POTOMAC ELECTRIC POWER COMPANY
AND
THE BANK OF NEW YORK,
Trustee
___________________
SENIOR DEBT SECURITIES
___________________
INDENTURE
Dated as of ____________ __, 1998
___________________
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
--------------- ---------
Section 310 (a)(1) ........................... 609
(a)(2) ........................... 609
(a)(3) ........................... Not Applicable
(a)(4) ........................... Not Applicable
(a)(5) ........................... 609
(b)............................... 608, 610
Section 311 (a)............................... 613
(b)............................... 613
Section 312 (a)............................... 701, 702(a)
(b)............................... 702(b)
(c)............................... 702(c)
Section 313 (a)............................... 703(a)
(b)............................... 703(a)
(c)............................... 703(a)
(d)............................... 703(b)
Section 314 (a)............................... 704
(a)(4) ........................... 101, 1007
(b)(1)............................ 303(c)
(b)(2)............................ 1008
(c)(1) ........................... 102
(c)(2) ........................... 102
(c)(3) ........................... Not Applicable
(d)(1)............................ 1409
(d)(2)............................ 1403
(d)(3) ........................... Not Applicable
(e)............................... 102
Section 315 (a)............................... 601(a)
(b)............................... 602
(c)............................... 601(b)
(d)............................... 601
(e)............................... 514
Section 316 (a)............................... 101
(a)(1)(A)......................... 502, 512
(a)(1)(B)......................... 513
(a)(2)............................ Not Applicable
(b)............................... 508
(c)............................... 104(c)
Section 317 (a)(1)............................ 503(b)
(a)(2)............................ 504
(b)............................... 1004
Section 318 (a)............................... 108
______________
NOTE: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
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PARTIES ..................................................
RECITALS OF THE COMPANY ..................................
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions ...............................
Section 102. Compliance Certificates and Opinions ......
Section 103. Form of Documents Delivered to Trustee ....
Section 104. Acts of Holders; Record Dates .............
Section 105. Notices, Etc., to Trustee and Company .....
Section 106. Notice to Holders; Waiver .................
Section 107. Language of Notices .......................
Section 108. Conflict with Trust Indenture Act .........
Section 109. Effect of Headings and Table of Contents...
Section 110. Successors and Assigns ....................
Section 111. Separability Clause .......................
Section 112. Benefits of Indenture .....................
Section 113. Governing Law .............................
Section 114. Legal Holidays ............................
ARTICLE TWO
Security Forms
Section 201. Forms Generally ...........................
Section 202. Form of Legend for Global Security ........
Section 203. Form of Trustee's Certificate of
Authentication ..........................
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.......
Section 302. Denominations..............................
Section 303. Execution, Authentication, Delivery and
Dating.....................................
Section 304. Temporary Securities.......................
Section 305. Registration, Registration of Transfer and
Exchange...................................
Section 306. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost and Stolen
Securities.................................
Section 307. Payment of Interest; Interest Rights
Preserved..................................
Section 308. Persons Deemed Owners......................
Section 309. Cancellation...............................
Section 310. Computation of Interest....................
Section 311. CUSIP Numbers..............................
______________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
Page
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ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture....
Section 402. Application of Trust Money.................
ARTICLE FIVE
Remedies
Section 501. Events of Default..........................
Section 502. Acceleration of Maturity; Rescission and
Annulment..................................
Section 503. Collection of Indebtedness
Section 504. Suits for Enforcement by Trustee ..........
Section 505. Trustee May File Proofs of Claim...........
Section 506. Trustee May Enforce Claims Without
Possession of Securities...................
Section 507. Application of Money Collected.............
Section 508. Limitation on Suits........................
Section 509. Unconditional Right of Holders to Receive
Principal, Premium and Interest............
Section 510. Restoration of Rights and Remedies.........
Section 511. Rights and Remedies Cumulative.............
Section 512. Delay or Omission Not Waiver...............
Section 513. Control by Holders.........................
Section 514. Waiver of Past Defaults....................
Section 515. Undertaking for Costs......................
Section 516. Waiver of Stay or Extension Laws...........
Section 517. Notice of Defaults.........................
Section 518. Defaults under the Mortgage ...............
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities........
Section 602. Certain Rights of Trustee..................
Section 603. Not Responsible for Recitals or Issuance of
Securities.................................
Section 604. May Hold Securities........................
Section 605. Money Held in Trust........................
Section 606. Compensation and Reimbursement.............
Section 607. Disqualification; Conflicting Interests....
Section 608. Corporate Trustee Required; Eligibility....
Section 609. Resignation and Removal; Appointment of
Successor..................................
Section 610. Acceptance of Appointment by Successor.....
______________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
- ii -
Page
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Section 611. Merger, Conversion, Consolidation or
Succession to Business.....................
Section 612. Preferential Collection of Claims Against
Company....................................
Section 613. Appointment of Authenticating Agent........
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and
Addresses of Holders.......................
Section 702. Preservation of Information; Communications to
Holders....................................
Section 703. Reports by Trustee.........................
Section 704. Reports by Company.........................
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on
Certain Terms..............................
Section 802. Successor Corporation to be Substituted....
Section 803. Opinion of Counsel to Be Given Trustee.....
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Holders....................................
Section 902. Supplemental Indentures with Consent of
Holders....................................
Section 903. Execution of Supplemental Indentures.......
Section 904. Effect of Supplemental Indentures..........
Section 905. Conformity with Trust Indenture Act........
Section 906. Reference in Securities to Supplemental
Indentures.................................
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and
Interest.................................
Section 1002. Maintenance of Office or Agency............
Section 1003. Vacancy in the Office of Trustee...........
Section 1004. Money for Securities Payments to Be
Held in Trust............................
_______________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
- iii -
Page
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Section 1005. Officers' Certificate Concerning Defaults;
Notices of Default under Mortgage........
Section 1006. Liens......................................
Section 1007. Limitation on Sale and Leaseback
Transactions.............................
Section 1008. Perfection of Security Interests ..........
Section 1009. Calculation of Original Issue Discount.....
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article...................
Section 1102. Election to Redeem; Notice to Trustee......
Section 1103. Selection by Trustee of Securities to Be
Redeemed...................................
Section 1104. Notice of Redemption.......................
Section 1105. Deposit of Redemption Price................
Section 1106. Securities Payable on Redemption Date......
Section 1107. Securities Redeemed in Part................
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article...................
Section 1202. Satisfaction of Sinking Fund Payments with
Securities.................................
Section 1203. Redemption of Securities for Sinking Fund..
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's
Option to Effect Defeasance or
Covenant Defeasance......................
Section 1302. Defeasance and Discharge...................
Section 1303. Covenant Defeasance........................
Section 1304. Conditions to Defeasance or Covenant
Defeasance...............................
Section 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions................
Section 1306. Reinstatement..............................
ARTICLE FOURTEEN
Security
Section 1401. Applicability of Article...................
_______________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
- iv -
Page
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Section 1402. Delivery of First Mortgage Bonds to
Trustee..................................
Section 1403. Authentication of Securities...............
Section 1404. First Mortgage Bonds as Security for
Securities...............................
Section 1405. No Other Security; No Modification of
Mortgage.................................
Section 1406. Payments on First Mortgage Bonds...........
Section 1407. Certain Responsibilities of Trustee with
Respect to First Mortgage Bonds..........
Section 1408. Permitted Transfers of First Mortgage
Bonds by the Trustee.....................
Section 1409. Release of First Mortgage Bonds............
Section 1410. Further Assurances.........................
ARTICLE FIFTEEN
Immunity of Incorporators, Stockholders,
Officers and Directors
Section 1501. Indenture, Securities and First Mortgage
Bonds Solely Corporate Obligations .......
TESTIMONIUM...............................................
SIGNATURES AND SEALS......................................
ACKNOWLEDGMENTS...........................................
______________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
- v -
This INDENTURE, dated as of __________ __, 1998, is
entered into between Potomac Electric Power Company, a corporation
duly organized and existing under the laws of the District of
Columbia and the Commonwealth of Virginia (herein called the
"Company"), having its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, D.C. 20068, and The Bank of New York, a
New York banking corporation, as trustee (herein called the
"Trustee"), having its Corporate Trust Office (as hereinafter
defined) at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution
and delivery of this Indenture to provide for the issuance from
time to time of its senior debentures, notes or other evidences of
indebtedness (herein called the "Securities"), to be issued in one
or more series as in this Indenture provided;
WHEREAS, the Securities to be issued hereunder may
include one or more series of Securities that are secured by First
Mortgage Bonds (as hereinafter defined) issued under the Mortgage
(as hereinafter defined), but with such security to remain in
effect only for so long as any First Mortgage Bonds issued under
the Mortgage (other than the First Mortgage Bonds that secure
Securities issued under this Indenture) remain outstanding, at
which time each series of Securities issued under this Indenture
that is secured by First Mortgage Bond would cease to be so
secured; and
WHEREAS, all things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which
Securities are to be authenticated, issued and delivered, and for
and in consideration of the premises and the purchase of the
Securities by the Holders thereof, the Company and the Trustee
covenant and agree, for the equal and proportionate benefit of all
Holders of the Securities and of any 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:
(i) the terms defined in this Article One
have the meanings assigned to them in this Article and include
the plural as well as the singular;
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(ii) all other terms used herein that are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;
(iii) all accounting terms not otherwise
defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles, and,
except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted at the date of
such computation; and
(iv) the words "herein", "hereof" and
"hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act", when used with respect to any Holder, has the
---
meaning specified in Section 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 term "controlling" and "controlled" have
meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
--------------------
Trustee pursuant to Section 614 to act on behalf of the Trustee to
authenticate Securities of one or more series.
"Board of Directors" means either the Board of Directors
------------------
of the Company or any duly authorized committee of the Board or
Directors to which the Board of Directors shall have delegated its
authority to act hereunder.
"Board Resolution" means a copy of a resolution that is
----------------
certified by the Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and that
is delivered to the Trustee.
"Business Day", when used with respect to any Place of
------------
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law or executive order to
close.
"Capitalization" shall mean the total of all the
--------------
following items appearing on, or included in, the consolidated
balance sheet of the Company: (i) liabilities for Indebtedness
maturing more than twelve months from the date of determination and
(ii) common stock, preferred stock, Hybrid Preferred Securities,
premium on capital stock, capital surplus, capital in excess of par
value, and retained earnings (however the foregoing may be
designated),
- 3 -
less, to the extent not otherwise deducted, the cost of shares of
capital stock of the Company held in its treasury.
"Commission" means the Securities and Exchange
----------
Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this
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 Person named as the "Company" in the
-------
first paragraph of this instrument until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.
"Company Order" or "Company Request" means a written
------------- ---------------
order or request delivered to the Trustee that is signed in the
name of the Company (i) by the Chairman of the Board, the
President, a Vice President, the Chief Financial Officer or the
Controller and (ii) by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary.
"Company Sale" has the meaning specified in Section 801.
------------
"Corporate Trust Office" means the office of the Trustee
----------------------
at which at any particular time its corporate trust business shall
be principally administered, which initially shall be the address
set forth in the first paragraph of this Indenture.
"Corporation" (whether or not capitalized) means a
-----------
corporation, association, company, joint-stock company or business
trust.
"Defaulted Interest" has the meaning specified in Section
------------------
307(b).
"Defeasible Covenant" has the meaning specified in
-------------------
Section 1303.
"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, the Person designated as Depositary for
such series by the Company pursuant to Section 301, which Person
shall be a "clearing agency" registered under the Exchange Act; 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.
"Event of Default" has the meaning specified in Section
----------------
501.
"Exchange Act" means the Securities Exchange Act of 1934,
------------
as it may be amended, and any successor act thereto.
"First Mortgage Bonds" shall mean mortgage bonds issued
--------------------
and outstanding under the Mortgage.
"Funded Debt" of any Person means all Indebtedness of
-----------
such Person that will mature, pursuant to a mandatory sinking fund
or prepayment provision
- 4 -
or otherwise, and all installments of Indebtedness that will fall
due, more than one year from the date of determination. In
calculating the maturity of any Indebtedness, there shall be
included the term of any unexercised right of the debtor to renew
or extend such Indebtedness existing at the time of determination.
"GAAP" means United States generally accepted accounting
----
principles applied on a consistent basis.
"Global Security" means a Security bearing the legend
---------------
prescribed in Section 202 (or such legend as may be specified as
contemplated by Section 301 for such Securities) evidencing all or
part of a series of Securities, authenticated and delivered to the
Depositary for such series or to its nominee, and registered in the
name of such Depositary or nominee.
"Holder" means a Person in whose name a Security is
------
registered in the Security Register.
