-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VLy9iNVwHYcULou5dcE1+4kyMvAwG4T089IQvqbBKbU8BDT8h8zrJSUIQ2vwIsxp PwXxpmPhc0zRLZPTFhWsKw== 0000950162-97-000139.txt : 19970222 0000950162-97-000139.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950162-97-000139 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970218 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW CENTURY ENERGIES INC CENTRAL INDEX KEY: 0001004858 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 1935 Act SEC FILE NUMBER: 070-09007 FILM NUMBER: 97537524 BUSINESS ADDRESS: STREET 1: 1225 17TH ST CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032948989 MAIL ADDRESS: STREET 1: 1225 17TH ST CITY: DENVER STATE: CO ZIP: 80202 U-1 1 FORM U-1 File No. 70- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------------------------------------------- FORM U-1 APPLICATION/DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ---------------------------------------------- New Century Energies, Inc. Public Service Company of Colorado Cheyenne Light, Fuel and Power Company New Century Services, Inc. WestGas Interstate Inc. New Century Enterprises, Inc. e prime, inc. and its subsidiary companies PS Colorado Credit Corporation Natural Fuels Corporation PSRI Investments, Inc. Green & Clear Lakes Company 1480 Welton, Inc. 1225 Seventeenth Street Denver, Colorado 80202 Southwestern Public Service Company Quixx Corporation and its subsidiary companies Utility Engineering Corporation and its subsidiary companies Tyler at Sixth Amarillo, Texas 79101 (Names of companies filing this statement and addresses of principal executive offices) ------------------------------------------------- New Century Energies, Inc. (Name of top registered holding company parent) ------------------------------------------------- Richard C. Kelly Doyle R. Bunch II President and Treasurer Chairman and Secretary 1225 Seventeenth Street Tyler at Sixth Denver, Colorado 80202 Amarillo, Texas 79101 (Name and address of agents for service) The Commission is requested to send copies of all notices, orders and communications in connection with this Application/Declaration to: Susan A. Marshall, Esq. Gary W. Wolf, Esq. LeBoeuf, Lamb, Greene & MacRae, Cahill Gordon & Reindel L.L.P. 80 Pine Street 125 West 55th Street New York, New York 10005 New York, New York 10019 James D. Steinhilper William Lewis Southwestern Public Service Public Service Company of Company Colorado Tyler at Sixth 1225 Seventeenth Street Amarillo, Texas 79101 Denver, Colorado 80202 Page TABLE OF CONTENTS Page Item 1. Description of Proposed Transaction......................... 1 A. General.................................................. 1 B. Description of the Parties to the Transaction............ 2 C. Overview of Financing Request............................ 2 D. Parameters for Financing Authorization................... 4 E. Description of Specific Types of Financings.............. 6 1. NCE External Financings............................. 6 a. Capital Stock................................. 7 i. General.................................. 7 ii. Benefit Plans and Open Market Purchases of Common Stock ............................ 7 iii. Dividend Reinvestment Plan............. 8 b. Short Term Debt............................... 9 c. Interest Rate and Equity Swaps................ 9 d. Other Securities.............................. 11 2. Utility Subsidiary Financings....................... 11 a. Short Term Debt............................... 12 b. Interest Rate Swaps........................... 12 c. Other Securities.............................. 13 3. Non-Utility Subsidiary Financings................... 13 -i- 4. Intra-System Financings...................... 14 a. General................................ 14 b. Guarantees............................. 15 5. Changes in Capital Stock of Subsidiaries..... 15 6. Financing Entities........................... 16 7. Existing Financing Arrangements.............. 16 F. Description of Money Pool Transactions............ 17 1. Utility Money Pool........................... 17 2. Non-Utility Money Pool....................... 20 3. Other Contributions to Money Pool............ 20 4. Operation of the Money Pools and Administrative Matters....................... 21 5. Authorization Amounts........................ 21 6. Use of Proceeds.............................. 21 G. Financing of EWGs and FUCOs....................... 22 H. Filing of Certificates of Notification............ 22 I. Statement Pursuant to Rule 54..................... 23 Item 2. Fees, Commissions and Expenses.............................. 24 Item 3. Applicable Statutory Provisions............................. 24 Item 4. Regulatory Approvals........................................ 25 Item 5. Procedure................................................... 25 Item 6. Exhibits and Financial Statements........................... 25 A. Exhibits.......................................... 25 B. Financial Statements.............................. 26 Item 7. Information as to Environmental Effects..................... 27 -ii- Item 1. Description of Proposed Transaction A. General New Century Energies, Inc. ("NCE"), a Delaware corporation, has previously filed an Application/Declaration on Form U-1 with the Securities and Exchange Commission (the "Commission") requesting authorization under Section 9(a)(2) of the Public Utility Holding Company Act of 1935, as amended (the "Act"), to acquire all of the outstanding voting securities of Public Service Company of Colorado, a Colorado corporation and an operating public utility company ("PSCo"), Southwestern Public Service Company, a New Mexico corporation and an operating public utility company ("SPS"), and Cheyenne Light, Fuel and Power Company, a Wyoming corporation and an operating public utility company ("Cheyenne"), and for other related transactions (File No. 70-8787) (the "Merger U-1").(1) Following the consummation of the transactions described in the Merger U-1, NCE will register as a holding company under the Act. Each of the entities that will be directly and indirectly owned subsidiaries (as defined in the Act) of NCE upon consummation of the transactions described in the Merger U-1, is referred to herein individually as a "Subsidiary" and collectively as "Subsidiaries". The terms "Subsidiary" and "Subsidiaries" shall also include entities that become subsidiaries of NCE after the consummation of the Merger. In order to ensure that NCE and its Subsidiaries (the "Applicants") are able to meet their capital requirements upon registration and plan their future financing accurately, the Applicants are hereby requesting authorization for (1) financ- - ---------- 1 No authority for the issuance or acquisition of any stock or debt security is sought in the Merger U-1 except: (i) the issuance of NCE stock in connection with the business combination, and in exchange for the stock, of PSCo, SPS and Cheyenne, (ii) the issuance of stock to NCE by New Century Enterprises, Inc. ("Enterprises"), New Century Services, Inc. and West Gas Interstate, Inc., (iii) the acquisition by Enterprises of the outstanding voting securities of all of SPS's, and certain of PSCo's, non-utility subsidiaries and (iv) the issuance by Enterprises of debt to SPS to acquire SPS's subsidiaries. Those transactions for which authority is sought in the Merger U-1 are not covered hereby. 2 ing transactions for the period beginning with the effective date of an order issued in this proceeding through December 31, 2002 (the "Authorization Period") and (2) the establishment of two money pool arrangements through December 31, 2002: the Utility Money Pool and the Non-Utility Money Pool. B. Description of the Parties to the Transaction Following the consummation of the merger of PSCo and SPS (the "Merger"), NCE will register as a holding company under the Act and will have three operating utility subsidiaries (the "Utility Subsidiaries"): PSCo, an electric and gas utility company providing service in an area having an estimated population of 2.8 million in Colorado; SPS, an electric utility company providing service to an area with a population of approximately one million in the Panhandle and south plains of Texas, eastern and southeastern New Mexico, the Oklahoma Panhandle and southwestern Kansas; and Cheyenne, an electric and gas utility operating principally in Cheyenne, Wyoming. NCE's other direct Subsidiaries will include New Century Services, Inc. ("NC Services"), West Gas Interstate Inc. ("WGI"), PS Colorado Credit Corporation (together with its successor, if any, "PSCCC") and New Century Enterprises, Inc. ("Enterprises"), an intermediate holding company. All of NCE's directly and indirectly owned subsidiaries, other than the utility subsidiaries, are herein called the "Non-Utility Subsidiaries". Additional information about the Applicants and their businesses is set forth in the Merger U-1 and the exhibits thereto. C. Overview of Financing Request The Applicants hereby request authorization to engage in the financing transactions set forth herein during the Authorization Period. The Applicants also request that any authorization with respect to this Application/Declaration (the "Application") include financings by newly formed Subsidiaries of NCE that are formed in accordance with the provisions of the Act, as the Applicants shall from time to time notify the Commission. The Application is intended to serve as a "shelf" application similar to a shelf registration permitted under Rule 415 promulgated under the Securities Act of 1933, as amended (the "1933 Act"), whereby the Applicants will be authorized to issue specified types of securities at any time, or from time to time, during the Authorization Period, with the details of each issuance and provisions of the securities to be determined 3 by the Applicants at the time of issuance within certain pre-established parameters and would not be limited by any of the Commission's "policies" with respect thereto. This type of Application is consistent with the recommendation of the staff of the Division of Investment Management that the Commission modernize its administration of the Act, particularly with respect to financing authorizations, in order to "reduce significantly the number of applications requiring SEC approval and to provide more flexibility for registered holding companies and their Subsidiaries"(2) by issuing "orders covering blocks of securities to be sold at one time or from time to time over periods of up to five years."(3) The shelf approach will give the Applicants flexibility that will allow them to respond quickly and efficiently to their financing needs and to changes in market conditions, which, in turn, should make them more competitive with other utility companies that are not subject to the jurisdiction of the Act. At the same time, the Commission will continue to have oversight over financings by the Applicants through the regular disclosures under the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934 Act"), and through the notification system established pursuant to this Application. Finally, this form of financing authorization under the Act is consistent with existing Commission precedent. See, e.g., Columbia Gas Systems, Inc., et al., HCAR No. 26634 (December 23, 1996); Consolidated Natural Gas Company, HCAR No. 26500, File 70-8667 (March 28, 1996); Mississippi Power Company, HCAR No. 26491 (March 13, 1996); Gulf States Utilities Company, HCAR No. 26451 (January 16, 1996). The Applicants also hereby request authorization to deviate from the Commission's statements of policy with respect to first mortgage bonds and preferred stock in connection with the securities proposed to be issued and sold pursuant to this Application. The authorization requested herein relates to (i) external issues of capital stock, short term debt, interest rate and equity swaps and other securities by NCE; - ---------- 2 Division of Investment Management, The Regulation of Public-Utility Holding Companies (June 1995) (the "1995 Report") at 50. 3 1995 Report at 54. 4 (ii) external issuances of capital stock and debt securities not subject to the Rule 52 safe harbor, including short term debt and interest rate swaps, by the Utility Subsidiaries, (iii) external issuances of capital stock and debt securities not subject to the Rule 52 safe harbor by Non-Utility Subsidiaries, (iv) intrasystem financing between NCE and its Subsidiaries, including the issuance of intrasystem guarantees, (v) the ability of the Subsidiaries to alter their legal capitalization in order to engage in financing with their parent company, (vi) the ability of NCE and its Subsidiaries to acquire, redeem or retire its securities to the extent not covered by the exemption provided in Rule 42, (vii) the formation and issuances of securities by newly formed financing entities, including intrasystem guarantees of such securities, (viii) the retention of existing financing entities, (ix) certain existing financings and (x) financing investments in exempt wholesale generators of ("EWGs") and foreign utility companies ("FUCOs"). This Application also constitutes a request by the Applicants for approval under the Act to solicit proxies, consents or authorizations to obtain shareholder approval which may be required under Section 12(e) of the Act and Rule 62 thereunder; provided that the solicitation shall be within the exemption provided by Rule 65. D. Parameters for Financing Authorization This Application requests authority to engage in financing transactions during the Authorization Period for which the specific terms and conditions are not at this time known, and which are not covered by Rule 52, without further prior approval by the Commission. Accordingly, it is appropriate that NCE and the Utility Subsidiaries meet certain financial tests as a precondition to such financing transactions. The general preconditions for engaging in authorized financing transactions without further Commission approval are set forth directly below; further limitations on specific types of financings are set forth further herein. 1. Maintenance of Equity Ratio. NCE's (and each Utility Subsidiary's) common equity (as reflected in their most recent Forms 10-K or Forms 10-Q filed with the Commission pursuant to the 1934 Act, as the case may be or, if such Forms are not filed, as set forth in their most recent quarterly or annual financial statements prepared in accordance with generally accepted accounting principles) is at least 30% of its consolidated capitalization, as adjusted to reflect subsequent events that affect capitalization; 5 2. Investment Grade Debt. Any long-term debt issued to unaffiliated parties pursuant to the authority requested hereby and not exempt under Rule 52 is rated or meets the qualifications for being rated investment grade by a nationally recognized statistical rating organization (as that term is used in Rule 15c3-1(c)2(vi)(F) under the 1934 Act); 3. Effective Cost of Money on Borrowings. The effective cost of money on long-term debt financings authorized by this Application does not exceed 300 basis points over the interest rate borne by comparable term U.S. Treasury securities and the effective cost of money on short-term debt financings authorized by this Application does not exceed 300 basis points over the London interbank offered rate (LIBOR); 4. Effective Cost of Money on Other Approved Securities. The effective cost of money on preferred stock and other fixed income oriented securities does not exceed 500 basis points over the interest rate borne by 30 year term U.S. Treasury securities; 5. Maturity of Debt. The maturity of authorized indebtedness will not exceed 50 years; 6. Issuance Expenses. The underwriting fees, commissions and other similar remunerations paid in connection with the non-competitive issue, sale or distribution of a security pursuant to this Application does not exceed 5% of the principal or total amount of the financing; 7. Aggregate Dollar Limit. The aggregate amount of outstanding external financing effected by NCE and its Subsidiaries pursuant to any authorization granted hereunder during the Authorization Period does not exceed $10 billion; provided, that in calculating the amount of external financing effected with respect to short term debt and revolving credit arrangements, only outstanding amounts of such debt and under such arrangements will be counted. Further, credit support of underlying subsidiary obligations (because the same would be subject to a separate $4 billion limitation relating to intrasystem guarantees and credit support discussed in the next paragraph) would not be included in the calculation. Interest and equity swaps will relate only to investments or obligations already existing at the time of the swap transaction. The aggregate amount of outstanding securities issued by the Subsidiaries to NCE or to other Subsidiaries pursuant to any authorization granted hereunder does not exceed $4 billion 6 and the aggregate amount of intrasystem guarantees and other credit support obligations outstanding at any one time pursuant to any authorization granted hereunder does not exceed $4 billion. 8. Use of Proceeds. The proceeds from the financings authorized by the Commission pursuant to this Application will be used for general and corporate purposes, including (i) financing, in part, capital expenditures of NCE and its Subsidiaries, (ii) the repayment, redemption, refunding or purchase of debt and capital stock of NCE or its Subsidiaries without the need for prior Commission approval pursuant to Rule 42 or a successor rule, (iii) financing working capital requirements and capital spending of the NCE system and (iv) other lawful general purposes. The authorization requested herein to engage in external or intrasystem financing without additional Commission approval does not apply in the case of any financing (other than through the use of internally generated funds and/or consolidated retained earnings) for the purpose of investing in an EWG or FUCO as defined in Sections 32 and 33 of the Act, respectively unless such investment is in compliance with Rules 53 and 54 (as described below). E. Description of Specific Types of Financings 1. NCE External Financings NCE may obtain funds externally through short-term debt financing, including commercial paper sales, and sales of capital stock. Debt and capital stock financings may be issued and sold pursuant to underwriting agreements of a type generally standard in the industry. Public distributions may be pursuant to private negotiation with underwriters, dealers or agents as discussed below or effected through competitive bidding among underwriters. In addition, sales may be made through private placements or other non-public offerings to one or more persons. All such debt and capital stock sales will be at rates or prices and under conditions negotiated or based upon, or otherwise determined by, competitive capital markets. Common stock may also be sold pursuant to various existing PSCo or SPS employee benefit plans or new NCE employee benefit plans and the NCE dividend reinvestment plan. In addition, NCE may issue and sell income preferred securities. NCE may sell securities covered by this Application in any of the following ways: (i) through underwriters or 7 dealers; (ii) through agents; (iii) directly to a limited number of purchasers or a single purchaser; or (iv) directly to employees (or to trusts established for their benefit) and other shareholders through its employee benefit plans or its dividend reinvestment plan. If underwriters are used in the sale of the securities, such securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The securities may be offered to the public either through underwriting syndicates (which may be represented by a managing underwriter or underwriters designated by NCE) or directly by one or more underwriters acting alone. The securities may be sold directly by NCE or through agents designated by NCE from time to time. If dealers are utilized in the sale of any of the securities, NCE will sell such securities to the dealers, as principal. Any dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale. If equity securities are being sold in an underwriting offering, NCE may grant the underwriters thereof a "green shoe" option permitting the purchase from NCE at the same price additional equity securities then being offered solely for the purpose of covering over allotments. If debt securities are being sold, they may be sold pursuant to "delayed delivery contracts" which permit the underwriters to locate buyers who will agree with NCE to buy the debt at the same price but at a later date than the date of the closing of the sale to the underwriters. a. Capital Stock i. General NCE may issue and sell common or preferred stock, income preferred securities or rights, options and warrants convertible into common or preferred stock and issue stock upon the exercise of convertible debt or equity securities or pursuant to rights, options, warrants and similar securities. NCE may also buy back shares of such stock or such other Securities during the Authorization Period. ii. Benefit Plans and Open Market Purchases of Common Stock PSCo and SPS currently have 6 employee benefit plans pursuant to which they issue and/or sell common stock to their 8 employees. Pursuant to the terms of the Agreement and Plan of Reorganization dated as of August 22, 1995, as amended, among NCE, PSCo and SPS, following the effective time of the Merger, 4 of these plans will provide for the issuance and/or sale of NCE common stock and the remaining 2 plans will be terminated. On or prior to the consummation of the mergers, NCE will adopt a plan which will provide for the issuance and/or sale of NCE common stock and stock options. NCE may issue shares of its common stock under the authorization, and within the limitations, set forth herein in order to satisfy its obligations under such plans. Attached hereto as Exhibit B-4 is a summary of the terms of these plans. To the extent that following consummation of the mergers NCE adopts its own employee benefit plans that provide for the issuance of NCE common stock, NCE may issue shares of its common stock under the authorization and within the limitations set forth herein, provided that NCE will provide the Commission with a summary of the terms of any such NCE employee benefit plan prior to issuing any shares pursuant to any authorization provided in this proceeding. Shares of common stock for use under any employee benefit plans may either be newly issued shares, treasury shares or shares purchased in the open market. NCE hereby seeks authority for its open market purchase of these shares in accordance with the terms of or in connection with the operation of the plans. NCE may also acquire treasury shares through other open market purchases. NCE also proposes to issue and/or sell shares of common stock pursuant to these existing plans and similar plans or plan funding arrangements hereafter adopted, and to engage in other sales of its treasury shares for general business purposes, without any additional prior Commission order. Stock transactions of this variety would thus be treated the same as other stock transactions permitted pursuant to this Application. The Applicants also hereby request authority for NCE to solicit proxies, authorizations or consents through a proxy statement, filed under and meeting the standards of the 1934 Act, requesting shareholder approval or ratification of amendments to, and/or requesting shareholder approval or ratification of, employee benefit plans for employees of NCE or its Subsidiaries. Such solicitations will be within the exemption provided by Rule 65. iii. Dividend Reinvestment Plan In connection with the Merger, an NCE Dividend Reinvestment Plan substantially in the form attached hereto as Exhibit B-5 will become effective. NCE may issue and/or sell 9 shares of its common stock under the authorization, and within the limitations set forth herein, in connection with the operation of the NCE Dividend Reinvestment Plan. Shares of common stock for use under the plan may either be newly issued shares, treasury shares or shares purchased in the open market. NCE hereby seeks authority for the issuance and sale or open market purchases and sales of its shares in accordance with the NCE Dividend Reinvestment Plan. b. Short-Term Debt To provide financing for general corporate purposes, other working capital requirements and construction spending until long term financing can be obtained, NCE may sell commercial paper, from time to time, in established domestic or European commercial paper markets. Such commercial paper would be sold to dealers at the discount rate per annum prevailing at the date of issuance for commercial paper of comparable quality and maturities sold to commercial paper dealers generally. It is expected that the dealers acquiring commercial paper from NCE will reoffer such paper at a discount to corporate, institutional and, with respect to European commercial paper, individual investors. It is anticipated that NCE's commercial paper will be reoffered to investors such as commercial banks, insurance companies, pension funds, investment trusts, foundations, colleges and universities, finance companies and nonfinancial corporations. Back-up bank lines of credit for 100% of the outstanding commercial paper are required by credit rating agencies. To satisfy this requirement, NCE proposes to establish back-up bank lines in an aggregate principal amount not to exceed the amount of authorized commercial paper. NCE would borrow, repay and reborrow under these lines from time to time, without collateral, to the extent that it becomes impracticable to sell commercial paper due to market conditions or otherwise. Loans under these lines will have a maturity date not more than one year from the date of each borrowing. NCE may engage in other types of short-term financing generally available to borrowers with investment grade credit ratings as it may deem appropriate in light of its needs and market conditions at the time of issuance. NCE may contribute the proceeds of any such short-term debt to the Money Pools. c. Interest Rate and Equity Swaps NCE requests authority to enter into, perform, purchase and sell financial instruments intended to manage the 10 volatility of interest rates, including but not limited to interest rate swaps, caps, floors, collars and forward agreements or any other similar agreements. NCE proposes to employ interest rate swaps as a means of prudently managing the risk associated with any of its outstanding debt by, in effect, synthetically (i) converting variable rate debt to fixed rate debt, (ii) converting fixed rate debt to variable rate debt, (iii) limiting the impact of changes in interest rates resulting from variable rate debt and (iv) providing an option to enter into interest rate swap transactions in future periods for planned issuances of debt securities. In no case will the notional principal amount of any interest rate swap exceed that of the underlying debt instrument and related interest rate exposure, i.e., NCE will not engage in "leveraged" or "speculative" transactions. The underlying interest rate indices of such interest rate swaps will closely correspond to the underlying interest rate indices of NCE's debt to which such interest rate swap relates. NCE will only enter into interest rate swap agreements with counterparties whose senior secured debt ratings, as published by Standard & Poor's Corporation, are greater than or equal to "BBB+", or an equivalent rating from Moody's Investor Service, Inc., Fitch Investor Service or Duff & Phelps. NCE also seeks authority to engage in equity swaps. An equity swap is one in which two counterparts exchange the rate of return of an equity investment for the rate of return of a non-equity investment or another equity investment. Typically, an investor will swap either fixed or floating rate interest payments for payments indexed on the performance of a broad-based stock index in a domestic or foreign market. An equity swap may also allow the exchange of one equity market risk (such as a fixed sum based on the S&P index) for another market risk (such as a sum based on a foreign equity market index). The use of equity swaps could be used by NCE to hedge earnings from domestic or international investments it or its Subsidiaries may own, but would not be used in any way to transfer title to the equity securities owned by it which are used in the swap transaction. NCE requests reservation of jurisdiction over the use of equity swaps pending completion of the record as to the exact form of transactions. NCE also undertakes to file a post-effective amendment in this proceeding which will describe the general terms of each such equity swap and request a supplemental order of the Commission authorizing the issuance thereof by NCE. NCE further requests that each supplemental order be issued by the Commission without further public notice. 11 d. Other Securities In addition to the specific securities for which authorization is sought herein, NCE also proposes to issue other types of securities that it deems appropriate at any time and from time to time during the Authorization Period. NCE requests that the Commission reserve jurisdiction over the issuance of additional types of securities. NCE also undertakes to file a post-effective amendment in this proceeding which will describe the general terms of each such security and request a supplemental order of the Commission authorizing the issuance thereof by NCE. NCE further requests that each supplemental order be issued by the Commission without further public notice. 2. Utility Subsidiary Financings In June 1995, the Commission promulgated an amendment to Rule 52 under the Act to provide an exemption from the prior authorization requirements of the Act for the issuance and sale of "common stock, preferred stock, bond, note or other form of indebtedness" by a public utility subsidiary of a registered holding company, provided, among other things, (i) the issue and sale of such securities are solely for the purpose of financing the business of such public utility subsidiary company; (ii) the issue and sale of such securities have been expressly authorized by the state commission of the state in which such subsidiary company is organized and doing business; and (iii) the interest rates and maturity dates of any debt security issued to an associate company are designed to parallel the effective cost of capital of that associate company.(4) Most common and preferred stock, medium-term notes, long-term debt, including mortgage bonds, pollution control bonds and similar financings by the Utility Subsidiaries will qualify for, the Rule 52 exemption as they will have been approved by the Colorado Public Utility Commission ("CPUC") in the case of PSCo, the New - ---------- 4 Rule 52 also provides an exemption for issuances of the same types of securities by non-utility subsidiaries of a registered holding company provided the issuance is solely for the purpose of financing the existing business of such subsidiary and the interest rates and maturity dates of any debt security issued to an associate company is designed to parallel the effective cost of capital of that associate company. 12 Mexico Public Service Commission ("NMPSC") in the case of SPS and the Wyoming Public Service Commission ("WPSC") in the case of Cheyenne. Copies of the current state commission financing authorizations of PSCo, SPS and Cheyenne that relate to financing activities that are not subject to an exemption under the Act are attached hereto as Exhibits D-1, D-2 and D-3, respectively. However, certain external financings by the Utility Subsidiaries for which authorization is requested herein may be outside the scope of the Rule 52 exemption. The following securities may be issued without the approval of the applicable State Commission and, if not so approved, would be outside the scope of the Rule 52 exemption: for PSCo, debt securities with maturities of less than 12 months, for SPS, debt securities with maturities of less than 18 months and for Cheyenne, debt securities with maturities of less than 12 months. a. Short Term Debt To provide financing for general corporate purposes and other working capital requirements, the Utility Subsidiaries may sell commercial paper, from time to time, in established domestic or European commercial paper markets in a manner similar to NCE as discussed in Item 1.E.1.b. above. The Utility Subsidiaries may also maintain backup lines of credit in aggregate principal amount not to exceed the amount of authorized commercial paper. The Utility Subsidiaries would borrow, repay and reborrow under such lines from time to time, without collateral, to the extent that it becomes impracticable to sell commercial paper due to market conditions or otherwise. Loans under these lines shall have a maturity date not more than one year from the date of each borrowing. Each Utility Subsidiary may engage in other types of short-term financing as it may deem appropriate in light of its needs and market conditions at the time of issuance. Such short-term financing could include, without limitation, bank lines and debt securities issued under their respective indentures and note programs. The Utility Subsidiaries may contribute the proceeds of any such short term debt financing to the Utility Money Pool as described in Item 1.F. below. b. Interest Rate Swaps Each Utility Subsidiary may engage in interest swaps to the same extent, and under the same conditions, discussed with respect to NCE in Item 1.E.1.c. above. 13 c. Other Securities In addition to the specific securities for which authorization is sought herein, the Utility Subsidiaries may issue other types of securities during the Authorization Period that are not exempt from prior Commission approval. The Utility Subsidiaries request that the Commission reserve jurisdiction over the issuance of such additional types of securities except to the extent the same are exempt pursuant to Rule 52. Each Utility Subsidiary also undertakes to have a post-effective amendment filed in this proceeding that will describe the general terms of each such security of such Utility Subsidiary and request a supplemental order of the Commission authorizing the issuance thereof. The Utility Subsidiaries further request that each supplemental order be issued by the Commission without further public notice. 3. Non-Utility Subsidiary Financings The Non-Utility Subsidiaries are expected to be active in the development and expansion of energy-related or otherwise functionally related, non-utility businesses in the NCE holding company system. They will be competing with large, well-capitalized companies in different sectors of the energy and other industries. In order to accomplish investments in such competitive arenas, it will be necessary for the Non-Utility Subsidiaries to have the ability to engage in financing transactions which are commonly accepted for such types of investments. The majority of such financings will be exempt from prior Commission authorization pursuant to Rule 52. The Non-Utility Subsidiaries may, however, engage in types of security financing with non-affiliates that are not exempt from prior Commission approval. The Non-Utility Subsidiaries therefore request that the Commission reserve jurisdiction over the issuance of such additional types of securities. They also undertake to cause a post-effective amendment to be filed in this proceeding which will describe the general terms of each such security and request a supplemental order of the Commission authorizing the issuance thereof by the subject Non-Utility Subsidiary. The Non-Utility Subsidiaries further request that each supplemental order be issued by the Commission without further public notice. 14 4. Intra-System Financings a. General NCE may finance certain of its Subsidiaries and certain Subsidiaries may finance other Subsidiaries in an aggregate amount not exceeding $4 billion during the Authorization Period. The $4 billion excludes financing that is exempt pursuant to Rules 45 and 52. Such financings would generally be in the form of open account advances, long-term loans and/or capital stock purchases, as requested by the chief financial officer or treasurer or designee thereof of each such Subsidiary and agreed to by NCE or the lending Subsidiary, as the case may be. Open account advances will provide funds for general corporate purposes and other working capital requirements and temporarily for capital expenditures until long-term financing is obtained and/or cash is generated internally. NCE or the lending Subsidiary will determine, at its discretion, how much financing to give each borrowing Subsidiary as its needs dictate during the Authorization Period. Generally, NCE's or the lending Subsidiary's long-term loans to, and purchase of capital stock from, such borrowing Subsidiaries will provide financing for their capital expenditures, and will be exempt transactions under Rule 52. The Subsidiaries may also from time to time as deemed appropriate by them, buy back shares of their respective common stock or preferred stock from their respective parent companies. Open account advances with interest to the Subsidiaries, which would not be covered by Rule 45 or Rule 52, may be made, repaid and remade on a revolving basis, with interest at the same effective rate of interest as the daily weighted average effective rate of commercial paper, revolving credit and/or other short-term borrowings of NCE or the lending Subsidiary as the case may be. If no such borrowings are outstanding then the interest rate shall be predicated on the Federal Funds' effective rate of interest as quoted daily by the Federal Reserve Bank of New York. Such advances may be made through the Money Pools discussed in Item 1.F. below. The Non-Utility Subsidiaries may issue and NCE or other Non-Utility Subsidiary may acquire other types of securities which do not qualify for use of Rule 52 but which are considered appropriate during the Authorization Period. NCE and the Non-Utility Subsidiaries request that the Commission reserve jurisdiction over the issuance of such additional types of securities. They also undertake to cause a post-effective amendment to be filed in this proceeding which will describe 15 the general terms of each such security and request a supplemental order of the Commission authorizing the issuance thereof by the subject Non-Utility Subsidiary. NCE and the Non-Utility Subsidiaries further request that each supplemental order be issued by the Commission without further public notice. b. Guarantees The Applicants request authorization to enter into guarantees, obtain letters of credit, enter into expense agreements or otherwise provide credit support with respect to the obligations of other system companies as may be appropriate to enable such system companies to carry on in the ordinary course of their respective businesses, in an aggregate principal amount not to exceed $4 billion outstanding at any one time, except to the extent the same are exempt pursuant to Rule 52. The $4 billion limit on guarantees and other credit support obligations is in addition to the $10 billion limit on the external financing for NCE and its Subsidiaries and the $4 billion limit on intrasystem financing requested elsewhere herein. NCE may enter into such arrangements with respect to any Subsidiary and any Subsidiary may enter into such arrangements with respect to any other Subsidiaries. 