolidation or into which it
is merged or the Person which acquires by conveyance or transfer, or which
leases, its properties and assets substantially as an entirety shall be a
Corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, in the case of the Company, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities; in
the case of the Company or American Water Works, the performance of every
covenant of this Indenture on the part of the Company or American Water
Works, as applicable; and in the case of American Water Works, all the
obligations under the Support Agreement to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company or American Water Works, as applicable, has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer or lease
complies with this Section 801 and that all conditions precedent herein
provided for relating to such transaction have been complied with. The
Company covenants and agrees that if, upon its consolidation with or merger
into any other corporation, or upon any consolidation or merger of any
other corporation with or into it, or upon any sale or conveyance of all or
substantially all of its property and assets to any other corporation, any
of its property or property of the Company's Subsidiaries, if any, would
thereupon become subject to any mortgage, security interest, pledge, lien
or other encumbrance not permitted by Section 1010 hereof, prior to or
concurrently with such consolidation, merger, sale or conveyance, it will
effectively secure the Securities then Outstanding (egually and ratably
with (or prior to) any other indebtedness of or guaranteed by it then
entitled thereto) by a direct lien, on such of its property or such
property of a Subsidiary or such indebtedness issued by a Subsidiary, prior
to all liens other than any theretofore existing thereon.
SECTION 802. Successor Corporation Substituted.
---------------------------------
Upon any consolidation by the Company or American Water Works with or
merger by the Company or American Water Works into any other Corporation or any
conveyance, transfer or lease of either the Company's or American Water Works'
properties and assets substantially as an entirety in accordance with Section
801, the successor Corporation formed by such consolidation or into which it is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or American Water Works, as applicable, under this Indenture with the same
effect as if such successor Corporation had been named as the Company or
American Water Works, as applicable, herein, and thereafter, except in the case
of a lease, the predecessor Corporation shall be relieved of all obligations and
covenants under this Indenture, the Securities and, in the case of American
Water Works, the Support Agreement.
SECTION 803. Assumption by American Water Works or Subsidiary.
------------------------------------------------
American Water Works or a Subsidiary may directly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (premium, if
any) and interest on all the Securities and any coupons appertaining thereto and
the performance of every covenant of this Indenture on the part of the Company
to be performed or observed. Upon any such assumption, American Water Works or
such Subsidiary shall succeed to and be substituted for and may exercise every
right and power of the Company under this Indenture with the same effect as if
-53-
American Water Works or such Subsidiary had been named as the Company herein and
the Company shall be released from its liability as obligor on the Securities;
provided that, in the case of such assumption by a Subsidiary, the Support
Agreement is modified so that references to the Company and its Debt therein are
changed to, or modified to include, references to such Subsidiary and its Debt
(including the Securities). No such assumption shall be permitted unless
American Water Works has delivered to the Trustee an Officers' Certificate of
American Water Works and an Opinion of Counsel for American Water Works, each
stating that such assumption and supplemental indenture comply with this
Article, that all conditions precedent herein provided for relating to such
transaction have been complied with and, in the event of assumption by a
Subsidiary, that American Water Works' obligations under this Indenture and the
Support Agreement (modified as aforesaid) remain in full force and effect.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company
and American Water Works, when authorized by Board Resolutions, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Corporation to the Company
or American Water Works and the assumption by any such successor of the
covenants of the Company or American Water Works, as the case may be,
herein and in the Securities and coupons; or
(2) to add to the covenants of the Company and American Water Works
for the benefit of the Holders of all or any series of Securities (and if
such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included solely
for the benefit of such series) or to surrender any right or power herein
conferred upon the Company or American Water Works; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal (or
premium, if any) on Registered Securities or of principal (or premium, if
any) or any interest on Bearer Securities, to permit Registered Securities
to be exchanged for Bearer Securities or to permit the issuance of
Securities in uncertificated form, provided any such action shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security
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Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series, to contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of any series as to
which the predecessor Trustee is not retiring shall continue to be vested
in the predecessor Trustee, and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to effect assumption by American Water Works or a Subsidiary
pursuant to Section 803; or
(11) to conform this Indenture to any amendments to the Trust
Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company,
American Water Works and the Trustee, the Company and American Water Works, when
authorized by Board Resolutions, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
modifying in any manner the rights of the Holders of Securities of such series
and any related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security or coupon affected thereby:
(1) change the Stated Maturity of the principal of, or of any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the method of calculating
the rate of interest thereon, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment in the United States where, or the coin
or currency in which, any Security or any
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premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1404 for quorum or voting;
or
(3) change any obligation of the Company to maintain an office or
agency in each Place of Payment, or any obligation of the Company to
maintain an office or agency outside the United States pursuant to Section
1002; or
(4) modify any of the provisions of this Section 902 or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder of a Security or coupon with respect to changes in
the references to "the Trustee" and concomitant changes in this Section 902
and Section 1006, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
The Company and American Water Works shall have the right to set a record
date for the solicitation of any consents under this Article Nine, which record
date shall be set in accordance with Section 104.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 315 of the Trust Indenture Act) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties, immunities or
liabilities under this Indenture or otherwise.