"Hybrid Preferred Securities" shall mean any preferred
---------------------------
securities issued by a Hybrid Preferred Securities Subsidiary,
where such preferred securities have the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary
uses substantially all of the proceeds from the issuance of such
preferred securities to purchase Junior Subordinated Indebtedness
issued by the Company;
(ii) such preferred securities contain terms
providing for the deferral of interest payments corresponding to
provisions, if any, providing for the deferral of interest payments
on the Junior Subordinated Indebtedness; and
(iii) the Company makes periodic interest payments
on the Junior Subordinated Indebtedness, which interest payments
are in turn used by the Hybrid Preferred Securities Subsidiary to
make corresponding payments to the holders of the preferred
securities.
"Hybrid Preferred Securities Subsidiary" shall mean any
--------------------------------------
business trust (or similar entity) (i) all of the common equity
interest of which is owned (either directly or indirectly through
one or more wholly owned Subsidiaries of the Company) at all times
by the Company, (ii) that has been formed for the purpose of
issuing Hybrid Preferred Securities, and (iii) substantially all of
the assets of which consist at all times of Junior Subordinated
Indebtedness issued by the Company and payments made from time to
time in respect of such Junior Subordinated Indebtedness.
"Indebtedness" of any Person shall mean, as at any date
------------
of determination, all indebtedness (including capitalized lease
obligations) of such Person and its consolidated subsidiaries at
such date that would be required to be included as a liability on
a consolidated balance sheet (excluding the footnotes thereto) of
such Person prepared in accordance with GAAP.
- 5 -
"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, including, for all purposes of this
instrument, and any such supplemental indenture, the provisions of
the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
The term "Indenture" also shall include the terms of particular
series of Securities established as contemplated by Section 301.
"Independent Expert" shall mean an accounting firm, an
------------------
investment banking firm, an appraiser or valuation firm or other
expert selected by the Company that is not generally engaged in a
major part in the service of the Company.
"Interest" (whether or not capitalized), when used with
--------
respect to an Original Issue Discount Security that 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.
"Issuance Fair Value Certificate" means a certificate or
-------------------------------
opinion delivered to the Trustee in accordance with Section 1403,
which includes: (i) a statement that the Person executing the
Certificate is familiar with the provisions of the First Mortgage
Bonds that are being pledged as security for a series of Securities
and with the provisions of this Indenture, (ii) a statement of the
principal amount of the First Mortgage Bonds to be pledged, the
stated interest rate of such First Mortgage Bonds and the stated
maturity date of such First Mortgage Bonds, (iii) a statement of
the fair value to the Company of such First Mortgage Bonds, (iv) a
statement identifying the Securities that are to be secured by such
First Mortgage Bonds, and (v) a statement that, based solely upon
the provisions of the First Mortgage Bonds and the Securities, the
fair value of the Securities to be secured by such First Mortgage
Bonds does not exceed the fair value to the Company of such First
Mortgage Bonds. For this purpose, the "fair value to the Company"
of First Mortgage Bonds and the "fair value" of Securities that are
secured by First Mortgage Bonds shall mean the principal amount
thereof. The Issuance Fair Value Certificate shall be made by an
Independent Expert, unless the Trust Indenture Act permits the
Certificate to be made by an engineer, appraiser or other expert
who is an officer or employee of the Company and who is duly
authorized to make such Certificate by the Company.
"Junior Subordinated Indebtedness" shall mean any
--------------------------------
unsecured Indebtedness of the Company (i) issued in consideration
of the proceeds of the sale of Hybrid Preferred Securities and (ii)
subordinated to the rights of the Holders hereunder.
"Lien" means, with respect to any asset of any Person,
----
(i) any mortgage, deed of trust, lien, pledge, encumbrance, charge
or security interest in or on such asset, (ii) the interest of a
vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of
- 6 -
the foregoing) relating to such asset, and (iii) in the case of
securities that constitute assets of such Person, any purchase
option, call or similar right of a third party with respect to such
securities.
"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 as
authorized by or pursuant to this Indenture, upon call for
redemption or otherwise.
"Mortgage" means the Mortgage and Deed of Trust, dated as
--------
of July 1, 1936, from the Company to The Bank of New York, as
successor trustee to The ▇▇▇▇▇ National Bank of Washington, D.C.,
as it heretofore has been and hereafter is supplemented and
amended.
"Mortgage Default" has the meaning specified in Section
----------------
501(7).
"Mortgage Trustee" means the Person serving as trustee at
----------------
the time under the Mortgage.
"Officers' Certificate" means a certificate delivered to
---------------------
the Trustee that is signed (i) by the Chairman of the Board, the
President, a Vice President, the Chief Financial Officer or the
Controller of the Company and (ii) by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company.
One of the officers signing an Officers' Certificate given pursuant
to Section 1005 shall be the principal executive officer, the
principal financial officer or the principal accounting officer of
the Company.
"Opinion of Counsel" means a written opinion of counsel,
------------------
who may (expect as otherwise expressly provided in this Indenture)
be an employee of or be counsel for the Company.
"Original Issue Discount Security" means any Security
--------------------------------
that 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 cancelled 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; provided that, if such
Securities are to be redeemed, notice of such redemption has
been duly
- 7 -
given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities as to which defeasance has
been effected pursuant to Section 1302; and
(iv) 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, (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable
as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount
of a Security denominated in one or more foreign currencies or
currency units shall be the U.S. dollar equivalent, determined in
the manner provided as contemplated by Section 301 on the date of
original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such security of the
amount determined as provided in (i) above) of such Security, and
(iii) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so
disregarded. Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of
the Trustee (i) the pledgee's right so to act with respect to such
Securities and (ii) that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company
------------
to pay the principal of or any premium or interest on any
Securities on behalf of the Company. Unless otherwise provided in
one or more indentures supplemental hereto, in a Board Resolution
or in an Officers' Certificate pursuant to a Board Resolution, the
Trustee shall be the Paying Agent with respect to the Securities of
each series.
"Person" means a legal person, including any individual,
------
corporation, estate, partnership, limited liability company, joint
venture, trust, unincorporated organization, or government or any
agency or political subdivision thereof or any other entity of
whatever nature.
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"Place of Payment", when used with respect to the
----------------
Securities of any series, means the place or places where the
principal of and any premium or interest on the Securities of that
series are payable 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.
"Principal Property" means all electric generation plants
------------------
and all electric transmission and distribution facilities (but
excluding all equipment and material not installed as part of the
fixed property) of the Company that is located within the United
States of America, except any such plant or facility that the Board
of Directors by resolution determines is not of material importance
to the total business conducted by the Company and its Subsidiaries
as an entirety.
"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 the Security is
to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any
-------------------
Interest Payment Date on the Securities of any series means the
date specified for that purpose as contemplated by Section 301.
"Release Date" means the date as of which all First
------------
Mortgage Bonds, other than First Mortgage Bonds held by the Trustee
pursuant to Article Fourteen, have been retired through payment or
redemption (including those First Mortgage Bonds "deemed to have
been paid" within the meaning of that term as used in Article XVI
of the Mortgage) at, before or after the maturity thereof.
"Release Fair Value Certificate" means a certificate or
------------------------------
opinion delivered to the Trustee in accordance with Section 1409,
which includes: (i) a statement that the Person executing the
Certificate is familiar with the provisions of the First Mortgage
Bonds that are being released from the lien of this Indenture and
with the provisions of this Indenture, (ii) a statement of the
principal amount of the First Mortgage Bonds to be released, the
stated interest rate of such First Mortgage Bonds and the stated
maturity date of such First Mortgage Bonds, (iii) a statement of
the fair value of such First Mortgage Bonds, (iv) a statement
identifying the Securities, the payment of the interest on and
principal of which has been secured by such First Mortgage Bonds,
and (v) a statement that, in the opinion of the Person executing
the Certificate, such release will not, in contravention of the
provisions of this
- 9 -
Indenture, impair the lien of the Indenture on the First Mortgage
Bonds not being released. For this purpose, the "fair value" of
First Mortgage Bonds shall mean the principal amount thereof. The
Release Fair Value Certificate shall be made by an Independent
Expert, unless the Trust Indenture Act permits the Certificate to
be made by an engineer, appraiser or other expert who is an officer
or employee of the Company and who is duly authorized to make such
Certificate by the Company.
"Responsible Officer", when used with respect to the
-------------------
Trustee, means any officer in the Corporate Trust Office of the
Trustee 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.
"Sale and Lease-Back Transaction" shall mean any
-------------------------------
arrangement with any Person providing for the leasing to the
Company of any Principal Property, which Principal Property has
been, or prior to the leasing thereof to the Company is, sold by
the Company to such Person; provided, however, Sale and Lease-back
Transaction shall not include any arrangement first entered into
prior to the date of this Indenture.
"Securities" has the meaning stated in the first recital
----------
of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the
----------------- ------------------
respective meanings specified in Section 305. Unless otherwise
provided in one or more indentures supplemental hereto, in a Board
Resolution or in an Officers' Certificate pursuant to a Board
Resolution, the Trustee shall be the Security Registrar and shall
maintain the Security Register with respect to the Securities of
each series of Securities.
"Special Record Date" for the payment of any Defaulted
-------------------
Interest means a date fixed by the Trustee pursuant to Section
307(b).
"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 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 (other than an individual or
----------
a government or any agency or political subdivision thereof) more
than 50% of the outstanding voting interest of which is owned,
directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.
"Successor Company" has the meaning specified in Section
-----------------
801.
"Trustee" means the Person named as the "Trustee" in the
-------
first paragraph of this Indenture until a successor Trustee shall
have become such
- 10 -
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.
"Trust Indenture Act" means the Trust Indenture Act of
-------------------
1939 as in force at the date as of which this Indenture was
executed; provided, however, that in the event the Trust Indenture
Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.
"U.S. Government Obligations" means securities that are
---------------------------
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the
account of the holder of such 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 principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
"Vice President", when used with respect to the Company
--------------
or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title
"vice president".
Section 102. Compliance Certificates and Opinions.
------------------------------------
(a) Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in
the form of an Officers' Certificate, if to be given by an officer
of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirements set forth in this
Indenture.
(b) Every certificate (other than the Officers'
Certificate provided pursuant to Section 1005) or opinion with
respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
- 11 -
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such 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.
--------------------------------------
(a) 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.
(b) Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
(c) 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 by this Indenture
to be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by
such Holders in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are received
by the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the
- 12 -
Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject
to Section 601) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section 104.
Without limiting the generality of the foregoing, 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 Act provided or permitted in this
Indenture to be made, given or taken by Holders, and a Depositary
that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global
Security.
(b) The fact and date of the execution by any Person of
any instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
execution of any instrument or writing, or the authority of the
Person executing the same, also may be proved in any other manner
which the Trustee deems sufficient.
(c) 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 Act, 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 (or, if later, the date of the most
recent list of Holders required to be provided pursuant to Section
701) prior to such first solicitation or vote, as the case may be.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date,
but only the Holders of record at the close of business on such
record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of
Outstanding Securities have authorized, or agreed or consented to,
such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of such record date.
(d) The ownership of Securities, including the dates of
holding thereof, shall be proved by the Security Register.
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the Holder
of every Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the
- 13 -
Trustee or the Company in reliance thereon, whether or not notation
of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any
particular Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with
regard to all or any different part of such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice,
consent, waiver or Act of the Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to,
or filed with:
(1) the Trustee by any Holder or by the
Company shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at
the address of its principal office specified in the first
paragraph of this instrument, marked "Attention: Treasurer",
or at any other address previously furnished in writing to the
Trustee by the Company.
Section 106. Notice to Holders; Waiver.
-------------------------
(a) Where this Indenture provides for any notice to
Holders, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder entitled to receive such notice, at
his address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly
given or provided, whether or not such notice is received by the
Holder.
(b) In case, by reason of the suspension of regular mail
service or by reason of any other cause, it shall be impracticable
to give notice by mail, then such notification as shall be made
with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
(c) 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
- 14 -
such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
Section 107. Language of Notices.
-------------------
Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this
Indenture shall be in the English language.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act that is required under
the Trust Indenture Act to be a part of and govern this Indenture,
the provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the
provision of the Trust Indenture Act shall be deemed to apply to
this Indenture as so modified or to be excluded.
Section 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of
Contents are for convenience of reference only and shall not affect
the construction of this Indenture.
Section 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether or not so
expressed.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express
or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New York,
without regard to the conflicts of laws principles thereof.