5. Changes in Capital Stock of Subsidiaries The portion of an individual Subsidiary's aggregate financing to be effected through the sale of stock to NCE or other immediate parent company during the Authorization Period cannot be ascertained at this time. It may happen that the proposed sale of capital stock may in some cases exceed the then authorized capital stock of such Subsidiary. In addition, the Subsidiary may choose to use other forms of capital stock. As needed to accommodate such proposed transactions and to provide for future issues, request is made for authority to increase the amount or change the terms of any such Subsidiary's authorized capital stock capitalization by an amount deemed appropriate by NCE or other immediate parent company in the instant case. A Subsidiary would be able to change the par value, or change between par and no-par stock, without additional Commission approval. The Applicants also seek authority to solicit proxies, consents or authorizations to obtain shareholder approval regarding changes to their capital stock which may be required under Section 12(e) of the Act and Rule 62 thereunder. Such solicitations will be within the exemption provided by Rule 65. 16 6. Financing Entities NCE and the Subsidiaries seek authority to organize new corporations, trusts, partnerships or other entities created for the purpose of facilitating financings through their issue to third parties of income preferred securities or other securities authorized hereby. Request is also made for these financing entities to issue such securities to third parties in the event such transactions involving financing by the Applicants are not exempt pursuant to Rule 52. Additionally, request is made for authorization with respect to (i) the issuance of debentures or other evidences of indebtedness by any of the Applicants to a financing entity in return for the proceeds of the financing, (ii) the acquisition by any of the Applicants of voting interests or equity securities issued by the financing entity to establish any such Applicant's ownership of the financing entity (the equity portion of the entity generally being created through a capital contribution or the purchase of equity securities, ranging from 1 to 3 percent of the capitalization of the financing entity) and (iii) the guarantee by the Applicants of such financing entity's obligations in connection therewith. Each of the Applicants and the Subsidiaries also request authorization to enter into expense agreements with its respective financing entity, pursuant to which it would agree to pay all expenses of such entity. Any amounts issued by such financing entities to third parties pursuant to this authorization will be included in the overall external financing limitation authorized herein for the immediate parent of such financing entity. In order to avoid double counting, however, the indebtedness issued by an Applicant to a financing entity will not count against the intrasystem financing limit set forth herein. Applicants also request that SPS be authorized to retain Southwestern Public Service Capital I, a wholly owned trust, that issued trust preferred securities and loaned the proceeds to SPS. 7. Existing Financing Arrangements NCE and the Subsidiaries hereby request authority to retain such financing arrangements as were in place prior to the Merger and which are not otherwise exempted from the provisions of the Act. The existing financing arrangements of the Utility Subsidiaries are set forth on Annex I attached hereto. The existing financing arrangements of the Non-Utility Subsidiaries are set forth on Annex II attached hereto. 17 F. Description of Money Pool Transactions NCE and the Utility Subsidiaries hereby request authorization to establish the Utility Money Pool and the Utility Subsidiaries, to the extent not exempted by Rule 52, also request authorization to make unsecured short-term borrowings from the Utility Money Pool and to contribute surplus funds to the Utility Money Pool and to lend and extend credit to one another through the Utility Money Pool. The remaining Subsidiaries, all of which are Non-Utility Subsidiaries as well as any other newly formed Non-utility Subsidiaries, which NCE may form with the approval of the Commission, may participate in the Non-Utility Money Pool. The Non-Utility Money Pool activities of all of the Non-Utility Subsidiaries except PSCCC are exempt from the prior approval requirements of the Act under Rule 52. PSCCC is hereby requesting authority to make unsecured short-term borrowings from the Non-Utility Money Pool to the maximum amount requested herein, to contribute surplus funds to the Non-Utility Money Pool and to lend and extend credit to other Non-Utility Subsidiaries. NCE is requesting authorization to contribute surplus funds and to lend and extend credit to (a) the Utility Subsidiaries through the Utility Money Pool and (b) the Non-Utility Subsidiaries through the Non-Utility Money Pool. The Applicants believe that the cost of the proposed borrowings through the two Money Pools will generally be more favorable to the borrowing participants than the comparable cost of external short-term borrowings, and the yield to the participants contributing available funds to the two Money Pools will generally be higher than the typical yield on short-term investments. 1. Utility-Money Pool Under the proposed terms of the Utility Money Pool, short-term funds would be available from the following sources for short-term loans to the Utility Subsidiaries from time to time: (1) surplus funds in the treasuries of Utility Money Pool participants other than NCE, (2) surplus funds in the treasury of NCE, and (3) proceeds from bank borrowings by Utility Money Pool participants or the sale of commercial paper by NCE, PSCo, SPS and Cheyenne for loan to the Utility Money Pool ("External Funds"). Funds would be made available from such sources in such order as NC Services, as administrator of the Utility Money Pool, may determine would result in a lower cost of borrowing, consistent with the individual borrowing needs and financial standing of the companies providing funds to the 18 pool. The determination of whether a Utility Money Pool participant at any time has surplus funds to lend to the Utility Money Pool or shall lend funds to the Utility Money Pool would be made by such participant's chief financial officer or treasurer, or by a designee thereof, on the basis of cash flow projections and other relevant factors, in such participant's sole discretion. As discussed in more detail below, a separate Non-Utility Money Pool will be established by NCE with other Non-Utility Subsidiary companies of NCE. Funds made available by NCE for loans through the money pools will be made available first for loans through the Utility Money Pool and thereafter for loans through the Non-Utility Money Pool. Utility Money Pool participants that borrow would borrow pro rata from each company that lends, in the proportion that the total amount loaned by each such lending company bears to the total amount then loaned through the Utility Money Pool. On any day when more than one fund source (e.g., surplus treasury funds of NCE and other Utility Money Pool participants ("Internal Funds") and External Funds), with different rates of interest, is used to fund loans through the Utility Money Pool, each borrower would borrow pro rata from each such fund source in the Utility Money Pool in the same proportion that the amount of funds provided by that fund source bears to the total amount of short-term funds available to the Utility Money Pool. Borrowings from the Utility Money Pool would require authorization by the borrower's chief financial officer or treasurer, or by a designee thereof. No party would be required to effect a borrowing through the Utility Money Pool if it is determined that it could (and had authority to) effect a borrowing at lower cost directly from banks or through the sale of its own commercial paper. No loans through the Utility Money Pool would be made to, and no borrowings through the Utility Money Pool would be made by, NCE. The cost of compensating balances, if any, and fees paid to banks to maintain credit lines and accounts by Utility Money Pool participants lending External Funds to the Utility Money Pool would initially be paid by the participant maintaining such line. A portion of such costs -- or all of such costs in the event a Utility Money Pool participant establishes a line of credit solely for purposes of lending any External Funds obtained thereby into the Utility Money Pool -- would be retroactively allocated every month to the companies borrowing such External Funds through the Utility Money Pool in propor- 19 tion to their respective daily outstanding borrowings of such External Funds. If only Internal Funds make up the funds available in the Utility Money Pool, the interest rate applicable and payable to or by subsidiaries for all loans of such Internal Funds will be the rates for high-grade unsecured 30-day commercial paper sold through dealers by major corporations as quoted in The Wall Street Journal. If only External Funds comprise the funds available in the Utility Money Pool, the interest rate applicable to loans of such External Funds would be equal to the lending company's cost for such External Funds (or, if more than one Utility Money Pool participant had made available External Funds on such day, the applicable interest rate would be a composite rate equal to the weighted average of the cost incurred by the respective Utility Money Pool participants for such External Funds). In cases where both Internal Funds and External Funds are concurrently borrowed through the Utility Money Pool, the rate applicable to all loans comprised of such "blended" funds would be a composite rate equal to the weighted average of (a) the cost of all Internal Funds contributed by Utility Money Pool participants (as determined pursuant to the second preceding paragraph above) and (b) the cost of all such External Funds (as determined pursuant to the immediately preceding paragraph above). In circumstances where Internal Funds and External Funds are available for loans through the Utility Money Pool, loans may be made exclusively from Internal Funds or External Funds, rather than from a "blend" of such funds, to the extent it is expected that such loans would result in a lower cost of borrowings. Funds not required by the Utility Money Pool to make loans (with the exception of funds required to satisfy the Utility Money Pool's liquidity requirements) would ordinarily be invested in one or more short-term investments, including: (i) interest-bearing accounts with banks; (ii) obligations issued or guaranteed by the U.S. government and/or its agencies and instrumentalities, including obligations under repurchase agreements; (iii) obligations issued or guaranteed by any state or political subdivision thereof, provided that such obligations are rated not less than A by a nationally recognized rating agency; (iv) commercial paper rated not less than A-1 or P-1 or their equivalent by a nationally recognized rating agency; (v) money market funds; (vi) bank certificates of de- 20 posit, (vii) Eurodollar funds; and (viii) such other investments as are permitted by Section 9(c) of the Act and Rule 40 thereunder. The interest income and investment income earned on loans and investments of surplus funds would be allocated among the participants in the Utility Money Pool in accordance with the proportion each participant's contribution of funds bears to the total amount of funds in the Utility Money Pool and the cost of funds provided to the Utility Money Pool by such participant. Each Applicant receiving a loan through the Utility Money Pool would be required to repay the principal amount of such loan, together with all interest accrued thereon, on demand and in any event not later than one year after the date of such loan. All loans made through the Utility Money Pool could be prepaid at any time by the borrower without premium or penalty. Under the authorization requested herein, all loans through the Utility Money Pool would be made on or before December 31, 2002. All loans would mature on demand, or on a date agreed by the parties (but in any case not later than one year after the date of the applicable borrowing), and would be prepayable in whole at any time or in part from time to time, without premium or penalty. Interest would be payable by each borrower monthly. 2. Non-Utility Money Pool The Non-Utility Money Pool will be operated on the same terms and conditions as the Utility Money Pool, except that NCE funds made available to the Money Pools will be made available to the Utility Money Pool first and thereafter to the Non-Utility Money Pool. All contributions to, and borrowings from, the Non-Utility Money Pool are exempt pursuant to the terms of Rule 52 under the Act, except contributions and extensions of credit by NCE and PSCCC and short-term borrowings by PSCCC in an amount not to exceed 40% of its total capitalization, authorization for which is hereby requested. 3. Other Contributions to Money Pool NCE, SPS, PSCo and Cheyenne may contribute funds from the issuance of short term debt as authorized above to the Utility Money Pool. NCE may contribute funds from the issuance of short term debt to the Non- 21 Utility Money Pool and the Non-Utility Subsidiaries may contribute funds from the issuance of short term debt to the Non-Utility Money Pool. 4. Operation of the Money Pools and Administrative Matters Operation of the Utility and Non-Utility Money Pools, including record keeping and coordination of loans, will be handled by NC Services under the authority of the appropriate officers of the participating companies. NC Services will administer the Utility and Non-Utility Money Pools on an "at cost" basis and will maintain separate records for each money pool. Surplus funds of the Utility Money Pool and the Non-Utility Money Pool may be combined in common short-term investments, but separate records of such funds shall be maintained by NC Services as administrator of the pools, and interest thereon shall be separately allocated, on a daily basis, to each Money Pool in accordance with the proportion that the amount of each Money Pool's surplus funds bears to the total amount of surplus funds available for investment from both Money Pools. 5. Authorization Amounts It is proposed that the Subsidiaries borrow short term funds from the Money Pool. The maximum amount of Money Pool borrowings outstanding for each Subsidiary will be determined by NCE and the Subsidiaries in accordance with business needs. Actual short-term financing would be issued based on working capital requirements and any interim financing needed to bridge between issuances of long-term capital. The maximum short-term debt under the Money Pool to be issued by PSCo, SPS and Cheyenne will not exceed 40% of their total capitalization. 6. Use of Proceeds Proceeds of any short term borrowings from the Money Pools by the Applicants may be used by each such Applicant (i) for the interim financing of its construction and capital expenditure programs; (ii) for its working capital needs; (iii) for the repayment, redemption or refinancing of its debt and preferred stock; (iv) to meet unexpected contingencies, payment and timing differences, and cash requirements; and (v) to otherwise finance its own business and for other lawful general purposes. 22 G. Financing of EWGs and FUCOs As described in the Merger U-1, upon consummation of the Merger, NCE, through its Non-Utility Subsidiaries, will own certain interests in EWGs. As outlined in the Merger U-1, NCE's Non-Utility Subsidiaries, e prime and Quixx and their subsidiaries, may expend internally generated funds on the development of such projects and FUCOs. In addition, e prime and Quixx and their subsidiaries will continually seek out and review investment opportunities which could lead to the acquisition of an interest in or the construction of EWGs or FUCOs. Sections 32 and 33 of the Act permit a registered holding company to acquire and maintain interests in one or more EWGs or FUCOs without the need to apply for or receive approval from the Commission. To the extent that funds for one or more projects are required in excess of internally generated funds, NCE hereby requests Commission authorization to invest proceeds from the financings authorized hereby in EWGs and FUCOs in compliance with Rule 53(a)(1) such that NCE's aggregate investment at any one time during the period covered by this Application will not exceed 50% of its "consolidated retained earnings", as defined in Rule 53(a)(1)(ii). NCE may seek additional Commission authorization if one or more prospective transactions warrant additional financing. H. Filing of Certificates of Notification It is proposed that, with respect to NCE, the reporting system of the 1933 Act and the 1934 Act be integrated with the reporting system under the 1935 Act. This would eliminate duplication of filings with the Commission that cover essentially the same subject matters, resulting in a reduction of expense for both the Commission and NCE. To effect such integration, the portion of the 1933 Act and 1934 Act reports containing or reflecting disclosures of transactions occurring pursuant to the authorization granted in this proceeding would be incorporated by reference into this proceeding through Rule 24 certificates of notification. The certificates would also contain all other information required by Rule 24, including the certification that each transaction being reported on had been carried out in accordance with the terms and conditions of and for the purposes represented in this Application. Such certificates of notification would be filed within 60 days after the end of each of the first three calendar quarters, and 90 days after the end of the last calendar quarter, in which transactions occur. 23 The Rule 24 certificates will contain the following information: (a) If sales of capital stock by NCE are reported, the purchase price per share and the market price per share at the date of the agreement of sale; (b) Consolidated balance sheets as of the end of the quarter, and separate balance sheets as of the end of the quarter for each company, including NCE, that has engaged in financing transactions during the quarter; (c) Future registration statements filed under the 1933 Act with respect to securities that are the subject of the Application and proxy materials filed under the Securities Exchange Act of 1934 that relate to matters which are the subject of this Application will be filed (or incorporated by reference) as exhibits to the next certificate filed pursuant to Rule 24; (d) A summary of any Money Pool activity, including (i) the maximum amount of each Money Pool participant's short-term borrowings outstanding during such quarter, and (ii) the average rate for the Utility Money Pool and the Non-Utility Money Pool during such quarter. I. Statement Pursuant to Rule 54 Rule 54 promulgated under the Act states that in determining whether to approve the issue or sale of a security by a registered holding company for purposes other than the acquisition of an exempt wholesale generator ("EWG") or a foreign utility company ("FUCO"), or other transactions by such registered holding company or its subsidiaries other than with respect to EWGs or FUCOs, the Commission shall not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company system if Rules 53(a), (b) or (c) are satisfied. Rule 53 requires that the aggregate investment in EWGs and FUCOs not exceed 50% of a system's consolidated retained earnings. Fifty percent of NCE's retained earnings, pro forma as of September 30, 1996 was $380,033,000; NCE's pro forma aggregate investment (as defined in Rule 53(a)(1)(i)) in EWGs and FUCOs is estimated to be approximately $8,207,000, thereby satisfying Rule 53(a)(1). 24 NCE and its Subsidiaries will maintain books and records to identify the investments in and earnings from EWGs and FUCOs in which they directly or indirectly hold an interest, thereby satisfying Rule 53(a)(2). In addition, the books and records of each such entity are and will be kept in conformity with United States generally accepted accounting principles ("GAAP"), the financial statements are and will be prepared according to GAAP, and NCE undertakes to provide the Commission access to such books and records and financial statements as it may request. Employees of NCE's domestic public-utility companies will not render services, directly or indirectly, to the EWGs or FUCOs in the NCE System, thereby satisfying Rule 53(a)(3). NCE, in connection with any Form U-1 seeking approval of EWG or FUCO financing, will submit copies of the documents described in Rule 53(a)(4) with every federal, state or local regulation having jurisdiction over the retail rates of the public-utility companies in the NCE System. Rule 53(a)(4) will be correspondingly satisfied. None of the conditions described in Rule 53(b) exist with respect to NCE, thereby satisfying Rule 53(b) and making Rule 53(c) inapplicable. Item 2. Fees, Commissions and Expenses Estimated Legal Fees and Expenses $ Estimated Miscellaneous Expenses $--------- Total Item 3. Applicable Statutory Provisions Sections 6(a), 7, 9(a), 10, and 12 of the Act and Rules 42, 43, 45, 52 and 62 are considered applicable to the proposed transactions. To the extent that the proposed transactions are considered by the Commission to require authorization, approval or exemption under any section of the Act or provision of the rules or regulations other than those specifically set forth 25 herein, request for such authorization, approval or exemption is hereby made. Item 4. Regulatory Approvals No state or federal regulatory agency other than the Commission under the Act has jurisdiction over the proposed transactions. If any such agency obtains jurisdiction over any of the proposed transactions, any orders obtained will be promptly filed with the Commission. Item 5. Procedure The Applicants hereby request that there be no hearing on this Application and that the Commission issue its order as soon as practicable after the filing hereof. The Commission is respectfully requested to issue and publish the requisite notice under Rule 23 with respect to the filing of this Application not later than February 24, 1997, such notice to specify a date not later than March 21, 1997, by which comments may be entered and a date not later than the date of the Commission's order for the Merger U-1, as the date which an order of the Commission granting and permitting the Application to become effective may be entered by the Commission. A form of Notice is filed herewith as Exhibit G-1. Without prejudice to its right to modify the same if a hearing should be ordered on this Application, NCE hereby makes the following specifications required by paragraph (b) of Item 5 of Form U-1: 1. There should not be a recommended decision by a hearing officer or any other responsible officer of the Commission. 2. The Division of Investment Management may assist in the preparation of the Commission's decision and/or order. 3. There should not be a 30-day waiting period between issuance of the Commission's order and the date on which the order is to become effective. Item 6. Exhibits and Financial Statements A. Exhibits B-1 Form of Commercial Paper Note 26 B-2 Form of Standard Purchase Agreement - Debt securities B-3 Form of Standard Purchase Agreement - Stock B-4 Summary of Terms of Employee Benefit Plans (to be filed by Amendment) B-5 Form of NCE Dividend Reinvestment Plan B-6 Form of Indenture for Debt Securities D-1 Current Financing Order[s] issued by the Colorado Public Utilities (to be filed by Amendment) D-2 Current Financing Order[s] issued by the New Mexico Public Service Commission (to be filed by Amendment) D-3 Current Financing Order[s] issued by the Wyoming Public Service Commission (to be filed by Amendment) F-1 Opinion of Counsel (to be filed by Amendment) G-1 Proposed Form of Public Notice G-2 Financial Data Schedules (incorporated by reference to the Annual Report on Form 10-K of NCE for the fiscal year ended December 31, 1996) B. Financial Statements 1.1 Pro-Forma Balance Sheet of NCE and subsidiaries, consolidated, as of September 30, 1996 (incorporated by reference to the Annual Report on Form 10-K of SPS for the fiscal year ended August 31, 1996 (File No. 1-3789)). 1.2 Pro-Forma Statement of Income of NCE and subsidiaries, for the 12 months ended September 30, 1996 (incorporated by reference to the Annual Report on Form 10-K of SPS for the fiscal year ended August 31, 1996 (File No. 1-3789)). 2.1 Balance Sheet of PSCo as of September 30, 1996 (incorporated by reference to the Quarterly 27 Statement on Form 10-Q of PSCo for the quarter ended September 30, 1996 (File No. 1-3280)). 2.2 Statement of Income and Retained Earnings of PSCo for the nine months ended September 30, 1996 (incorporated by reference to the Quarterly Statement on Form 10-Q of PSCo for the quarter ended September 30, 1996 (File No. 1-3280)). 3.1 Balance Sheet of SPS as of November 30, 1996 (incorporated by reference to the Quarterly Statement on Form 10-Q of SPS for the quarter ended November 30, 1996 (File No. 1-3789)). 3.2 Statement of Earnings for the three months ended November 30, 1996 (incorporated by reference to the Quarterly Statement on form 10-Q of SPS for the quarter ended November 30, 1996 (File No. 1-3789)). Item 7. Information as to Environmental Effects None of the matters that are the subject of this application and declaration involve a "major federal action" nor do they "significantly affect the quality of the human environment" as those terms are used in section 102(2)(C) of the National Environmental Policy Act. The transaction that is the subject of this application will not result in changes in the operation of the company that will have an impact on the environment. The Applicants are not aware of any federal agency that has prepared or is preparing an environmental impact statement with respect to the transactions that are the subject of this application. 28 SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this application and declaration to be signed on its behalf by the undersigned thereunto duly authorized. By: /s/ Doyle R. Bunch ------------------------------- Name: Doyle R. Bunch, II Title: Chairman and Secretary Date: February 18, 1997 EX-1 2 FORM OF COMMERCIAL PAPER MASTER NOTE Exhibit B-1 FORM OF COMMERCIAL PAPER MASTER NOTE ________________________ (DATE OF ISSUANCE) _____________________________________________ (the "Issuer"), a corporation organized and existing under the laws of the State of ________________, for value received, hereby promises to pay to _________________ or registered assigns on the maturity date of each obligation identified on the records of the Issuer (which records are maintained by ______________________________ [the "Paying Agent"]) the principal amount for each such obli- gation. Payment shall be made by wire transfer to the regis- tered owner from the Paying Agent without the necessity of pre- sentation and surrender of this Master Note. This Master Note is a valid and binding obligation of the Issuer. ___________________________________ ___________________________________ (As Guarantor) (As Issuer) By:________________________________ By:________________________________ (Authorized Officer's Signature) (Authorized Officer's Signature) ___________________________________ ___________________________________ (Print Name and Title) (Print Name and Title) -2- At the request of the registered owner, the Issuer shall promptly issue and deliver one or more separate note certifi- cates evidencing each obligation evidenced by this Master Note. As of the date any such note certificate or certificates are issued, the obligations which are evidenced thereby shall no longer be evidenced by this Master Note. _______________________________________________________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto _______________________________________________________________ (Name, Address, and Taxpayer Identification Number of Assignee) the Master Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________________ Attorney to transfer said Master Note on the books of the Issuer with full power of substitution in the premises. Dated: _________________________________ Signature Signature(s) Guaranteed: NOTICE: The signature on this assignment must correspond with the name as written upon the face of this Master Note, in every particu- lar, without alteration or enlarge- ment or any change whatsoever. -3- _______________________________________________________________ [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE- SENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANS- FER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] EX-2 3 DEBT SECURITIES PURCHASE AGREEMENT Exhibit B-2 [NAME OF ISSUER] DEBT SECURITIES STANDARD PURCHASE PROVISIONS INCLUDING FORM OF PURCHASE AGREEMENT [NAME OF ISSUER] STANDARD PURCHASE PROVISIONS - DEBT SECURITIES From time to time, [Name of Issuer], a corporation organized and existing under the laws of the State of Delaware (the "Company"), may enter into purchase agreements that pro- vide for the sale of designated securities to the purchaser or purchasers named therein. The standard provisions set forth herein may be incorporated by reference in any such purchase agreement (the "Purchase Agreement"). The Purchase Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as "this Agreement." The term "Securities" shall mean the Debt Securities of the Company to be sold by the Company pursuant to the applicable Purchase Agreement. Unless otherwise defined herein, terms defined in the Purchase Agreement are used herein as therein defined. The Company has filed, in accordance with the provi- sions of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder (collectively called the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement on Form S-3 (including a prospectus), relating to the Securities, which pursuant to Item 12 of Form S-3 incorporates by reference documents which the Company has filed in accor- dance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively called the "Exchange Act"). Such registration statement has been declared effective by the Commission. Promptly upon the execution of this Agreement, the Company will prepare a prospectus supplement relating to the Securities (the "Prospectus Supplement"). The Company has furnished to you, for use by the Underwriters (as defined herein) and dealers, copies of one or more preliminary prospectuses and the docu- ments so incorporated therein (each thereof, including the doc- uments so incorporated therein, is herein called the "Prelimi- nary Prospectus"). The terms Registration Statement and Pro- spectus shall have the meanings ascribed to them in the Pur- chase Agreement. 1. Introductory. The Company proposes to issue and sell from time to time Securities registered under the Regis- tration Statement. The Securities will be issued pursuant to an Indenture, dated , to as Trustee (the "Trustee"), as supplemented and amended, including a sup- plemental indenture pertaining to the particular series of -2- Securities involved in the offering (the "Indenture"), and will have varying designations, interest rates and times of payment of any interest, maturities, redemption provisions and other terms, with all such terms for any particular series of the Securities being determined at the time of the sale and set forth in the Purchase Agreement and the Prospectus Supplement relating to such series of Securities. The Securities involved in any such offering are hereinafter referred to as the "Pur- chased Securities," and the firm or firms, as the case may be, which agree to purchase the same are hereinafter referred to as the "Underwriters" of the Purchased Securities. The terms "you" and "your" refer to those Underwriters who sign the Pur- chase Agreement either on behalf of themselves only or on behalf of themselves and as representatives of the several Underwriters named in Schedule A thereto, as the case may be. Purchased Securities to be purchased by Underwriters are herein referred to as "Underwriters' Securities," and any Purchased Securities to be purchased pursuant to Delayed Delivery Con- tracts (as defined below) as hereinafter provided are herein referred to as "Contract Securities." 2. Delivery and Payment. The Company will deliver the Underwriters' Securities to you for the accounts of the Underwriters at the place specified in the Purchase Agreement, against payment of the purchase price by wire transfer of imme- diately available funds (as agreed to by the parties and speci- fied in the Purchase Agreement), at the time set forth in this Agreement [or at such other time not later than seven full business days thereafter] as you and the Company determine, such time being herein referred to as the "time of purchase." Unless otherwise provided for in the Purchase Agreement, the Underwriters' Securities so to be delivered will be in defini- tive fully registered form registered in such authorized denom- inations and in such names as you request in writing not later than 10:00 A.M.,* on the third business day prior to the time of purchase, or, if no such request is received, in the names of the respective Underwriters in the amounts agreed to be pur- chased by them pursuant to this Agreement. For the purpose of expediting the checking of the Underwriters' Securities, the Company agrees to make the Underwriters' Securities available to you (at the place specified in the Purchase Agreement) in _________________________ * Times mentioned herein are New York City Time. -3- definitive form not later than 10:00 A.M. on the first business day preceding the time of purchase.* If any Purchase Agreement provides for sales of Pur- chased Securities pursuant to delayed delivery contracts, the Company authorizes the Underwriters to solicit offers to pur- chase Contract Securities pursuant to delayed delivery con- tracts substantially in the form of Schedule I attached hereto (the "Delayed Delivery Contracts") with such changes therein as the Company may approve. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment com- panies, and educational and charitable institutions. At the time of purchase the Company will pay you as compensation, for the accounts of the Underwriters, the compensation set forth in such Purchase Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and deliv- ers Delayed Delivery Contracts, the Contract Securities shall be deducted from the Purchased Securities to be purchased by the several Underwriters and the aggregate principal amount of Purchased Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Purchased Securities set forth opposite each Underwriter's name in such Purchase Agreement, except to the extent that you determine that such reduction shall be otherwise allocated and so advise the Company. 