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SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities, any coupons appertaining thereto and this Indenture.
Any interest due on Bearer Securities on or before Maturity, in respect of
principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but, except as
otherwise provided below, unless such Place of Payment is located outside the
United States, not Bearer Securities) may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company initially hereby appoints the Trustee, its office or agency for each of
said purposes. If Securities of a series are issuable as Bearer Securities, the
Company will maintain, subject to any laws or regulations applicable thereto, an
office or agency in a Place of Payment for such series that is
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located outside the United States where Securities of such series and the
related coupons may be presented and surrendered for payment; provided, however,
that if the Securities of such series are listed on The Stock Exchange of the
United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or
any other stock exchange located outside the United States and such stock
exchange shall so require, the Company will maintain a Paying Agent in London or
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Securities of such series are listed on such
exchange. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency in
respect of any series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations and surrenders of Securities of that
series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment at
the place specified for the purpose pursuant to Section 301 or, if no such place
is specified, at the main office of the Trustee in London, and the Company
hereby appoints the Trustee as its agent to receive such respective
presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, payment
of principal of and any premium and interest in U.S. dollars (including
additional amounts payable in respect thereof) on any Bearer Security may be
made at the Corporate Trust Office of the Trustee [ __________________ ] if (but
only if) payment of the full amount of such principal, premium, interest or
additional amounts at all offices outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
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Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal of (and premium, if any) or interest on the Securities
of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Order of
the Company direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any sums deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Request of the Company, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in an Authorized Newspaper in each Place of Payment or mailed to
each such Holder, or both, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company.
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SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and its rights (charter and statutory) and franchises.
Subject to Article Eight, American Water Works will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 1005. Statement as to Default.
-----------------------
(a) Each of the Company and American Water Works will deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company ending
after the date hereof, a certificate, signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company or
American Water Works, as the case may be, stating whether or not to the best
knowledge of the signers thereof the Company or American Water Works, as the
case may be, is in default in the performance and observance of any of the
terms, provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and, if the Company or
American Water Works shall be in default, specifying all such defaults and the
nature and status thereof of which they may have knowledge.
(b) The Company or American Water Works, as applicable, will deliver to
the Trustee, within ten days after the occurrence thereof, written notice of any
event which after notice or lapse of time would become an Event of Default
pursuant to clause (4) of Section 501.
SECTION 1006. Waiver of Certain Covenants.
---------------------------
The Company and American Water Works may omit in any particular instance to
comply with any term, provision or condition set forth in Sections 1002 through
1005 and 1008 through 1010, if before the time for such compliance or upon such
time as such series is effected by a default, the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and American Water Works and the duties of the
Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
SECTION 1007. Support Agreement.
-----------------
Each of the Company and American Water Works covenants and agrees for the
benefit of each series of Securities that (1) it will perform its respective
obligations under the Support Agreement, and (2) it will not agree to any
amendment or termination of the Support Agreement
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as in effect on the date of this Indenture, except in accordance with the terms
of the Support Agreement as in effect on the date of this Indenture.
SECTION 1008. Maintenance of Properties.
-------------------------
Each of the Company and American Water Works will cause all properties used
or exclusively held for use in the conduct of their respective businesses, and
American Water Works will cause all properties used or held for use in the
business of its Subsidiaries, to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as may be necessary so that the businesses carried on
in connection therewith may be properly and advantageously conducted at all
times; provided, that nothing in this Section 1008 shall prevent the Company or
American Water Works from discontinuing the operation or maintenance of any of
such properties or disposing of them if such discontinuance or disposal is, in
the judgment of the Company or American Water Works, desirable in the conduct of
its business and not disadvantageous in any material respect to the Holder of
Securities.
SECTION 1009. Payment of Taxes and Other Claims.