- 15 -
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 (other than a provision of
the Securities of any series which specifically states that such
provision shall apply in lieu of this Section)) payment of the
principal, premium or interest need not be made at such Place of
Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date,
or at the Stated Maturity, and no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date
or Stated Maturity.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
---------------
(a) The Securities of each series shall be in
substantially the form set forth in Attachment A to this Indenture,
or in such other form as shall be established by one or more
indentures supplemental hereto, by a Board Resolution or by an
Officers' Certificate pursuant to a Board Resolution, 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, as evidenced by their execution of the Securities. If
the form of Securities of any series is established by action taken
pursuant to a Board Resolution or an Officers' Certificate pursuant
to a Board Resolution, the Board Resolution or Officers'
Certificate (accompanied by the Board Resolution) shall be
delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and
delivery of such Securities.
(b) The definitive Securities 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.
Section 202. Form of Legend for Global Security.
----------------------------------
Unless otherwise specified as contemplated by Section 301
for the Securities evidenced thereby, any Global Security
authenticated and delivered hereunder shall bear a legend in
substantially the following form:
"This Security is a Global Security within the meaning of
the Indenture hereinafter referred to and is registered in the
name of a Depositary or a nominee thereof. This Security may
not be transferred to, or registered or exchanged for
Securities registered in the name of,
- 16 -
any Person other than the Depositary or a nominee thereof and
no such transfer may be registered, except in the limited
circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of,
or in exchange for or in lieu of, this Security shall be a
Global Security that is subject to the foregoing, except in
such limited circumstances."
Section 203. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK
As Trustee
By: _________________________
Authorized Signatory
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
(a) The aggregate principal amount of Securities that
may be authenticated and delivered under this Indenture is
unlimited.
(b) Securities may be issued in one or more series.
Prior to the issuance of Securities of any series, there shall be
established, by an indenture supplemental hereto, by a Board
Resolution or by an Officer's Certificate pursuant to a Board
Resolution, with respect to such series:
(1) the title of the Securities of the series
(which shall distinguish the Securities of the series from
Securities of any other series);
(2) any limit upon the aggregate principal amount
of the Securities of the series that 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 Section 304, 305, 306, 906 or 1107, and
except for any Securities which, pursuant to Section 303(h),
are deemed never to have been authenticated and delivered
hereunder);
- 17 -
(3) the Person to whom any interest on a Security
of the series shall be payable, if other than 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;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of
the series shall bear interest, if any, the date or dates from
which such interest shall accrue, the Interest Payment Dates
on which any such interest shall be payable and the Regular
Record Date for any interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and
any premium or interest on Securities of the series shall be
payable;
(7) the period or periods within which, the price
or prices at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part,
at the option of the Company;
(8) 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;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which
Securities of the series shall be issuable;
(10) the currency, currencies or currency units in
which payment of the principal of and any premium or interest
on any Securities of the series shall be payable, if other
than the currency of the United States of America, and the
manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition
of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or
any premium or interest on any Securities of the series may be
determined by reference to an index or formula, the manner in
which such amounts shall be determined;
(12) if the principal of or any premium or interest
on any Securities of the series is to be payable, at the
election of the Company or a Holder thereof, in one or more
currencies or currency units other than that or those in which
the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal
of and any premium or interest on Securities of such series as
to which such election is made shall be payable, and the
- 18 -
periods within which and the terms and conditions upon which
such election is to be made;
(13) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series
that shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(14) the application, if any, of either or both of
Section 1302 and Section 1303 to the Securities of the series;
(15) whether the Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities, and any
circumstances, other than those set forth in Section 305(h),
in which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name
of, a Person other than the Depositary for such Global
Security or a nominee thereof and in which any such transfer
may be registered;
(16) if other than as specified in Section 501, the
events of default applicable with respect to the Securities of
the series;
(17) if other than as specified in Section 502, the
events of default the occurrence of which would permit the
declaration of the acceleration of maturity pursuant to
Section 502;
(18) any other covenant or warranty included for the
benefit of Securities of the series in addition to (and not
inconsistent with) those included in this Indenture for the
benefit of Securities of all series, or any other covenant or
warranty included for the benefit of Securities of the series
in lieu of any covenant or warranty included in this Indenture
for the benefit of Securities of all series, or any provision
that any covenant or warranty included in this Indenture for
the benefit of Securities of all series shall not be for the
benefit of Securities of such series, or any combination of
such covenants, warranties or provisions;
(19) prior to the Release Date, whether the
Securities shall be secured by First Mortgage Bonds as
provided in Article Fourteen and, if so, the designation of
the related series of First Mortgage Bonds being delivered to
the Trustee in connection with the issuance of the securities;
and
(20) any other term of the series (which terms shall
not be inconsistent with the provisions of this Indenture,
except as permitted by Section 901(7)).
(c) All Securities of any one series shall be
substantially identical, except as to denomination and except as
may otherwise be provided in or pursuant to the indenture
supplemental hereto, the Board Resolution or
- 19 -
the Officers' Certificate pursuant to a Board Resolution with
respect to such series.
(d) If any of the terms of the Securities of any series
are established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
Section 302. Denominations.
-------------
The Securities of each series shall be issuable in
registered form without coupons in such denominations as shall be
specified as contemplated by Section 301. In the absence of any
such provisions with respect to the Securities of any series, the
Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
(a) The Securities shall be executed on behalf of the
Company by its Chairman of the Board, President or a Vice
President, under its corporate seal, or a facsimile thereof,
reproduced thereon and attested by its Secretary or an Assistant
Secretary. The signature of any of these officers on the
Securities may be manual or facsimile.
(b) Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
(c) 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 by the Company to the Trustee for
authentication, together with the supplemental indenture, Board
Resolution or Officers' Certificate with respect to such Securities
referred to in Section 301 and a Company Order for the
authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order, subject to the provisions
hereof, shall authenticate and deliver such Securities. In
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject
to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating to the effect:
(1) that the form and terms of such Securities have
been established in conformity with the provisions of this
Indenture;
(2) that all conditions precedent to the execution
and delivery by the Company of the Securities have been
complied with;
- 20 -
(3) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law);
(4) that all laws in respect of the issuance,
execution and delivery by the Company of the Securities have
been complied with; and
(5) in the case of the issuance of a series of
Securities that is secured by First Mortgage Bonds in
accordance with Article Fourteen, that the security interest
of the Trustee in the First Mortgage Bonds delivered to the
Trustee pursuant to Section 1402 is a valid and perfected
first priority security interest.
(d) Notwithstanding the provisions of Section 301 and
paragraph (c) of this Section 303, if all Securities of a series
are not to be originally issued at one time, it shall not be
necessary to deliver the Board Resolution or Officers' Certificate
otherwise required pursuant to Section 301, or the Company Order
and Opinion of Counsel otherwise required pursuant to paragraph
(c), at or prior to the time of authentication of each Security of
such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such
series to be issued.
(e) The Trustee shall not be required to authenticate
such Securities if the issue of such Securities pursuant to this
Indenture would affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in
a manner that is not reasonably acceptable to the Trustee or if the
Trustee, being advised by counsel, determines that such action may
not lawfully be taken.
(f) 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 303 and the Company Order 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 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.
(g) Each Security shall be dated the date of its
authentication.
(h) No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on
- 21 -
such Security a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual
signature of an authorized signatory of the Trustee, and such
certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder, but
never issued and sold by the Company, and the Company shall deliver
such Security to the Trustee for cancellation as provided in
Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder
and shall never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
--------------------
(a) Pending the preparation of definitive Securities of
any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities 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
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.
(b) 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, upon the request of the Holder,
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 the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one
or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture
as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Company shall cause to be kept at an office or
agency maintained by the Company in accordance with Section 1002 a
register (herein sometimes 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
Securities and of transfers of Securities.
(b) Upon surrender for registration of transfer of any
Security of any series at the office or agency in a Place of
Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new
- 22 -
Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor.
(c) At the option of the Holder, Securities of any
series may be exchanged for other Securities of the same series, of
any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Securities to be exchanged
at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the
Holder making the exchange is entitled to receive.
(d) 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.
(e) Every 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.
(f) No service charge shall be made to a Holder 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 Section 304, 906 or 1107 not involving any
transfer.
(g) The Company shall not be required (i) to issue,
register the transfer of or exchange Securities of any series
during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of Securities of
that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(h) Notwithstanding the foregoing and except as
otherwise specified or contemplated by Section 301, no Global
Security shall be exchangeable pursuant to this Section 305 or
Sections 304, 906 and 1107 for Securities registered in the name
of, and no transfer of a Global Security of any series may be
registered to, any Person other than the Depositary for such
Security or its nominee, unless (i) such Depositary (A) notifies
the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (B) ceases to be a "clearing
agency" registered under the Exchange Act, and the Company within
90 days after it receives such notice or becomes aware of such
ineligibility does not appoint successor Depository, (ii) the
Company executes and delivers to the Trustee a Company Order that
such Global Security shall be so exchangeable and the transfer
thereof so registerable, or (iii) there shall have occurred and be
continuing an Event of Default, or an
- 23 -
event which with notice or lapse of time or both would become an
Event of Default, with respect to the Securities evidenced by such
Global Security. Upon the occurrence in respect of any Global
Security of any series of any one or more of the conditions
specified in clause (i), (ii) or (iii) of the preceding sentence or
such other conditions as may be specified as contemplated by
Section 301 for such series, such Global Security may be exchanged
for Securities registered in the names of, and the transfer of such
Global Security may be registered to, such Persons (including
Persons other than the Depositary with respect to such series and
its nominees) as such Depositary shall direct. Notwithstanding any
other provision of this Indenture, any Security authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, any Global Security shall also be a Global Security and
shall bear the legend specified in Section 202, except for any
Security authenticated and delivered in exchange for, or upon
registration of transfer of, a Global Security pursuant to the
preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
(a) If any mutilated Security 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 and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
(b) 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 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 has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and of like
principal amount and tenor and bearing a number not
contemporaneously outstanding.
(c) In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new
Security, pay such Security.
(d) Upon the issuance of any new Security under this
Section 306, 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.
(e) Every new Security of any series issued pursuant to
this Section 306 in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued
hereunder.
- 24 -
(f) The provisions of this Section 306 are exclusive and
shall preclude (to the extent permitted by law) all other rights
and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
(a) Except as otherwise provided as contemplated by
Section 301 with respect to any series of Securities, interest on
any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest.
(b) Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
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 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 in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than ten days prior to the date of the proposed
payment and not less than ten 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 Securities of
such series at his address as it appears in the Security
Register, not less than ten days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall not be
payable pursuant to the following clause (2).
- 25 -
(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.
(c) Subject to the foregoing provisions of this Section
307, 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 Security for registration
of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium or (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 notice to the contrary.
Section 309. Cancellation.
------------
All Securities 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
cancelled 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 may deliver to the Trustee
(or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all securities so
delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section 309, except as
expressly permitted by this Indenture. All cancelled Securities
held by the Trustee shall be disposed of as directed by a Company
Order; provided that the Trustee shall not be required to destroy
such cancelled Securities.
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 of
twelve 30-day months.
- 26 -
Section 311. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either
as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of
such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
---------------------------------------
(a) Upon the direction of the Company, by a Company
Order, this Indenture shall 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 theretofore authenticated
and delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities the payment for
which 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 1004) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore
delivered to the Trustee for cancellation (i) have become due
and payable, (ii) will become due and payable at their Stated
Maturity within one year, or (iii) are to be called for
redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company, and
the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust (A) lawful money of the United States, (B) U.S.
Government Obligations which through the payment of scheduled
principal and interest in accordance with the terms thereof
will provide, not later than one day before the due date of
any payment such money, or (C) a combination thereof, in an
amount sufficient, without reinvestment, to pay and discharge
the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation for principal and
any premium or interest to the date of such deposit (in the
case of Securities which
- 27 -
have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
(b) Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company to the Trustee under
Section 606, the obligations of the Company to any Authenticating
Agent under Section 613, and, if money or U.S. Government
Securities shall have been deposited with the Trustee pursuant to
paragraph (a)(1)(B) of this Section 401, the obligations of the
Trustee under Section 402 and paragraph (e) of Section 1004, shall
survive.
(c) The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against
the U.S. Government Securities deposited pursuant to this Section
401, or the principal and interest received in respect thereof,
other than any such tax, fee or other charge that by law is for the
account of the Holders of Outstanding Securities.
Section 402. Application of Trust Money.