3. Certain Covenants of the Company. The Company agrees: (a) As soon as possible after the execution and delivery of this Agreement to file, or mail for filing, the Prospectus with the Commission pursuant to its Rule 424 under the Act and, if and when required at any time after such execution and delivery, to file amendments to the applications the Company has previously filed with any state regulatory agencies having jurisdiction to govern the Company's issuance of its securities setting forth, among other things, the necessary informa- tion with respect to the price and terms of the _________________________ * As used herein, "business day" shall mean a day on which the New York Stock Exchange is open for trading. -4- Purchased Securities and the terms of offering of the Purchased Securities; (b) To file no amendment or supplement to the Registration Statement or Prospectus (other than a required filing under the Exchange Act) subsequent to the execution of this Agreement to which you object in writing; (c) To furnish such proper information as may be required and otherwise to cooperate in qualifying the Purchased Securities for sale under the laws of such jurisdictions as you may desig- nate and in determining their eligibility for investment under the laws of such jurisdictions; provided that the Company shall not be required to qualify as a foreign corporation or to file a gen- eral consent to service of process in any jurisdiction; (d) To the extent not previously furnished to you, to furnish to you two signed copies of the Registration Statement, as initially filed with the Commission, of all amendments thereto, and of all documents incorporated by reference therein (including all exhibits filed therewith, other than exhibits which have previously been furnished to you), two signed copies of each consent and certificate of independent accountants and of each other person who by his profession gives authority to statements made by him and who is named in the Registration Statement as having prepared, certi- fied or reviewed any part thereof, and to furnish to you sufficient unsigned copies of the foregoing (other than exhibits, including consents filed as exhibits, to the Registration Statement) for dis- tribution of a copy to you and to each of the other Underwriters; (e) To deliver to the Underwriters without charge in New York City as soon as practicable after the execution and delivery of this Agreement and thereafter from time to time to furnish to the Underwriters, without charge, as many copies of the Prospectus in final form and any documents incorporated by reference therein at or after the date thereof (or as amended or supplemented, if -5- the Company shall have made any amendment or sup- plement after the effective date of the Registra- tion Statement) as you or the respective Under- writers may reasonably request for the purposes contemplated by the Act; (f) To advise you promptly (confirming such advice in writing) of any official request made by the Commission for amendments to the Registration Statement or Prospectus or for additional informa- tion with respect thereto, or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effectiveness of the Registration Statement and, if such order should be entered by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible, or of the suspension of qualification of the Purchased Securities for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; (g) To apply the net proceeds from the sale of the Purchased Securities in the manner set forth in the Prospectus; (h) To furnish to you during a period of five years from the time of purchase (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; (ii) from time to time, copies of any reports or other communications which it shall file with the Commission or any governmental agency substituted therefor under the Exchange Act or sent to its public stockholders, or holders of the Purchased Securities, and (iii) such other information as you may from time to time reason- ably request regarding the financial condition and operations of the Company; (i) To furnish to any other Underwriter cop- ies of such of the financial statements, reports or other information referred to in the foregoing subparagraphs (h)(i) and (ii) as such Underwriter may, from time to time during the period you are entitled to receive them, request; -6- (j) To advise the Underwriters of the hap- pening of any event known to the Company within the time during which a prospectus relating to the Purchased Securities is required to be delivered under the Act which, in the judgment of the Com- pany, would require the making of any change in the Prospectus or any amended or supplemented Pro- spectus or in the information incorporated by ref- erence therein so that as thereafter delivered to purchasers such Prospectus will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the state- ments therein, in the light of the circumstances under which they were made, not misleading, and on request to prepare and furnish to the Underwriters and to dealers and other persons designated by you such amendments or supplements (including appro- priate filings under the Exchange Act) to the Pro- spectus as may be necessary to reflect any such change, provided that the Company shall be so obligated only so long as the Company is notified of unsold allotments (failure by the Underwriters to so notify the Company cancels the Company's obligation under this Section 3(j)); (k) As soon as practicable, to make gener- ally available to its security holders an earnings statement (as contemplated by Rule 158 under the Act) covering a period of twelve months after the effective date of the Registration Statement; (l) To pay the fees and expenses of counsel for the Underwriters, and to reimburse the Under- writers for their reasonable out-of-pocket expenses incurred in contemplation of the perfor- mance of this Agreement, in the event that the Underwriters' Securities are not delivered to and taken up and paid for by the Underwriters hereun- der for any reason whatsoever except the failure or refusal of any Underwriter to take up and pay for Underwriters' Securities for some reason not permitted by the terms of this Agreement, the Underwriters agreeing to pay the fees and expenses of counsel for the Underwriters in any other event; -7- (m) To pay all expenses, fees and taxes (other than transfer taxes and fees and disburse- ments of counsel for the Underwriters except as set forth under 3(l) above or (iv) below) in con- nection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospec- tus and the Prospectus, any documents incorporated by reference therein at or after the date thereof and any amendments or supplements thereto, and the printing or reproduction and furnishing of copies of each thereof to the Underwriters and to deal- ers, (ii) the issue, sale and delivery of the Pur- chased Securities, (iii) the printing or reproduc- tion of this Agreement and the opinions and let- ters referred to in Section 4(a) hereof, (iv) the qualification of the Purchased Securities for sale and determination of their eligibility for invest- ment under state laws as aforesaid, including the legal fees and all filing fees and disbursements of counsel for the Underwriters and all other fil- ing fees, and the printing or reproduction and furnishing of copies of the "Blue Sky Survey" and the "Legal Investment Survey" to the Underwriters and to dealers, (v) the rating of the Purchased Securities by national rating agencies and (vi) the performance of the Company's other obli- gations hereunder; (n) To furnish to you as early as practi- cable prior to the time of purchase, but no later than two business days prior thereto, a copy of the latest available unaudited interim consoli- dated financial statements, if any, of the Company which have been read by the Company's independent public accountants as stated in their letters to be furnished pursuant to Section 4(a) of this Agreement; and (o) If a public offering of the Purchased Securities is to be made, not to offer or sell any of its other debt securities which are substan- tially similar to the Purchased Securities prior to ten days after the time of purchase without your consent. -8- 4. Conditions of Underwriters' Obligations. The several obligations of the Underwriters hereunder are subject to the following conditions: (a) That, at the time of purchase, you shall receive the signed opinions of counsel for the Company and counsel for the Underwriters, substan- tially in the forms heretofore furnished to you, addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); and that, at the time of purchase, you shall receive the signed letters of the independent public accountants of the Company, substantially in the form heretofore furnished to you and in substance satisfactory to you addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); (b) That, at or before 5:30 P.M. on the date hereof, or at such later time and day as you may have from time to time consented to in writing or by telephone, confirmed in writing, such orders of state authorities which are necessary to permit the issue, sale and delivery of the Purchased Securities, if any, shall have been issued; at the time of purchase such orders shall be in full force and effect; and prior to such time of pur- chase no stop order with respect to the effective- ness of the Registration Statement shall have been issued under the Act by the Commission and at such time of purchase no proceedings therefor shall be pending or threatened; (c) That, at the time the Registration Statement became effective, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that at the time of purchase the Prospectus shall not con- tain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than any statement contained in, or any matter omitted -9- from, the Registration Statement or the Prospectus in reliance upon, and in conformity with, informa- tion furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration Statement or Prospectus; (d) That, subsequent to the respective dates as of which information is given in the Registra- tion Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for fil- ing, pursuant to Rule 424 under the Act, and prior to the time of purchase, in your opinion no mate- rial adverse change, or any development involving a prospective material adverse change, in the con- dition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time); (e) That the Company shall have performed all of its obligations under this Agreement which are to be performed by the terms hereof at or before the time of purchase; (f) That, since the date of this Agreement, there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direc- tion of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organi- zation," as such term is defined for purposes of Rule 436(g)(2) under the Act (other than as referred to in or contemplated by the Registration Statement and the Prospectus as of such time); (g) That the Company shall, at the time of purchase, deliver to you (with reproduced or con- formed copies thereof for each of the other Under- writers) a signed certificate of two of its execu- tive officers stating that, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospec- tus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the -10- Act, and prior to the time of purchase, no mate- rial adverse change, or any development involving a prospective material adverse change, in the con- dition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time) and also covering the matters set forth in (c) and (e) of this Sec- tion 4; and (h) That the Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwrit- ers have been approved by the Company. 5. Termination of Agreement. The obligations of the several Underwriters hereunder shall be subject to termina- tion in your absolute discretion, if, at any time prior to the time of purchase, trading in securities on the New York Stock Exchange shall have been suspended (other than a temporary sus- pension to provide for an orderly market) or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if after the execution of this Agreement the United States shall have declared war in accordance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on the financial markets of the United States as, in your judgment, to make it impracti- cable to market the Purchased Securities. If you elect to terminate this Agreement as provided in this Section 5, the Company and each other Underwriter shall be notified promptly in writing or by telephone, confirmed in writing. If the sale to the Underwriters of the Underwriters' Securities, as herein contemplated, is not carried out by the Underwriters for any reason permitted hereunder or if such sale is not carried out because the Company shall be unable to com- ply with any of the terms thereof, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 3(l), 3(m), 7(b) and 9 hereof), and the Underwriters shall be under no obligation or liability to the Company (except to the extent provided in -11- Sections 8(b) and 9 hereof) or to one another under this Agreement. 6. Increase in Underwriters' Commitments: If any Underwriter shall default in its obligation to take up and pay for the Purchased Securities to be purchased by it hereunder and if the principal amount of the Purchased Securities which all Underwriters so defaulting shall have so failed to take up and pay for does not exceed 10% of the total principal amount of the Purchased Securities, the non-defaulting Underwriters shall take up and pay for (in addition to the principal amount of the Purchased Securities they are obligated to purchase pur- suant to this Agreement) the principal amount of the Purchased Securities agreed to be purchased by all such defaulting Under- writers, as herein provided. Such Purchased Securities shall be taken up and paid for by such non-defaulting Underwriter or Underwriters in such amount or amounts as you may designate with the consent of each Underwriter so designated or, in the event no such designation is made, such Purchased Securities shall be taken up and paid for by all non-defaulting Underwrit- ers pro rata in proportion to the principal amount of the Pur- chased Securities set opposite the names of all such non- defaulting Underwriters in Schedule A to the Purchase Agreement. Without relieving any defaulting Underwriter of its obligations hereunder, the Company agrees with the non-default- ing Underwriters that it will not sell any Purchased Securities hereunder unless all of the Underwriters' Securities are pur- chased by the Underwriters (or by substituted Underwriters selected by you with the approval of the Company or selected by the Company with your approval). If a new underwriter or underwriters are substituted by the Underwriters or by the Company for a defaulting Under- writer or Underwriters in accordance with the foregoing provi- sion, the Company or you will have the right to postpone the time of purchase for a period of not exceeding five business days in order that necessary changes in the Registration State- ment and Prospectus and other documents may be effected. The term Underwriter as used in this Agreement will refer to and include any underwriter substituted under this Section 6 with like effect as if such substituted underwriter had originally been named in Schedule A to the Purchase Agreement. -12- 7. Warranties and Representations of and Indemnity by the Company. (a) The Company warrants and represents that, when the Registration Statement became effective, the Registra- tion Statement complied in all material respects, and, when the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, the Prospectus will comply in all mate- rial respects with the provisions of the Act, and that neither will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or neces- sary to make the statements therein not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in, or any matter omit- ted from, the Registration Statement or the Prospectus in reli- ance upon and in conformity with information furnished in writ- ing by or on behalf of any Underwriter through you to the Com- pany expressly for use with reference to the Underwriter in the Registration Statement or Prospectus. The Company also war- rants and represents that the documents incorporated by refer- ence in the Prospectus comply in all material respects with the requirements of the Exchange Act and any additional documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein, or neces- sary to make the statements therein, in the light of the cir- cumstances under which they are made, not misleading. (b) The Company agrees to indemnify and hold harm- less each Underwriter, and any person who controls any Under- writer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact in the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus, or arises out of or is based upon any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not mislead- ing. The foregoing shall not cover any such loss, expense, liability or claim, however, which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company -13- expressly for use with reference to the Underwriter in, any such documents or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in any such documents or nec- essary to make such information not misleading. If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter shall promptly notify the Company in writing or by telephone, confirmed in writing, of the institution of such action and the Company shall assume the defense of such action, including the employment of counsel and payment of expenses. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Com- pany in connection with the defense of such action or the Com- pany shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of one counsel (in addition to local counsel) for all indemnified parties selected by you shall be borne by the Company. Anything in this paragraph to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent. The Company's indemnity agreement con- tained in this Section 7(b) and its warranties and representa- tions contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or controlling person, and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. The Company agrees promptly to notify the Underwriters of the commencement of any litigation or proceedings against the Company or any of its officers or directors in connection with the issue and sale of the Pur- chased Securities or with such Registration Statement or Prospectus. 8. Warranties and Representations of and Indemnity by Underwriters. (a) Each Underwriter warrants and represents that the information furnished in writing by or on behalf of -14- such Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration State- ment at the time it became effective or the Prospectus, or any related preliminary prospectus does not contain an untrue statement of a material fact and does not omit to state a mate- rial fact in connection with such information required to be stated in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus or necessary to make such information not misleading. Each Underwriter, in addition to other information furnished by such Underwriter or on its behalf through you to the Company in writing expressly for use with reference to such Underwriter in the Registration Statement and Prospectus, hereby furnishes to the Company in writing expressly for use with reference to such Underwriter the statements with respect to the terms of offer- ing of the Purchased Securities by the Underwriters set forth on the cover page of the Prospectus Supplement and under "Underwriting" therein. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and its officers from and against any loss, expense, liability or claim (includ- ing the reasonable fees and expenses of counsel and other rea- sonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in, the Registration Statement, any prospectus contained in the Regis- tration Statement at the time it became effective or the Pro- spectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in such documents or necessary to make such information not misleading. If any action is brought against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Com- pany or such person shall promptly notify such Underwriter in writing or by telephone, confirmed in writing, of the institu- tion of such action and such Underwriter shall assume the defense of such action, including the employment of counsel and payment of expenses. The Company or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense -15- of the Company or such person unless the employment of such counsel shall have been authorized in writing by such Under- writer in connection with the defense of such action or such Underwriter shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses for all indemnified parties of one counsel (in addition to local counsel) selected by the Company shall be borne by such Underwriter. Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of such Underwriter. The indemnity agreement on the part of each Underwriter contained in this Section 8(b) shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or such person, and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. Each Underwriter agrees promptly to notify the Company of the commencement of any litigation or proceedings against such Underwriter in connection with the issue and sale of the Purchased Securities or with such Registration Statement or Prospectus. 9. Contribution. If the indemnification provided for in Sections 7(b) or 8(b) above is unavailable in respect of any losses, expenses, liabilities or claims referred to therein, then the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses except to the extent that contribution is not per- mitted under the Act or the Exchange Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Purchased Secu- rities (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable con- siderations appropriate under the circumstances. The Company and the Underwriters and such controlling persons agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters and such controlling persons were treated as one -16- entity for such purpose). Notwithstanding the provisions of this Section 9, no indemnifying Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by such Under- writer and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter other- wise has been required to pay by reason of such untrue state- ment or alleged untrue statement or omission or alleged omis- sion. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudu- lent misrepresentation. The contribution agreement contained in this Section 9 shall remain in full force and effect regard- less of any investigation made by or on behalf of any Under- writer or the Company or any of its officers or directors or any controlling person and shall survive any termination of this Agreement or the issuance and delivery of the Purchased Securities. 10. Notices. All statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered or sent by registered mail to the address furnished in writing for the purpose of such statements, requests, notices and agreements hereunder, and, if to the Company shall be suffi- cient in all respects if delivered or sent by registered mail to the Company at [Name of Issuer/Address], Attention: . 11. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this agreement. 12. Parties in Interest. The Agreement herein set forth has been and is made solely for the benefit of the Under- writers and the Company, and the controlling persons, directors and officers referred to in Sections 7, 8 and 9 hereof, and their respective successors, assigns, executors and administra- tors, and no other person shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation (including, without limitation, any pur- chaser of the Purchased Securities from an Underwriter or any subsequent holder thereof or any purchaser of any Contract -17- Securities or any subsequent holder thereof) any legal or equi- table right, remedy or claim under or in respect of this Agree- ment or any provision herein contained. The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any Purchased Securities from any Underwriter or any subsequent holder thereof or any purchaser, as such purchaser, of any Contract Securities or any subsequent holder thereof. 13. Counterparts. This Agreement may be executed in any number of counterparts which, taken together, shall consti- tute one and the same instrument. Schedule I DELAYED DELIVERY CONTRACT Dated: , 199 [NAME OF ISSUER] [ADDRESS] Attention: Dear Sirs: The undersigned hereby agrees to purchase from [Name of Issuer] (the "Company"), and the Company agrees to sell to the undersigned, $___________________ principal amount of the Company's [state title of issue] (the "Securities") offered by the Company's Prospectus dated , 199 and a Prospectus Supplement dated , 199 , receipt of copies of which is hereby acknowledged, at a purchase price of % of the principal amount thereof plus accrued interest and on the further terms and conditions set forth in this contract. The undersigned agrees to purchase such Securities in the principal amounts and on the delivery dates (the "Delivery" "Dates") set forth below: Delivery Principal Plus Accrued __Date__ _Amount__ Interest From: ________________ $_______________ ________________ ________________ $_______________ ________________ ________________ $_______________ ________________ Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company by wire transfer of immediately available at the -2- Corporate Trust Office of (or at such other place as the undersigned and the Company shall agree) at 11:00 A.M., New York City Time, on such Delivery Date upon issuance and delivery to the undersigned of the Securities to be purchased by the undersigned on such Delivery Date in such authorized denominations and, unless otherwise provided herein, registered in such names as the undersigned may designate by written or telegraphic communications addressed to the Company not less than five full business days prior to such Delivery Date. The obligation of the Company to sell and deliver, and of the undersigned to take delivery of and make payment for, Securities on each Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject, (2) the sale of the Securities by the Company pursuant to this contract shall not at the time of delivery be prohib- ited under the laws of any jurisdiction to which the Company is subject and (3) the Company shall have sold, and delivery shall have taken place, to the Underwriters of such principal amount of the Securities as is to be sold and delivered to them. In the event that Securities are not sold to the undersigned because one of the foregoing conditions is not met, the Company shall not be liable to the undersigned for damages arising out of the transactions covered by this contract. Promptly after completion of the sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by copies of the opinions of counsel for the Company delivered to the Underwriters. Failure to take delivery of and make payment for Bonds by any purchaser under any other Delayed Delivery Con- tract shall not relieve the undersigned of its obligations under this contract. The undersigned represents and warrants that (a) as of the date of this contract, the undersigned is not prohibited under the laws of the jurisdictions to which the undersigned is subject from purchasing the Securities hereby agreed to be pur- chased and (b) the undersigned does not contemplate selling the Securities which it has agreed to purchase hereunder prior to the Delivery Date therefor. -3- This contract will inure to the benefit of and be binding upon the parties hereto and their respective succes- sors, but will not be assignable by either party hereto without the written consent of the other. This contract shall be gov- erned by and construed in accordance with the laws of the State of New York. This contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It is understood that the acceptance of any Delayed Delivery Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If the contract is acceptable to the Com- pany, it is requested that the Company sign the form of accep- tance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the under- signed when such counterpart is so signed. Yours very truly, ____________________________________ By____________________________________ ____________________________________ ____________________________________ Address Accepted, as of the date first above written [Name of Issuer] By_________________________________ -4- PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the repre- sentative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows: (Please print.) Telephone No. Name (Including Area Code) Department [NAME OF ISSUER] PURCHASE AGREEMENT DEBT SECURITIES _______________, 1996 [Name of Issuer] [ADDRESS] Dear Sirs: Referring to the Debt Securities, ______% Series due (the "Securities"), of [Name of Issuer] (the "Company") covered by registration statement on Form S-3 (No. 333- ), such registration statement including (i) the prospectus included therein, dated , 1996, as supplemented by a prospectus supplement dated ______________, 19 in the form first filed under Rule 424 and any additional prospectus sup- plements relating to the Securities filed under Rule 424 (such prospectus as so supplemented, including each document incorpo- rated by reference therein is hereinafter called the "Prospec- tus") and (ii) all documents filed as part thereof or incorpo- rated by reference therein, is hereinafter called the "Regis- tration Statement" on the basis of the representations, warran- ties and agreements contained in this Agreement, but subject to the terms and conditions herein set forth, the purchaser or purchasers named in Schedule A hereto (the "Underwriters") sev- erally agree to purchase and the Company agrees to sell to each Underwriter the principal amount of the Company's Securities having the terms described below (the "Purchased Securities") set forth opposite the name of each Underwriter on Schedule A hereto. The price at which the Purchased Securities shall be purchased from the Company by the Underwriters shall be ______%. The initial public offering price shall be ______%. The Purchased Securities will be offered by the Underwriters as set forth in the Prospectus relating to such Purchased Securities. The Purchased Securities will have the following terms: Title of Securities: ____________________________ -2- Interest rate: ____________________________ Interest Payment Dates: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Maturity: ____________________________ Redemption Provisions: ____________________________ ____________________________ ____________________________ Other: ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ Payment for the Purchased Securities shall be made in the following funds: ____________________________ The time of purchase shall be: ____________________________ The place(s) at which the Purchased Securities shall be delivered and sold shall be: ____________________________ Delayed Delivery Contracts: ______________________________ Notices to the Underwriters shall be sent to the fol- lowing address or telecopier number: -3- If we are acting as Representative(s) for the several Underwriters named in Schedule A hereto, we represent that we are authorized to act for such several Underwriters in connection with the transactions contemplated in this Agreement, and that, if there are more than one of us, any action under this Agreement taken by any of us will be binding upon all the Underwriters. All of the provisions contained in the document enti- tled "[Name of Issuer] Standard Purchase Provisions - Debt Secu- rities," a copy of which has been previously furnished to us, are hereby incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. -4- If the foregoing is in accordance with your understand- ing of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and each Underwriter in accordance with its terms. Very truly yours, [Firm Name] By ________________________________ Title: [Firm Name] By ________________________________ Title: Acting on behalf of and as Representative(s) of the several Underwriters named in Schedule A hereto.* The foregoing Purchase Agreement is hereby confirmed as of the date first above written. [NAME OF ISSUER] By ___________________________ Title: _________________________ * To be deleted if the Purchase Agreement is not executed by one or more Underwriters acting as Representative(s) of the Underwriters for purposes of this Agreement. SCHEDULE A Principal Name of Underwriter Amount Total __________ $ EX-3 4 EQUITY SECURITIES PURCHASE AGREEMENT Exhibit B-3 [NAME OF ISSUER] EQUITY SECURITIES STANDARD PURCHASE PROVISIONS INCLUDING FORM OF PURCHASE AGREEMENT [NAME OF ISSUER] STANDARD PURCHASE PROVISIONS - EQUITY SECURITIES From time to time, [Name of Issuer], a corporation organized and existing under the laws of the State of Delaware (the "Company") may enter into purchase agreements that provide for the sale of designated securities to the purchaser or pur- chasers named therein. The standard provisions set forth herein may be incorporated by reference in any such purchase agreement (the "Purchase Agreement"). The Purchase Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as "this Agreement." The term "[Preferred] [Common] Stock" shall mean the [Preferred] [Com- mon] Stock of the Company. Unless otherwise defined herein, terms defined in the Purchase Agreement are used herein as therein defined. The Company has filed, in accordance with the provi- sions of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder (collectively called the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement on Form S-3 (including a prospectus), relating to the Company's [Preferred] [Common] Stock, which pursuant to Item 12 of Form S-3 incorporates by reference documents which the Com- pany has filed in accordance with the provisions of the Securi- ties Exchange Act of 1934, as amended, and the rules and regu- lations thereunder (collectively called the "Exchange Act"). Such registration statement has been declared effective by the Commission. Promptly upon the execution of this Agreement, the Company will prepare a prospectus supplement relating to the [Preferred] [Common] Stock to be sold by the Company pursuant to the applicable Purchase Agreement (the "Prospectus Supple- ment"). The Company has furnished to you, for use by the Underwriters (as defined herein) and dealers, copies of one or more preliminary prospectuses and the documents so incorporated therein (each thereof, including the documents so incorporated therein, is herein called the "Preliminary Prospectus"). The terms Registration Statement and Prospectus shall have the meanings ascribed to them in the Purchase Agreement. 1. Introductory. The Company proposes to issue and sell from time to time [Preferred] [Common] Stock registered under the Registration Statement. [Each series of Preferred Stock to be sold pursuant to a particular Purchase Agreement will bear dividends and have the redemption and sinking fund provisions, if any, and other terms determined at the time of the sale and set forth in the Purchase Agreement and the -2- Prospectus Supplement relating to such series of Preferred Stock.] The shares of [Preferred] [Common] Stock involved in any such offering are hereinafter referred to as the "Shares," and the firm or firms, as the case may be, which agree to pur- chase the same are hereinafter referred to as the "Underwrit- ers" of the Shares. The terms "you" and "your" refer to those Underwriters who sign the Purchase Agreement either on behalf of themselves only or on behalf of themselves and as represen- tatives of the several Underwriters named in Schedule A thereto, as the case may be. Shares to be purchased by Under- writers are herein referred to as "Underwriters' Shares," and any Shares to be purchased pursuant to Delayed Delivery Con- tracts (as defined below) as hereinafter provided are herein referred to as "Contract Shares." 2. Delivery and Payment. The Company will deliver the certificates for the Shares to you for the accounts of the Underwriters at the place specified in the Purchase Agreement, against payment of the purchase price by wire transfer of imme- diately available funds (as agreed to by the parties and speci- fied in the Purchase Agreement), at the time set forth in this Agreement or at such other time not later than seven full busi- ness days thereafter as you and the Company determine, such time being herein referred to as the "time of purchase." Unless otherwise provided for in the Purchase Agreement, the certificates for the Underwriters' Shares so to be delivered will be in such denominations and registered in such names as you request in writing not later than 10.00 A.M.,* on the third business day prior to the time of purchase, or, if no such request is received, in the names of the respective Underwrit- ers in the denominations agreed to be purchased by them pursu- ant to this Agreement. For the purpose of expediting the checking of the certificates for the Underwriters' Shares, the Company agrees to make such certificates available to you at the place specified in the Purchase Agreement registered in such names and denominations as you shall have requested not later than 10.00 A.M. on the first business day preceding the time of purchase.* If any Purchase Agreement provides for sales of Shares pursuant to delayed delivery contracts, the Company ___________________ * Times mentioned herein are New York City Time. * As used herein, "business day" shall mean a day on which the New York Stock Exchange is open for trading. -3- authorizes the Underwriters to solicit offers to purchase Con- tract Shares pursuant to delayed delivery contracts substan- tially in the form of Schedule I attached hereto (the "Delayed Delivery Contracts") with such changes therein as the Company may approve. Delayed Delivery Contracts are to be with insti- tutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies, and educational and charitable institutions. At the time of pur- chase the Company will pay you as compensation, for the accounts of the Underwriters, the compensation set forth in such Purchase Agreement in respect of the principal amount of Contract Shares. The Underwriters will not have any responsi- bility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts, the Contract Shares shall be deducted from the Shares to be purchased by the several Under- writers and the aggregate principal amount of Shares to be pur- chased by each Underwriter shall be reduced pro rata in propor- tion to the principal amount of Shares set forth opposite each Underwriter's name in such Purchase Agreement, except to the extent that you determine that such reduction shall be other- wise allocated and so advise the Company. 