---------------------------------
Each of the Company and American Water Works will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon it or upon
the income, profits or property of the Company or American Water Works, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, would by
law become a lien upon the property of the Company or American Water Works;
provided, that neither the Company nor American Water Works shall be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith.
SECTION 1010. Restrictions on Liens.
---------------------
(a) So long as any Securities remain outstanding, the Company will
not issue, assume or guarantee any indebtedness for money borrowed
(hereinafter in this Section 1010 referred to as "Debt"), secured by any
mortgage, security interest, pledge, lien or other encumbrance (hereinafter
in this Section 1010 called "mortgage" or "mortgages") upon any property of
the Company, without in any such case effectively securing, prior to or
concurrently with the issuance, assumption or guarantee of any such Debt,
the Securities (together with, if the Company shall so determine, any other
Debt of or guaranteed by the Company ranking equally with the Securities
and then existing or thereafter created) equally and ratably with (or prior
to) such Debt; provided, that the foregoing restrictions shall not apply to
nor prevent the creation or existence of:
(i) mortgages on any property, acquired, constructed or improved by
the Compamy after the date of this Indenture, and any improvements thereon,
accessions thereto or other property acquired or constructed for use in
connection therewith or related thereto, which are created or assumed prior
to or contemporaneously with, or within 180 days after, such acquisition or
completion of such construction or improvement, or within one year
thereafter pursuant to a firm commitment for financing arranged with a
lender or investor
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within such 180-day period, to secure or provide for the payment of all or
any part of the purchase price of such property or the cost of such
construction or improvement incurred after the date of this Indenture, or,
in addition to mortgages contemplated by clauses (ii) and (iii) below,
mortgages on any property existing at the time of acquisition thereof;
provided, that the mortgages shall not extend to any property theretofore
owned by the Company other than, in the case of any such construction or
improvement, (1) unimproved real property on which the property so
constructed or the improvement is located, (2) other property (or
improvement thereon) which is an improvement to or is acquired or
constructed for use in connection therewith or related thereto, (3) any
right and interest under any agreement or other documents relating to the
property being so constructed or improved or such other property and (4)
the stock of any Subsidiary created or maintained for the primary purpose
of owning the property so constructed or improved;
(ii) existing mortgages on any property of a Person which is merged
with or into or consolidated with the Company; provided, that mortgages
shall not extend to any property theretofore owned by the Company;
(iii) mortgages, security interests, pledges, liens or other
encumbrances to secure Debt of the Company to American Water Works;
(iv) mortgages, security interests, pledges, liens or other
encumbrances in favor of the United States of America, any State, any
foreign country or any department, agency or instrumentality or political
subdivision of any such jurisdiction, to secure partial, progress, advance
or other payments pursuant to any contract or statute or to secure any Debt
incurred for the purpose of financing all or any part of the purchase price
or the cost of constructing or improving the property subject to such
mortgages, security interests, pledges, liens or other encumbrances
including, without limitation, mortgages to secure Debt of the industrial
revenue bond type;
(v) mortgages to secure Debt of the Company maturing within 12
months from the creation thereof and incurred in the ordinary course of
business;
(vi) mortgages existing on the date of this Indenture; and
(vii) mortgages for the purposes of extending, renewing or replacing
in whole or in part Debt secured by any mortgage referred to in the
foregoing clauses (i) to (vi), inclusive, or this clause (vii); provided,
that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal
or replacement, and that such extension, renewal or replacement shall be
limited to all or a part of the property or Debt which secured the mortgage
so extended, renewed or replaced (plus improvements on such property).
Notwithstanding the foregoing, nothing herein shall be deemed (1) to prohibit
the Company from assuming or guaranteeing any Debt of American Water Works or
any Subsidiary of American Water Works (other than the Company), which Debt is
secured by assets of American Water Works or any Subsidiary of American Water
Works (other than the Company), or (2) to
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prohibit the Company (or a Subsidiary of the Company) from securing Debt with
accounts receivable in an accounts receivable financing.
(b) The provisions of subsection (a) of this Section 1010 shall not
apply to the issuance, assumption or guarantee by the Company of Debt
secured by a mortgage which would otherwise be subject to the foregoing
restrictions up to an aggregate amount which, together with all other Debt
of American Water Works and the Subsidiaries secured by mortgages (other
than mortgages permitted by subsection (a) of this Section 1010 which would
otherwise be subject to the foregoing restrictions), does not at the time
exceed 10% of Consolidated Net Tangible Assets.