--------------------------
Subject to the provisions of paragraph (e) of Section
1004, 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 and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to
the Persons entitled thereto, of the principal and any premium or
interest for the payment of which such money has been deposited
with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to
Securities of any particular series, means any one of the following
events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental
body):
(1) default in the due and punctual payment of any
installment of interest upon any of the Securities of that
series as and
- 28 -
when the same shall become due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the due and punctual payment of the
principal of (or premium, if any, on) any of the Securities of
that series as and when the same shall become due and payable
at Maturity; or
(3) default in the deposit of any sinking fund
payment, when and as due by the terms of a Security of that
series, and the continuance of such default for a period of 30
days; or
(4) failure on the part of the Company duly to
observe or perform any covenant or agreement on the part of
the Company (other than a failure that constitutes another
Event of Default under this Section 501) set forth in this
Indenture or in the Securities of a particular series (other
than those covenants and agreements that have been included in
this Indenture for the benefit of Securities of other series
or are set forth exclusively in the terms of Securities of
another series), and the continuance of such failure for a
period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least a majority
in principal amount of the Securities of that series at the
time Outstanding, a written notice specifying such failure and
requiring the same to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) the entry of a decree or order by a court
having jurisdiction in the premises granting relief in respect
of the Company in an involuntary case under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law adjudging the Company as being bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
in respect of the Company under any applicable Federal or
State law, or appointing a receiver, liquidator, custodian,
assignee, trustee, sequestrator (or other similar official) of
the Company, or of any substantial part of its properties, or
ordering the winding up or liquidation of the affairs of the
Company, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Company of proceedings
to be adjudicated as being bankrupt or insolvent, or the
consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by the
Company of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law,
or the consent by the Company to the filing of any such
petition or to the appointment of a receiver, liquidator,
custodian, assignee, trustee, sequestrator (or other similar
official) of the Company, or of any substantial part of its
properties, or the making by the Company of an assignment for
the benefit of creditors, or the admission by the Company in
writing of its inability to pay its debts generally as they
become
- 29 -
due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) in the case of any series of Securities that is
secured by First Mortgage Bonds in accordance with Article
Fourteen, prior to the Release Date, an "event of default"
under Article IX, Section 1, of the Mortgage has occurred and
is continuing (a "Mortgage Default"); or
(8) any other Event of Default provided for in
accordance with Section 301 with respect to Securities of that
series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) In case one or more of the Events of Default
specified in Section 501 (other than as provided in Section 501(7))
shall have occurred and be continuing with respect to any
particular series of Securities, then and in each and every such
case (unless the principal of all of the Securities of that series
shall have already become due and payable) either the Trustee or
the Holders of not less than thirty-three percent (33%) in
aggregate principal amount of the Securities of that series then
Outstanding hereunder, by notice in writing to the Company (and to
the Trustee, if given by Holders), may declare the principal (or,
in the case of Original Issue Discount Securities, such amount of
principal as may be provided for in such Securities) of all the
Securities of that series to be due and payable immediately, and
upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the
Securities of that series contained to the contrary
notwithstanding, subject only to the provisions paragraph (c) of
this Section 502.
(b) In the case of an Event of Default specified in
Section 501(7), (i) the principal (or, in the case of Original
Issue Discount Securities, such amount of principal as may be
provided for in such Securities) of all of the Securities of each
series of Securities that is secured by First Mortgage Bonds in
accordance with Article Fourteen (unless the principal of all of
the Securities of any such series shall have already become due and
payable) shall become immediately due and payable if and only if
the First Mortgage Bonds securing such series of Securities shall
have become immediately due and payable in accordance with the
terms of the Mortgage (which acceleration shall occur without any
further action on the part of the Trustee (other than action by the
Trustee as a holder of Mortgage Bonds under the Mortgage) or the
Holders of such Securities, and (ii) the waiver or cure of any
Mortgage Default and the rescission and annulment of its
consequences in accordance with the terms of the Mortgage shall
constitute an automatic waiver of the corresponding Event of
Default under this Indenture and rescission and annulment of the
consequences thereof under this Indenture, in either case, anything
in this Indenture or in the Securities of that series contained to
the contrary notwithstanding, subject only to paragraph (c) of this
Section 502. Upon an acceleration of the Securities pursuant to
this paragraph (b), the Trustee shall immediately file with the
Company a written demand for redemption of the Mortgage Bonds, if
any, securing such Securities pursuant to Article Fourteen to the
extent such redemption is provided for
- 30 -
with respect to such series of First Mortgage Bonds either in the
Mortgage or in an indenture supplemental thereto.
(c) The provisions of paragraphs (a) and (b) are subject
to the condition that if, at any time after the principal or the
amount of principal, as the case may be, of any series of
Securities, shall have been so declared or shall have become due
and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter
provided,
(1) the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay
(A) all matured installments of interest upon
all Securities of that series and the principal of (and
premium, if any, on) any and all Securities of that series
that shall have become due otherwise than by acceleration
(with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under
applicable law) and on such principal (and premium, if any) at
the rate of interest prescribed therefor by such Securities,
to the date of such payment or deposit), and
(B) the fees and expenses of the Trustee,
including the reasonable fees and disbursements of its
counsel, and
(2) any and all defaults under this Indenture with
respect to the Securities of the series, other than the
nonpayment of principal of (and premium, if any) and accrued
interest on the Securities of that series which shall have
become due solely by acceleration, shall have been cured or
waived (including, if applicable, a Mortgage Default)
then the Holders of a majority in aggregate principal amount of the
Securities of that series then Outstanding, by written notice to
the Company and to the Trustee, may waive all defaults and rescind
and annul such declaration and its consequences; but no such waiver
or rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
Section 503. Collection of Indebtedness.
--------------------------
(a) 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,
the Company will, upon written demand of the Trustee, pay to the
Trustee, for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for principal
and any premium or interest and, to
- 31 -
the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and premium and on
any overdue interest, at the rate or rates prescribed therefor in
such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 504. Suits for Enforcement by Trustee.
--------------------------------
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee, in its own name and
as trustee as an express trust, may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of
Securities of such series by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any
such rights (including, prior to the Release Date, in the case of
any series of Securities that is secured by First Mortgage Bonds in
accordance with Article Fourteen, the exercise of all rights to
that end that the Trustee may have as a holder of the First
Mortgage Bonds that secure such series of Securities), whether for
the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted under this
Indenture, or to enforce any other legal or equitable right vested
in the Trustee by this Indenture or by law.
Section 505. Trustee May File Proofs of Claim.
--------------------------------
(a) In case of any judicial proceeding relative to the
Company (or any other obligor upon the Securities), its property or
its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such
proceeding (including, prior to the Release Date, in the case of
any series of Securities that is secured by First Mortgage Bonds in
accordance with Article Fourteen, any claims of the Trustee as a
holder of First Mortgage Bonds). In particular, the Trustee shall
be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 606.
(b) No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of
any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided,
however, the Trustee may vote on behalf of the Holders for the
election of a trustee in bankruptcy or similar official and may be
a member of a creditors' or other similar committee.
- 32 -
Section 506. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, 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 in respect of which such judgment has been recovered.
Section 507. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this
Article Five shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or any premium or interest, upon
presentation of the Securities 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 606;
SECOND: To the payment of the amounts then due and
unpaid for principal of and any premium or interest on the
Securities 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 for principal and any premium or interest,
respectively; and
THIRD: To the Company or its assigns, or as a court of
competent jurisdiction may determine.
Section 508. Limitation on Suits.
-------------------
No Holder of any Security of any series shall have any
right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such ▇▇▇▇▇▇ 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 a majority in
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;
- 33 -
(3) such Holder or Holders have offered to the
Trustee indemnity and security satisfactory to the Trustee
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 and security 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 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 to affect,
disturb or prejudice the rights of any other of such Holders or the
Holders of any other series, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce
any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such
Holders.
Section 509. Unconditional Right of Holders to Receive Principal,
---------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of and any
premium and (subject to Section 307) any interest on such Security
on the Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
Section 510. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder,
then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be
restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been
instituted.
Section 511. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Securities in Section 306(f), no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter
- 34 -
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 512. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of
any Securities 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 Five or by
law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
Section 513. Control by Holders.
------------------
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
remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee (including, prior to the Release Date, in
the case of First Mortgage Bonds that secure any series of
Securities in accordance with Article Fourteen, the exercise by the
Trustee of any rights, powers or privileges possessed by the
Trustee as a holder of such First Mortgage Bonds under terms of
such First Mortgage Bonds or under the Mortgage), with respect to
the Securities of such series, provided that:
(1) such direction shall not be in conflict with
any provision of law or with this Indenture (and, in the case
of the First Mortgage Bonds, the terms such First Mortgage
Bonds and the Mortgage), and
(2) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction.
Section 514. 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 waive any past
default hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of, or any
premium or interest on, any 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
- 35 -
purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 515. Undertaking for Costs.
---------------------
Each party to this Indenture agrees, and each Holder of
any Security by his acceptance thereof shall be deemed to have
agreed, that 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, a court may in
its discretion require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess
reasonable costs, including reasonable attorneys' fees and
disbursements, against any party litigant in any such suit, in the
manner and to the extent provided in the Trust Indenture Act. This
Section 515 does not apply to a suit instituted (i) by the Trustee,
(ii) by a Holder pursuant to Section 509, or (iii) by a Holder or
Holders of more than 10% in principal amount of the then
Outstanding Securities.
Section 516. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that
it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 517. Notice of Defaults.
------------------
If a default occurs hereunder with respect to Securities
of any series that is actually known to a Responsible Officer of
the Trustee, the Trustee shall give the Holders of Securities of
such series notice of such default as and to the extent required,
and in the manner provided, by the Trust Indenture Act. For the
purpose of this Section 517, 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 518. Defaults Under the Mortgage.
---------------------------
In the case of any series of Securities that is secured
by First Mortgage Bonds in accordance with Article Fourteen, in
addition to every other right and remedy provided in this
Indenture, the Trustee, subject to Section 513, may exercise any
right or remedy available to the Trustee in its capacity as owner
and holder of First Mortgage Bonds that arises as a result of a
default under the Mortgage.
- 36 -
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of
Default,
(1) the Trustee undertakes to perform such duties,
and only such duties, as specifically are 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 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 provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine such certificates or opinions to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such
person's 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 paragraph (c) shall not be construed to
limit the effect of paragraph (a) of this Section 601;
(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, provided such direction shall not be in conflict with
any rule of law or with this Indenture; and
- 37 -
(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.
(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
601.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company
referred to herein shall be sufficiently evidenced by a
Company Order or Company Request and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution;
(3) 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, except
that in the case of any such Officers' Certificate that by any
provision hereof is specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not it conforms to the
requirements of this Indenture;
(4) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon, except
that in the case of any such Opinion of Counsel that by any
provision hereof is specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not it conforms to the
requirements of this Indenture;
(5) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to
the Trustee against the costs, expenses and
- 38 -
liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company,
personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this
Indenture;
(9) the Trustee shall not be deemed to have notice
of any default or Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless
(i) written notice of any event which is in fact such a
default or Event of Default is received by the Trustee at the
Corporate Trust Office of the Trustee and (ii) such notice
references the Securities and this Indenture; and
(10) the rights, privileges, protections, immunities
and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person
employed to act hereunder.
Section 603. Not Responsible for Recitals or Issuance of
-------------------------------------------
Securities.
----------
The recitals contained in this Indenture and in the
Securities, except the Trustee's certificate of authentication,
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 or of the Securities.
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 604. 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
- 39 -
other capacity, may become the owner or pledgee of Securities and,
subject to Sections 607 and 612, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such
other agent.
Section 605. 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 in writing with
the Company.
Section 606. Compensation and Reimbursement.
------------------------------
(a) The Company agrees:
(1) to pay to the Trustee from time to time such
compensation as the Company and the Trustee agree in writing
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 expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based on the
income of the Trustee), incurred without negligence or willful
misconduct 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 (whether asserted by the Company, any
Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties
hereunder; provided that:
(i) with respect to any such claim, the
Trustee shall have given the Company written notice thereof
promptly after the Trustee shall have knowledge thereof, but
failure by the Trustee to give such notice shall not affect
the Trustee's right or the Company's obligation to indemnity
hereunder;
(ii) while maintaining absolute control over
its own defense, the Trustee shall cooperate and consult with
the Company in preparing such defense; and
(iii) notwithstanding anything to the contrary
in this Section 606(3), the Company shall not be liable for
settlement of any
- 40 -
such claim by the Trustee entered into without the prior
written consent of the Company, which consent shall not be
unreasonably withheld.
(b) The Trustee shall have a lien prior to the
Securities as to all property and funds held by it hereunder for
any amount owing it or any predecessor Trustee pursuant to this
Section 606, except with respect to funds held in trust for the
benefit of the Holders of particular Securities.