3. Certain Covenants of the Company. The Company agrees: (a) As soon as possible after the execution and delivery of this Agreement to file, or mail for filing, the Prospectus with the Commission pursuant to its Rule 424 under the Act and, if and when required at any time after such execution and delivery, to file amendments to the applications the Company has previously filed with any state regulatory agencies having jurisdiction to govern the Company's issuance of its securities setting forth, among other things, the necessary informa- tion with respect to the price and the terms of the Shares and the terms of offering of the Shares; (b) To file no amendment or supplement to the Registration Statement or Prospectus (other than a required filing under the Exchange Act) subsequent to the execution of this Agreement and prior to the time of purchase to which you object in writing; -4- (c) To furnish such proper information as may be required and otherwise to cooperate in qualifying the Shares for sale under the laws of such jurisdictions as you may designate and in determining their eligibility for investment under the laws of such jurisdictions; provided that the Company shall not be required to qualify as a for- eign corporation or to file a general consent to service of process in any jurisdiction; (d) To the extent not previously furnished to you, to furnish to you two signed copies of the Registration Statement, as initially filed with the Commission, of all amendments thereto, and of all documents incorporated by reference therein (including all exhibits filed therewith, other than exhibits which have previously been furnished to you), two signed copies of each consent and certificate of independent accountants and of each other person who by his profession gives authority to statements made by him and who is named in the Registration Statement as having prepared, certi- fied or reviewed any part thereof, and to furnish to you sufficient unsigned copies of the foregoing (other than exhibits, including consents filed as exhibits, to the Registration Statement) for dis- tribution of a copy to you and to each of the other Underwriters; (e) To deliver to the Underwriters without charge in New York City as soon as practicable after the execution and delivery of this Agreement and thereafter from time to time to furnish to the Underwriters, without charge, as many copies of the Prospectus in final form and any documents incorporated by reference therein at or after the date thereof (or as amended or supplemented, if the Company shall have made any amendment or sup- plement after the effective date of the Registra- tion Statement) as you or the respective Under- writers may reasonably request for the purposes contemplated by the Act; (f) To advise you promptly (confirming such advice in writing) of any official request made by the Commission for amendments to the Registration Statement or Prospectus or for additional -5- information with respect thereto, or of official notice of institution of proceedings for, or the entry of, a stop order suspending the effective- ness of the Registration Statement and, if such order should be entered by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible, or of the suspension of qualification of the Shares for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; (g) To apply the net proceeds from the sale of the Shares in the manner set forth in the Prospectus; (h) To furnish to you during a period of five years from the time of purchase (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year, (ii) from time to time, copies of any reports or other communications which it shall file with the Commission or any governmental agency substituted therefor under the Exchange Act or sent to its public stockholders, or holders of the Shares, and (iii) such other information as you may from time to time reasonably request regarding the financial condition and operations of the Company; (i) To furnish to any other Underwriter cop- ies of such of the financial statements, reports or other information referred to in the foregoing subparagraphs (h)(i) and (ii) as such Underwriter may, from time to time during the period you are entitled to receive them, request; (j) To advise the Underwriters of the hap- pening of any event known to the Company within the time during which a prospectus relating to the Shares is required to be delivered under the Act which, in the judgment of the Company, would require the making of any change in the Prospectus or any amended or supplemented Prospectus or in the information incorporated by reference therein so that as thereafter delivered to purchasers such Prospectus will not include an untrue statement of -6- a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and on request to pre- pare and furnish to the Underwriters and to deal- ers and other persons designated by you such amendments or supplements (including appropriate filings under the Exchange Act) to the Prospectus as may be necessary to reflect any such change, provided that the Company shall be so obligated only so long as the Company is notified of unsold allotments (failure by the Underwriters to so notify the Company cancels the Company's obliga- tion under this Section 3(j)); (k) As soon as practicable, to make gener- ally available to its security holders an earnings statement (as contemplated by Rule 158 under the Act) covering a period of twelve months after the effective date of the Registration Statement; (l) to pay the fees and expenses of counsel for the Underwriters, and to reimburse the Under- writers for their reasonable out-of-pocket expenses incurred in contemplation of the perfor- mance of this Agreement, in the event that the Shares are not delivered to and taken up and paid for by the Underwriters hereunder for any reason whatsoever except the failure or refusal of any Underwriter to take up and pay for Shares for some reason not permitted by the terms of this Agree- ment, the Underwriters agreeing to pay the fees and expenses of counsel for the Underwriters in any other event; (m) To pay all expenses, fees and taxes (other than transfer taxes and fees and disburse- ments of counsel for the Underwriters except as set forth under 3(1) above or (iv) below) in con- nection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospec- tus and the Prospectus, any documents incorporated by reference therein at or after the date thereof and any amendments or supplements thereto, and the printing or reproduction and furnishing of copies of each thereof to the Underwriters and to deal- ers, (ii) the issue, sale and delivery of the -7- Shares, (iii) the printing or reproduction of this Agreement and the opinions and letters referred to in Section 4(a) hereof, (iv) the qualification of the Shares for sale and determination of their eligibility for investment under state laws as aforesaid, including the reasonable legal fees and all filing fees and disbursements of counsel for the Underwriters and all other filing fees, and the printing or reproduction and furnishing of copies of the "Blue Sky Survey" and the "Legal Investment Survey" to the Underwriters and to dealers, (v) the rating of the Shares by national rating agencies and (vi) the performance of the Company's other obligations hereunder; (n) To furnish to you as early as practi- cable prior to the time of purchase, but no later than two business days prior thereto, a copy of the latest available unaudited interim consoli- dated financial statements, if any, of the Company which have been read by the Company's independent public accountants as stated in their letter to be furnished pursuant to Section 4(a) of this Agree- ment; and (o) If a public offering of the Shares is to be made, not to offer or sell any of its [Pre- ferred] [Common] Stock prior to thirty days after the time of purchase without your consent (except pursuant to employee benefit or dividend reinvest- ment plans). 4. Conditions of Underwriters' Obligations. The several obligations of the Underwriters hereunder are subject to the following conditions: (a) That, at the time of purchase, you shall receive the signed opinions of counsel for the Company and counsel for the Underwriters, substan- tially in the forms heretofore furnished to you, addressed to the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); and that, at the time of purchase, you shall receive the signed letters of the inde- pendent public accountants of the Company, sub- stantially in the form heretofore furnished to you and in substance satisfactory to you addressed to -8- the Underwriters (with reproduced or conformed copies thereof for each of the other Underwriters); (b) That, at or before 5:30 P.M. on the date hereof, or at such later time and day as you may have from time to time consented to in writing or by telephone, confirmed in writing, such orders of state authorities which are necessary to permit the issue, sale and delivery of the Shares, if any, shall have been issued; at the time of pur- chase such orders shall be in full force and effect; and prior to such time of purchase no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act by the Commission and at such time of purchase no proceedings therefor shall be pend- ing or threatened; (c) That, at the time the Registration Statement became effective, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that at the time of purchase the Prospectus shall not con- tain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than any statement contained in, or any matter omitted from, the Registration Statement or the Prospectus in reliance upon, and in conformity with, informa- tion furnished in writing by or on behalf of any Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration Statement or Prospectus; (d) That, subsequent to the respective dates as of which information is given in the Registra- tion Statement and in the Prospectus, at the time the Prospectus is first filed, or mailed for fil- ing, pursuant to Rule 424 under the Act, and prior to the time of purchase, in your opinion no mate- rial adverse change, or any development involving a prospective material adverse change, in the -9- condition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time); (e) That the Company shall have performed all of its obligations under this Agreement which are to be performed by the terms hereof at or before the time of purchase; and (f) That, since the date of this Agreement, there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direc- tion of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organi- zation," as such term is defined for purposes of Rule 436(g)(2) under the Act (other than as referred to in or contemplated by the Registration Statement and the Prospectus as of such time); (g) That the Company shall, at the time of purchase, deliver to you (with reproduced or con- formed copies thereof for each of the other Under- writers) a signed certificate of two of its execu- tive officers stating that, subsequent to the respective dates as of which information is given in the Registration Statement and in the Prospec- tus, at the time the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, and prior to the time of purchase, no mate- rial adverse change, or any development involving a prospective material adverse change, in the con- dition of the Company, financial or otherwise, shall have taken place (other than as referred to in or contemplated by the Registration Statement and Prospectus as of such time) and also covering the matters set forth in (c) and (e) of this Section 4. (h) That the Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Shares arranged by the Underwriters have been approved by the Company. -10- 5. Termination of Agreement. The obligations of the several Underwriters hereunder shall be subject to termina- tion in your absolute discretion, if, at any time prior to the time of purchase, trading in securities on the New York Stock Exchange shall have been suspended (other than a temporary sus- pension to provide for an orderly market) or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if after the execution of this Agreement the United States shall have declared war in accordance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on the financial markets of the United States as, in your judgment, to make it impracti- cable to market the Shares. If you elect to terminate this Agreement as provided in this Section 5, the Company and each other Underwriter shall be notified promptly in writing or by telephone, confirmed in writing. If the sale to the Underwriters of the Underwriters' Shares as herein contemplated is not carried out by the Under- writers for any reason permitted hereunder or if such sale is not carried out because the Company shall be unable to comply with any of the terms thereof, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 3(1), 3(m), 7(b) and 9 hereof), and the Underwriters shall be under no obligation or liability to the Company (except to the extent provided in Sections 8(b) and 9 hereof) or to one another under this Agreement. 6. Increase in Underwriters' Commitments. If any Underwriter shall default in its obligation to take up and pay for the Shares to be purchased by it hereunder and if the num- ber of Shares which all Underwriters so defaulting shall have so failed to take up and pay for does not exceed 10% of the total number of Shares, the non-defaulting Underwriters shall take up and pay for (in addition to the number of Shares they are obligated to purchase pursuant to this Agreement) the num- ber of Shares agreed to be purchased by all such defaulting Underwriters, as herein provided. Such Shares shall be taken up and paid for by such non-defaulting Underwriter or Under- writers in such number as you may designate with the consent of each Underwriter so designated or, in the event no such desig- nation is made, such Shares shall be taken up and paid for by -11- all non-defaulting Underwriters pro rata in proportion to the number of Shares set opposite the names of all such non- defaulting Underwriters in Schedule A to the Purchase Agreement. Without relieving any defaulting Underwriter of its obligations hereunder, the Company agrees with the non-default- ing Underwriters that it will not sell any Shares hereunder unless all of the Shares are purchased by the Underwriters (or by substituted Underwriters selected by you with the approval of the Company or selected by the Company with your approval). If a new underwriter or underwriters are substituted by the Underwriters or by the Company for a defaulting Under- writer or Underwriters in accordance with the foregoing provi- sion, the Company or you will have the right to postpone the time of purchase for a period of not exceeding five business days in order that necessary changes in the Registration State- ment and Prospectus and other documents may be effected. The term Underwriter as used in this Agreement will refer to and include any underwriter substituted under this Section 6 with like effect as if such substituted underwriter had originally been named in Schedule A to the Purchase Agreement. 7. Warranties and Representations of and Indemnity by the Company. (a) The Company warrants and represents that, when the Registration Statement became effective, the Registra- tion Statement complied in all material respects, and, when the Prospectus is first filed, or mailed for filing, pursuant to Rule 424 under the Act, the Prospectus will comply in all mate- rial respects with the provisions of the Act, and that neither will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or neces- sary to make the statements therein not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in, or any matter omit- ted from, the Registration Statement or the Prospectus in reli- ance upon and in conformity with information furnished in writ- ing by or on behalf of any Underwriter through you to the Com- pany expressly for use with reference to the Underwriter in the Registration Statement or Prospectus. The Company also war- rants and represents that the documents incorporated by refer- ence in the Prospectus comply in all material respects with the requirements of the Exchange Act and any additional documents deemed to be incorporated by reference in the Prospectus will, -12- when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein, or neces- sary to make the statements therein, in the light of the cir- cumstances under which they are made, not misleading. (b) The Company agrees to indemnify and hold harm- less each Underwriter, and any person who controls any Under- writer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any loss, expense, liability or claim (including the reasonable fees and expenses of counsel and other reasonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact in the Registration Statement, any prospectus contained in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus, or arises out of or is based upon any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not mislead- ing. The foregoing shall not cover any such loss, expense, liability or claim, however, which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to the Underwriter in, any such documents or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in any such documents or nec- essary to make such information not misleading. If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter shall promptly notify the Company in writing or by telephone, confirmed in writing, of the institution of such action and the Company shall assume the defense of such action, including the employment of counsel and payment of expenses. Such Underwriter or controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Com- pany in connection with the defense of such action or the Com- pany shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties -13- shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of one counsel (in addition to local counsel) for all indemnified parties selected by you shall be borne by the Company. Anything in this paragraph to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent. The Company's indemnity agreement con- tained in this Section 7(b) and its warranties and representa- tions contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or controlling person, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. The Company agrees promptly to notify the Under- writers of the commencement of any litigation or proceedings against the Company or any of its officers or directors in con- nection with the issue and sale of the Shares or with such Reg- istration Statement or Prospectus. 8. Warranties and Representations of the Indemnity by Underwriters. (a) Each Underwriter warrants and represents that the information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in the Registration State- ment at the time it became effective or the Prospectus, or any related preliminary prospectus does not contain an untrue statement of a material fact and does not omit to state a mate- rial fact in connection with such information required to be stated in the Registration Statement at the time it became effective or the Prospectus, or any related preliminary pro- spectus or necessary to make such information not misleading. Each Underwriter, in addition to other information furnished by such Underwriter or on its behalf through you to the Company in writing expressly for use with reference to such Underwriter in the Registration Statement and Prospectus, hereby furnishes to the Company in writing expressly for use with reference to such Underwriter the statements with respect to the terms of offer- ing of the Shares by the Underwriters set forth on the cover page of the Prospectus Supplement and under "underwriting" therein. -14- (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and its officers from and against any loss, expense, liability or claim (includ- ing the reasonable fees and expenses of counsel and other rea- sonable expenses in connection with investigating, defending or settling any such claim) which arises out of or is based upon any alleged untrue statement of a material fact contained in, and in conformity with information furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use with reference to such Underwriter in, the Registration Statement, any prospectus contained in the Regis- tration Statement at the time it became effective or the Pro- spectus, or any related preliminary prospectus, or arises out of or is based upon any alleged omission to state a material fact in connection with such information required to be stated in such documents or necessary to make such information not misleading. If any action is brought against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Com- pany or such person shall promptly notify such Underwriter in writing or by telephone, confirmed in writing, of the institu- tion of such action and such Underwriter shall assume the defense of such action, including the employment of counsel and payment of expenses. The Company or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by such Under- writer in connection with the defense of such action or such Underwriter shall not have employed counsel to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses for all indemnified parties of one counsel (in addition to local counsel) selected by the Company shall be borne by such Underwriter. Anything in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action effected without the written consent of such Underwriter. The indemnity agreement on the part of each Underwriter contained in this Section 8(b) shall remain in full force and effect regardless of any investigation made by or on behalf of the -15- Company or such person, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. Each Underwriter agrees promptly to notify the Company of the commencement of any litigation or proceedings against such Underwriter in connection with the issue and sale of the Shares or with such Registration Statement or Prospectus. 9. Contribution. If the indemnification provided for in Section 7(b) or 8(b) above is unavailable in respect of any losses, expenses, liabilities or claims referred to therein, then the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses except to the extent that contribution is not per- mitted under the Act or the Exchange Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Shares (taking into account the portion of the proceeds of the offering real- ized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. The Company and the Underwriters and such controlling persons agree that it would not be equitable if the amount of such contribution were deter- mined by pro rata or per capita allocation (even if the Under- writers and such controlling persons were treated as one entity for such purpose). Notwithstanding the provisions of this Section 9, no indemnifying Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by such Under- writer and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter other- wise has been required to pay by reason of such untrue state- ment or alleged untrue statement or omission or alleged omis- sion. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudu- lent misrepresentation. The contribution agreement contained in this Section 9 shall remain in full force and effect regard- less of any investigation made by or on behalf of any Under- writer or the Company or any of its officers or directors or any controlling person and shall survive any termination of this Agreement or the issuance and delivery of the Shares. -16- 10. Notices. All statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered or sent by registered mail to the address furnished in writing for the purpose of such statements, requests, notices and agreements hereunder, and, if to the Company shall be suffi- cient in all respects if delivered or sent by registered mail to the Company at [Issuer/Address], Attention: . 11. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this agreement. 12. The Agreement herein set forth has been and is made solely for the benefit of the Underwriters and the con- trolling persons, directors and officers referred to in Section 8 hereof, and their respective successors, assigns, executors and administrators, and no other person shall acquire or have any right under or by virtue of this Agreement. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation (including, without limita- tion, any purchaser of the Securities from an Underwriter or any subsequent holder thereof) any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successor" as used in this Agreement shall not include any purchaser, as such purchaser, of any Shares from any Underwriter or any subsequent holder thereof. 13. Counterparts. This Agreement may be executed in any number of counterparts which, taken together, shall consti- tute one and the same instrument. Schedule I DELAYED DELIVERY CONTRACT Dated: , 199 [NAME OF ISSUER] [ADDRESS] Attention: Dear Sirs: The undersigned hereby agrees to purchase from [Name of Issuer] (the "Company"), and the Company agrees to sell to the undersigned, ___________________ shares of the Company's [state title of issue] (the "Shares") offered by the Company's Prospectus dated , 199 and a Prospectus Supplement dated , 199 , receipt of cop- ies of which is hereby acknowledged, at a purchase price of $ per share [plus accrued dividends] and on the further terms and conditions set forth in this contract. The undersigned agrees to purchase such Shares in the amounts and on the delivery dates (the "Delivery Dates") set forth below: Delivery Number of [Plus Accrued __Date__ _Shares__ Dividends From:] ________________ _______________ ________________ ________________ _______________ ________________ ________________ _______________ ________________ Payment for the Shares which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company or its order by wire transfer of immediately available -2- funds at the Corporate Trust Office of (or at such other place as the undersigned and the Company shall agree) at 11:00 A.M., New York City Time, on such Delivery Date upon issuance and delivery to the undersigned of the Shares to be purchased by the undersigned on such Delivery Date and, unless otherwise provided herein, registered in such names as the undersigned may designate by written or telegraphic commu- nications addressed to the Company not less than five full business days prior to such Delivery Date. The obligation of the Company to sell and deliver, and of the undersigned to take delivery of and make payment for, Shares on each Delivery Date shall be subject to the con- ditions that (1) the purchase of Shares to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject, (2) the sale of the Shares by the Company pursuant to this contract shall not at the time of delivery be prohibited under the laws of any jurisdiction to which the Company is sub- ject and (3) the Company shall have sold, and delivery shall have taken place, to the Underwriters of such number of the Shares as is to be sold and delivered to them. In the event that Shares are not sold to the undersigned because one of the foregoing conditions is not met, the Company shall not be lia- ble to the undersigned for damages arising out of the transac- tions covered by this contract. Promptly after completion of the sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by copies of the opinions of counsel for the Company delivered to the Underwriters. Failure to take delivery of and make payment for Shares by any purchaser under any other Delayed Delivery Con- tract shall not relieve the undersigned of its obligations under this contract. The undersigned represents and warrants that (a) as of the date of this contract, the undersigned is not prohibited under the laws of the jurisdictions to which the undersigned is subject from purchasing the Shares hereby agreed to be pur- chased and (b) the undersigned does not contemplate selling the Shares which it has agreed to purchase hereunder prior to the Delivery Date therefor. -3- This contract will inure to the benefit of and be binding upon the parties hereto and their respective succes- sors, but will not be assignable by either party hereto without the written consent of the other. This contract shall be gov- erned by and construed in accordance with the laws of the State of New York. This contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It is understood that the acceptance of any Delayed Delivery Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If the contract is acceptable to the Com- pany, it is requested that the Company sign the form of accep- tance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the under- signed when such counterpart is so signed. Yours very truly, ____________________________________ By____________________________________ ____________________________________ ____________________________________ Address Accepted, as of the date first above written [Name of Issuer] By_________________________________ -4- PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the repre- sentative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows: (Please print.) Telephone No. Name (Including Area Code) Department [NAME OF ISSUER] PURCHASE AGREEMENT EQUITY SECURITIES [Name of Issuer] [ADDRESS] Dear Sirs: Referring to the [Preferred] [Common] Stock of [Name of Issuer] (the "Company") covered by the registration state- ment on Form S-3 (No. 333-______), such registration statement including (i) the prospectus included therein, dated , 199_ in the form first filed under Rule 424 and any additional prospectus supplements relating to the [Pre- ferred] [Common] Stock filed under Rule 424 (such prospectus as so supplemented, including each document incorporated by refer- ence therein is hereinafter called the "Prospectus") and (ii) all documents filed as part thereof or incorporated by reference therein, is hereinafter called the "Registration Statement", on the basis of the representations, warranties and agreements contained in this Agreement, but subject to the terms and conditions herein set forth, the purchaser or pur- chasers named in Schedule A hereto (the "Underwriters") agree to purchase, severally, and the Company agrees to sell to the Underwriters, severally, the respective number of shares of [Preferred] [Common] Stock having the terms described below (the "Shares") set forth opposite the name of each Underwriter on Schedule A hereto. The price at which the Shares shall be purchased from the Company by the Underwriters shall be $____ per share [plus dividends, if any, accrued from _________________, 199_]. The initial public offering price shall be $____ per share [plus dividends, if any, accrued from ___________________, 199_]. The Shares will be offered by the Underwriters as set forth in the Prospectus relating to such Shares. The Shares will have the following terms: -2- Title of Shares: [___% Preferred Stock] [Dividend rate: [____% per annum] Date from which [cumula- tive] dividend will accrue:] _______________, 199_ [Liquidation Preference per share:] ______________________ [Redemption Provisions:] _______________________ _______________________ _______________________ [Sinking Fund Provisions:] _______________________ _______________________ _______________________ Other: _______________________ _______________________ _______________________ Payment for the Shares shall be made in the fol- lowing funds: _______________________ The "time of purchase" shall be: _______________________ The place at which the Shares may be checked and packaged shall be: _______________________ The place(s) at which the Shares shall be delivered and sold shall be: _______________________ Delayed Delivery Contracts: _______________________ -3- Notices to Underwriters shall be sent to the follow- ing address(es) or telecopier number(s): If we are acting as Representative(s) for the several Underwriters named in Schedule A hereto, we represent that we are authorized to act for such several Underwriters in connec- tion with the transactions contemplated in this Agreement, and that, if there are more than one of us, any action under this Agreement taken by any of us will be binding upon all the Underwriters. All of the provisions contained in the document enti- tled "[Name of Issuer] Standard Purchase Provisions - Equity Securities", a copy of which has been previously furnished to us, are hereby incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. If the foregoing is in accordance with your under- standing of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms. Very truly yours, [Firm Name] By _____________________________ Title: ______________________ [Firm Name] By _____________________________ Title: ______________________ Acting on behalf of and as Representative(s) of the several Underwriters named in Schedule A hereto.* ___________________ * To be deleted if the Purchase Agreement is not executed by one or more Underwriters acting as Representative(s) of the Underwriters for purposes of this Agreement. -4- The foregoing Purchase Agreement is hereby confirmed as of the date first above written [NAME OF ISSUER] By ____________________________ Title: _____________________ _______________________________ SCHEDULE A Number of Name of Underwriters Shares Total __________ __________ EX-4 5 FORM OF NCE DIVIDEND REINVESTMENT PLAN PROSPECTUS EXHIBIT B-5 NEW CENTURY ENERGIES, INC. Dividend Reinvestment and Cash Payment Plan Common Stock, $1 Par Value -------------------- The Dividend Reinvestment and Cash Payment Plan (the "Plan") of New Century Energies, Inc. (the "Company") provides a convenient and economical way for the shareholders of the Company to reinvest cash dividends and, through optional cash payments, to purchase shares of the Company's common stock, $1.00 par value per share (the "Common Stock" or "Company Common Stock"), without paying any service charge and only a minimal brokerage commission. On January 31, 1996, shareholders of Public Service Company of Colorado, a Colorado corporation ("PSCo"), and Southwestern Public Service Company, a New Mexico corporation ("SPS"), approved an Agreement and Plan of Reorganization (the "Merger Agreement") and the transactions contemplated thereby including: (i) the merger of PSCo Merger Corp., a Colorado corporation and wholly owned subsidiary of the Company, and PSCo, with PSCo as the surviving corporation (the "PSCo Merger"), (ii) the merger of SPS Merger Corp., a New Mexico corporation and wholly owned subsidiary of the Company, and SPS, with SPS as the surviving corporation (the "SPS Merger"), (iii) the cancellation and conversion of each outstanding share of PSCo common stock, $5.00 par value per share (the "PSCo Common Stock"), and the SPS common stock, par value $1.00 per share (the "SPS Common Stock"), into the right to receive one share of Company Common Stock and 0.95 of one share of Company Common Stock, respectively (the "Conversion Ratio"), and (iv) the common shareholders of each of PSCo and SPS becoming the common shareholders of the Company (these transactions collectively referred to as the "Merger"). Upon the consummation of the Merger (the "Effective Date"), all shares of PSCo Common Stock and SPS Common Stock credited to the accounts of participants in the PSCo Automatic Dividend Reinvestment and Common Stock Purchase Plan (the "PSCo DRIP"), the SPS Dividend Reinvestment and Cash Payment Plan for Employees and the SPS Dividend Reinvestment and Cash Payment Plan for Shareholders (collectively, the "SPS DRIP") have been converted into shares of Company Common Stock based on the Conversion Ratio and have been automatically transferred to this Plan. (See Questions 34 and 35.) However, physical certificates representing shares of common stock of PSCo or SPS in your possession must be presented for exchange into Company Common Stock. The agent for the Plan ("Agent") is The Bank of New York. Any shareholder enrolled in the Plan as in effect on the Effective Date as a result of an automatic transfer from 2 the PSCo DRIP or SPS DRIP will continue to be enrolled in the Plan without taking any action. Any shareholder who wishes to participate in the Plan and who has not been previously enrolled in the Plan must properly complete and return the Authorization Card to the Agent. An Authorization Card may be obtained from the Agent. Participants in the plan may: a. have cash dividends on all or part of the shares of Company Common Stock registered in their names automatically reinvested and also invest optional cash payments; or b. continue to receive cash dividends on shares registered in their names and invest by making optional cash payments of not less than $25 per payment nor more than $100,000 per calendar year. Shares purchased under the Plan may be, at the option of the Company, newly issued shares, treasury shares, shares purchased on the open market by the Agent or any combination of the foregoing. The price at which shares of Company Common Stock will be purchased directly from the Company will be the average of the high and low price per share paid on the last day on which Company Common Stock was traded preceding the Investment Date (as defined) as reported on the composite tape for New York Stock Exchange listed securities administered by the Consolidated Tape Association. (See Question 10.) The price at which shares of Common Stock purchased by the Agent on the open market shall be deemed to have been acquired shall be the average price (including brokerage commissions) of all shares purchased by the Agent for Participants in the Plan on the relevant Investment Date. Participation in the Plan is entirely voluntary. Any shareholder who does not participate in the Plan will receive cash dividends, as declared, by check. This Prospectus relates to [ ] shares of Common Stock of the Company registered for sale under the Plan and should be retained for future reference. 3 -------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------- The date of this Prospectus is [ ], 1997. 4 AVAILABLE INFORMATION New Century Energies, Inc. is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, will file with the Securities and Exchange Commission ("SEC") reports, proxy statements, and other information, which are available for inspection and copying at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at 7 World Trade Center, Suite 1300, New York, New York 10048, and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. (The Commission maintains a site on the World Wide Web containing reports, proxy materials, information statements and other items. The address is http://www.sec.gov.) Copies of such material can be obtained from the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Copies of such material also can be inspected at the office of the New York Stock Exchange, Inc. (the "NYSE"). INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby undertakes to provide without charge to each person, including any beneficial owner of shares of the Company to whom a copy of this Prospectus has been delivered, upon the written or oral request of such person, a copy (without exhibits, except those specifically incorporated by reference) of any and all of the documents referred to below which have been or may be incorporated in this Prospectus by reference. Requests for such documents should be directed to W. Wayne Brown, Secretary, New Century Energies, Inc., 1225 Seventeenth Street, Denver, Colorado 80202, (Tel: (303) 571-7511). The following documents, previously filed with the SEC pursuant to the Exchange Act, are hereby incorporated by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. [33-64951])(the "NCE 1996 Form 10-K"); 2. The description of the Company's Common Stock contained in the Joint Proxy Statement/Prospectus and Registration Statement on Form S-4 of the Company (File No. 33-64951); 3. PSCo Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 1-3280) (the "PSCo 1995 Form 10-K"); 4. PSCo Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996 (File No. 1-3280) (the "PSCo Forms 10-Q"); 5 5. SPS Annual Report on Form 10-K for the year ended August 31, 1996 (File No. 1-3789) (the "SPS 1996 Form 10-K"); 6. SPS Quarterly Report on Form 10-Q for the quarter ended November 30, 1996 (File No. 1-3789) (the "SPS Form 10-Q"); and 7. SPS Current Reports on Form 8-K dated October 11, 1996 and February 12, 1997 (File No. 1-3789). All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the securities offered hereby, shall be deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. 