(c) If at any time the Company shall issue, assume or guarantee any
Debt secured by any mortgage and if subsection (a) of this Section 1010
requires that the Securities be secured equally and ratably with such Debt,
the Company will promptly deliver to the Trustee an Officers' Certificate
stating that, and Opinion of Counsel to the effect that, the covenants of
the Company contained in subsection (a) of this Section 1010 have been
complied with.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
all of the Securities of any series, the Company shall, at least 60 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date. In case of any redemption at the election of the Company of less than all
the Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
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If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee from the Outstanding Securities of
such series (other than Securities of such series held by the Company or
American Water Works), not previously called for redemption, by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the Securities of a series, partial redemptions must be in
an amount not less than $1,000,000 principal amount of Securities.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section 106
to the Holders of Securities to be redeemed not less than 30 nor more than 60
days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities, together in the case
of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of
the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
-64-
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest, if any, on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, and the conditions, if
any, set forth in such notice having been satisfied, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only upon presentation and surrender of coupons for such
interest (at an office or agency located outside the United States except as
otherwise provided in Section 1002); and provided, further, that installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside of the United States except
as otherwise provided in Section 1002.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires with
respect to any Registered Security, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series, Stated Maturity and of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
Except as otherwise specified as contemplated by Section 301, if a Global
Security is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the Depositary in global form, without service
charge, a new Global Security or Securities of the same series, Stated Maturity
and of any authorized denomination as requested by the Depositary, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered.
ARTICLE TWELVE
Sinking Funds
SECTION 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of
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such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities have not
been previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Securities
for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and stating the basis for such credit and that such
Securities have not previously been so credited and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
Defeasance
SECTION 1301. Applicability of Article.
------------------------
If, pursuant to Section 301, provision is made for the defeasance of
Securities of a series, and if the Securities of such series are Registered
Securities and denominated and payable only in Dollars (except as provided
pursuant to Section 301) then the provisions of this Article shall be applicable
except as otherwise specified pursuant to Section 301 for Securities of such
series.
SECTION 1302. Defeasance Upon Deposit of Moneys or U.S. Government Obligations.
----------------------------------------------------------------
At the Company's option, either (a) the Company and American Water Works
shall be deemed to have been Discharged (as defined below) from its obligations
with respect to Securities of any series ("legal defeasance option") or (b) the
Company and American Water Works shall cease to be under any obligation to
comply with any term, provision or condition set forth in Article Eight and
Sections 1004, 1005 and 1007 with respect to Securities of any series (and, if
so specified pursuant to Section 301, any other obligation of the Company or
restrictive covenant added for the benefit of such series pursuant to Section
401) ("covenant defeasance option") at any time after the applicable conditions
set forth below have been satisfied:
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(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in an amount, or (ii) U.S. Government
Obligations (as defined below) 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) or (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, without consideration of any reinvestment of
money, principal or interest, to pay and discharge each installment of
principal (including any mandatory sinking fund payments) of and premium,
if any, and interest on, the Outstanding Securities of such series on the
dates such installments of interest, principal, and premium are due;
(2) this Indenture may be Discharged with respect to Securities of a
series which have a floating or variable rate of interest that cannot
exceed a specified or determinable maximum rate of interest by deposit, in
accordance with clause (1) of this Section 1302, with respect to the
interest payments required to be made on the outstanding Securities of such
series, of money and/or U.S. Government Obligations sufficient (determined
in accordance with clause (1) of this Section 1302) to pay and discharge
each installment of interest on the outstanding Securities of such series,
at the applicable specified or determined maximum rate of interest thereon
on the dates such installments of interest are due and the satisfaction of
all other requirements of this Section 1302.
(3) such deposit shall not cause the Trustee with respect to the
Securities of that series to have a conflicting interest as defined in the
Trust Indenture Act with respect to the Securities of any series;
(4) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(5) if the Securities of such series are then listed on any national
securities exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel or a letter or other document from such exchange to the
effect that the Company's exercise of its option under this Section would
not cause such Securities to be delisted;
(6) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with
respect to the Securities of such series shall have occurred and be
continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under Section 501(5) or Section
501(6) or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under Section 501(5) or Section 501(6)
shall have occurred and be continuing on the 91/st/ day after such date;
(7) the Company shall have delivered to the Trustee an Opinion of
Counsel or a ruling from the Internal Revenue Service to the effect that
the Holders of the Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as of a result of such
deposit, defeasance or Discharge; and
(8) the Company has delivered to the Trustee an Officers'
Certificate of the Company and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture with respect to such Securities have been
complied with.
Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 501(5) or Section 501(6) or event
which, with the giving of notice or lapse of time, or both, would become an
Event of Default under Section 501(5) or Section 501(6) shall have occurred and
be continuing on the 91/st/ day after the date of such deposit, the obligations
of the Company referred to under the definition of covenant defeasance option
with respect to such Securities shall be reinstated.
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"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities of such series and to have satisfied all the obligations under this
Indenture relating to the Securities of such series (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except (A) the rights of Holders of Securities of such series to receive,
from the trust fund described in clause (1) above, payment of the principal of
(and premium, if any) and interest on such Securities when such payments are
due, (B) the Company's obligations with respect to the Securities of such series
under Sections 304, 305, 306, 1002 and 1303 and (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case under clause (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.
SECTION 1303. Deposited Moneys and U.S. Government Obligations to Be Held in
--------------------------------------------------------------
Trust.
-----
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 1302 in respect of Securities of a series shall be held in
trust and applied by it, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the holders of such Securities, of all sum due and to become due
thereon for principal (and premium, if any) and interest, if any, but such money
need not be segregated from other funds except to the extent required by law.
SECTION 1304. Repayment to Company.
--------------------
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any moneys or U.S. Government Obligations held by
them at any time which, in the opinion of a nationally recognized firm of
independent accountants expressed in a written certification delivered to the
Trustee, are in excess of the amount that is required for the payment of the
principal of (and premium, if any) and interest on the Securities of any series
for which money or U.S. Government Obligations have been deposited pursuant to
Section 1302.
The provisions of the last paragraph of Section 1003 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Debt Securities for
which money or U.S. Government Obligations have been deposited pursuant to
Section 1302.
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ARTICLE FOURTEEN
Meetings of Holders of Securities
SECTION 1401. Purposes for Which Meetings May be Called.
-----------------------------------------
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1402. Call Notice and Place of Meeting.
--------------------------------
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1401, to be held at such time
and at such place in the [ ], or, with the approval of the Company, at
any other place. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1401, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
[___________________], or in such other places as shall be determined or
approved by the Company for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company, American Water
Works and each of their respective counsel.
SECTION 1404. Quorum; Action.
--------------
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The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of a series shall constitute a quorum for a meeting
of Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1405(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1402(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in aggregate principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote
of the Holders of such specified percentage in principal amount of the
Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104.
Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
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(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1402(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities of such
series held or represented by him or her; 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, except as a Holder of a
Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1402 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series 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, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1407. Action Without Meeting.
----------------------
In lieu of a vote of Holders at a meeting as hereinbefore contemplated in
this Article, any request, demand, authorization, direction, notice, consent,
waiver or other action may be made, given or taken by Holders by written
instruments as provided in Section 104.
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ARTICLE FIFTEEN
Immunity of Incorporators, Stockholders, Officers,
Directors and Employees
SECTION 1501. Liability Solely Corporate.
--------------------------
No recourse shall be had for the payment of the principal of or premium, if
any, or interest, if any, on any Securities, or any part thereof, or for any
claim based thereon or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or agreement under this
Indenture, against any incorporator, stockholder, officer, director or employee,
as such, past, present or future of the Company or American Water Works or of
any predecessor or successor Corporation (either directly or through the
Company, American Water Works or a predecessor or successor Corporation of
either of them), whether by virtue of any constitutional provision, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Indenture and all the Securities
are solely corporate obligations, and that no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, stockholder, officer,
director or employee, past, present or future, of the Company or American Water
Works or of any predecessor or successor Corporation of either of them, either
directly or indirectly through the Company, American Water Works or any
predecessor or successor Corporation of either of them, because of the
indebtedness hereby authorized or under or by reason of any of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or to be implied herefrom or therefrom, and that any such personal liability is
hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution of this Indenture and the issuance of the
Securities; provided, however, that nothing in this Section 1501 shall be
interpreted to relieve American Water Works of its corporate obligations set
forth in this Indenture by virtue of it being a stockholder of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
American Water Capital Corp.
[SEAL] By: _______________________________
Name:
Attest: Title:
__________________________
American Water Works Company, Inc.
[SEAL] By: _______________________________
Name:
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Attest: Title:
_____________________________
First Union National Bank, as Trustee
[SEAL]
By: _________________________________
Attest: Name:
Title:
By: _________________________
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