(c) When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 501(5)
or Section 501(6), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the services
are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar
law.
(d) The provisions of this Section 606 shall survive the
termination of this Indenture.
Section 607. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
Section 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee under this
Indenture which shall be a corporation that (i) is organized and
doing business under the laws of the United States, any State
thereof or the District of Columbia, (ii) is authorized under such
laws to exercise corporate trust power, (iii) has a combined
capital and surplus of at least $50,000,000, (iv) is subject to
supervision or examination by Federal, State or District of
Columbia authority, (v) has its Corporate Trust Office in the
United States, and (vi) is otherwise qualified to act as Trustee
under the Trust Indenture Act. If such Person 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 609, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 609, it shall resign
immediately in the manner and with the effect hereinafter specified
in this Article Six.
Section 609. 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 Six
shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of
Section 610.
- 41 -
(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. If the instrument of acceptance by a
successor Trustee required by Section 610 shall not have been
delivered to the Trustee within 60 days after the giving of such
notice of resignation, the resigning Trustee may petition, at the
expense of the Company, 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 and to the Company. If the instrument of
acceptance by a successor Trustee required by Section 610 shall not
have been delivered to the Trustee within 60 days after the giving
of such notice of removal, the Trustee being removed may petition,
at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the
Securities of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
607 after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under
Section 608 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged as being 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 by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject
to Section 515, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee 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, by a Board Resolution, 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 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such
- 42 -
vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of
Section 610, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 610, any Holder who
has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities
of such series.
(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 to all Holders of Securities of
such series in the manner provided in Section 106. 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 610. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor
Trustee or Trustees with respect to all Securities, every successor
Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its fees and
expenses, 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 (including all right, title and interest in any
Mortgage Bonds held by the retiring Trustee in accordance with
Article Fourteen).
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of such series shall execute
and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (i) shall contain
such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, 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, (ii) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the
- 43 -
retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (iii) shall add
to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any
other such Trustee and that no Trustee shall be responsible for any
notice given to, or received by, or any act or failure to act on
the part of any other Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates (including all right, title and interest
in any Mortgage Bonds held by the retiring Trustee in accordance
with Article Fourteen).
(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or (b)
of this Section 610, 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 Six.
Section 611. 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 Six, 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.
- 44 -
Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of
the Company (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company (or any such
other obligor).
Section 613. Appointment of Authenticating Agent.
-----------------------------------
(a) The Trustee may appoint an Authenticating Agent or
Agents acceptable to the Company with respect to one or more series
of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon
original issue and 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 at all times be a corporation
organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal, 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 examining authority, then for
the purposes of this Section 613, 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 613, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this
Section.
(b) 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 all or substantially all of 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 613,
without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
(c) An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case
- 45 -
at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 613, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable
to the Company and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Securities of
the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security
Register. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights,
powers and duties of an Authenticating Agent 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 613.
(d) The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services
under this Section 613.
(e) If an appointment of an Authenticating Agent with
respect to one or more series is made pursuant to this Section 613,
the Securities of such series may have endorsed thereon an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK
As Trustee
By: ______________________________
As Authenticating Agent
By: ______________________________
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
-------
The Company will furnish or cause to be furnished to the
Trustee:
(1) semi-annually, not later then June 30 and
December 31 in each year, a list for each series of
Securities, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of
Securities of such series as of the preceding June 15 or
December 15, and
(2) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Company of
any such
- 46 -
request, a list of similar form and content as of a date not
more than 45 days prior to the time such list is furnished;
provided, however, that if the Trustee is acting in the capacity as
Security Registrar, no delivery of such lists shall be required.
Section 702. Preservation of Information; Communications to
----------------------------------------------
Holders.
-------
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable and for so long as is required by the
Trust Indenture Act, the names and addresses of Holders of each
series of Securities (i) contained in the most recent list, if any,
furnished to the Trustee as provided in Section 701 and (ii)
received by the Trustee in the capacity as Security Registrar, if
the Trustee is then acting in such capacity.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under
the Securities of any series, and the corresponding rights and
privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be
held accountable by reason of any disclosure of information as to
names and addresses of Holders made pursuant to the Trust Indenture
Act.
Section 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee, its relationship to the Company (or any
other obligor under the Securities) and its actions under this
Indenture as are required pursuant to the Trust Indenture Act at
the times or such intervals and in the manner provided for in the
Trust Indenture Act. If required, the report contemplated by
Section 313(a) of the Trust Indenture Act, shall be dated May 15
and shall be delivered to the Holders by the Trustee within sixty
days after each May 15 following the date of this Indenture.
(b) A copy of each report required by paragraph (a), at
the time of transmission to Holders, shall be filed by the Trustee
with the Commission and with each stock exchange upon which any
Securities of any series are listed and shall be furnished to the
Company. If and when Securities of any series are listed on any
stock exchange, the Company shall notify the Trustee promptly of
such listing and of any subsequent delisting thereof.
Section 704. Reports by Company.
------------------
(a) The Company shall:
(1) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the
foregoing as the Commission may
- 47 -
from time to time by rules and regulations prescribe pursuant
to the Trust Indenture Act) that the Company is required to
file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required
to file information, documents or reports pursuant to either
of said sections of the Exchange Act, then it shall file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission
pursuant to the Trust Indenture Act, such of the supplementary
and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect
of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules
and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to
time by the Commission pursuant to the Trust Indenture Act,
such additional information, documents and reports with
respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to
time by such rules and regulations; and
(3) transmit, within 30 days after the filing
thereof with the Trustee, in the manner and to the extent
required by the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the
Company pursuant to clauses (1) and (2) of this Section 704 as
may be required by rules and regulations prescribed from time
to time by the Commission pursuant to the Trust Indenture Act.
(b) Delivery to the Trustee of the reports, information
and documents contemplated by this Section 704 is for informational
purposes only and the Trustee's receipt thereof shall not
constitute (unless otherwise provided in the Trust Indenture Act or
the rules and regulations of the Commission thereunder)
constructive notice of any information contained therein or
determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on an Officers'
Certificate).
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company may Consolidate, Etc., Only on Certain
----------------------------------------------
Terms.
-----
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company
with or into any other Person, or successive consolidations or
mergers in which the Company or its successor or successors shall
be a party or parties, or shall prevent any sale, conveyance,
transfer, lease or other disposition of the properties and assets
of the Company, or its successor or successors, to any other
Person; provided that (i) the Person formed by such consolidation
or into which the Company is merged or any Person that acquires by
sale, conveyance, transfer or otherwise, or which leases, the
properties and assets of the Company as an entirety or
substantially as an entirety (a "Company
- 48 -
Sale") shall be a corporation, organized and validly existing under
the laws of the United States of America, any State thereof or the
District of Columbia and shall be authorized to acquire and operate
the assets so acquired (the "Successor Company"), (ii) as a
condition precedent to a Company Sale, (A) the due and punctual
payment of the principal of and any premium or interest on all of
the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Company shall be expressly
assumed by supplemental indenture to this Indenture, reasonably
satisfactory in form to the Trustee, executed and delivered to the
Trustee by the Successor Company and (B) if the Company Sale occurs
prior to the Release Date, the due and punctual payment of the
principal of and any premium or interest on the First Mortgage
Bonds securing any series of Securities, according to their tenor,
and the due and punctual performance and observance of all of the
covenants and conditions of the Mortgage to be performed by the
Company with respect to such First Mortgage Bonds shall be
expressly assumed by supplemental indenture to the Mortgage
executed and delivered to the Mortgage Trustee by the Successor
Company, and (iii) the Company shall not be permitted to effect any
Company Sale if the completion of such Company Sale would create an
Event of Default or an event under this Indenture which, with the
passage of time or the giving of notice or both, would become an
Event of Default.
(b) Anything in this Indenture to the contrary
notwithstanding, the conveyance or other transfer by the Company,
in a single transaction or a series of related transactions, of
either (i) all or any portion of its facilities for the generation
and transmission of electric energy or (ii) all of any portion of
its facilities for the distribution of electric energy, in either
case alone or in combination with other assets (but not in
combination with the other) shall in no event be deemed to
constitute a conveyance or other transfer of the properties and
assets of the Company as an entirety or substantially as an
entirety. The character of particular facilities shall be
determined in accordance with the Uniform System of Accounts
prescribed for public utilities and licensees subject to the
Federal Power Act, as amended, to the extent applicable.
Section 802. Successor Corporation to Be Substituted.
---------------------------------------
(a) In case of any Company Sale, the Successor Company
shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the Company. The
Successor Company thereupon may cause to be signed, and may issue
either in its own name or in the name of Potomac Electric Power
Company or in the name of any corporation which previously shall
have become the Company in accordance with the provisions of this
Article Eight any or all of the Securities issuable hereunder,
which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of the Successor
Company instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver, any Securities which
previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Securities
which the Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Securities
of a particular series so
- 49 -
issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities of such series theretofore
or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date or the
execution hereof.
(b) Nothing contained in this Indenture or in any of the
Securities shall prevent the Company (i) from merging into itself
any other Person, (ii) from selling or otherwise disposing of its
property or assets not as an entirety or substantially as an
entirety, or (iii) from acquiring by purchase or otherwise all or
any part of the property of any other Person.
Section 803. Opinion of Counsel to Be Given Trustee.
--------------------------------------
The Trustee, subject to Sections 601 and 602, may receive
an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale or conveyance and any such assumption
complies with the provisions of this Article Eight.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures
supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and
if such covenants are to be for the benefit of less than all
series of Securities, stating that such covenants are
expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred
upon the Company; or
(3) to add to or change any of the provisions of
this Indenture to such extent as shall be necessary to permit
or facilitate the issuance of Securities in bearer form,
registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(4) to establish the form and terms of Securities
of any series as permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the
- 50 -
Securities of one or more series and to add to or change any
of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the
requirements of Section 610(b); or
(6) to cure any ambiguity, to correct or supplement
any provision herein that may be inconsistent with any other
provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture, provided
that such action shall not adversely affect the interests of
the Holders of Securities of any series in any material
respect; or
(7) to add to, change or eliminate any of the
provisions of this Indenture in respect of one or more series
of Securities, provided that any such addition, change or
elimination (i) shall neither (A) apply to any Security of any
series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holders of any such Security with
respect to such provision or (ii) shall become effective only
when there is no such Security Outstanding; or
(8) to secure the Securities of one or more series
(other than as provided in Article Fourteen); or
(9) to establish the terms upon which the
Securities of one or more series may be convertible into, or
exchangeable for, shares of common stock, preferred stock or
other securities of the Company; or
(10) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the Trust
Indenture Act or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as
may be expressly required under the Trust Indenture Act.
Section 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
(a) With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of all
series affected by such supplemental indenture (voting as a single
class), by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture
or of modifying in any manner the rights of the Holders of
Securities of each such series under this Indenture; provided,
however that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of,
or 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
- 51 -
payable upon the redemption thereof, 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 where, or the coin or currency in which, any
Security or any premium or interest thereon is payable or
impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date), 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
(3) modify any of the provisions of this Section
902 or Section 514, 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 with respect to changes in the
references to "the Trustee" and concomitant changes in this
Section 902, or the deletion of this proviso, in accordance
with the requirements of Sections 610(b) and 901(5), or
(4) in the case of any series of Securities that is
secured by First Mortgage Bonds in accordance with Article
Fourteen, impair the security interest of the Trustee
hereunder in such First Mortgage Bonds, or reduce the
principal amount of First Mortgage Bonds securing the
Securities of a series to an amount less than the principal
amount of Outstanding Securities of such series.
(b) A supplemental indenture that changes or eliminates
any covenant or other provision of this Indenture that has
expressly been included solely for the benefit of one or more
particular series of Securities, or that 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.
(c) It shall not be necessary for any Act of Holders
under this Section 902 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such
Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article Nine or
the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in conclusively relying upon, an
Opinion of Counsel and an Officers' Certificate
- 52 -
stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under
this Article Nine, 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 (or
the applicable series) theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to
this Article Nine shall conform to the requirements of the Trust
Indenture Act.
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 Nine 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 or cause
to be paid the principal of and any premium or interest on the
Securities of that series in accordance with the terms of the
Securities and this Indenture. Interest on Securities shall be
payable without presentment of such Securities, and only to the
registered Holders thereof determined as provided in Section 307.