6 THE COMPANY The Company is a Delaware corporation which, as a result of the Merger, is the holding company for PSCo, SPS and certain other subsidiaries. The Company is a public utility holding company registered under the Public Utility Holding Company Act of 1935. The principal executive offices of the Company are located at 1225 Seventeenth Street, Denver, Colorado 80202. PSCo. PSCo is an operating public utility engaged primarily in the generation, purchase, transmission, distribution and sale of electricity and in the purchase, transmission, distribution, sale and transportation of natural gas. PSCo provides electricity or gas or both in an area having an estimated population of 3.0 million people, of which approximately 2.1 million are in the Denver metropolitan area. The principal executive offices of PSCo are located at 1225 Seventeenth Street, Denver, Colorado 80202. SPS. SPS is principally engaged in the generation, transmission, distribution and sale of electric energy in portions of Texas, New Mexico, Oklahoma and Kansas. Electric service is provided through an interconnected system to a population of about one million in a 52,000 square-mile area of the Panhandle and South Plains of Texas, eastern and southeastern New Mexico, the Oklahoma Panhandle and southwestern Kansas. The principal executive offices of SPS are located at Tyler at Sixth, Amarillo, Texas 79101. DESCRIPTION OF THE PLAN The following, in question and answer form, sets forth the provisions of the Dividend Reinvestment and Cash Payment Plan effective as of the date of this Prospectus. Purpose 1. What is the purpose of the Plan? The purpose of the Plan is to provide shareholders of the Company with a convenient and economical method of purchasing Company Common Stock. Once enrolled in the Plan, shareholders (the "Participants") may also reinvest cash dividends and, through optional cash investments, purchase additional shares of Common Stock at regular intervals. Although the Company expects the Plan to appeal to many shareholders, it is entirely optional. Each shareholder who desires to participate must make an election in the manner set out herein unless he or she is already a Participant in the Plan. (See Question 5.) Each shareholder who is currently participating in the Plan will continue to participate without any further action on such shareholder's part. (See Question 33.) 7 Advantages 2. What are the advantages of the Plan? Participants in the Plan may: a. have cash dividends on all or part of the shares of Common Stock registered in their names automatically reinvested and also invest optional cash payments; or b. continue to receive cash dividends on shares registered in their names and invest by making optional cash payments of not less than $25 per payment nor more than $100,000 per calendar year. Participants will pay only a minimal brokerage commission in connection with open market purchases under the Plan. Such commissions payable by a Plan Participant on each investment will be such Participant's pro rata share of the commissions paid by the Agent in effecting all open market purchases of Common Stock on the applicable Investment Date. The amount of such commissions will be deducted from the dividend reinvested or the optional cash payment, as the case may be, prior to the purchase of shares of Common Stock. However, because the Plan Agent will be making purchases on behalf of all Plan Participants it is expected that the amount of commissions actually paid by a Plan Participant would be minimal compared to that paid by a shareholder who wishes to invest outside of the Plan. The Company will pay the Agent's costs and expenses in connection with the administration of the Plan. Commissions will be added to the shareholders' cost basis of the Common Stock purchased under the Plan. Full investment of funds is possible under the Plan because the Plan permits fractions of shares, as well as full shares, to be purchased for Participants' accounts. Dividends on such fractions, as well as on full shares, will be used to purchase additional shares for the Participants' accounts. The Plan includes a safekeeping service which permits Participants to deposit all of their Common Stock certificates with the Agent, thereby reducing shareholders' risk of loss of physical certificates and making it convenient for shareholders to hold all shares of Common Stock in one account. In addition, regular statements of account will provide Participants with a record of each transaction. Administration 3. Who administers the Plan for Participants? By participating in the Plan each Participant designates The Bank of New York as his or her Agent under the Plan. The Bank of New York will administer the Plan, purchase shares of Common Stock as Agent for Participants in the Plan, serve as custodian for shares on deposit in the Plan, keep records, send statements of account to Participants and perform 8 other duties relating to the Plan. Shares of Common Stock purchased under the Plan will be registered in the name of the Agent (or its nominee) and held by the Agent for each Participant in the Plan. Participants may contact the Agent by telephone toll free at 1-800-______ between the hours of 9:00 a.m. and 6:00 p.m., Eastern time, on business days or by writing to one of the following addresses. Optional cash payments and all notices and transaction requests concerning the Plan should be mailed to: New Century Energies, Inc. c/o Dividend Reinvestment Plan P.O. Box 1958 Newark, NJ 07101-9774 All inquiries regarding your account should be mailed to: New Century Energies, Inc. c/o Investor Relations Department P.O. Box 11358 Church Street Station New York, NY 10286-1258 Please include in your letter a telephone number where you may be reached during busines hours. Participation 4. Who is eligible to participate? The Plan is available to shareholders of the Company. Shareholders who wish to participate must be holders of record of the Company's Common Stock ("Eligible Shareholders"). A shareholder can elect to participate only with respect to shares registered in his or her own name. Owners of Company Common Stock whose shares are registered in names other than their own (e.g., broker, bank nominee) must first become holders of record by having those shares transferred into their own names in order to participate in the Plan with respect to such shares. 5. How does an Eligible Shareholder join the Plan? In order to join the Plan an Eligible Shareholder must properly complete an Authorization Card and return it to the Agent. (See Question 33.) 9 An Authorization Card may be obtained at any time by contacting the Agent, The Bank of New York, at 1-800-[ ]. An Eligible Shareholder may choose to participate in the dividend reinvestment portion of the Plan to the extent of all or part of the shares of Common Stock registered in his or her name and he or she may also make optional cash payments. Alternatively, an Eligible Shareholder may choose to participate in the optional cash payment portion only, and continue to receive cash dividends on shares registered in his or her name. 6. What does the Authorization Card provide? The Authorization Card allows you to indicate how you wish to participate in the Plan. Participants must indicate whether dividends should be fully or partially reinvested and whether any additional optional cash payments are to be made. Participants may choose one of the following three options: 1) Full Dividend Reinvestment: Dividends on all shares of Common Stock registered in your name will be reinvested in additional shares of Common Stock and you will also be entitled to invest optional cash payments in additional shares. 2) Partial Dividend Reinvestment: By designating the number of shares on which you wish the dividends reinvested, you can cause the dividends on the designated shares to be reinvested in Common Stock and you will also be entitled to invest optional cash payments in additional shares. 3) Optional Cash Payments Only: Dividends on shares registered in your name will be paid by check as usual and will not be reinvested. You may make optional cash payments (in an amount not less than $25) to the Agent which will be invested in additional shares. Dividends on all shares purchased with optional cash payments and credited to your account under this aspect of the Plan will, however, be reinvested in additional shares unless and until you request that the purchased shares be registered in your name through the issuance of certificates. (See Questions 12 and 20 for information concerning the issuance of certificates.) Shareholders who do not participate in the Plan will receive cash dividends, as declared, by check. 7. When may an Eligible Shareholder join the Plan? An Eligible Shareholder may join the Plan at any time. If an Authorization Card specifying "Full Dividend Reinvestment" or "Partial Dividend Reinvestment" is properly completed and received by the Agent in sufficient time to process prior to payment of a particular 10 dividend, then reinvestment of the designated dividends will commence with that dividend payment. Otherwise, participation will begin with the following dividend payment. Dividend Payment Dates (which are "Investment Dates" for reinvested dividends) normally are February 1, May 1, August 1, and November 1 of each year. Optional cash payments may be made at any time after a shareholder has returned a properly completed Authorization Card to the Agent. Although optional cash payments may be made at various times, they are invested only once a month, usually on the "Investment Date." (See Question 13 for information concerning the investment of optional cash payments.) Costs 8. Are there any costs to Participants in connection with purchases and sales under the Plan? Participants will be charged a pro rata share of the brokerage commissions paid by the Agent for open market purchases of shares made under the Plan. The amount of such commissions will be deducted from the dividend reinvested or the optional cash payment, as the case may be, prior to the purchase of shares of Common Stock. However, due to the volume of purchases of Company Common Stock by the Agent with each reinvestment of dividends or optional cash payments, it is expected that such commissions will be substantially less than commissions which would be payable by purchasing shares of Common Stock outside of the Plan. If the source of the Company Common Stock is treasury shares or newly issued shares (see Question 9), the Participants will not be charged. Administration costs of the Plan will be paid by the Company. In addition, Participants that request the sale, withdrawal or transfer of any of their Plan shares (see Questions 24 and 27) must pay any related brokerage commissions and applicable stock transfer taxes. The Agent may effect open market purchases and sales of shares for the Plan through BNY Brokerage Inc., an affiliated broker-dealer, in which case BNY Brokerage Inc. will receive a commission for effecting such transactions. Source of Shares 9. What is the source of shares purchased under the Plan? The Company has the sole discretion to determine whether shares purchased under the Plan will come from the authorized and unissued shares of Company Common Stock, treasury shares or shares purchased on the open market by the Agent for Plan Participants. The Company will not change its determination as to the source of the shares more than once in any three month period. Any such change will be based on a determination by the Chief Financial Officer of the Company with respect to the Company's capital needs or another compelling reason for a change. 11 Purchases 10. What will be the price of shares of Common Stock purchased under the Plan? The price at which authorized and unissued shares of Company Common Stock and treasury stock will be purchased from the Company will be the average of the high and low price per share paid on the last day on which Company Common Stock was traded preceding the Investment Date as reported on the composite tape for New York Stock Exchange listed securities administered by the Consolidated Tape Association. The price at which shares of Common Stock purchased by the Agent on the open market shall be deemed to have been acquired shall be the average price (including brokerage commissions) of all shares purchased by the Agent for Participants in the Plan on the relevant Investment Date. Such purchases may be made on any securities exchange where Company Common Stock is traded. The Agent may commingle Participants' funds (dividends and optional cash payments) with those of others participating in the Plan. The Agent shall have no responsibility as to the market value of shares acquired for Participants' accounts. 11. How many shares of Common Stock will be purchased for Participants? You cannot purchase a previously specified number of shares. Your account will be credited with the number of shares, including fractions computed to four decimal places, equal to the total amount invested (less, in the case of open market purchases, your pro rata share of brokerage commissions) divided by the purchase price per share. 12. Will certificates be issued to Participants for shares of Common Stock purchased under the Plan? Certificates for whole shares of Common Stock purchased under the Plan will be issued only upon your written request to the Agent. (See Question 20 for instructions on certificate issuance and Question 27 for information on termination of participation in the Plan.) 13. When will dividends and/or optional cash payments be invested? Dividends will be reinvested in additional shares of Company Common Stock on the dividend payment dates (each, an "Investment Date") of February 1, May 1, August 1, and November 1, or as soon as practicable thereafter. Optional cash payments will be invested on the first business day of each month (also "Investment Dates") or soon as practicable there- 12 after. Shares purchased will be credited to a Participant's account on the first day of each month or as soon as practicable thereafter. Optional cash payments received on or before the business day preceding a given Investment Date will be invested on that Investment Date. Optional cash payments received on or after a given Investment Date will be held by the Agent until the next Investment Date. The Company recommends that optional cash payments be sent so as to be received shortly before an Investment Date since no interest will be paid on such payments. (See Questions 18 and 19 for information on when dividends will be paid on shares purchased with optional cash payments.) Optional Cash Payments 14. Who is eligible to make optional cash payments? Eligible Shareholders who are Participants in the Plan or who have submitted a properly completed Authorization Card may make optional cash payments at any time. Eligible Shareholders may make an initial optional cash payment of not less than $25 per payment nor more than $100,000 total per calendar year when enrolling in the Plan by enclosing a check or money order with the properly completed Authorization Card. Checks or money orders should be made payable to The Bank of New York and mailed with the Authorization Card. Thereafter, optional cash payments may be made at any time by sending your personal check or money order to the Agent. PARTICIPANTS WHO WISH TO MAKE REGULAR OPTIONAL INVESTMENTS SHOULD CONTACT THE AGENT TO REQUEST AN AUTOMATIC MONTHLY DEDUCTION FORM. THIS PROGRAM PROVIDES THE CONVENIENCE OF AUTOMATIC MONTHLY INVESTMENTS DEDUCTED DIRECTLY FROM YOUR BANK ACCOUNT, WITHOUT THE NEED TO MAIL CHECKS. 15. May a Participant withdraw an optional cash payment? Yes. A Participant may withdraw an optional cash payment by sending to the Agent written notice of his or her intention to make such withdrawal, provided, however, that the Agent receives such written notice not later than [48 hours]1 before the next Investment Date. 16. Are there any limitations on optional cash payments? - ---------- 1 BONY to confirm. 13 Optional cash payments may be made at any time but may not be less than $25 per payment nor more than $100,000 per calendar year. Accordingly, if payments in excess of the combined $100,000 limit per calendar year are remitted, the Agent will return the excess to the Participant. The Agent will also return any optional cash payments which are for amounts less than $25. The same amount of money need not be sent with each payment, and there is no obligation to make an optional cash payment each month. Reports to Participants 17. What kind of reports will be sent to Participants in the Plan? Soon after investment of optional cash payments and/or dividends, Participants will receive a statement indicating the amount of dividends, optional cash payments, and/or payroll deductions, the purchase price, number of shares purchased and the total number of shares in their account. THESE STATEMENTS ARE A PARTICIPANT'S CONTINUING RECORDS OF THE TAX COST OF THEIR PURCHASES OF COMPANY COMMON STOCK UNDER THE PLAN, AND SHOULD BE RETAINED FOR INCOME TAX PURPOSES UNTIL SUCH TIME AS THE PARTICIPANT HAS DISPOSED OF ALL SUCH SHARES. Participants will also receive copies of the Company's annual and quarterly reports to shareholders and proxy statements. All dividends paid on shares held in the Plan for a Participant will be reported to the Internal Revenue Service. Dividends 18. Will Participants be credited with dividends on shares held in their accounts under the Plan? On the Dividend Payment Date, the Agent will credit the dividends attributable to those outstanding shares held in the Plan for the Participant's account as of the dividend record date and will reinvest such dividends. Participants whose participation is limited to optional cash payments will receive dividend checks on those shares registered in their name. Dividends on all shares credited to their account under the Plan will be reinvested in additional shares of Company Common Stock. 19. How will dividends be handled? Dividends on all shares credited to your account in the Plan, including shares purchased with reinvested dividends or optional cash payments, will be reinvested in additional shares. Cash dividends will be paid directly to you only with respect to those whole shares for which certificates have been issued. Any shares remaining in your account after issuance of 14 certificates for whole shares will continue to be credited to your account, and dividends paid with respect thereto will be reinvested in additional shares. Shares purchased with optional cash payments invested on an Investment Date which corresponds to a Dividend Payment Date, usually February 1, May 1, August 1 and November 1, will not receive the dividend paid on that Investment Date. This is because the investment will be made after the record date for the dividend payment made on that Investment Date. Issuance of Certificates 20. How may a Participant obtain certificates for shares purchased under the Plan? A Participant may obtain certificates for any number of whole shares in the Participant's Plan account at any time by notifying the Agent in writing to that effect. Certificates for whole shares of stock will be issued to the Participant, but in no event will certificates for fractional shares be issued. Any shares remaining in the Participant's account will continue to be credited to that account, and dividends paid with respect thereto will be reinvested in additional shares, until participation in the Plan is terminated. (See Question 27 for information on termination of participation and liquidation of fractional shares.) 21. What happens to a Participant's Plan account if all certificates held by the Participant are transferred or sold? If the Participant disposes of all certificates representing shares of the Common Stock held by the Participant in the Participant's own name, the Agent will continue to reinvest the dividends on the shares held in the Plan account until participation in the Plan is terminated. Safekeeping Service 22. Can Participants deposit their registered shares with the Plan? You may deposit any Common Stock certificates in your possession and registered in your name with the Agent for safekeeping. Shares deposited for safekeeping will be transferred into the name of the Agent, as agent for Participants in the Plan, and credited to your account under the Plan. Thereafter, the shares will be treated in the same manner as shares purchased through the Plan. This service eliminates the need for safekeeping by you to protect against loss, theft or destruction of stock certificates with respect to the shares credited to your account. 23. What are the advantages of using the depositary service of the Plan? 15 The Plan's depositary service for the safekeeping of stock certificates offers two significant advantages to you. First, the risk associated with loss of your stock certificates is eliminated. If a stock certificate is lost, stolen or destroyed, no transfer or sale of the shares may take place until a replacement certificate is obtained. This procedure is not always simple and usually results in costs and paperwork to you, to the Company and to the Company's transfer agent. Second, because shares deposited with the Plan for safekeeping are treated in the same manner as shares purchased through the Plan, they may be sold through the Plan in a convenient and efficient manner. How to Sell Shares 24. May a Participant transfer all or a part of the Participant's Plan shares to another person? Yes. If you wish to transfer ownership of all or part of the shares of Common Stock in your account through gift, private sale or otherwise, you may effect transfer by mailing to the Agent at the address in Question 3 a properly executed stock assignment along with a letter stating your specific instructions regarding the transfer and both an Authorization Form and a Form W-9 (Certification of Taxpayer Identification Number) completed by the transferee. Requests for transfer of such shares are subject to the same requirements as the transfer of Common Stock certificates, including the requirement of a medallion signature guarantee on the stock assignment. The Agent will provide the appropriate forms upon request. Any shares so transferred by you will be withdrawn from your account, and your account statement will show the number of shares withdrawn. You may also transfer all or a portion of the shares of Common Stock in your Plan account into an account established for another person within the Plan. In order to effect such a "book-to-book" transfer, the transferee must complete an Authorization Form to open a new account within the Plan. (See Question 5.) The Authorization Form should be sent to the Agent along with a written request to effect the "book-to-book" transfer indicating the number of shares to be transferred to the new account. All Participants listed on a current Plan account must sign the written request, and their signatures must be guaranteed by a bank, broker or financial institution that is a member of the Signature Guarantee Medallion Program. Unless otherwise indicated in the Authorization Form, the new account will provide for "Full Dividend Reinvestment." (See Question 6.) You may contact the Agent at (800)___-____ to obtain additional information and required forms to effect a "book-to-book" transfer. 25. When shares in the Plan are transferred to another person who wishes to become a Participant in the Plan, will the Agent issue a stock certificate to the transferee? 16 No. The Agent will retain such shares. An account in the Plan will be opened in the name of the person to whom such shares are transferred, although a signed Authorization Form will be required before the transfer can be effected. 26. How will a transferee be advised of the transfer? After the transfer has been made, a transferee of shares from a Participant will receive a statement showing the number of shares transferred to and held in the transferee's Plan account. Termination by a Participant 27. How does a Participant terminate participation in the Plan? A Participant may terminate participation in the Plan prior to any dividend payment date by giving written notice of termination signed by all persons for whom the account is carried and directed to the Agent. Any notice received too late to process before the payment date will not become effective until after dividends paid on such payment date have been credited to the Participant's account and invested as provided in the Plan. After termination, all dividends will be paid to the Participant in cash. In requesting termination, a Participant may elect to receive either Common Stock or cash for all of the full shares in the Participant's account. If the Participant elects cash, the Agent will sell such Common Stock and send proceeds to the Participant, net of any applicable brokerage commission and transfer tax. If no election is made in the request for termination, a certificate for the total number of whole shares held in the account will be issued to the Participant. In every case of termination, the Participant's interest in fractional shares will be adjusted in cash based on the market price of Company Common Stock on the date the termination becomes effective as determined by the Agent and uninvested voluntary cash contributions credited to the Participant's account will be distributed in cash. Any optional cash payment received from a Participant after timely receipt by the Agent from such Participant of a notice of termination will not be invested but will be returned to the Participant. (See Question 16 relating to withdrawal of optional cash payments.) - ------------------------------------------------------------------------------- The Participant should recognize that neither the Company nor the Agent can purchase any whole shares from Participants upon their withdrawal from the Plan. - ------------------------------------------------------------------------------- Other Information 28. What happens if the Company issues a stock dividend or declares a stock split? 17 Any stock dividend or shares resulting from stock splits with respect to shares, both full and fractional, credited to Participants' accounts will be added to their accounts. Stock dividends or stock splits distributed on shares of Common Stock registered in the name of the Participant will be mailed directly to the Participant in the same manner as to shareholders who are not participating in the Plan. 29. How will a Participant's Plan shares be voted at a meeting of shareholders? All shares credited to an account under the Plan will be voted as directed. If on the record date for a meeting of shareholders there are shares credited to an account under the Plan, proxy material will be sent for such meeting. When an executed proxy is returned in a timely manner, it will be voted with respect to all shares credited to the Participant's account under the Plan (including any fractional share). Participants may instead vote all of such shares in person at the shareholders' meeting. 30. What are the Federal income tax consequences of participation in the Plan? Dividends, even though reinvested and not actually received by the Participant, are taxable just as though they had been received directly by the Participant. If shares of Company Common Stock are purchased on the open market with reinvested dividends, a Participant will be treated for Federal income tax purposes as having received a dividend distribution equal in amount to the cash dividend used to purchase such shares and to have paid the allocable portion of related brokerage commissions. Such dividend distribution will be reported on the Participant's year-end Form 1099-DIV. A Participant's tax basis of shares so purchased will equal the amount treated as a dividend distribution. If shares of Company Common Stock are purchased directly from the Company with reinvested dividends, a Participant will be treated for Federal income tax purposes as having received a dividend distribution equal in amount to the fair market value of the purchased shares on the dividend Payment Date, including fractional shares, purchased for the Participant. Such dividend distributions will be reported on the Participant's year-end Form 1099-DIV. A Participant's tax basis of the shares so purchased will be equal to the amount treated as a dividend distribution to the Participant. A Participant who purchases shares of Company Common Stock with voluntary cash payments will not recognize any taxable income upon such purchase. The tax basis of such shares will be the amount of the voluntary cash payment. A Participant's holding period for shares of Common Stock acquired pursuant to the Plan generally begins on the day following the date the shares are credited to the Participant's account. 18 Each statement of account will show the amount of dividends paid and reinvested, shares purchased, as well as the price per share to be used in determining the cost basis of the Common Stock purchased with reinvested dividends and/or cash payments pursuant to the stock purchase provision of the Plan. A Participant will not realize any taxable income when the Participant receives certificates for whole shares credited to the Participant's account under the Plan, either upon request for certificates for certain of these shares, or upon termination of participation or termination of the Plan by the Company. However, gain or loss may be realized by the Participant when whole shares are sold, either by the Agent pursuant to the Participant's request when the Participant terminates participation in the Plan or by the Participant after withdrawal or termination. In addition, a Participant who receives, upon termination of participation or termination of the Plan by the Company, a cash adjustment for a fraction of a share credited to the Participant's account may realize a gain or loss with respect to such fraction. The amount of any such gain or loss would be the difference between the amount which the Participant receives for a fractional share and the Participant's cost basis therefor. In the case of foreign shareholders who elect to have their dividends reinvested and whose dividends are subject to United States income tax withholding and shareholders subject to backup withholding, the Agent will invest in shares of Common Stock an amount equal to the dividends of such Participants, less the amount of tax required to be withheld. The quarterly statements confirming purchases made for such Participants will indicate the net dividend payment reinvested. This description of Federal income tax consequences of participating in the Plan is only a summary and is not intended to be a complete description of all tax consequences of participating in the Plan. Eligible shareholders should consult their tax advisors as to the Federal income tax consequences of Plan participation in their particular situations, as to rules applicable in special circumstances, such as death of a Participant or gift of shares held under the Plan or other tax consequences, and as to the tax consequences of Plan participation under applicable state, local or foreign income tax laws. 31. What is the responsibility of the Company under the Plan? Neither the Company nor the Agent administering the Plan will be liable for any act done in good faith or for any good faith omission to act, including, without limitation, any claim of liability arising out of failure to terminate a Participant's account upon such Participant's death prior to receiving notice of death. 19 The Participant should recognize that neither the Company nor the Agent can provide any assurance of a profit or protection against loss on any shares purchased under the Plan. 32. May the Plan be changed or discontinued? The Company reserves the right to suspend or terminate the Plan at any time. It also reserves the sole right to make modifications to the Plan without the necessity of Participants' approval. Participants will be notified of any suspension, termination or modification. 33. How will a Participant in the PSCo DRIP or the SPS DRIP become a Participant in this Plan? Upon the consummation of the Merger, all shares of PSCo Common Stock and SPS Common Stock credited to the accounts of Participants in the PSCo DRIP and the SPS DRIP were cancelled and converted into shares of the Company Common Stock based on the Conversion Ratio and were automatically transferred to this Plan without any action by the Participant. However, physical certificate representing shares of PSCo Common Stock and SPS Common Stock in your possession must be presented for exchange into Company Common Stock. 34. Is a Participant of the PSCo DRIP or the SPS DRIP required to continue to participate in this Plan? Participants in the PSCo DRIP or the SPS DRIP may elect to discontinue participation in this Plan in accordance with the terms of this Plan. (See Question 27.) USE OF PROCEEDS The Company has no basis for estimating the number of shares of Common Stock that ultimately will be purchased from the Company pursuant to the Plan or the prices at which such shares will be sold. The net proceeds from the sale of any shares of authorized and unissued stock or treasury stock sold pursuant to the Plan will be added to the general funds of the Company and used for general corporate purposes. EXPERTS The consolidated financial statements and schedules of the Company as of December 31, 1996 included in the NCE 1996 Form 10-K, which is incorporated herein by reference, are incorporated herein in reliance upon the report of Arthur Andersen LLP, independent public accountants, included in the NCE 1996 Form 10-K, and upon the authority of that firm as experts in accounting and auditing. 20 The consolidated balance sheets of PSCo and its subsidiaries as of December 31, 1995 and 1994, and the related statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1995, and the related financial statement schedule, included in the PSCo 1995 Form 10-K, which are incorporated herein by reference, have been audited by Arthur Andersen LLP, independent public accountants ("Arthur Andersen"), as set forth in their reports with respect thereto, and are incorporated herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. Reference is made to said PSCo report which includes and explanatory paragraph that describes uncertainties discussed in Note 2 to the consolidated financial statements relating to PSCo's Fort St. Vrain Nuclear Generating Station. With respect to the unaudited consolidated interim financial information of PSCo and subsidiaries for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996, included in the PSCo Forms 10-Q, which are incorporated herein by reference, Arthur Andersen has applied limited procedures in accordance with professional standards for a review of that information. However, their separate reports thereon state that they did not audit and they do not express an opinion on that consolidated condensed interim financial information. Accordingly, the degree of reliance on their reports on that information should be restricted in light of the limited nature of the review procedures applied. In addition, the accountants are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited consolidated condensed interim financial information because those reports are not "reports" or a "part" of the Registration Statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Act. The consolidated financial statements incorporated in this prospectus by reference from the SPS 1996 Form 10-K for the year ended August 31, 1996 have been audited by Deloitte & Touche LLP, independent certified public accountants ("Deloitte & Touche") , as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. With respect to any unaudited interim financial information included in SPS's Quarterly Reports on Form 10-Q that are or will be incorporated herein by reference, Deloitte & Touche applies limited procedures in accordance with professional standards for reviews of such information. As stated in any of their reports that are included in SPS's Quarterly Reports on Form 10-Q that are or will be incorporated by reference herein, they did not audit or will not have audited and they did not express or will not have expressed an opinion on such interim financial information. Accordingly, the degree of reliance of any of their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche are not subject to the liability provisions of Section 11 of the Securities Act for any of their reports on such unaudited interim financial information because those reports 21 are not "reports" or a "part" of the registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act. LEGAL OPINIONS The legality of the share of Common Stock offered hereby has been passed upon for the Company by _______________, New York, New York.
========================================================= ========================================================= No person has been authorized to give any information or to make any representation not contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or a NEW CENTURY ENERGIES, INC. solicitation of an offer to buy any securities other than the securities offered hereby or any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has Dividend Reinvestment and been no change in the affairs of the Company since the Cash Payment Plan date hereof. TABLE OF CONTENTS Page Available Information....................... Incorporation of Certain Documents by Reference.................. _____________________ Description of the Plan..................... Purpose................................. PROSPECTUS Advantages.............................. _____________________ Administration.......................... Participation........................... Costs................................... Source of Shares........................ Purchases............................... Optional Cash Payments.................. Reports to Participants................. Dividends............................... Issuance of Certificates................ Safekeeping Service..................... How to Sell Shares...................... Termination by a Participant............ Other Information....................... Use of Proceeds............................. Experts..................................... Legal Opinions.............................. Dated: , 1997 ========================================================= =========================================================