The Company shall have the right to require a Holder, in connection
with the payment of the principal of and any premium or interest on
a Security, to present at the office or agency of the Company at
which such payment is made a certificate, in such form as the
Company may from time to time prescribe, to enable the Company to
determine its duties and liabilities with respect to any taxes,
assessments or governmental charges that it may be required to
deduct or withhold therefrom under any present or future law of the
United States of America or of any State, county, municipality or
taxing or withholding authority therein, and the Company shall be
entitled to determine its duties
- 53 -
and liabilities with respect to such deduction or withholding on
the basis of information contained in such certificate or, if no
such certificate shall be so presented, on the basis of any
presumption created by any such law, and shall be entitled to act
in accordance with such determination.
Section 1002. Maintenance of Office or Agency.
-------------------------------
(a) So long as any Securities remain outstanding, the
Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may
be presented or surrendered for payment, where Securities of that
series may be surrendered for registration of transfer or exchange,
and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
(b) 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 purposes
referred to in paragraph (a) and may from time to time rescind such
designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment
for Securities 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.
(c) Unless otherwise set forth in one or more indentures
supplemental hereto, a Board Resolution or an Officers' Certificate
pursuant to a Board Resolution with respect to a series of
Securities, the Company hereby designates, as the Place of Payment
for each series of Securities, the Borough of Manhattan, The City
of New York, and initially appoints The Bank of New York at its
Corporate Trust Office as the Company's office or agency for each
of such purposes in such city.
Section 1003. Vacancy in the Office of Trustee.
--------------------------------
The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Article Six, a Trustee, so that there shall at all
times be a Trustee hereunder.
Section 1004. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
(a) 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 or any premium 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 any premium or
- 54 -
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.
(b) Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, prior to 10:00 a.m.
(New York City time) on due date for the payment of the principal
of or any premium or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
(c) 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 1004, that such Paying Agent will (i) hold all sums held by
it for the payment of the principal of and any premium 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, (ii) give the
Trustee notice of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment of
principal, premium or interest on the Securities of that series,
and (iii) during the continuance of any default by the Company (or
any other obligor upon the Securities of that series) in the making
of any payment in respect of the Securities of that series, and
upon the written request of the Trustee, forthwith pay to the
Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
(d) The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying Agent
to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company
or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
(e) Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the
principal of or any premium or interest on any Security of any
series and remaining unclaimed for two years after such principal,
premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of
the Company cause to be published once, in a newspaper published in
the English language customarily published on each Business Day and
of general circulation in the Place of Payment, notice that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days
- 55 -
after the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 1005. Officers' Certificate Concerning Defaults; Notice of
----------------------------------------------------
Default Under Mortgage.
----------------------
(a) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate covering such preceding
fiscal year and stating whether or not, to the knowledge of the
signers thereof, the Company has complied with all conditions and
covenants under this Indenture (determined without regard to any
period of grace or requirement of notice provided hereunder) and,
if not, describing in reasonable detail such noncompliance and the
status thereof.
(b) Prior to the Release Date, upon the occurrence of an
"event of default" under Article IX, Section 1, of the Mortgage,
the Company shall promptly deliver to the Trustee an Officers'
Certificate notifying the Trustee of such Event of Default.
Section 1006. Liens.
-----
(a) Except as provided in paragraph (b) of this Section
1006, from and after the Release Date and for so long as the
Securities of any series are Outstanding, the Company will not
create, incur, assume or permit to exist any Indebtedness secured
by any Lien on any property or assets now owned or hereafter
acquired by the Company without making effective provision, and the
Company covenants that in any such case it will make effective
provision, whereby the Securities of any series then or thereafter
Outstanding shall be secured by such ▇▇▇▇ equally and ratably with
the Indebtedness thereby secured, so long as such Indebtedness
shall be so secured.
(b) Nothing in this Section 1006 shall be construed to
prevent the Company from creating, incurring, assuming or
permitting to exist any Lien of the following character, to all of
which the provisions of paragraph (a) of this Section 1006 shall
not be applicable:
(1) Liens on property or assets of the Company
existing on the date hereof, provided that such Liens shall
secure only those obligations which they secure as of the date
hereof;
(2) any Lien existing on any property or asset
prior to the acquisition thereof by the Company, provided that
(i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not
extend to any other property or assets of the Company;
(3) Liens for taxes not yet due or that are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves, to the extent required by
GAAP, have been set aside;
- 56 -
(4) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business and securing obligations that are
not due and payable or that are being contested in good faith
by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been set aside;
(5) pledges and deposits made in the ordinary
course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or
regulations;
(6) deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases (other
than capital leases), statutory obligations, surety and appeal
bonds, advance payment bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course
of business;
(7) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and do
not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business
of the Company;
(8) Liens upon any property acquired, constructed
or improved by the Company that are created or incurred within
18 months after such acquisition, construction or improvement
to secure or provide for the payment of any part of the
purchase price of such property or the cost of such
construction or improvement, including carrying costs;
provided that any such Lien shall not apply to any other
property of the Company;
(9) Liens upon bills, notes and accounts
receivable, cash, contracts, operating agreements, and leases
in which the Company is lessor;
(10) Liens upon shares of stock and other
certificates or evidences of interest therein, and all bonds,
notes and other evidences of indebtedness or certificates of
interest therein and other securities now owned or hereafter
acquired or possessed by the Company;
(11) Liens upon equipment and materials not
installed as a part of the fixed property of the Company and
merchandise and supplies acquired by the Company for the
purpose of resale or leasing to its customers in the ordinary
course and conduct of its business;
(12) Liens upon electric energy and other materials
or products generated, manufactured, produced or purchased by
the Company for sale, distribution or use in the ordinary
course and conduct of its business;
- 57 -
(13) extensions, renewals and replacements of Liens
referred to in paragraphs (1) through (12) of this Section
1006(b), provided that any such extension, renewal or
replacement Lien shall be limited to the property or assets
covered by the Lien extended, renewed or replaced and that the
obligations secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the
amount of the obligations secured by the Lien extended,
renewed or replaced;
(14) any Lien, of the type described in clause (iii)
of the definition of the term "Lien", on securities imposed
pursuant to an agreement entered into for the sale or
disposition of such securities pending the closing of such
sale or disposition; provided such sale or disposition is
otherwise permitted under this Indenture;
(15) Liens on the capital stock or other securities,
or on the property, permits, franchises or other assets of,
any Subsidiary of the Company; and
(16) Liens to secure Indebtedness if, immediately
after the grant thereof, the aggregate amount of all
Indebtedness secured by ▇▇▇▇▇ that would not be permitted but
for this clause (16) does not exceed 20% of Capitalization as
shown on the most recent consolidated balance sheet of the
Company and its Subsidiaries filed with the Commission
pursuant to the Exchange Act.
(c) If the Company shall issue, assume, or guarantee any
Indebtedness secured by any Lien and if Section 1006(a) requires
that the outstanding Securities be secured equally and ratably with
such Indebtedness, the Company will promptly execute, at its
expense, any instruments necessary to so equally and ratably secure
the outstanding Securities and deliver the same to the Trustee
along with:
(i) An Officers' Certificate stating that the
covenant of the Company contained in this Section 1006(c) has
been complied with; and
(ii) An Opinion of Counsel to the effect that
the Company has complied with the covenant contained in that
Section 1006(c), and that all instruments executed by the
Company in the performance of such covenant comply with the
requirements of such covenant and this Indenture.
(d) In the event that the Company shall hereafter secure
outstanding Securities equally and ratably with any other
Indebtedness pursuant to the provisions of this Section 1006, the
Company will enter into an indenture or agreement supplemental
hereto and take such other action, if any, as is reasonably
necessary to enable the Trustee to enforce effectively the rights
of the Holders of outstanding Securities so secured equally and
ratably with such other Indebtedness.
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Section 1007. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
From and after the Release Date, and for so long as the
Securities of any series are Outstanding, the Company will not
enter into or permit to exist any Sale and Lease-Back Transaction;
provided, however, that this Section 1007 shall not prevent the
Company from;
(1) entering into any Sale and Lease-Back
Transaction not involving a lease with a term of more than
four years;
(2) entering into any Sale and Lease-Back
Transaction to the extent a Lien on the Principal Property
subject to such Sale and Lease-Back Transaction would be
permitted under Section 1006;
(3) entering into any Sale and Lease-Back
Transaction with respect to any property if such lease is
entered into within eighteen months after the later of the
acquisition, completion of construction or commencement of
operation of such Principal Property; and
(4) entering into any Sale and Lease-Back
Transaction if the Company, within 120 days after the
effective date of the lease, applies an amount equal to the
greater of (i) the net proceeds of the sale of the Principal
Property leased in such Sale and Lease-Back Transaction or
(ii) the fair market value (as determined in good faith by the
Board of Directors) of such Principal Property on any date
within 90 days prior to the effective date of the lease, to
the retirement of Funded Debt of the Company; provided,
however, that the amount required to be applied to the
retirement of Funded Debt of the Company shall be reduced by:
(A) the principal amount of any
Securities surrendered to the Trustee by the Company for
cancellation within 120 days after the effective date of the
lease, and
(B) the principal amount of Funded Debt,
other than Securities, voluntarily retired by the Company
within 120 days after the effective date of the lease; and
provided further that no retirement referred to in this clause
(4) may be effected by payment on Maturity or pursuant to any
mandatory sinking fund or prepayment provision.
Section 1008. Perfection of Security Interests.
--------------------------------
(a) The Company will cause this Indenture, any
indentures supplemental to this Indenture, and any financing or
continuation statements to be promptly recorded and filed, and
re-recorded and refiled, in such a manner, at such times and in
such places as may be required by law in order fully to preserve,
protect and perfect the security, if any, for any series of
Securities (including the security contemplated by Article
Fourteen) and all rights therein of the Trustee.
- 59 -
(b) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending after
the date hereof, an Opinion of Counsel stating that in the opinion
of such counsel either (i) such action has been taken, with respect
to the recording, filing, re-recording and refiling of this
Indenture, each supplemental indenture and any financing or
continuation statements, as is necessary to maintain and perfect
the security interest of the Trustee intended to be created by this
Indenture or any supplemental indenture for the benefit of the
Holders from time to time of any series of Securities that is so
secured (including any series of Securities that is secured by
First Mortgage Bonds in accordance with Article Fourteen), and
reciting the details of such action, or (ii) no such action is
necessary to maintain and perfect such security interest.
Section 1009. Calculation of Original Issue Discount.
--------------------------------------
In the event that there is issued and outstanding under
this Indenture any Original Issue Discount Security, the Company
shall file with the Trustee promptly following the end of each
calendar year (i) a written notice specifying the amount of
original issue discount (including daily rates and accrual periods)
accrued on such Securities as of the end of such year and (ii) such
other specific information relating to such original issue discount
as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
------------------------
Securities of any series that 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
Eleven.
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 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 period shall be
satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be
redeemed. In the case that the redemption of Securities of any
series is subject to any restriction on such redemption provided
for in the terms of such Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
- 60 -
Section 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
(a) If less than all the Securities of any series are to
be redeemed in accordance with this Article Eleven (unless all of
the Securities of such series and of a specified tenor 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 not
previously called for redemption, pro rata, by lot or by such other
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. If less
than all of the Securities of such series and of a specified tenor
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 and
specified tenor not previously called for redemption in accordance
with the preceding sentence.
(b) 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.
(c) 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.
--------------------
(a) Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date (unless a shorter period is
specified in the Securities to be redeemed), to each Holder of
Securities to be redeemed, at his address appearing in the Security
Register.
(b) All notices of redemption shall identify the
Securities to be redeemed (including the CUSIP number(s)) and shall
state:
(1) the Redemption Date,
(2) the Redemption Price and accrued interest, if
any,
(3) if less than all the Outstanding Securities of
any series are to be redeemed, the identification (and, in the
case of partial redemption of any Securities, the principal
amounts) of the particular securities to be redeemed,
(4) in case any Security is to be redeemed in part
only, the notice that relates to such Security shall state
that on and after the Redemption Date, upon surrender of such
Security, the Holder of such
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Security will receive, without charge, a new Security or
Securities of authorized denominations for the principal
amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption
Price and accrued interest, if any, 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,
(6) the place or places where such Securities are
to be surrendered for payment of the Redemption Price and
accrued interest, if any, and
(7) that the redemption is for a sinking fund, if
such is the case.
(c) 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 written request, by the Trustee in the name and at
the expense of the Company and shall be irrevocable.
Section 1105. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit
by 10:00 a.m. (New York City time) on the Redemption Date) 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 1004) 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 on, all the Securities which are to
be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
-------------------------------------
(a) Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified,
and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided,
however, that, unless otherwise specified as contemplated by
Section 301, installments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Persons who
are Holders of such Securities, or one or more Predecessor
Securities, at the close of business on the Regular Record Dates
according to their terms and the provisions of Section 307.