EX-5 6 DEBT SECURITIES INDENTURE Exhibit B-6 [NAME OF ISSUER] DEBT SECURITIES INDENTURE _______________________________________________________________ Dated as of , , Trustee PARTIAL CROSS-REFERENCE TABLE Indenture Section TIA Section 2.05 317(b) 2.06 312(a) 2.11 316(a) (last sentence) 4.05 314(a)(4) 4.06 314(a)(1) 6.03 317(a)(1) 6.04 316(a)(1)(B) 6.05 316(a)(1)(A) 6.07 317(a)(1) 7.01 315(a) 315(d) 7.04 315(b) 7.05 313(a), 313(d) 7.07 310(a), 310(b) 7.09 310(a)(2) 8.02 310(a), 310(b) 10.04 316(c) 11.01 318(a) 11.02 313(c) 11.03 314(c)(1) 314(c)(2) 11.04 314(e) -i- TABLE OF CONTENTS Article Section Heading Page 1 DEFINITIONS 1.01 Definitions ....................... 1 1.02 Other Definitions ................. 3 1.03 Rules of Construction ............. 4 2 THE SECURITIES 2.01 Issuable in Series ................ 4 2.02 Execution and Authentication....... 6 2.03 Bond Agents ....................... 7 2.04 Bearer Securities ................. 7 2.05 Paying Agent to Hold Money in Trust ........................... 8 2.06 Securityholder Lists .............. 9 2.07 Transfer and Exchange ............. 9 2.08 Replacement Securities ............ 10 2.09 Outstanding Securities ............ 10 2.10 Discounted Securities ............. 11 2.11 Treasury Securities ............... 11 2.12 Global Securities ................. 11 2.13 Temporary Securities .............. 12 2.14 Cancellation ...................... 12 2.15 Defaulted Interest ................ 12 3 REDEMPTION 3.01 Notices to Trustee ................ 13 3.02 Selection of Securities to Be Redeemed ........................ 13 3.03 Notice of Redemption .............. 13 3.04 Effect of Notice of Redemption ...................... 14 3.05 Payment of Redemption Price ....... 15 3.06 Securities Redeemed in Part ....... 15 4 COVENANTS 4.01 Certain Definitions ............... 16 4.02 Payment of Securities ............. 16 4.03 Overdue Interest .................. 16 4.04 No Lien Created, etc. ............. 16 4.05 Compliance Certificate ............ 17 4.06 SEC Reports ....................... 17 -ii- Article Section Heading Page 5 SUCCESSORS 5.01 When Company May Merge, etc. ...... 17 6 DEFAULTS AND REMEDIES 6.01 Events of Default ................. 18 6.02 Acceleration ...................... 19 6.03 Other Remedies .................... 20 6.04 Waiver of Past Defaults ........... 20 6.05 Control by Majority ............... 21 6.06 Limitation on Suits ............... 21 6.07 Collection Suit by Trustee ........ 21 6.08 Priorities ........................ 22 7 TRUSTEE 7.01 Rights of Trustee ................. 22 7.02 Individual Rights of Trustee ...... 23 7.03 Trustee's Disclaimer .............. 23 7.04 Notice of Defaults ................ 23 7.05 Reports by Trustee to Holders ..... 24 7.06 Compensation and Indemnity ........ 24 7.07 Replacement of Trustee ............ 25 7.08 Successor Trustee by Merger, etc. ............................ 26 7.09 Trustee's Capital and Surplus ..... 26 8 DISCHARGE OF INDENTURE 8.01 Defeasance ........................ 26 8.02 Conditions to Defeasance .......... 27 8.03 Application of Trust Money ........ 27 8.04 Repayment to Company .............. 27 9 CONVERSION 9.01 Conversion Privilege .............. 29 9.02 Conversion Procedure .............. 29 9.03 Taxes on Conversion ............... 30 9.04 Company Determination Final ....... 31 9.05 Trustee's and Conversion Agent's Disclaimer ............. 31 9.06 Company to Provide Conversion Securities ...................... 31 9.07 Cash Settlement Option ............ 31 9.08 Adjustment in Conversion Rate for Change in Capital Stock ..... 33 -iii- Article Section Heading Page 9.09 Adjustment in Conversion Rate for Common Stock Issued Below Market Price .............. 34 9.10 Adjustment for Other Distributions ................... 36 9.11 Voluntary Adjustment .............. 37 9.12 When Adjustment May Be Deferred ........................ 37 9.13 When No Adjustment Required ....... 38 9.14 Notice of Adjustment .............. 38 9.15 Notice of Certain Transactions .................... 38 9.16 Reorganization of the Company ..... 39 10 AMENDMENTS 10.01 Without Consent of Holders ........ 39 10.02 With Consent of Holders ........... 40 10.03 Compliance with Trust Inden- ture Act ........................ 41 10.04 Effect of Consents ................ 41 10.05 Notation on or Exchange of Securities ...................... 41 10.06 Trustee Protected ................. 42 11 MISCELLANEOUS 11.01 Trust Indenture Act ............... 42 11.02 Notices ........................... 42 11.03 Certificate and Opinion as to Conditions Precedent ............ 43 11.04 Statements Required in Cer- tificate or Opinion ............. 44 11.05 Rules by Company and Agents ....... 44 11.06 Legal Holidays .................... 44 11.07 No Recourse Against Others ........ 44 11.08 Duplicate Originals ............... 45 11.09 Governing Law ..................... 45 SIGNATURES ................................ 46 Exhibit A: Form of Registered Security ...................... Exhibit B: Form of Bearer Security ....... Notes to Exhibits A and B ................. Exhibit C: Form of Assignment ............ Exhibit D: Form of Conversion Notice ..... -iv- INDENTURE dated as of , between [NAME OF ISSUER], a corporation organized and existing under the laws of the State of (hereinafter called the "Company") and , a banking corporation ("Trustee"). Each party agrees as follows for the benefit of the Hold- ers of the Company's debt securities issued under this Indenture: ARTICLE 1 ` DEFINITIONS SECTION 1.01. Definitions. "Affiliate" means any person directly or indirectly con- trolling or controlled by or under direct or indirect common control with the Company. "Agent" means any Registrar, Transfer Agent or Paying Agent. "Authorized Newspaper" means a newspaper that is: (1) printed in the English language or in an offi- cial language of the country of publication; (2) customarily published on each business day in the place of publication; and (3) of general circulation in the relevant place or in the financial community of such place. Whenever successive publications in an Authorized Newspaper are required, they may be made on the same or different business days and in the same or different Authorized Newspapers. "Bearer Security" means a Security payable to bearer. "Board" means the Board of Directors of the Company or any authorized committee of the Board. "Bond Resolution" means a resolution adopted by the Board or by a committee of Officers or an Officer pursuant to Board delegation authorizing a series of Securities. "Capital Stock" means any and all shares, interests, par- ticipations or other equivalents (however designated) of capi- tal stock of any person and all warrants or options to acquire such capital stock. "Common Stock" means the common stock, per value $1.00 per share, of the Company. "Company" means the party named as such above until a suc- cessor replaces it and thereafter means the successor. "Conversion Rate" means such number or amount of shares of Common Stock or other equity or debt securities for which $1,000 aggregate principal amount of Securities of any series is convertible, initially as stated in the Bond Resolution authorizing the series and as adjusted pursuant to the terms of this Indenture and the Bond Resolution. "coupon" means an interest coupon for a Bearer Security. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. "Discounted Security" means a Security where the amount of principal due upon acceleration is less than the stated princi- pal amount. "Holder" or "Securityholder" means the person in whose name a Registered Security is registered and the bearer of a Bearer Security or coupon. "Indenture" means this Indenture and any Bond Resolution as amended from time to time. "Officer" means the Chairman, any Vice-Chairman, the Pres- ident, any Executive or Senior Vice President, any Vice-Presi- dent, the Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers of the Company. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "principal" of a debt security means the principal of the security plus the premium, if and when applicable, on the security. "Registered Security" means a Security registered as to principal and interest by the Registrar. "SEC" means the Securities and Exchange Commission. -2- "Securities" means the debt securities issued under this Indenture. "series" means a series of Securities or the Securities of the series. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code { 77aaa-77bbbb) as amended. "Trading Day" means each day on which the securities exchange or quotation system which is used to determine the Market Price is open for trading or quotation. "Trustee" means the party named as such above until a suc- cessor replaces it and thereafter means the successor. "Trust Officer" means the Chairman of the Board, the Pres- ident or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "United States" means the United States of America, its territories and possessions and other areas subject to its jurisdiction. SECTION 1.02. Other Definitions. Term Defined in Section "Bankruptcy Law" 6.01 "Conditional Redemption" 3.04 "Conversion Agent" 2.03 "Conversion Date" 9.02 "Conversion Notice" 9.02 "Conversion Right" 9.01 "Custodian" 6.01 "Event of Default" 6.01 "Legal Holiday" 11.06 "Lien" 4.01 "Market Price" 9.07 "Paying Agent" 2.03 "Price Per Share" 9.09 "Registrar" 2.03 "Subsidiary" 4.01 "Transfer Agent" 2.03 "Treasury Regulations" 2.04 "U.S. Government Obligations" 8.02 "Voting Stock" 4.01 "Yield to Maturity" 4.01 -3- SECTION 1.03. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with gener- ally accepted accounting principles in the United States; (3) generally accepted accounting principles are those applicable from time to time; (4) all terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them by such definitions; (5) "or" is not exclusive; and (6) words in the singular include the plural, and in the plural include the singular. ARTICLE 2 ` THE SECURITIES SECTION 2.01. Issuable in Series. The aggregate principal amount of Securities that may be issued under this Indenture is unlimited. The Securities may be issued from time to time in one or more series. Each series shall be created by a Bond Resolution or a supplemental inden- ture that establishes the terms of the series, which may include the following: (1) the title of the series; (2) the aggregate principal amount of the series; (3) the interest rate, if any, or method of calcula- ting the interest rate; (4) the date from which interest will accrue; (5) the record dates for interest payable on Regis- tered Securities; -4- (6) the dates when principal and interest are payable; (7) the manner of paying principal and interest; (8) the places where principal and interest are payable; (9) the Registrar, Transfer Agent and Paying Agent; (10) the terms of any mandatory or optional redemp- tion by the Company including any sinking fund; (11) the terms of any redemption at the option of Holders; (12) the denominations in which Securities are issuable; (13) whether Securities will be issuable as Regis- tered Securities or Bearer Securities; (14) whether and upon what terms Registered Securi- ties and Bearer Securities may be exchanged; (15) whether any Securities will be represented by a Security in global form; (16) the terms of any global Security; (17) the terms of any tax indemnity; (18) the currencies (including any composite cur- rency) in which principal or interest may be paid; (19) if payments of principal or interest may be made in a currency other than that in which Securi- ties are denominated, the manner for determining such payments; (20) if amounts of principal or interest may be determined by reference to an index, formula or other method, the manner for determining such amounts; (21) provisions for electronic issuance of Securities or for Securities in uncertificated form; -5- (22) the portion of principal payable upon accelera- tion of a Discounted Security; (23) any Events of Default or covenants in addition to or in lieu of those set forth in this Indenture; (24) whether and upon what terms Securities may be defeased; (25) the forms of the Securities or any coupon, which may be in the form of Exhibit A or B; (26) any terms that may be required by or advisable under U.S. laws; (27) whether and upon what terms the Securities will be convertible into or exchangeable for Common Stock of the Company or other equity or debt securities, which may include the terms provided in Article 9; and (28) any other terms not inconsistent with this Indenture. All Securities of one series need not be issued at the same time and, unless otherwise provided, a series may be reopened for issuances of additional Securities of such series. The creation and issuance of a series and the authentica- tion and delivery thereof are not subject to any conditions precedent. SECTION 2.02. Execution and Authentication. Two Officers shall sign the Securities by manual or fac- simile signature. The Company's seal shall be reproduced on the Securities. An Officer shall sign any coupons by facsimile signature. If an Officer whose signature is on a Security or its cou- pons no longer holds that office at the time the Security is authenticated or delivered, the Security and coupons shall nevertheless be valid. A Security and its coupons shall not be valid until the Security is authenticated by the manual signature of the Regis- trar. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. -6- Each Registered Security shall be dated the date of its authentication. Each Bearer Security shall be dated the date of its original issuance or as provided in the Bond Resolution. Securities may have notations, legends or endorsements required by law, stock exchange rule, agreement or usage. In the event Securities are issued in electronic or other uncertificated form, such Securities may be validly issued without the signatures or seal contemplated by this Section 2.02. SECTION 2.03. Bond Agents. The Company shall maintain an office or agency where Securities may be authenticated ("Registrar"), where Securities may be presented for registration of transfer or for exchange ("Transfer Agent"), where Securities may be presented for pay- ment ("Paying Agent") and where Securities may be presented for conversion ("Conversion Agent"). Whenever the Company must issue or deliver Securities pursuant to this Indenture, the Registrar shall authenticate the Securities at the Company's request. The Transfer Agent shall keep a register of the Secu- rities and of their transfer and exchange. The Company may appoint more than one Registrar, Transfer Agent, Paying Agent or Conversion Agent for a series. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company does not appoint or maintain a Registrar, Transfer Agent, Paying Agent or Conversion Agent for a series, the Trustee shall act as such. SECTION 2.04. Bearer Securities. U.S. laws and Treasury Regulations restrict sales or exchanges of and payments on Bearer Securities. Therefore, except as provided below: (1) Bearer Securities will be offered, sold and delivered only outside the United States and will be delivered only upon presentation of a certificate in a form prescribed by the Company to comply with U.S. laws and regulations. (2) Bearer Securities will not be issued in exchange for Registered Securities. -7- (3) All payments of principal and interest (includ- ing original issue discount) on Bearer Securi- ties will be made outside the United States by a Paying Agent located outside the United States unless the Company determines that: (A) such payments may not be made by such Pay- ing Agent because the payments are illegal or prevented by exchange controls as described in Treasury Regulation { 1.163-5(c)(2)(v); and (B) making the payments in the United States would not have an adverse tax effect on the Company. If there is a change in the relevant provisions of U.S. laws or Treasury Regulations or the judicial or administrative interpretation thereof, a restriction set forth in paragraph (1), (2) or (3) above will not apply to a series if the Company determines that the relevant provisions no longer apply to the series or that failure to comply with the relevant provisions would not have an adverse tax effect on the Company or on Securityholders or cause the series to be treated as "registration-required" obligations under U.S. law. The Company shall notify the Trustee of any determinations by the Company under this Section. "Treasury Regulations" means regulations of the U.S. Trea- sury Department under the Internal Revenue Code of 1986, as amended. SECTION 2.05. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent for a series other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the persons enti- tled thereto all money held by the Paying Agent for the payment of principal of or interest on the series, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money so held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no further liability for the money. -8- If the Company or an Affiliate acts as Paying Agent for a series, it shall segregate and hold as a separate trust fund all money held by it as Paying Agent for the series. The Company may elect not to exchange or register the transfer of any Security for a period of 15 days before a selection of Securities to be redeemed. SECTION 2.06. Securityholder Lists. The Trustee shall preserve in as current a form as is rea- sonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Transfer Agent, the Company shall furnish to the Trustee semiannually and at such other times as the Trustee may request a list in such form and as of such date as the Trustee may rea- sonably require of the names and addresses of Holders of Regis- tered Securities and Holders of Bearer Securities whose names are on the list referred to below. The Transfer Agent shall keep a list of the names and addresses of Holders of Bearer Securities who file a request to be included on such list. A request will remain in effect for two years but successive requests may be made. Whenever the Company or the Trustee is required to mail a notice to all Holders of Registered Securities of a series, it also shall mail the notice to Holders of Bearer Securities of the series whose names are on the list. Whenever the Company is required to publish a notice to all Holders of Bearer Securities of a series, it also shall mail the notice to such of them whose names are on the list. SECTION 2.07. Transfer and Exchange. Where Registered Securities of a series are presented to the Transfer Agent with a request to register transfer or to exchange them for an equal principal amount of Registered Secu- rities of other denominations of the series, the Transfer Agent shall register the transfer or make the exchange if its requirements for such transactions are met. The Transfer Agent may require a Holder to pay a sum suf- ficient to cover any taxes imposed on a transfer or exchange. If a series provides for Registered and Bearer Securities and for their exchange, Bearer Securities may be exchanged for Registered Securities and Registered Securities may be -9- exchanged for Bearer Securities as provided in the Securities or the Bond Resolution if the requirements of the Transfer Agent for such transactions are met and if Section 2.04 permits the exchange. SECTION 2.08. Replacement Securities. If the Holder of a Security or coupon claims that it has been lost, destroyed or wrongfully taken, then, in the absence of notice to the Company or the Trustee that the Security or coupon has been acquired by a bona fide purchaser, the Company shall issue a replacement Security or coupon if the Company and the Trustee receive: (1) evidence satisfactory to them of the loss, destruction or taking; (2) an indemnity bond satisfactory to them; and (3) payment of a sum sufficient to cover their expenses and any taxes for replacing the Secu- rity or coupon. A replacement Security shall have coupons attached correspond- ing to those, if any, on the replaced Security. Every replacement Security or coupon is an additional obligation of the Company. SECTION 2.09. Outstanding Securities. The Securities outstanding at any time are all the Securi- ties authenticated by the Registrar except for those cancelled by it, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser. If Securities are considered paid under Section 4.02, they cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate holds the Security. -10- SECTION 2.10. Discounted Securities. In determining whether the Holders of the required princi- pal amount of Securities have concurred in any direction, waiver or consent, the principal amount of a Discounted Secu- rity shall be the amount of principal that would be due as of the date of such determination if payment of the Security were accelerated on that date. SECTION 2.11. Treasury Securities. In determining whether the Holders of the required princi- pal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affil- iate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.12. Global Securities. If the Bond Resolution so provides, the Company may issue some or all of the Securities of a series in temporary or per- manent global form. A global Security may be in registered form, in bearer form with or without coupons or in uncertificated form. A global Security shall represent that amount of Securities of a series as specified in the global Security or as endorsed thereon from time to time. At the Com- pany's request, the Registrar shall endorse a global Security to reflect the amount of any increase or decrease in the Secu- rities represented thereby. The Company may issue a global Security only to a deposi- tory designated by the Company. A depository may transfer a global Security only as a whole to its nominee or to a succes- sor depository. The Bond Resolution may establish, among other things, the manner of paying principal and interest on a global Security and whether and upon what terms a beneficial owner of an inter- est in a global Security may exchange such interest for defini- tive Securities. The Company, an Affiliate, the Trustee and any Agent shall not be responsible for any acts or omissions of a depository, for any depository records of beneficial ownership interests or for any transactions between the depository and beneficial owners. -11- SECTION 2.13. Temporary Securities. Until definitive Securities of a series are ready for delivery, the Company may use temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Temporary Securities may be in global form. Temporary Bearer Securities may have one or more coupons or no coupons. Without unreasonable delay, the Company shall deliver definitive Securities in exchange for temporary Securities. SECTION 2.14. Cancellation. The Company at any time may deliver Securities to the Reg- istrar for cancellation. The Transfer Agent and the Paying Agent shall forward to the Registrar any Securities and coupons surrendered to them for payment, exchange or registration of transfer. The Registrar shall cancel all Securities or coupons surrendered for payment, registration of transfer, exchange or cancellation as follows: the Registrar will cancel all Regis- tered Securities and matured coupons. The Registrar also will cancel all Bearer Securities and unmatured coupons unless the Company requests the Registrar to hold the same for redelivery. Any Bearer Securities so held shall be considered delivered for cancellation under Section 2.09. The Registrar shall destroy cancelled Securities and coupons unless the Company otherwise directs. Unless the Bond Resolution otherwise provides, the Company may not issue new Securities to replace Securities that the Company has paid or that the Company has delivered to the Reg- istrar for cancellation. SECTION 2.15. Defaulted Interest If the Company defaults in a payment of interest on Regis- tered Securities, it need not pay the defaulted interest to Holders on the regular record date. The Company may fix a spe- cial record date for determining Holders entitled to receive defaulted interest or the Company may pay defaulted interest in any other lawful manner. -12- ARTICLE 3 ` REDEMPTION SECTION 3.01. Notices to Trustee. Securities of a series that are redeemable before maturity shall be redeemable in accordance with their terms and, unless the Bond Resolution otherwise provides, in accordance with this Article. In the case of a redemption by the Company, the Company shall notify the Trustee of the redemption date and the princi- pal amount of Securities to be redeemed. The Company shall notify the Trustee at least 35 days before the redemption date unless a shorter notice is satisfactory to the Trustee. If the Company is required to redeem Securities, it may reduce the principal amount of Securities required to be redeemed to the extent it is permitted a credit by the terms of the Securities and it notifies the Trustee of the amount of the credit and the basis for it. If the reduction is based on a credit for acquired or redeemed Securities that the Company has not previously delivered to the Registrar for cancellation, the Company shall deliver the Securities at the same time as the notice. SECTION 3.02. Selection of Securities to Be Redeemed. If less than all the Securities of a series are to be redeemed, the Trustee shall select the Securities to be redeemed by a method the Trustee considers fair and appropri- ate. The Trustee shall make the selection from Securities of the series outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities having denominations larger than the minimum denomination for the series. Securities and portions thereof selected for redemption shall be in amounts equal to the mini- mum denomination for the series or an integral multiple thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. SECTION 3.03. Notice of Redemption. At least 30 days before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder of Registered Securities whose Securities are to be redeemed. -13- If Bearer Securities are to be redeemed, the Company shall publish a notice of redemption in an Authorized Newspaper as provided in the Securities. A notice shall identify the Securities of the series to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) the name and address of the Paying Agent; (4) that Securities called for redemption, together with all coupons, if any, maturing after the redemption date, must be surrendered to the Pay- ing Agent to collect the redemption price; (5) that interest on Securities called for redemp- tion ceases to accrue on and after the redemp- tion date; and (6) whether the redemption by the Company is manda- tory or optional; and (7) whether the redemption is conditional as pro- vided in Section 3.04, the terms of the condi- tion, and that, if the condition is not satis- fied or is not waived by the Company, the Secu- rities will not be redeemed and such a failure to redeem will not constitute an Event of Default. A redemption notice given by publication need not identify Registered Securities to be redeemed. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense. SECTION 3.04. Effect of Notice of Redemption. Except as provided below, once notice of redemption is given, Securities called for redemption become due and payable on the redemption date at the redemption price stated in the notice. A notice of redemption may provide that it is subject to the occurrence of any event before the date fixed for such redemption as described in such notice ("Conditional -14- Redemption") and such notice of Conditional Redemption shall be of no effect unless all such conditions to the redemption have occurred before such date or have been waived by the Company. SECTION 3.05. Payment of Redemption Price. On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. When the Holder of a Security surrenders it for redemption in accordance with the redemption notice, the Company shall pay to the Holder on the redemption date the redemption price and accrued interest to such date, except that: (1) the Company will pay any such interest (except defaulted interest) to Holders on the record date of Registered Securities if the redemption date occurs on an interest payment date; and (2) the Company will pay any such interest to Hold- ers of coupons that mature on or before the redemption date upon surrender of such coupons to the Paying Agent. Coupons maturing after the redemption date on a called Security are void absent a payment default on that date. Nevertheless, if a Holder surrenders for redemption a Bearer Security missing any such coupons, the Company may deduct the face amount of such coupons from the redemption price. If thereafter the Holder surrenders to the Paying Agent the miss- ing coupons, the Company will return the amount so deducted. The Company also may waive surrender of the missing coupons if it receives an indemnity bond satisfactory to the Company. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall deliver to the Holder a new Security of the same series equal in principal amount to the unredeemed portion of the Security surrendered. -15- ARTICLE 4 ` COVENANTS SECTION 4.01. Certain Definitions. "Lien" means any mortgage, pledge, security interest or lien. "Subsidiary" means a corporation a majority of whose Vot- ing Stock is owned by the Company or a Subsidiary. "Voting Stock" means capital stock having voting power under ordinary circumstances to elect directors. "Yield to Maturity" means the yield to maturity on a Secu- rity at the time of its issuance or at the most recent determi- nation of interest on the Security. SECTION 4.02. Payment of Securities. The Company shall pay the principal of and interest on a series in accordance with the terms of the Securities for the series, any related coupons, and this Indenture. Principal and interest on a series shall be considered paid on the date due if the Paying Agent for the series holds on that date money sufficient to pay all principal and interest then due on the series. SECTION 4.03. Overdue Interest. Unless the Bond Resolution otherwise provides, the Company shall pay interest on overdue principal of a Security of a series at the rate (or Yield to Maturity in the case of a Dis- counted Security) borne by the series; it shall pay interest on overdue installments of interest at the same rate or Yield to Maturity to the extent lawful. SECTION 4.04. No Lien Created, etc. This Indenture and the Securities do not create a Lien, charge or encumbrance on any property of the Company or any Subsidiary. -16- SECTION 4.05. Compliance Certificate. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a brief cer- tificate signed by the principal executive officer, principal financial officer or principal accounting officer of the Com- pany, as to the signer's knowledge of the Company's compliance with all conditions and covenants under this Indenture (deter- mined without regard to any period of grace or requirement of notice provided herein). Any other obligor on the Securities shall also deliver to the Trustee such a certificate as to its compliance with this Indenture within 120 days after the end of each of its fiscal years. The certificates need not comply with Section 11.04. SECTION 4.06. SEC Reports. The Company shall file with the Trustee, within 15 days after the Company is required to file the same with the SEC, copies of the annual reports and of the information, documents, and other reports (or such portions of the foregoing as the SEC may prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Any other obligor on the Securities shall do likewise as to the above items which it is required to file with the SEC pursuant to those sections. ARTICLE 5 ` SUCCESSORS SECTION 5.01. When Company May Merge, etc. Unless the Bond Resolution establishing a Series otherwise provides, the Company shall not consolidate with or merge into, or transfer all or substantially all of its assets to, any per- son unless: (1) the person is organized under the laws of the United States or a State thereof; (2) the person assumes by supplemental indenture all the obligations of the Company under this Inden- ture, the Securities and any coupons; -17- (3) all required approvals of any regulatory body having jurisdiction over the transaction shall have been obtained; and (4) immediately after the transaction no Default exists. The successor shall be substituted for the Company, and thereafter all obligations of the Company under this Indenture, the Securities and any coupons shall terminate. ARTICLE 6 ` DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. Unless the Bond Resolution otherwise provides, an "Event of Default" on a series occurs if: (1) the Company defaults in any payment of interest on any Securities of the series when the same becomes due and payable and the Default contin- ues for a period of 60 days; (2) the Company defaults in the payment of the prin- cipal and premium, if any, of any Securities of the series when the same becomes due and payable at maturity or upon redemption, acceleration or otherwise, and such default shall continue for five or more days; (3) the Company defaults in the payment or satisfac- tion of any sinking fund obligation with respect to any Securities of a Series as required by the Securities Resolution establishing such series and the Default continues for a period of 60 days; (4) the Company defaults in the performance of any of its other agreements applicable to the series and the Default continues for 90 days after the notice specified below; (5) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, -18- (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian for it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; (6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian for the Company or for all or substantially all of its property, or (C) orders the liquidation of the Company; and the order or decree remains unstayed and in effect for 60 days; or (7) there occurs any other Event of Default provided for in the series. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liqui- dator or a similar official under any Bankruptcy Law. A Default under clause (4) is not an Event of Default until the Trustee or the Holders of at least 33 1/3% in princi- pal amount of the series notify the Company of the Default and the Company does not cure the Default within the time specified after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." If Holders notify the Company of a Default, they shall notify the Trustee at the same time. The failure to redeem any Security subject to a Condi- tional Redemption is not an Event of Default if any event on which such redemption is so conditioned does not occur and is not waived before the redemption date. -19- SECTION 6.02. Acceleration. If an Event of Default occurs and is continuing on a series, the Trustee by notice to the Company, or the Holders of at least 33 1/3% in principal amount of the series by notice to the Company and the Trustee, may declare the principal of and accrued interest on all the Securities of the series to be due and payable immediately. Discounted Securities may provide that the amount of principal due upon acceleration is less than the stated principal amount. The Holders of a majority in principal amount of the series by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default on the series have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing on a series, the Trustee may pursue any available remedy to collect principal or interest then due on the series, to enforce the performance of any provision applicable to the series, or otherwise to protect the rights of the Trustee and Holders of the series. The Trustee may maintain a proceeding even if it does not possess any of the Securities or coupons or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permit- ted by law. SECTION 6.04. Waiver of Past Defaults. Unless the Bond Resolution otherwise provides, the Holders of a majority in principal amount of a series by notice to the Trustee may waive an existing Default on the series and its consequences except: (1) a Default in the payment of the principal of or interest on the series, or -20- (2) a Default in respect of a provision that under Section 10.02 cannot be amended without the con- sent of each Securityholder affected. SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of a series may direct the time, method and place of conducting any pro- ceeding for any remedy available to the Trustee, or of exer- cising any trust or power conferred on the Trustee, with respect to the series. However, the Trustee may refuse to fol- low any direction that conflicts with law or this Indenture. SECTION 6.06. Limitation on Suits. A Securityholder of a series may pursue a remedy with respect to the series only if: (1) the Holder gives to the Trustee notice of a con- tinuing Event of Default on the series; (2) the Holders of at least 25% in principal amount of the series make a request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the series do not give the Trustee a direction inconsistent with such request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. Collection Suit by Trustee. If an Event of Default in payment of interest, principal or sinking fund specified in Section 6.01(1), (2) or (3) occurs and is continuing on a series, the Trustee may recover judgment -21- in it own name and as trustee of an express trust against the Company for the whole amount of principal and interest remain- ing unpaid on the series. SECTION 6.08. Priorities. If the Trustee collects any money for a series pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.06; Second: to Securityholders of the series for amounts due and unpaid for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable for princi- pal and interest, respectively; and Third: to the Company. The Trustee may fix a payment date for any payment to Securityholders. ARTICLE 7 ` TRUSTEE SECTION 7.01. Rights of Trustee. (1) The Trustee may rely on any document believed by it to be genuine and to have been signed or pre- sented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (2) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Certificate or Opinion. (3) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith in -22- accordance with a direction received by it pur- suant to Section 6.05. (5) The Trustee may refuse to perform any duty or exercise any right or power which it reasonably believes may expose it to any loss, liability or expense unless it receives indemnity satisfac- tory to it against such loss, liability or expense. (6) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (7) The Trustee shall have no duty with respect to a Default unless it has actual knowledge of the Default. (8) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized and within its powers. (9) Any Agent shall have the same rights and be pro- tected to the same extent as if it were Trustee. SECTION 7.02. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities or coupons and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. SECTION 7.03. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities or any coupons; it shall not be accountable for the Company's use of the proceeds from the Securities; it shall not be responsible for any state- ment in the Securities or any coupons; it shall not be respon- sible for any overissue; it shall not be responsible for deter- mining whether the form and terms of any Securities or coupons were established in conformity with this Indenture; and it shall not be responsible for determining whether any Securities were issued in accordance with this Indenture. -23- SECTION 7.04. Notice of Defaults. If a Default occurs and is continuing on a series and if it is known to the Trustee, the Trustee shall mail a notice of the Default within 90 days after it occurs to Holders of Regis- tered Securities of the series. Except in the case of a Default in payment on a series, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interest of Holders of the series. The Trustee shall withhold notice of a Default described in Section 6.01(4) until at least 90 days after it occurs. SECTION 7.05. Reports by Trustee to Holders. Any report required by TIA { 313(a) to be mailed to Securityholders shall be mailed by the Trustee on or before July 15 of each year. A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which any Securities are listed. The Company shall notify the Trustee when any Securities are listed on a stock exchange. SECTION 7.06. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee's com- pensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss or liability incurred by it. The Trustee shall notify the Com- pany promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall coop- erate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. -24- To secure the Company's payment obligations in this Sec- tion, the Trustee shall have a lien prior to the Securities and any coupons on all money or property held or collected by the Trustee, except that held in trust to pay principal or interest on particular securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, such expenses and the compensation for such services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of the Section shall survive any termina- tion or discharge of this Indenture (including without limita- tion any termination under any Bankruptcy Law) and the resigna- tion or removal of the Trustee. SECTION 7.07. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the suc- cessor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company may remove the Trustee if: (1) the Trustee fails to comply with TIA { 310(a) or { 310(b) or with Section 7.09; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a Custodian or other public officer takes charge of the Trustee or its property; (4) the Trustee becomes incapable of acting; or (5) an event of the kind described in Section 6.01(5) or (6) occurs with respect to the Trustee. The Company also may remove the Trustee with or without cause if the Company so notifies the Trustee six months in advance and if no Default occurs during the six-month period. -25- If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with TIA { 310(a) or { 310(b) or with Section 7.09, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of Registered Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.06. SECTION 7.08. Successor Trustee by Merger, etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust busi- ness to, another corporation, the successor corporation without any further act shall be the successor Trustee. SECTION 7.09. Trustee's Capital and Surplus. The Trustee at all times shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published report of condition. ARTICLE 8 ` DISCHARGE OF INDENTURE SECTION 8.01. Defeasance. Securities of a series may be defeased in accordance with their terms and, unless the Bond Resolution otherwise provides, in accordance with this Article. -26- The Company at any time may terminate as to a series all of its obligations under this Indenture, the Securities of the series and any related coupons ("legal defeasance option"). The Company at any time may terminate as to a series its obli- gations, if any, under any restrictive covenants which may be applicable to a particular series ("covenant defeasance option"). However, in the case of the legal defeasance option, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.06, 7.07 and 8.04 shall survive until the Securi- ties of the series are no longer outstanding; thereafter the Company's obligations in Section 7.06 shall survive. The Company may exercise its legal defeasance option not- withstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, a series may not be accelerated because of an Event of Default. If the Company exercises it covenant defeasance option, a series may not be accelerated by reference to any restrictive covenants which may be applicable to a particular series so defeased under the terms of the series. The Trustee upon request shall acknowledge in writing the discharge of those obligations that the Company terminates. SECTION 8.02. Conditions to Defeasance. The Company may exercise as to a series its legal defea- sance option or its covenant defeasance option if: (1) the Company irrevocably deposits in trust with the Trustee or another trustee money or U.S. Government Obligations; (2) the Company delivers to the Trustee a certifi- cate from a nationally recognized firm of inde- pendent accountants expressing their opinion that the payments of principal and interest when due on the deposited U.S. Government Obligations without reinvestment plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities of the series to maturity or redemption, as the case may be; (3) immediately after the deposit no Default exists; (4) the deposit does not constitute a default under any other agreement binding on the Company; -27- (5) the deposit does not cause the Trustee to have a conflicting interest under TIA { 310(a) or { 310(b) as to another series; (6) the Company delivers to the Trustee an Opinion of Counsel to the effect that Holders of the series will not recognize income, gain or loss for Federal income tax purposes as a result of the defeasance; and (7) 91 days pass after the deposit is made and dur- ing the 91-day period no Default specified in Section 6.01(5) or (6) occurs that is continuing at the end of the period. Before or after a deposit the Company may make arrange- ments satisfactory to the Trustee for the redemption of Securi- ties at a future date in accordance with Article 3. "U.S. Government Obligations" means direct obligations of (i) the United States or (ii) an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed by the United States, which, in either case, have the full faith and credit of the United States pledged for pay- ment and which are not callable at the issuer's option, or cer- tificates representing an ownership interest in such obligations. SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.02. It shall apply the deposited money and the money from U.S. Govern- ment Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on Securities of the defeased series. SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of princi- pal or interest that remains unclaimed for two years. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as unsecured general -28- creditors unless an abandoned property law designates another person. ARTICLE 9 ` CONVERSION SECTION 9.01. Conversion Privilege. If the Bond Resolution establishing the terms of a series of securities so provides, Securities of any series may be convertible into or for Common Stock or other equity or debt securities (a "Conversion Right"). The Bond Resolution may establish, among other things, the Conversion Rate, provisions for adjustments to the Conversion Rate and limitations upon exercise of the Conversion Right. Unless the Bond Resolution otherwise provides, a Holder may convert a portion of a Security if the portion is $1,000 or an integral multiples thereof. Provisions of this Indenture that apply to the conversion of the aggregate princi- pal amount of a Security also apply to conversion of a portion of it. SECTION 9.02. Conversion Procedure. To convert a Security a Holder must satisfy all requirements in the Securities or the Bond Resolution and (i) complete and manually sign the conversion notice (the "Con- version Notice") provided for in the Bond Resolution or the Security (or complete and manually sign a facsimile thereof) and deliver such notice to the Conversion Agent or any other office or agency maintained for such purpose, (ii) surrender the Security to the Conversion Agent or at such other office or agency by physical delivery, (iii) if required, furnish appro- priate endorsements and transfer documents, and (iv) if required, pay all transfer or similar taxes. The date on which such notice shall have been received by and the Security shall have been so surrendered to the Conversion Agent is the "Con- version Date." Such Conversion Notice shall be irrevocable and may not be withdrawn by a Holder for any reason. The Company will complete settlement of any conver- sion of Securities not later than the fifth business day fol- lowing the Conversion Date in respect of the cash portion elected to be delivered in lieu of the securities into which the Security is convertible and not later than the seventh business day following the Conversion Date in respect of the portion to be settled in such securities. -29- If any Security is converted between the record date for the payment of interest and the next succeeding interest payment date, such Security must be accompanied by funds equal to the interest payable on such succeeding interest payment date on the principal amount so converted (unless such Security shall have been called for redemption during such period, in which case no such payment shall be required). A Security con- verted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Security being converted will be paid on such interest payment date to the registered holder of such Security on the immedi- ately preceding record date. Subject to the aforesaid right of the registered holder to receive interest, no payment or adjustment will be made on conversion for interest accrued on the converted Security or for interest, dividends or other dis- tributions payable on any security issued on conversion. If a Holder converts more than one Security at the same time, the securities into which the Security is convert- ible issuable or cash payable upon the conversion shall be based on the total principal amount of the Securities converted. Upon surrender of a Security that is converted in part the Trustee shall authenticate for the Holder a new Secu- rity equal in principal amount to the unconverted portion of the Security surrendered; except that if a Global Security is so surrendered the Trustee shall authenticate and deliver to the Depositary a new Global Security in a denomination equal to and in exchange for the unconverted portion of the principal of the Global Security so surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. SECTION 9.03. Taxes on Conversion. If a Holder of a Security exercises a Conversion Right, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of the securities into which the Security is convertible upon the conversion. How- ever, the Holder shall pay any such tax which is due because securities or other property are issued in a name other than the Holder's name. Nothing herein shall preclude any income tax or other withholding required by law or regulations. -30- SECTION 9.04. Company Determination Final. Any determination that the Board of Directors makes pursuant to this Article 9 or consistent with terms provided for in any Bond Resolution is conclusive, absent manifest error. SECTION 9.05. Trustee's and Conversion Agent's Disclaimer. The Trustee (and each Conversion Agent other than the Company) has no duty to determine when or if an adjustment under this Article 9 or any Bond Resolution should be made, how it should be made or calculated or what it should be. The Trustee (and each Conversion Agent other than the Company) makes no representation as to the validity or value of any securities issued upon conversion of Securities. The Trustee (and each Conversion Agent other than the Company) shall not be responsible for the Company's failure to comply with this Article 9 or any provision of a Bond Resolution relating to a Conversion Right. SECTION 9.06. Company to Provide Conversion Securities. The Company shall reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury suf- ficient shares to permit the conversion of all of the Securi- ties convertible into Common Stock. The Company shall arrange and make available for issuance upon conversion the full amount of any other securities into which the Securities are convert- ible to permit such conversion of the Securities. All shares of Common Stock or other equity securities of any person which may be issued upon conversion of the Secu- rities shall be validly issued, fully paid and non-assessable. The Company will comply with all securities laws reg- ulating the offer and delivery of securities upon conversion of Securities. SECTION 9.07. Cash Settlement Option. If the Bond Resolution so provides, the Company may elect to satisfy, in whole or in part, a Conversion Right of Securities convertible into Common Stock or other securities of any person by the delivery of cash. The amount of cash to be delivered shall be equal to the Market Price on the last Trad- ing Day preceding the applicable Conversion Date of a share of -31- Common Stock or other securities of any person into which the Securities are convertible multiplied by the number of shares of Common Stock or the number of shares or principal amount of other securities into which the Securities are convertible, respectively, in respect of which the Company elects to deliver cash. If the Company elects to satisfy, in whole or in part, a Conversion Right by the delivery of shares of Common Stock or other securities, no fractional shares or portion of other securities will be delivered. Instead, the Company will pay cash based on the Market Price for such fractional share of Common Stock or portion of other securities. The "Market Price" of the Common Stock into which Securities or other equity securities into which the Securities are convertible may be converted pursuant to a Bond Resolution or this Article 9 on any Trading Day means the weighted average per share sale price for all sales of the Common Stock or other equity securities on such Trading Day (or, if the information necessary to calculate such weighted average per share sale price is not reported, the average of the high and low sale prices, or if no sales are reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices), as reported in the composite transactions for the New York Stock Exchange, or if the Common Stock or other equity securities into which the Securities are convertible is not listed or admitted to trading on such exchange, as reported in the composite transactions for the principal national or regional United States securities exchange on which the Common Stock or other equity securities into which the Securities are convertible is listed or admitted to trading or, if the Common Stock or other equity securities into which the Securities are convertible is not listed or admitted to trading on a United States national or regional securities exchange, as reported by NASDAQ or by the National Quotation Bureau Incorporated or if not so reported as deter- mined in the manner set forth in the appropriate Bond Resolu- tion. In the absence of such quotations, the Company shall be entitled to determine the Market Price on the basis of such quotations as it considers appropriate. The "Market Price" of any debt security into which Securi- ties are convertible shall be determined as set forth in the applicable Bond Resolution. -32- SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock. If the Securities are convertible into Common Stock and the Company: (1) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (2) subdivides its outstanding shares of Common Stock into a greater number of shares; (3) combines its outstanding shares of Common Stock into a smaller number of shares; (4) pays a dividend or makes a distribution on its Common Stock in shares of its Capital Stock other than Common Stock; or (5) issues by reclassification of its Common Stock any shares of its Capital Stock, then the conversion privilege and the Conversion Rate in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the num- ber of shares of Capital Stock of the Company (or, at the Com- pany's option, an equivalent amount in cash) which he would have owned immediately following such action if he had con- verted the Security immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a sub- division, combination or reclassification. If the Security into which the Securities are con- vertible are other than Common Stock of the Company, the con- version rate sall be subject to adjustment as set forth in the applicable Bond Resolution. If after an adjustment a Holder of a Security may, upon conversion, receive shares of two or more classes of Capi- tal Stock of the Company or other securities, the Board of Directors of the Company shall determine allocation of the adjusted Conversion Rate between or among the classes of Capi- tal Stock or other securities. After such allocation, the con- version privilege and the Conversion Rate of each class of Cap- ital Stock or other securities shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Article or in such Bond Resolution. -33- SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market Price. If the Securities are convertible with Common Stock, and the Company issues to all holders of Common Stock rights, options or warrants to subscribe for or purchase shares of Com- mon Stock, or any securities convertible into or exchangeable for shares of Common Stock, or rights, options or warrants to subscribe for or purchase such convertible or exchangeable securities at a Price Per Share (as defined and determined according to the formula given below) lower than the current Market Price on the date of such issuance, the Conversion Rate shall be adjusted in accordance with the following formula: AC = CC x O + N___ O + R M where: AC = the adjusted Conversion Rate. CC = the then current Conversion Rate. O = the number of shares of Common Stock outstanding immedi- ately prior to such issuance (which number shall include shares owned or held by or for the account of the Company). N = the "Number of Shares," which (i) in the case of rights, options or warrants to subscribe for or purchase shares of Common Stock or of securities convertible into or exchangeable for shares of Common Stock, is the maximum number of shares of Common Stock initially issuable upon exercise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or purchase convertible or exchangeable securities, is the maximum number of shares of Common Stock initially issu- able upon the conversion or exchange of the convertible or exchangeable securities issuable upon the exercise of such rights, options or warrants. R = the proceeds received or receivable by the Company, which (i) in the case of rights, options or warrants to sub- scribe for or purchase shares of Common Stock or of secu- rities convertible into or exchangeable for shares of Com- mon Stock, is the aggregate amount received or receivable by the Company in consideration for the sale and issuance of such rights, options, warrants or convertible or exchangeable securities, plus the minimum aggregate amount -34- of additional consideration, other than the convertible or exchangeable securities, payable to the Company upon exer- cise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or pur- chase convertible or exchangeable securities, is the aggregate amount received or receivable by the Company in consideration for the sale and issuance of such rights, options or warrants, plus the minimum aggregate considera- tion payable to the Company upon the exercise thereof, plus the minimum aggregate amount of additional considera- tion, other than the convertible or exchangeable securi- ties, payable upon the conversion or exchange of the con- vertible or exchangeable securities; provided, that in each case the proceeds received or receivable by the Com- pany shall be deemed to be the amount of gross cash pro- ceeds without deducting therefrom any compensation paid or discount allowed in the sale, underwriting or purchase thereof by underwriters or dealers or others performing similar services or any expenses incurred in connection therewith. M = the current Market Price per share of Common Stock on the date of issue of the rights, options or warrants to sub- scribe for or purchase shares of Common Stock or the secu- rities convertible into or exchangeable for shares of Com- mon Stock or the rights, options or warrants to subscribe for or purchase convertible or exchangeable securities. "Price Per Share" shall be defined and determined accord- ing to the following formula: P = R N where: P = Price Per Share and R and N have the meanings assigned above. If the Company shall issue rights, options, warrants or convertible or exchangeable securities with respect to its Common Stock for a consideration consisting, in whole or in part, of property other than cash the amount of such considera- tion shall be determined in good faith by the Board of Direc- tors whose determination shall be conclusive and evidenced by a resolution of the Board of Directors filed with the Trustee. The adjustment shall be made successively whenever any such additional rights, options, warrants or convertible or -35- exchangeable securities with respect to its Common Stock are issued, and shall become effective immediately after the date of issue of such shares, rights, options, warrants or convert- ible or exchangeable securities. To the extent that such rights, options or warrants to acquire Common Stock expire unexercised or to the extent any convertible or exchangeable securities with respect to its Com- mon Stock are redeemed by the Company or otherwise cease to be convertible or exchangeable into shares of Common Stock, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect had the adjustment made upon the date of issuance of such rights, options, warrants or convert- ible or exchangeable securities been made upon the basis of the issuance of rights, options or warrants to subscribe for or purchase only the number of shares of Common Stock as to which such rights, options or warrants were actually exercised and the number of shares of Common Stock that were actually issued upon the conversion or exchange of the convertible or exchange- able securities. If the Securities are convertible into securities other than the Common Stock, any adjustment in the Conversion Rate required for the issuance or sale of the securities into which the Securities are convertible shall be made as set forth in the Bond Resolution. SECTION 9.10. Adjustment for Other Distributions. If the Securities are initially convertible into Com- mon Stock and the Company distributes to all holders of its Common Stock any of its assets or debt securities or any rights or warrants to purchase assets or debt securities of the Com- pany, the Conversion Rate shall be adjusted in accordance with the following formula: AC = CC x __(O x M)__ (O x M) - F where: AC = the adjusted Conversion Rate. CC = the then current Conversion Rate. O = the number of shares of Common Stock outstanding on the record date mentioned below (which number shall include shares owned or held by or for the account of the Company). -36- M = the current Market Price per share of Common Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants distributed. The Board of Directors of the Company shall determine the fair market value. The adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. If the securities into which the Securities are con- vertible are other than Common Stock, any adjustments for such other distribution shall be made as set forth in the Bond Resolution. This Section does not apply to cash dividends or dis- tributions or to reclassifications or distributions referred to in Section 9.08. Also, this Section does not apply to shares issued below Market Price referred to in Section 9.09. SECTION 9.11. Voluntary Adjustment. The Company at any time may increase the Conversion Rate, temporarily or otherwise, by any amount but in no event shall such Conversion Rate result in the issuance of Capital Stock at a price less than the par value of such Capital Stock at the time such increase is made. SECTION 9.12. When Adjustment May Be Deferred. No adjustment in the Conversion Rate need be made unless the adjustment would require a change of at least 1% in the Conversion Rate. Any adjustments that are not made due to the immediately preceding sentence shall be carried forward and taken into account in any subsequent adjustment; provided, that any adjustment carried forward shall be deferred not in excess of three years, whereupon any adjustment to the Conversion Rate will be effected. All calculations under this Article 9 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. -37- SECTION 9.13. When No Adjustment Required. Except as set forth in Section 9.09, no adjustment in the Conversion Rate shall be made because the Company issues, in exchange for cash, property or services, shares of Common Stock, or any securities convertible into shares of Common Stock, or securities carrying the right to purchase shares of Common Stock or such convertible securities. No adjustment in the Conversion Rate need be made for rights to purchase or the sale of Common Stock pursuant to a Company plan providing for reinvestment of dividends or interest. No adjustment in the Conversion Rate need be made for a change in the par value of the Common Stock or other securi- ties having a par value. No adjustment need be made for a transaction referred to in Section 9.08, 9.09 or 9.10 if Securityholders are to par- ticipate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock or other securities into which the Securities are convertible participate in the transaction. SECTION 9.14. Notice of Adjustment. Whenever the Conversion Rate is adjusted, the Company shall promptly mail to Holders of Securities affected a notice of the adjustment. The Company shall file with the Trustee an Officers' Certificate or a certificate from the Company's inde- pendent public accountants stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. SECTION 9.15. Notice of Certain Transactions. If: (1) the Company proposes to take any action that would require an adjustment in the Conversion Rate, (2) the Company proposes to take any action that would require a supplemental indenture pursuant to Section 9.16, or -38- (3) there is a proposed liquidation or dissolution of the Company or of the issuer of any other security into which the Securities are convertible, the Company shall mail to Holders of Securities of any affected series a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivi- sion, combination, reclassification, consolidation, merger, transfer, lease, liquidation or dissolution. The Company shall mail the notice at least 15 days before such date. Failure to mail the notice or any defect in it shall not affect the valid- ity of the transaction. SECTION 9.16. Reorganization of the Company. If the Company is a party to a transaction subject to Section 5.01, the successor corporation (if other than the Com- pany) shall enter into a supplemental indenture which shall provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which he would have owned immediately after the consolidation, merger or transfer if he had converted the Security immediately before the effective date of the transaction. The supplemental inden- ture shall provide for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article. The successor company shall mail to Holders of Securities of any affected series a notice briefly describ- ing the supplemental indenture. If this Section applies, Sections 9.08, 9.09 and 9.10 do not apply. ARTICLE 10 ` AMENDMENTS SECTION 10.01. Without Consent of Holders. The Company and the Trustee may amend this Indenture, the Securities or any coupons without the consent of any Securityholder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Article 5 or Section 9.16; -39- (3) to provide that specific provisions of this Indenture shall not apply to a series not previ- ously issued; (4) to create a series and establish its terms; (5) to provide for a separate Trustee for one or more series; or (6) to make any change that does not materially adversely affect the rights of any Securityholder. SECTION 10.02. With Consent of Holders. Unless the Bond Resolution otherwise provides, the Company and the Trustee may amend this Indenture, the Securities and any coupons with the written consent of the Holders of a major- ity in principal amount of the Securities of all series affected by the amendment voting as one class. However, with- out the consent of each Securityholder affected, an amendment under this Section may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the interest on or change the time for payment of interest on any Security; (3) change the fixed maturity of any Security; (4) reduce the principal of any non-Discounted Secu- rity or reduce the amount of principal of any Discounted Security that would be due upon an acceleration thereof; (5) change the currency in which principal or inter- est on a Security is payable; (6) make any change that materially adversely affects the right to convert any Security; or (7) make any change in Section 6.04 or 10.02, except to increase the amount of Securities whose Hold- ers must consent to an amendment or waiver or to provide that other provisions of this Indenture cannot be amended or waived without the consent of each Securityholder affected thereby. -40- An amendment of a provision included solely for the bene- fit of one or more series does not affect Securityholders of any other series. Securityholders need not consent to the exact text of a proposed amendment or waiver; it is sufficient if they consent to the substance thereof. SECTION 10.03. Compliance with Trust Indenture Act. Every amendment pursuant to Section 10.01 or 10.02 shall be set forth in a supplemental indenture that complies with the TIA. If a provision of the TIA requires or permits a provision of this Indenture and the TIA provision is amended, then the Indenture provision shall be automatically amended to like effect. SECTION 10.04. Effect of Consents. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder enti- tled to consent to it. A consent to an amendment or waiver by a Holder of a Secu- rity is a continuing consent by the Holder and every subsequent Holder of a Security that evidences the same debt as the con- senting Holder's Security. Any Holder or subsequent Holder may revoke the consent as to his Security if the Trustee receives notice of the revocation before the amendment or waiver becomes effective. The Company may fix a record date for the determination of Holders of Registered Securities entitled to give a consent. The record date shall not be less than 10 nor more than 60 days prior to the first written solicitation of Securityholders. SECTION 10.05. Notation on or Exchange of Securities. The Company or the Trustee may place an appropriate nota- tion about an amendment or waiver on any Security thereafter authenticated. The Company may issue in exchange for affected Securities new Securities that reflect the amendment or waiver. -41- SECTION 10.06. Trustee Protected. The Trustee need not sign any supplemental indenture that adversely affects its rights. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opin- ion of Counsel and an Officers' Certificate each stating that the execution of any amendment or supplement or waiver autho- rized puruant to this Article is authorized or permitted by this Indenture, and that such amendment or supplement or waiver constitutes the legal, valid and binding obligation of the Company. ARTICLE 11 ` MISCELLANEOUS SECTION 11.01. Trust Indenture Act. The provisions of TIA {{ 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Inden- ture) are a part of and govern this Indenture, whether or not expressly set forth herein. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 11.02. Notices Any notice by one party to another is duly given if in writing and delivered in person, sent by facsimile transmission confirmed by mail or mailed by first-class mail to the other's address shown below: Company: Fax: Attention: Trustee: Fax: -42- Attention: A party by notice to the other parties may designate addi- tional or different addresses for subsequent notices. Any notice mailed to a Securityholder shall be mailed to his address shown on the register kept by the Transfer Agent or on the list referred to in Section 2.06. Failure to mail a notice to a Securityholder or any defect in a notice mailed to a Securityholder shall not affect the sufficiency of the notice mailed to other Securityholders or the sufficiency of any pub- lished notice. If a notice is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. If in the Company's opinion it is impractical to mail a notice required to be mailed or to publish a notice required to be published, the Company may give such substitute notice as the Trustee approves. Failure to publish a notice as required or any defect in it shall not affect the sufficiency of any mailed notice. All notices shall be in the English language, except that any published notice may be in an official language of the country of publication. A "notice" includes any communication required by this Indenture. SECTION 11.03. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall if so requested furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions prece- dent, if any, provided for in this Indenture relating to the proposed action have been com- plied with; and -43- (2) an Opinion of Counsel stating that, in the opin- ion of such counsel, all such conditions prece- dent have been complied with. SECTION 11.04. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certifi- cate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such cer- tificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such cove- nant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 11.05. Rules by Company and Agents. The Company may make reasonable rules for action by or a meeting of Securityholders. An Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 11.06. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open. If a payment date is a Legal Holiday at a place of payment, unless the Bond Resolution establishing a series otherwise provides with respect to Securities of the series, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. -44- SECTION 11.07. No Recourse Against Others. All liability described in the Securities of any director, officer, employee or stockholder, as such, of the Company is waived and released. SECTION 11.08. Duplicate Originals. The parties may sign any number of copies of this Inden- ture. One signed copy is enough to prove this Indenture. SECTION 11.09. Governing Law. The laws of the State of New York shall govern this Inden- ture, the Securities and any coupons, unless federal law governs. -45- SIGNATURES Dated: , [NAME OF ISSUER] By ______________________________ Name: Title: (SEAL) Attest: ________________________ Name: Title: Dated: , [ ] By ______________________________ Name: Title: Attest: (SEAL) _________________________ Name: Title: -46- EXHIBIT A A Form of Registered Security No. $ [NAME OF ISSUER] [Title of Security] [Name Of Issuer] promises to pay to or registered assigns the principal sum of Dollars on , Interest Payment Dates: Record Dates: Dated: [ ] [NAME OF ISSUER] Transfer Agent and Paying Agent by (SEAL) Authenticated: Chairman of the Board [Name of Registrar] Registrar, by Authorized Signature Vice-President A-1 [NAME OF ISSUER] [Title of Security] 1. Interest.1 [Name Of Issuer] ("Company"), a corporation organized and existing under the laws of the State of , promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest on and of each year commencing , 19__. Interest on the Securi- ties will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from , 19__. Interest will be com- puted on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment.2 The Company will pay interest on the Securities to the persons who are registered holders of Securities at the close of business on the record date for the next interest payment date, except as otherwise pro- vided in the Indenture. Holders must surrender Secu- rities to a Paying Agent to collect principal pay- ments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder's registered address. 3. Bond Agents. Initially, Attention: , will act as Paying Agent, Transfer Agent and Registrar. The Company may change any Paying Agent, Transfer Agent or Registrar without notice or provide for more than one such agent. The Company or any Affiliate may act in any such capacity. Subject to certain conditions, the Company may change the Trustee. 4. Indenture. The Company issued the securities of this series ("Securities") under an Indenture dated as , ("Indenture") between the Company and A-2 ("Trustee"). The terms of the Securi- ties include those stated in the Indenture and in the Bond Resolution creating the Securities and those made part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code {{ 77aaa-77bbbb). Securityholders are referred to the Indenture, the Bond Resolution and the Act for a statement of such terms. 5. Optional Redemption.3 On or after , the Company may redeem all the Securities at any time or some of them from time to time at the following redemption prices (expressed in percentages of principal amount), plus accrued interest to the redemption date. If redeemed during the 12-month period beginning, Year Percentage Year Percentage and thereafter at 100%. 6. Mandatory Redemption.4 The Company will redeem $ principal amount of Securities on and on each thereafter through at a redemption price of 100% of principal amount, plus accrued interest to the redemption date.5 The Company may reduce the principal amount of Securities to be redeemed pursuant to this paragraph by sub- tracting 100% of the principal amount (excluding pre- mium) of any Securities (i) that the Company has acquired or that the Company has redeemed other than pursuant to this paragraph and (ii) that the Company has delivered to the Registrar for cancellation. The Company may so subtract the same Security only once. 7. Additional Optional Redemption.6 In addition to redemptions pursuant to the above paragraph(s), the Company may redeem not more than $ principal amount of Securities on and on each thereafter through at a redemption price of 100% of A-3 principal amount, plus accrued interest to the redemption date. 8. Notice of Redemption.7 Notice of redemption will be mailed at least 30 days before the redemption date to each holder of Securi- ties to be redeemed at his registered address. A notice of redemption may provide that it is subject to the occurrence of any event before the date fixed for such redemption as described in such notice ("Conditional Redemption") and such notice of Condi- tional Redemption shall be of no effect unless all such conditions to the redemption have occurred before such date or have been waived by the Company. 