(b) If any Security called for redemption shall not be
so paid upon surrender thereof for redemption due to the failure of
Company to deposit the Redemption Price as provided in Section
1105, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor
in the Security.
- 62 -
Section 1107. Securities Redeemed in Part.
---------------------------
Any Security that is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or
the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the
Security Registrar 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 and of like tenor, of any authorized
denomination as requested by such ▇▇▇▇▇▇, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
------------------------
(a) The provisions of this Article Twelve 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.
(b) 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 may, 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, (i) deliver
Outstanding Securities of a series (other than any Securities
previously called for redemption) and (ii) apply as a credit
Securities of a series that have been redeemed either at the
election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities; 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.
- 63 -
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 shall 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, that is to be
satisfied by payment of cash and the portion thereof, if any, that
is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1202 and also shall deliver to the
Security Registrar any Securities to be so delivered. If such
Officers' Certificate shall specify an optional amount to be added
in cash to the next ensuing mandatory sinking fund payment, the
Company shall thereupon be obligated to pay the amount therein
specified. 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 and Covenant Defeasance
Section 1301. Applicability of Article; Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance.
---------------------------------
If pursuant to Section 301 provision is made for either
or both of (i) defeasance of the Securities of a series under
Section 1302 or (ii) covenant defeasance of the Securities of a
series under Section 1303, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of
this Article Thirteen, shall be applicable to the Securities of
such series, and the Company may at its option by Board Resolution,
at any time, with respect to the Securities of such series, elect
to have either Section 1302 (if applicable) or Section 1303 (if
applicable) be applied to the Outstanding Securities of such series
upon compliance with the conditions set forth below in this Article
Thirteen.
Section 1302. Defeasance and Discharge.
------------------------
Upon the Company's exercise of the above option
applicable to this Section 1302, the Company shall be deemed to
have been discharged from its obligations with respect to the
Outstanding Securities of such series on and after the date the
conditions precedent set forth in Section 1304 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance
means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Outstanding Securities
of such series and to have satisfied all of its other obligations
under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated
- 64 -
or discharged hereunder: (i) the rights of Holders of Outstanding
Securities of such series to receive, solely from the trust fund
described in Section 1305 as more fully set forth in such Section,
payments of the principal of and any premium or interest on such
Securities when such payments are due, (ii) the Company's
obligations with respect to such Securities under Sections 304,
305, 306, 1002 and 1004 and such obligations as shall be ancillary
thereto, (iii) the rights, powers, trusts, duties, immunities and
other provisions in respect of the Trustee under this Indenture and
(iv) this Article Thirteen. Subject to compliance with this
Article Thirteen, the Company may exercise its option under this
Section 1302 notwithstanding the prior exercise of its option under
Section 1303 with respect to the Securities of such series.
Following a defeasance, payment of the Securities of such series
may not be accelerated because of an Event of Default.
Section 1303. Covenant Defeasance.
-------------------
Upon the Company's exercise of the above option
applicable to this Section 1303 and after the date the conditions
set forth in Section 1304 are satisfied, the Company shall be
released from its obligations under any additional or substitute
covenant established with respect to the Securities of any series
pursuant to Section 301(20) if the Securities of such series have
been determined pursuant to Section 301 to be subject to this
provision (with any such additional or substitute covenant referred
to herein as a "Defeasible Covenant"), and the occurrence of an
event specified in Section 501(4) with respect to such Defeasible
Covenant shall not be deemed to be an Event of Default with respect
to the Outstanding Securities of such series (hereinafter,
"covenant defeasance"). For this purpose, such covenant defeasance
means that, with respect to the Outstanding Securities of such
series, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth
in any such Defeasible Covenant whether directly or indirectly by
reason of any reference elsewhere herein to any such Defeasible
Covenant or by reason of any reference in any such Defeasible
Covenant to any other provision herein or in any other document,
but the remainder of this Indenture and such Securities shall be
unaffected thereby. Following a covenant defeasance, payment of
the Securities of such series may not be accelerated because of an
Event of Default specified in Section 501(5) or Section 501(6) or
by reference to Section 501(4) and such Defeasible Covenant.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions precedent to
application of either Section 1302 or Section 1303 to the
Outstanding Securities of such series:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 608 who shall agree to
comply with the provisions of this Article Thirteen applicable
to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and
dedicated solely to the benefit of the Holders of such
Securities, (A) money in an amount, or (B) U.S.
- 65 -
Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a
combination thereof, sufficient, without reinvestment, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee)
to pay and discharge, the principal of and any premium or
interest on the Outstanding Securities of such series on the
Maturity of such principal, premium or interest and any
mandatory sinking fund payments or analogous payments
applicable to the Outstanding Securities of such series on the
due dates thereof. Before such a deposit, the Company may
make arrangements satisfactory to the Trustee for the
redemption of Securities at a future date or dates in
accordance with Article Eleven, which shall be given effect in
applying the foregoing.
(2) No Event of Default or event 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 (A) on the date of such deposit or (B)
insofar as subsections 501(5) and (6) are concerned, at any
time during the period ending on the 91st day after the date
of such deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to the
Company in respect of such deposit (it being understood that
the condition in this clause (B) shall not be deemed satisfied
until the expiration of such period).
(3) Such defeasance or covenant defeasance shall
not (A) cause the Trustee for the Securities of such series to
have a conflicting interest referred to in Section 607 or for
purposes of the Trust Indenture Act with respect to any
securities of the Company or (B) result in the trust arising
from such deposit to constitute, unless it is qualified as, a
regulated investment company under the Investment Company Act
of 1940, as amended.
(4) Such defeasance or covenant defeasance shall
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) Such defeasance or covenant defeasance shall
not cause any Securities of such series then listed on any
registered national securities exchange under the Exchange Act
to be delisted.
(6) In the case of an election under Section 1302,
the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of this Indenture there has
been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding
- 66 -
Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
(7) In the case of an election under Section 1303,
the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Outstanding
Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times
as would have been the case if such covenant defeasance had
not occurred.
(8) Such defeasance or covenant defeasance shall be
effected in compliance with any additional terms, conditions
or limitations which may be imposed on the Company in
connection therewith pursuant to Section 301.
(9) The Company shall have paid, or provided for
the payment of, the fees and expenses of the Trustee payable
pursuant to Section 606.
(10) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to
either the defeasance under Section 1302 or the covenant
defeasance under Section 1303 (as the case may be) have been
complied with.
Section 1305. Deposited Money and U.S. Government Obligations to
--------------------------------------------------
Be Held in Trust; Other Miscellaneous Provisions.
------------------------------------------------
(a) Subject to the provisions of Section 1004(e), all
money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee
(collectively, for purposes of this Section 1305, the "Trustee")
pursuant to Section 1304 in respect of the Outstanding Securities
of such series shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying
Agent (but not including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of
principal and any premium or interest, but such money need not be
segregated from other funds (except to the extent required by law).
(b) The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against
the money or U.S. Government Obligations deposited pursuant to
Section 1304 or the principal and interest received in respect
thereof.
- 67 -
(c) Anything herein to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon
Company Request any money or U.S. Government Obligations held by it
as provided in Section 1304 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant
defeasance.
Section 1306. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 1305 by reason of any order or
judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the
Company's obligations under the Securities of such series shall be
revived and reinstated as though no deposit had occurred pursuant
to this Article Thirteen until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with
Section 1305; provided, however, that if the Company makes any
payment of principal, premium or interest on any such Security
following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or the
Paying Agent.
ARTICLE FOURTEEN
Security
Section 1401. Applicability of Article.
------------------------
If pursuant to Section 301 provision is made to secure
the payment of the principal of, premium, if any, and interest on
any series of Securities issued under this Indenture by delivery to
and pledging with the Trustee of First Mortgage Bonds issued under
the Mortgage, this Article Fourteen shall apply.
Section 1402. Delivery of First Mortgage Bonds to Trustee.
-------------------------------------------
(a) In order to secure by the lien of the Mortgage the
obligation of the Company to pay duly and punctually the principal
of, premium, if any, and interest on the Securities of any series
issued under this Indenture, the Company, at any time prior to or
concurrently with its delivery to the Trustee of any Securities for
authentication and delivery in accordance with a Company Order
pursuant to Section 303, shall deliver to the Trustee and pledge as
security for payment of the principal of, premium, if any, and
interest on such Securities, and the Trustee, subject to Section
1403, shall accept therefor, First Mortgage Bonds registered in the
name of the Trustee (i) in an aggregate principal amount equal to
or exceeding the aggregate principal amount of Securities of such
series to be authenticated and delivered pursuant to such Company
Order, (ii) with a stated maturity date not earlier than the Stated
Maturity of such Securities, (iii) bearing an interest rate equal
to the interest rate borne by such Securities, (iv) having interest
payment dates that are the same as the
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Interest Payment Dates of such Securities, and (v) in all other
material respects conforming as nearly as is practicable to the
terms of such Securities.
(b) The First Mortgage Bonds shall be in the form
established by or in accordance with the Mortgage and with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by the Mortgage, or are
required or permitted by this Indenture and consistent with the
Mortgage.
(c) Any series of First Mortgage Bonds may secure the
payment of the principal, premium, if any, and interest on only one
corresponding series of Securities, and no series of Securities
shall be secured by more than one series of First Mortgage Bonds.
Each Security of a series shall specify the series of First
Mortgage Bond that secures the Securities of such series.
Section 1403. Authentication of Securities.
----------------------------
Prior to the authentication of any Securities secured by
First Mortgage Bonds, in addition to the deliveries to the Trustee
contemplated by Sections 301 and 303, the Trustee shall receive
from the Company, and (subject to Section 601 hereof) shall be
fully protected in relying upon:
(1) the Board Resolution authorizing the issuance
and delivery to the Trustee of the First Mortgage Bonds;
(2) a copy of the Combined Engineer's, Officers'
and Accountant's Certificate delivered to the Mortgage Trustee
pursuant to Article III, Sections 3(b) and 4(a), and Article XVIII,
Sections 1(a), 1(c), 2 and 3(c), of the Mortgage, on which the
Trustee shall be entitled conclusively to rely as if such
Certificate were addressed to the Trustee;
(3) a copy of the Order of the District of Columbia
Public Service Commission and of the order of any other applicable
regulatory authority the consent or approval of which is required
for the issuance of the First Mortgage Bonds;
(4) a copy of the opinion of counsel delivered to
the Mortgage Trustee pursuant to Article III, Section 4, of the
Mortgage, which shall state that the Trustee shall be entitled
conclusively to rely thereon as if addressed to the Trustee; and
(5) if required by the Trust Indenture Act, an
Issuance Fair Value Certificate.
Section 1404. First Mortgage Bonds as Security for Securities.
-----------------------------------------------
(a) Until the Release Date, the First Mortgage Bonds
delivered to and pledged with the Trustee pursuant to Section 1402
shall be held in trust by the Trustee for the equal and
proportionate benefit and security of the Holders from time to time
of the corresponding series of Securities, and shall serve as
security for (i) the full and prompt payment of the principal
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of and premium, if any, on such Securities when and as the same
shall become due in accordance with the terms and provisions of the
Securities and this Indenture, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, and
(ii) the full and prompt payment of any interest on such Securities
when and as the same shall become due in accordance with the terms
and provisions of the Securities and this Indenture.
(b) Notwithstanding anything in this Indenture to the
contrary, from and after the Release Date, (i) the First Mortgage
Bonds held by the Trustee shall cease to secure any obligation of
the Company under this Indenture, including the payment of
principal of and any premium or interest on all Securities issued
in accordance with this Article Fourteen, (ii) the obligation of
the Company to make payment with respect to the principal of and
any premium or interest on the First Mortgage Bonds held by the
Trustee shall cease, and (iii) the Trustee shall release the First
Mortgage Bonds as provided for in Section 1409.
(c) Following the Release Date, the Company shall cause
the Mortgage to be terminated and the Company shall not issue any
additional First Mortgage Bonds under the Mortgage.
Section 1405. No Other Security; No Modification of Mortgage.
----------------------------------------------
(a) Except for the designated First Mortgage Bonds, the
Securities issued in accordance with this Article Fourteen shall
not be secured by any particular assets, franchises, rights, powers
or entitlements of the Company or any other Person.
(b) The rights, powers, obligations and duties of the
Company and the Mortgage Trustee under the First Mortgage Bonds are
governed exclusively by the terms thereof and the Mortgage, and
nothing herein shall create any additional rights or powers, or any
additional obligation or duty, of any Person in, under or to the
Mortgage or the First Mortgage Bonds (other than the rights and
powers of the Trustee as a holder of First Mortgage Bonds).
Section 1406. Payments on First Mortgage Bonds.
--------------------------------
(a) The obligation of the Company to make any payment of
the principal of, or any premium or interest on, any First Mortgage
Bonds securing any series of Securities in accordance with this
Article Fourteen, whether at Stated Maturity, upon call for
redemption, or otherwise, shall be fully or partially, as the case
may be, deemed to have been satisfied and discharged to the extent
that (i) at the time any such payment shall be due, the then due
principal of or any premium or interest on the corresponding
principal amount of Securities that such First Mortgage Bonds
secure shall have been fully or partially paid, deemed to have been
paid or otherwise satisfied or discharged in accordance with the
terms thereof or this Indenture or (ii) the amount of the Company's
obligation to make any such payment in respect of such First
Mortgage Bonds exceeds the obligation of the Company at that time
to make payment of the principal of, premium, if any, and interest
on the Securities that are secured by such First Mortgage Bonds.
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(b) In the event that the Company fails to make payment
of any principal of, or premium or interest on, any series of
Securities that are secured by First Mortgage Bonds in accordance
with this Article XIV, the Trustee shall, within five days after
the date such payment was due, notify the Mortgage Trustee in
writing of the details of such nonpayment.
Section 1407. Certain Responsibilities of Trustee with
----------------------------------------
Respect to First Mortgage Bonds.
-------------------------------
(a) The Trustee, as a holder of First Mortgage Bonds, or
its agent shall attend any meeting of the holders of First Mortgage
Bonds duly called under the Mortgage as to which it receives due
notice, or, at its option, shall deliver its proxy in connection
therewith, as to matters with respect to which it is entitled to
vote or consent. Either at such meeting, or otherwise where the
consent of holders of First Mortgage Bonds under the Mortgage is
sought without a meeting, the Trustee shall vote the First Mortgage
Bonds held by it, or shall grant or withhold its consent with
respect thereto, as the Trustee determines to be in the best
interests of the Holders of the series of Securities secured by
such First Mortgage Bonds, unless the Trustee is directed otherwise
by the Holders of not less than a majority in aggregate principal
amount of such series of Securities.
(b) In exercising its responsibilities under paragraph
(a), the Trustee may solicit instructions from the Holders of any
series of Securities that is secured by First Mortgage Bonds and,
if so, shall vote or shall grant or withhold its consent with
respect to the First Mortgage Bonds as directed by the Holders of
a majority in aggregate principal amount of the Securities of that
series.
Section 1408. Permitted Transfers of First Mortgage Bonds
___________________________________________
by the Trustee.
--------------
Except (i) as required to effect an assignment to a
successor Trustee under this Indenture, (ii) in accordance with
Section 1409 or (iii) in compliance with a final order of a court
of competent jurisdiction in connection with any bankruptcy or
reorganization proceeding of the Company, the Trustee shall not
sell, assign or transfer the First Mortgage Bonds delivered to the
Trustee pursuant to Section 1402, and the Company shall issue stop
transfer instructions to the Mortgage Trustee and to any transfer
agent for the First Mortgage Bonds to effect compliance with this
Section 1408.
Section 1409. Release of First Mortgage Bonds.
-------------------------------
(a) Following the Release Date, the Trustee shall, upon
the request of the Company set forth in a Company Order and (if
required to be delivered under the Trust Indenture Act) the receipt
of a Release Fair Value Certificate, surrender to the Company or
the Mortgage Trustee (as directed by the Company Order), together
with such appropriate instruments of transfer or release as may be
reasonably requested by the Company, without any payment of
consideration by the Company therefor, all of the First Mortgage
Bonds held by the Trustee.
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(b) If, prior to the Release Date, there shall be
delivered to the Trustee for cancellation all of the Outstanding
Securities of any series that is secured in accordance with this
Article Fourteen by First Mortgage Bonds, or the Company pays or
causes to be paid, or deposits or causes to be deposited with the
Trustee in accordance with Section 1302 funds or U.S. Government
Securities sufficient to pay, the principal of and any premium or
interest on all of the Outstanding Securities of such series, (i)
such Securities shall cease to be entitled to any lien, benefit or
security pursuant to this Article Fourteen, (ii) the obligation of
the Company to make payment with respect to the principal of and
any premium or interest on the First Mortgage Bonds securing such
Securities shall be deemed satisfied and discharged, and (iii) upon
the written request of the Company set forth in a Company Order and
(if required to be delivered under the Trust Indenture Act) the
receipt of a Release Fair Value Certificate, the Trustee shall
surrender to the Company or the Mortgage Trustee (as directed by
the Company Order), together with such appropriate instruments of
transfer or release as may be reasonably requested by the Company,
without any payment of consideration by the Company therefor, all
of the First Mortgage Bonds securing such Securities.
(c) If, prior to the Release Date, there shall be
delivered to the Trustee for cancellation (excluding Securities
delivered to the Trustee for cancellation following the
registration of transfer or exchange thereof pursuant to Section
305 or the replacement thereof pursuant to Section 306) less than
all of the Outstanding Securities of any series that is secured in
accordance with this Article Fourteen by First Mortgage Bonds, or
the Company pays or causes to be paid, the principal of and any
premium or interest on less than all of the Outstanding Securities
of any series, (i) the Securities cancelled shall cease to be
entitled to any lien, benefit or security pursuant to this Article
Fourteen, (ii) the obligation of the Company to make payment with
respect to the principal of and any premium or interest on the
First Mortgage Bonds securing such Securities shall be deemed
satisfied and discharged, and (iii) upon the written request of the
Company set forth in a Company Order and (if required to be
delivered under the Trust Indenture Act) the receipt of a Release
Fair Value Certificate, the Trustee shall surrender to the Company
or the Mortgage Trustee (as directed by the Company Order),
together with such appropriate instruments of transfer or release
as may be reasonably requested by the Company, without any payment
of consideration by the Company therefor, First Mortgage Bonds
securing such Securities in an aggregate principal amount equal to
the aggregate principal amount of Securities delivered to the
Trustee for cancellation.
(d) Prior to the Release Date, the Company shall not
cause the surrender by the Trustee, as contemplated by this Section
1409, of First Mortgage Bonds of any series if, after such
surrender, the aggregate principal amount of First Mortgage Bonds
of such series held by the Trustee would be less than the aggregate
principal amount of Securities that are secured by such series of
First Mortgage Bonds.
(e) The Company shall notify the Trustee promptly in
writing of the occurrence of the Release Date. Notice of the
occurrence of the Release Date shall be prepared by the Company
and, at the written request of the
- 72 -
Company, shall be given by the Trustee to the Holders of the
Securities in the manner provided in Section 1.06 hereof not later
than 30 days after the receipt of such notice from the Company.
Section 1410. Further Assurances.
------------------
The Company, at its own expense, shall do such further
lawful acts and things, and execute and deliver such additional
conveyances, assignments, assurances, agreements, financing
statements and instruments, as may be necessary in order to better
assign, assure, perfect and confirm to the Trustee its security
interest in the First Mortgage Bonds and for maintaining,
protecting and preserving such security interest.
ARTICLE FIFTEEN
Immunity of Incorporators, Stockholders,
Officers and Directors
Section 15.01. Indenture, Securities and First Mortgage Bonds
----------------------------------------------
Solely Corporate Obligations.
----------------------------
No recourse for the payment of the principal of or any
premium or interest on any Security or on any First Mortgage Bond,
or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of
the Company, contained in this Indenture, the Mortgage or in any
supplemental indenture, or in any Security or in any First Mortgage
Bond, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through
the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood
that all such liability is hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this
Indenture and the issuance of the Securities.
* * *
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.
- 73 -
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
POTOMAC ELECTRIC POWER COMPANY
By: _________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: ___________________________
Name:
Title:
- 74 -
Schedule A
Form of Face of Security.
------------------------
[Insert any legend required by the Internal Revenue Code
and the regulations thereunder.]
POTOMAC ELECTRIC POWER COMPANY
No._________ $__________
CUSIP No. _________
Potomac Electric Power Company, a corporation duly
organized and existing under the laws of the District of Columbia
and the Commonwealth of Virginia (herein called the "Company",
which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to ____________, or registered assigns, the principal sum of
__________________ [Dollars] on _____________, [if the Security is
to bear interest prior to Maturity, insert -- , and to pay interest
thereon from __________ or from the most recent Interest Payment
Date to which interest has been paid or duly provided for,
semi-annually on __________ and ___________ in each year (an
"Interest Payment Date"), commencing _________, at the rate of ___%
per annum, until the principal hereof is paid or made available for
payment [if applicable, insert -- , and (to the extent that the
payment of such interest shall be legally enforceable) at the rate
of __% per annum on any overdue principal and premium and on any
overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on the last business day which
is more than ten days prior to Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to
Maturity, insert -- The principal of this Security shall not bear
interest, except in the case of a default in payment of principal
upon acceleration, upon redemption or at Stated Maturity and in
such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment
of such principal has been made
- 75 -
or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that
is not so paid on demand shall bear interest at the rate of ____%
per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been
made or duly provided for, and such interest shall also be payable
on
demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be
made at the office or agency of the Company maintained for that
purpose [insert place of payment] in such coin or currency of the
United States of America [or insert other currency], as at the time
of payment is legal tender for payment of public and private debts
[if applicable, insert --; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear
in the Security Register].
Until the Release Date, the due and punctual payment of
the principal of, premium, if any, and interest on this Security is
secured pursuant to Article XIV of the Indenture by a series of
First Mortgage Bonds issued by the Company under the Mortgage and
Deed of Trust, dated July 1, 1936, as amended and supplemented,
between the Company and The Bank of New York, as trustee and as
successor in such capacity to The ▇▇▇▇▇ National Bank of
Washington, D.C., and designated as "First Mortgage Bonds, ___%
Series due _____" and delivered and pledged by the Company to the
Trustee.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
POTOMAC ELECTRIC POWER COMPANY
By: _________________________
Attest:
_____________________
- 76 -
Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued
and to be issued under an Indenture, dated as of _____ __, 1998
(herein called the "Indenture"), between the Company and The Bank
of New York, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the
face hereof[, limited in aggregate principal amount to $ ________].
[If applicable, insert -- The Securities of this series
are subject to redemption upon not less than 30 days' notice by
mail, [if applicable, insert -- (i) on ___________ in any year
commencing with the year ____ and ending with the year ____ through
operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (ii)] at any time on or
after _________, 19__], as a whole or in part, at the election of
the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before
___________, __%, and if redeemed] during the 12-month period
beginning _________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to ___% of the principal
amount, together in the case of any such redemption [if applicable,
insert -- (whether through operation of the sinking fund or
otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series
are subject to redemption upon not less than 30 days' notice by
mail, (i) on _______ in any year commencing with the year ____ and
ending with the year ____ through operation of the sinking fund for
this series at the Redemption Prices for redemption through
operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below, and (ii) at any
time [on or after ____________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below:
If redeemed during the 12-month period beginning ___________ of the
years indicated,
- 77 -
Redemption Price Redemption Price For
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
---- ------------------- ----------------------
and thereafter at a Redemption Price equal to ___% of the principal
amount, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued
interest to the Redemption Date, but interest installments whose
Stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the
relevant Record Date referred to on the face hereof, all as
provided in the Indenture.]
[The sinking fund for this series provides for the
redemption on ________ in each year beginning with the year ____
and ending with the year of____ [not less than $_________
("mandatory sinking fund") and not more than] $________ aggregate
principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- in the inverse order in which
they become due].
[If the Security is subject to redemption, insert -- In
the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.]
[If applicable, insert -- This Security is not subject to
redemption prior to maturity.]
[If applicable, insert -- The Indenture contains
provisions for defeasance at any time of [(i)] (the entire
indebtedness evidenced by this Security] [and (ii)] [certain
restrictive covenants,] [in each case] upon compliance by the
Company with certain conditions set forth therein, which provisions
apply to this Security.]
[If the Security is not an Original Issue Discount
Security, insert -- If an Event of Default with respect to
Securities of this series shall occur and be continuing, the
principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this
series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture. Such amount
shall be equal to [-- insert formula for determining the amount].
Upon payment [if applicable, insert -- (i)] of the amount of
principal so declared due and payable [if applicable, insert -- and
(ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be
legally enforceable)],
- 78 -
all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any
time by the Company and the Trustee with the consent of the Holders
of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected (voting as a single
class). The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of and any premium or interest on this Security
at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in
registered form without coupons in denominations of $ ______ and
any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee
- 79 -
may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Security and the Indenture are governed by and shall
be construed in accordance with the laws of the State of New York,
without regard to the conflicts of law principles thereof.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.