9. Conversion.8 A Holder of a Security may convert it into Common Stock of the Company or cash, or a combination thereof, at the Company's option, at any time before the close of business on ___________, or, if the Security is called for redemption, the Holder may convert it at any time before the close of business on the redemption date. The initial Conversion Rate is ____________ (or an equivalent amount in cash) per $1,000 principal amount of the Securities, subject to adjustment as provided in Article 9 of the Indenture.9 The Company will deliver a check in lieu of any fractional share. On conversion no payment or adjustment for interest accrued on the Securities will be made nor for dividends on the Common Stock issued on conversion. If any Security is converted between the record date for the payment of interest and the next succeeding interest payment date, such Security must be accompanied by funds equal to the interest payable on such succeeding interest payment date on the principal amount so converted (unless such Security shall have been called for redemption, in which case no such payment shall be required). A Security converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Security being con- verted will be paid on such interest payment date to the registered holder of such Security on the immedi- ately preceding record date. To convert a Security a Holder must (1) complete and sign the conversion notice on the back of the A-4 Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if required. A Holder may convert a portion of a Security if the portion is $1,000 or an integral mul- tiple of $1,000. 10. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,00010 and whole multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Transfer Agent may require a holder, among other things, to furnish appropriate endorse- ments and transfer documents and to pay any taxes and fees required by law or the Indenture. The Transfer Agent need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. 11. Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 12. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of a majority in principal amount of the securities of all series affected by the amendment.11 Subject to certain exceptions, a default on a series may be waived with the consent of the holders of a majority in principal amount of the series. Without the consent of any Securityholder, the Indenture or the Securities may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Com- pany obligations to Securityholders; or to make any change that does not materially adversely affect the rights of any Securityholder. A-5 13. Restrictive Covenants.12 The Securities are unsecured general obligations of the Company limited to $ principal amount. The Indenture does not limit other unsecured debt. 14. Successors. When a successor assumes all the obligations of the Company under the Securities and the Indenture, the Company will be released from those obligations. 15. Defeasance Prior to Redemption or Maturity.13 Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity. U.S. Government Obligations are securities backed by the full faith and credit of the United States of America or certificates representing an ownership interest in such Obligations. 16. Defaults and Remedies. An Event of Default14 includes: default for 60 days in payment of interest on the Securities; default in payment of principal on the Securities; default in payment or satisfaction of any sinking fund obliga- tion; default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities; cer- tain events of bankruptcy or insolvency; and any other Event of Default provided for in the series. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 33 1/3% in princi- pal amount of the Securities may declare the principal15 of all the Securities to be due and pay- able immediately. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of A-6 any continuing default (except a default in payment of principal or interest) if it determines that with- holding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee. 17. Trustee Dealings with Company. , the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 18. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Secu- rity waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 19. Authentication. This Security shall not be valid until authenticated by a manual signature of the Registrar. 20. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to Minors Act). The Company will furnish to any Securityholder upon writ- ten request and without charge a copy of the Indenture and the Bond Resolution, which contains the text of this Security in larger type. Requests may be made to: [Name/Address Of Issuer], Attention: Corporate Secretary. A-7 EXHIBIT B A Form of Bearer Security No. $ [NAME OF ISSUER] [Title of Security] [Name Of Issuer] promises to pay to bearer the principal sum of Dollars on , Interest Payment Dates: Dated: [ ] [NAME OF ISSUER] Transfer Agent (SEAL) by Authenticated: Chairman of the Board [Name of Registrar] Registrar, by Authorized Signature Vice-President B-1 [NAME OF ISSUER] [Title of Security] 1. Interest.1 [Name Of Issuer] ("Company"), a corporation organized and existing under the laws of the State of Delaware, promises to pay to bearer interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest on and of each year commencing , 19 . Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from , 19 . Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment.2 Holders must surrender Securities and any coupons to a Paying Agent to collect principal and interest pay- ments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money. 3. Bond Agents. Initially, , Attention: , will act as Transfer Agent, Paying Agent and Registrar. The Company may change any Paying Agent, Transfer Agent or Registrar without notice or provide for more than one such agent. The Company or any Affiliate may act in any such capac- ity. Subject to certain conditions, the Company may change the Trustee. 4. Indenture. The Company issued the securities of this series ("Securities") under an Indenture dated as of , ("Indenture") between the Company and ("Trustee"). The terms of the Securities include those stated in the Indenture and the Bond Resolution and those made part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code {{ 77aaa-77bbbb). Securityholders are referred to B-2 the Indenture, the Bond Resolution and the Act for a statement of such terms. 5. Optional Redemption.3 On or after , the Company may redeem all the Securities at any time or some of them from time to time at the following redemption prices (expressed in percentages of principal amount), plus accrued interest to the redemption date. If redeemed during the 12-month period beginning, Year Percentage Year Percentage and thereafter 100%. 6. Mandatory Redemption.4 The Company will redeem $ principal amount of Securities on and on each thereafter through at a redemption price of 100% of principal amount, plus accrued interest to the redemption date.5 The Company may reduce the principal amount of Securities to be redeemed pursu- ant to this paragraph by subtracting 100% of the principal amount (excluding premium) of any Securi- ties (i) that the Company has acquired or that the Company has redeemed other than pursuant to this paragraph and (ii) that the Company has delivered to the Registrar for cancellation. The Company may so subtract the same Security only once. 7. Additional Optional Redemption.6 In addition to redemptions pursuant to the above paragraph(s), the Company may redeem not more than $ principal amount of Securities on and on each thereafter through at a redemption price of 100% of principal amount, plus accrued interest to the redemption date. 8. Notice of Redemption.7 Notice of redemption will be published once in an Authorized Newspaper in the City of New York and if the Securities are listed on any stock exchange located outside the United States and such stock exchange so requires, in any other required city B-3 outside the United States at least 30 days before the redemption date. Notice of redemption also will be mailed to holders who have filed their names and addresses with the Transfer Agent within the two pre- ceding years. A holder of Securities may miss impor- tant notices if he fails to maintain his name and address with the Transfer Agent. A notice of redemption may provide that it is subject to the occurrence of any event before the date fixed for such redemption as described in such notice ("Conditional Redemption") and such notice of Condi- tional Redemption shall be of no effect unless all such conditions to the redemption have occurred before such date or have been waived by the Company. 9. Conversion.8 A Holder of a Security may convert it into Common Stock of the Company or cash, or a combination thereof, at the Company's option, at any time before the close of business on ___________, or, if the Security is called for redemption, the Holder may convert it at any time before the close of business on the redemption date. The initial Conversion Rate is ____________ (or an equivalent amount in cash) per $1,000 principal amount of the Securities, subject to adjustment as provided in Article 9 of the Indenture.9 The Company will deliver a check in lieu of any fractional share. On conversion no payment or adjustment for interest accrued on the Securities will be made nor for dividends on the Common Stock issued on conversion. If any Security is converted between the record date for the payment of interest and the next succeeding interest payment date, such Security must be accompanied by funds equal to the interest payable on such succeeding interest payment date on the principal amount so converted (unless such Security shall have been called for redemption, in which case no such payment shall be required). A Security converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Security being con- verted will be paid on such interest payment date to the registered holder of such Security on the immedi- ately preceding record date. To convert a Security a Holder must (1) complete and sign the conversion notice on the back of the Security, (2) surrender the Security to a B-4 Conversion Agent, (3) furnish appropriate endorse- ments and transfer documents if required by the Reg- istrar or Conversion Agent and (4) pay any transfer or similar tax if required. A Holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. 10. Denominations, Transfer, Exchange. The Securities are in bearer form with coupons in denominations of $5,00010 and whole multiples of $5,000. The Securities may be transferred by deliv- ery and exchanged as provided in the Indenture. Upon an exchange, the Transfer Agent may require a holder, among other things, to furnish appropriate documents and to pay any taxes and fees required by law or the Indenture. The Transfer Agent need not exchange any Security or portion of a Security selected for redemption. Also, it need not exchange any Securi- ties for a period of 15 days before a selection of Securities to be redeemed. 11. Persons Deemed Owners. The holder of a Security or coupon may be treated as its owner for all purposes. 12. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of a majority in principal amount of the securities of all series affected by the amendment.11 Subject to certain exceptions, a default on a series may be waived with the consent of the holders of a majority in principal amount of the series. Without the consent of any Securityholder, the Inden- ture or the Securities may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to Securityholders; or to make any change that does not materially adversely affect the rights of any Securityholder. 13. Restrictive Covenants.12 The Securities are unsecured general obligations of the Company limited to $ principal amount. The Indenture does not limit other unsecured debt. B-5 14. Successors. When a successor assumes all the obligations of the Company under the Securities, any coupons and the Indenture, the Company will be released from those obligations. 15. Defeasance Prior to Redemption or Maturity.13 Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Securities, any coupons and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of prin- cipal and interest on the Securities to redemption or maturity. U.S. Government Obligations are securities backed by the full faith and credit of the United States of America or certificates representing an ownership interest in such Obligations. 16. Defaults and Remedies. An Event of Default14 includes: default for 60 days in payment of interest on the Securities; default in payment of principal on the Securities; default in payment or satisfaction of any sinking fund obliga- tion; default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities; cer- tain events of bankruptcy or insolvency; and any other Event of Default provided for in the series. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 33 1/3% in princi- pal amount of the Securities may declare the principal15 of all the Securities to be due and pay- able immediately. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that with- holding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee. B-6 17. Trustee Dealings with Company. , the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 18. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Secu- rity waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 19. Authentication. This Security shall not be valid until authenticated by a manual signature of the Registrar. 20. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to Minors Act). The Company will furnish to any Securityholder upon writ- ten request and without charge a copy of the Indenture and the Bond Resolution, which contains the text of this Security in larger type. Requests may be made to: [Name/Address Of Issuer], Attention: Corporate Secretary. B-7 [FACE OF COUPON] ............... [$]............ Due............ [NAME OF ISSUER] [Title of Security] Unless the Security attached to this coupon has been called for redemption, [Name Of Issuer] (the "Company") will pay to bearer, upon surrender, the amount shown hereon when due. This coupon may be surrendered for payment to any Paying Agent listed on the back of this coupon unless the Company has replaced such Agent. Payment may be made by check. This cou- pon represents months' interest. [Name Of Issuer] By_______________________________ [REVERSE OF COUPON] PAYING AGENTS B-8 NOTES TO EXHIBITS A AND B 1 If the Security is not to bear interest at a fixed rate per annum, insert a description of the manner in which the rate of interest is to be determined. If the Security is not to bear interest prior to maturity, so state. 2 If the method or currency of payment is different, insert a statement thereof. 3 If applicable. A restriction on redemption or refunding or any provision applicable to to its redemption other may be added. 4 If applicable. 5 If the Security is a Discounted Security, insert amount to be redeemed or method of calculating such amount. 6 If applicable. Also insert, if applicable, provisions for repayment of Securities at the option of the Securityholder. 7 If applicable. 8 If applicable. If convertible into securities other than Common Stock, insert appropriate summary. 9 If additional or different adjustment provisions apply so specify. 10 If applicable. Insert additional or different denomina- tions and terms as appropriate. 11 If different terms apply, insert a brief summary thereof. 12 If applicable. If additional or different covenants apply, insert a brief summary thereof. 13 If applicable. If different defeasance terms apply, insert a brief summary thereof. 14 If additional or different Events of Default apply, insert a brief summary thereof. 15 If the Security is a Discounted Security, set forth the amount due and payable upon an Event of Default. Note: U.S. tax law may require certain legends on Discounted and Bearer Securities. EXHIBIT C ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to _________________________________________ : : :_______________________________________: (Insert assignee's soc. sec. or tax I.D. no.) _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint _______________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: _______________ Your Signature: ________________________ ________________________ (Sign exactly as your name appears on the other side of this Security) C-1 EXHIBIT D CONVERSION NOTICE To convert this Security, check the box: _____ / / To convert only part of this Security, state the amount (must be in integral multiples of $1,000); $_____________________________ If you want the securities delivered upon conversion made out in another person's name, fill in the form below: (Insert other person's Social Security or Tax I.D. Number) ______________________________ ______________________________ ______________________________ ______________________________ (Print or type other person's name, address and zip code) Date: _________ Signature(s): ______________________________ ______________________________ (Sign exactly as your name(s) appear(s) on the other side of this Security) D-1 Signature(s) guaranteed by: ________________________________ (All signatures must be guaranteed by a member of a national securities exchange or of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company located in the United States) D-2 EX-6 7 PROPOSED FORM OF PUBLIC NOTICE EXHIBIT G-1 New Century Energies, Inc., et al. (70- ) New Century Energies, Inc. ("NCE"), it service company subsidiary, New Century Services, Inc., and its non-utility holding company subsidiary, New Century Enterprises, Inc., together with, Public Service Company of Colorado, a Colorado public utility company ("PSCo"), Cheyenne Light, Fuel and Power Company ("Cheyenne"), WestGas Interstate Inc., e prime, inc. and its subsidiary companies ("e prime"), PS Colorado Credit Corporation ("PSCC"), Natural Fuels Corporation, PSRI Investments, Inc., Green & Clear Lakes Company, 1480 Welton, Inc., each of 1225 Seventeenth Street, Denver, Colorado 80202 and Southwestern Public Service Company, a New Mexico public utility company ("SPS" and together with PSCo and Cheyenne, the "Utility Subsidiaries"), Utility Engineering Corporation and its subsidiary companies and Quixx Corporation and its subsidiary companies ("Quixx"), each of Tyler at Sixth, Amarillo, Texas 79101 (together, "Applicants")(all subsidiaries, "Subsidiaries")(all subsidiary companies, excluding the Utility Subsidiaries, the "Non-Utility Subsidiaries") have filed a joint application/declaration under sections 6, 7, 9, 10, 12(b), 12(c), 12(e), 12(f), 32 and 33 and rules 42, 43, 45, 53 and 62 thereunder. The Applicants are seeking, for the period from the effective date of an order in this matter through December 31, 2002 (the "Authorization Period"), as more fully described below, Commission authorization for: (1) external financings by 2 NCE, including (a) equity financing, (b) short-term financing, (c) interest rate and equity swaps and (d) the issuance of other securities; (2) financing by the Utility Subsidiaries, including (a) short-term debt, (b) interest rate swaps and (c) the issuance of other securities; (3) financing by the Non-Utility Subsidiaries; (4) intrasystem financing of Subsidiaries, including (a) open account advances, long term loans and/or capital stock purchases and (b) guarantees; (5) changes in capital stock of the Subsidiaries; (6) the formation and retention of financing entities; (7) certain existing financing arrangements; (8) the establishment of two money pool arrangements through December 31, 2002, including (a) a Utility Money Pool and (b) a Non-Utility Money Pool; (9) financing for the purpose of acquiring exempt wholesale generators ("EWGs") and foreign utility companies ("FUCOs"); (10) the acquisition, redemption or retirement of securities; and (11) the solicitation of proxies, consents or authorizations to seek shareholder approval. The Applicants request authority to engage in various financing and related transactions, for a period from the effective date of an order in this matter through December 31, 2002, for which the specific terms and conditions are not at this time known. The authorization is sought subject to the following conditions: (1) NCE's (and each Utility Subsidiary's) common equity will be at least 30% of its consolidated capitalization; (2) any long-term debt issued to unaffiliated 3 persons pursuant to an authorization in this proceeding will be, or will meet the qualifications for being, investment grade; (3) the effective cost of money on financings authorized in this proceeding will not exceed, for long-term debt, 300 basis points over the rate borne by comparable term U.S. Treasury securities, and for short-term debt, 300 basis points over the London interbank offered rate; (4) the effective cost of money for preferred stock and other fixed income oriented securities will not exceed 500 basis points over the interest rate borne by 30 year term U.S. Treasury securities; (5) the maturity of authorized indebtedness will not exceed 50 years; (6) issuance expenses in connection with an offering of securities, including any underwriting fees, commissions or other similar compensation, may not exceed 5% of the total amount of the securities being issued; (7) the aggregate amount of external financing will not exceed $10 billion, the aggregate amount of intrasystem financing will not exceed $4 billion and the aggregate amount of intrasystem guarantees and other credit support will not exceed $4 billion; (9) the proceeds of the proposed financings will be used for general and corporate purposes including: (a) capital expenditures of NCE and its Subsidiaries, (b) the repayment, redemption, refunding or repurchase of debt and capital stock of NCE or its Subsidiaries, (c) financing working capital requirements, and (d) other lawful general purposes. Financing may not be used to invest in an EWG or a FUCO unless, at the time of each financing transaction, NCE is in compliance with the requirements of rules 53 and 54 under the Act. Any 4 deviation from these conditions would require further Commission approval. The proposed transactions and the proposed participation of the various Applicants are described below. 1. External Financing by NCE. During the Authorization Period NCE proposes from time to time to issue and sell capital stock, short-term debt and other securities and to engage in interest rate and equity swaps. Securities may be sold through underwriters or dealers, directly to a limited number of purchasers, or through agents. a. Capital Stock. NCE proposes to issue and sell preferred stock or common stock, including stock issued upon the exercise of convertible debt or pursuant to rights, options, warrants and similar securities and income preferred securities.1 NCE may also buy back shares of such stock or such other securities during the Authorization Period. NCE also proposes to issue and/or sell its common stock under certain employee benefit plans and dividend reinvestment plans to be adopted. Such shares may be newly issued shares, treasury shares or shares purchased in the open market. - ---------- 1 In connection with issuance of such securities, NCE proposes to form financing entities, as described below, and to issue debt to such entities to back up obligations under securities issued by such entities. 5 Applicants also request authority to solicit proxies, consents or authorizations in connection with employee benefit plans for employees of NCE or its Subsidiaries. Such solicitations shall be within the exemption provided by Rule 65. b. Short-term Debt. NCE proposes to issue and sell commercial paper in established domestic or European commercial paper markets to dealers at the discount rate prevailing at the date of issuance for comparable commercial paper. The dealers would reoffer such commercial paper at a discount to investors. NCE also proposes to establish back-up lines of credit providing for borrowings from time to time when it is impracticable to issue commercial paper. Such lines of credit would be in an aggregate principal amount not to exceed the amount of authorized commercial paper, and borrowings under these lines would mature not more than one year from the date of borrowing. NCE also proposes to engage in other types of short-term financing generally available to borrowers with investment grade credit ratings as it may deem appropriate. c. Interest Rate and Equity Swaps. NCE proposes to engage in interest rate swaps involving its interest obligations existing at the date of the swap. NCE also proposes to engage in equity swaps in which it would exchange one equity investment market risk for another or would exchange fixed or floating rate interest income from an investment for payments 6 based on a stock index.2 Interest rate and equity swaps would be limited to obligations and investments existing at the time of the swap. NCE requests reservation of jurisdiction over the use of equity swaps pending completion of the record as to the exact form of transactions. NCE also undertakes to file a post-effective amendment in this proceeding which will describe the general terms of each such equity swap and request a supplemental order of the Commission authorizing the issuance thereof by NCE. Such supplemental order may be issued by the Commission without further public notice in the Federal Register. d. Other Securities. In addition to the specific securities for which authorization is sought, NCE also proposes to issue other types of securities that it deems appropriate during the period of the Commission's authorization. NCE requests that the Commission reserve jurisdiction over the issuance of additional types of securities. NCE also undertakes that it will file a post-effective amendment in this proceeding describing the general terms of each such security and obtain a supplemental order of the Commission authorizing the issuance thereof by NCE. Such supplemental orders may be issued by the Commission without further public notice in the Federal Register. - ---------- 2 NCE states that equity swaps could be used to hedge earnings from its domestic or international investments, but would not be used to transfer title to the equity securities owned by it that are used in the swap transaction. 7 2. Utility Subsidiary Financings. The Utility Subsidiaries request authorization to engage in certain external financings which are outside the scope of the Rule 52 exemption for financings of utility companies, interest rate swaps and other securities. a. Short-term debt. These may include short-term debt financings of PSCo and Cheyenne (less than 12 month maturity) and SPS (less than 18 month maturity) which may be granted but do not require approval by state regulators. Each of these companies may issue commercial paper in established domestic or European commercial paper markets in a manner similar to NCE discussed above. b. Interest Rate Swaps. Each Utility Subsidiary may engage in interest rate swaps to the same extent, and under the same conditions, as NCE. c. Other Securities. Each Utility Subsidiary may issue other securities in the same manner, and subject to the same conditions, as NCE. 3. Non-Utility Subsidiary Financings. Each of the Non-Utility Subsidiaries propose to issue other types of securities that are not exempted by Rule 52 from the requirement of Commission approval and that they deem appropriate during the 8 period of the Commission's authorization. These Applicants request that the Commission reserve jurisdiction over the issuance of additional types of securities and also undertake that they will cause a post-effective amendment to be filed in this proceeding describing the general terms of each such security and obtain a supplemental order of the Commission authorizing the issuance thereof by such Applicants. Such supplemental orders may be issued by the Commission without further public notice in the Federal Register. 4. Intrasystem Financing. The Applicants propose various financing transactions between NCE and its subsidiaries and between certain subsidiaries. The aggregate amount of all such financing would not exceed $4.0 billion excluding amounts exempt pursuant to Rules 45 and 52. a. General. NCE proposes to make to its Subsidiaries and certain Subsidiaries propose to make to other Subsidiaries open-account advances, long-term loans and/or capital stock purchases, as determined by NCE and its respective Subsidiaries to be appropriate. These borrowings would be made on a revolving basis and would bear interest at a rate equal to the weighted average effective interest rate of NCE's short-term borrowings or, if no such borrowings are outstanding, at a rate based on the Federal Funds effective rate of interest quoted daily by the Federal Reserve Bank of New York. Such advances may be made through the Money Pools. 9 In addition, the Non-Utility Subsidiaries propose to issue and NCE or other Non-Utility Subsidiaries propose to acquire other types of securities that are not exempted by Rule 52 from the requirement of Commission approval but that are considered by such companies to be appropriate during the period of the Commissions authorization. These Applicants request that the Commission reserve jurisdiction over the issuance of additional types of securities and also undertake that they will cause a post-effective amendment to be filed in this proceeding describing the general terms of each such security and obtain a supplemental order of the Commission authorizing the issuance and acquisition thereof. Such supplemental orders may be issued by the Commission without further public notice in the Federal Register. b. Guarantees. The Applicants propose to enter into guarantee arrangements, obtain letters of credit, enter into expense agreements and otherwise provide credit support with respect to the obligations of the other Applicants to third parties. NCE proposes to enter into such arrangements with respect to the obligations of any Subsidiary and any Subsidiary proposes to enter into such arrangements with respect to any other Subsidiary. The aggregate amount of all such arrangements would not exceed $4.0 billion outstanding at any one time, except to the extent the same are exempt pursuant to Rule 52 and are in addition to the $10.0 billion limit on ex 10 ternal financing for NCE and its Subsidiaries and the $4.0 billion limit on intrasystem financing. 5. Changes in Capital Stock of Subsidiaries. The portion of an individual Subsidiary's aggregate financing through the sale of stock to NCE or other immediate parent company cannot be ascertained at this time. NCE and its Subsidiaries request authority to increase such Subsidiary's authorized capital stock and to change the amount or terms of any such Subsidiary's capital stock capitalization by an amount deemed appropriate by NCE or other immediate parent company and to change or eliminate the par value of such stock without further Commission approval. The Applicants also seek authority to solicit proxies, consents or authorizations to obtain shareholder approval regarding changes in their capital stock which may be required under Section 12(e) and Rule 62 thereunder. Such solicitations shall be within the exemption provided by Rule 65. 6. Financing Entities. In connection with the issuance of income preferred securities or other securities authorized in this proceeding, the Applicants seek authorization to organize new corporations, trusts, partnerships or other entities created for the purpose of facilitating such financings.. Request is also made for these financing entities to issue such securities to third parties in the event such transactions involving financing by the Applicants are not exempt pursuant to Rule 52. Additionally, request is made for authorization with respect to (i) the issuance of debentures or 11 other evidences of indebtedness by any of the Applicants to a financing entity in return for the proceeds of the financing, (ii) the acquisition by any of the Applicants of voting interests or equity securities issued by the financing entity to establish any such Applicant's ownership of the financing entity (the equity portion of the entity generally being created through a capital contribution or the purchase of equity securities, ranging from 1 to 3 percent of the capitalization of the financing entity) and (iii) the guarantee by the Applicants of such financing entity's obligations in connection therewith. Each of the Applicants and the Subsidiaries also request authorization to enter into expense agreements with its respective financing entity, pursuant to which it would agree to pay all expenses of such entity. Any amounts issued by such financing entities to third parties pursuant to this authorization will be included in the overall external financing limitation authorized herein for the immediate parent of such financing entity, however, the indebtedness issued by an Applicant to a financing entity will not count against the intrasystem financing limit set forth herein. Applicants also request that SPS be authorized to retain Southwestern Public Service Capital I, a wholly owned trust, that issued trust preferred securities and loaned the proceeds to SPS. 7. Existing Financing Arrangements. The Applicants propose to retain such financing arrangements as were in 12 place prior to the Merger and which are not otherwise exempted from the provisions of the Act. 8. Establishment of Money Pools. The Applicants propose to establish (i) the Utility Money Pool and the Utility Subsidiaries, to the extent not exempted by Rule 52, also request authorization to make borrowings and to contribute to the Utility Money Pool and (ii) the Non-Utility Money Pool in which the Non-Utility Subsidiaries as well as any other newly formed Non-Utility Subsidiaries, may participate. The Non-Utility Money Pool activities of all of the Non-Utility subsidiaries except PSCCC are exempt from the prior approval requirements of the Act under Rule 52. Applicants propose PSCCC participate in the Non-Utility Money Pool. Applicants also propose NCE contribute surplus funds and lend and extend credit to (a) the Utility Subsidiaries through the Utility Money Pool and (b) the Non-Utility Subsidiaries through the Non-Utility Money Pool. Funds made available by NCE for loans through the money pools will be made available first for loans through the Utility Money Pool and thereafter for loans through the Non-Utility Money Pool. No loans through the Utility Money Pool would be made to, and no borrowings through the Utility Money Pool would be made by, NCE. The maximum amount of Money Pool borrowings outstanding for each Subsidiary will be determined by NCE and the Subsidiaries in accordance with business needs. Actual short-term financing would be issued based on working capital requirements 13 and any interim financing needed to bridge between issuances of long-term capital. NC Services will operate and administer the Utility and Non-Utility Money Pools on an "at cost" basis and will maintain separate records for each money pool. Surplus funds of the Utility Money Pool and the Non-Utility Money Pool may be combined in common short-term investments, but separate records of such funds shall be maintained by NC Services as administrator of the pools, and interest thereon shall be separately allocated, on a daily basis, to each Money Pool in accordance with the proportion that the amount of each Money Pool's surplus funds bears to the total amount of surplus funds available for investment from both Money Pools and will be similarly allocated among the Participants. a. Utility-Money Pool. Under the proposed terms of the Utility Money Pool, funds would be available for short-term loans to the Utility Subsidiaries from time to time. The maximum short-term debt under the Utility Money Pool to be issued by PSCo, SPS and Cheyenne will not exceed 40% of their total capitalization. Utility Money Pool participants that borrow would borrow pro rata from each company that lends, in the proportion that the total amount loaned by each such lending company bears to the total amount then loaned through the Utility Money Pool. On any day when more than one fund source (e.g., surplus treas- 14 ury funds of NCE and other Utility Money Pool participants ("Internal Funds") and proceeds from bank borrowings or commercial paper sales by the Utility Subsidiaries or NCE ("External Funds")), with different rates of interest, is used to fund loans through the Utility Money Pool, each borrower would borrow pro rata from each such fund source in the Utility Money Pool in the same proportion that the amount of funds provided by that fund source bears to the total amount of short-term funds available to the Utility Money Pool. The interest rate applicable and payable to or by subsidiaries for all loans of Internal Funds will be the rates for high-grade unsecured 30-day commercial paper sold through dealers by major corporations as quoted in The Wall Street Journal. The interest rate applicable to loans of such External Funds would be equal to the lending company's cost for such External Funds (or, if more than one Utility Money Pool participant had made available External Funds on such day, the applicable interest rate would be a composite rate equal to the weighted average of the cost incurred by the respective Utility Money Pool participants for such External Funds). In cases where both Internal Funds and External Funds are concurrently borrowed through the Utility Money Pool, the rate applicable to all loans comprised of such "blended" funds would be a composite rate. Funds not required by the Utility Money Pool to make loans (with the exception of funds required to satisfy the 15 Utility Money Pool's liquidity requirements) would ordinarily be invested in one or more short-term investments. b. Non-Utility Money Pool. The Non-Utility Money Pool will be operated on the same terms and conditions as the Utility Money Pool. All contributions to, and borrowings from, the Non-Utility Money Pool are exempt pursuant to the terms of Rule 52 under the Act, except contributions and extensions of credit by NCE and PSCCC and short-term borrowings by PSCCC in an amount not to exceed 40% of its total capitalization, authorization for which is hereby requested. 9. Financing of EWGs and FUCOs. NCE's Non-Utility Subsidiaries, e prime and Quixx and their subsidiaries, currently own investments in EWGs. Sections 32 and 33 of the Act permit a registered holding company to acquire and maintain interests in one or more EWGs or FUCOs without the need to apply for or receive approval from the Commission. To the extent that funds for one or more projects are required in excess of internally generated funds, NCE hereby requests Commission authorization to invest proceeds from the financings authorized hereby in EWGs and FUCOs in compliance with Rule 53(a)(1) such that NCE's aggregate investment at any one time during the period covered by this Application will not exceed 50% of its "consolidated retained earnings", as defined in Rule 53(a)(1)(ii). 16 For the Commission, by the Division of Investment Management, pursuant to delegated authority. -----END PRIVACY-ENHANCED MESSAGE-----