-----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, I5siCjzc/i0VC7WEFmUeIecj0FDIjfZlVrQA2A1fm32XZPWk7cxfvB3s2WzBN2hm rZV4NtRiCDauDolmawYmXA== 0000893220-95-000733.txt : 19951118 0000893220-95-000733.hdr.sgml : 19951118 ACCESSION NUMBER: 0000893220-95-000733 CONFORMED SUBMISSION TYPE: T-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19951108 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA GAS SYSTEM INC CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 131594808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: T-3 SEC ACT: 1939 Act SEC FILE NUMBER: 022-22215 FILM NUMBER: 95588427 BUSINESS ADDRESS: STREET 1: 20 MONTCHANIN RD CITY: WILMINGTON STATE: DE ZIP: 19807 BUSINESS PHONE: 3024295000 T-3 1 FORM T-3 COLUMBIA GAS SYSTEM, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-3 FOR APPLICATION FOR QUALIFICATION OF INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939 The Columbia Gas System, Inc. - -------------------------------------------------------------------------------- (Name of Applicant) 20 Montchanin Road, Wilmington, DE 19807 - -------------------------------------------------------------------------------- (Address of principal executive offices) Securities to be Issued Under the Indenture to be Qualified - -------------------------------------------------------------------------------- Title of Class Amount - -------------------------------------------------------------------------------- Senior Debt Securities up to $2.1 Billion ___% Debentures Series A ___% Debentures Series B ___% Debentures Series C ___% Debentures Series D ___% Debentures Series E ___% Debentures Series F ___% Debentures Series G Approximate date of proposed public offering: November 27, 1995 ----------------------------------- Name and address of agent for service: L. J. Bainter, Treasurer The Columbia Gas System, Inc. 20 Montchanin Road Wilmington, DE 19807 THE APPLICANT HEREBY AMENDS THIS APPLICATION FOR QUALIFICATION ON THE DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVENESS UNTIL (i) THE 20TH DAY AFTER THE FILING OF AN AMENDMENT WHICH SPECIFICALLY STATES THAT IT SHALL SUPERSEDE THIS APPLICATION OR SUBSEQUENT AMENDMENT, OR (ii) SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 307(c) OF THE ACT, MAY DETERMINE UPON WRITTEN REQUEST OF THE APPLICANT. 2 GENERAL ITEM 1. GENERAL INFORMATION (a) Form of organization: A CORPORATION (b) State or other sovereign power under the laws of which organized: DELAWARE ITEM 2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied upon by the applicant as a basis for the claim that registration of the indenture securities under the Securities Act of 1933 is not required. The applicant is a debtor under Chapter 11 of Title 11 of the Code (the "Bankruptcy Code"). The applicant has filed a plan of reorganization (the "Plan") pursuant to Section 1125 of the Bankruptcy Code and the securities being registered hereunder are being issued pursuant to the Plan to creditors of the applicant. Accordingly, registration of the indenture securities under the Securities Act of 1933, as amended, is not required pursuant to Section 1145 of the Bankruptcy Code. Section 1145 of Title 11 of the United States Code (the "Bankruptcy Code") exempts the original issuance of securities under the Plan from registration under section 5 of the Securities Act of 1933 if three principal requirements are satisfied; (i) the securities must be issued by the debtor or its successors "under a plan" of reorganization, (ii) the recipients of the securities must hold a claim against the debtor, an interest in the debtor or a claim for an administrative expense against the debtor, and (iii) the securities must be issued entirely in exchange for the recipient's claim against or interest in the debtor, or "principally" in such exchange and "partly" for cash or property. The applicant believes that the contemplated issuances of the indenture securities will satisfy all three conditions because (i) those issuances are specifically required under the provisions of the applicant's Plan pursuant to which the indenture securities will be issued, (ii) the recipients of such securities will be holders of claims against or interest in the applicant, and (iii) the recipients will be issued the indenture securities entirely in exchange for their claims or interests in the applicant. ITEM 3. AFFILIATES. Furnish a list or diagram of all affiliates of the applicant and indicate the respective percentages of voting securities or other bases of control. See Exhibit 1. - 2 - 3 MANAGEMENT AND CONTROL ITEM 4. DIRECTORS AND EXECUTIVE OFFICERS.
- ---------------------------------------------------------------------------------------------- Name Address Title - ---------------------------------------------------------------------------------------------- Richard F. Albosta c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Robert H. Beeby c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Wilson K. Cadman c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 James P. Heffernan c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Donald P. Hodel c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Malcolm T. Hopkins c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Malcolm Jozoff c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 William E. Lavery c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 George E. Mayo c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Douglas E. Oleson c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 Ernesta G. Procope c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807
- 3 - 4 Oliver G. Richard III c/o The Columbia Gas System, Inc. Chairman of the Board, 20 Montchanin Road Chief Executive Officer Wilmington, DE 19807 and President of Applicant James R .Thomas, II c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807 William R. Wilson c/o The Columbia Gas System, Inc. Director 20 Montchanin Road Wilmington, DE 19807
OFFICERS OF THE APPLICANT (other than stated above)
- ---------------------------------------------------------------------------------------------- Name Address Title - ---------------------------------------------------------------------------------------------- Carolyn M. Afshar c/o The Columbia Gas System, Inc. Secretary 20 Montchanin Road Wilmington, DE 19807 Larry J. Bainter c/o The Columbia Gas System, Inc. Treasurer 20 Montchanin Road Wilmington, DE 19807 Tejinder S. Bindra c/o The Columbia Gas System, Inc. Assistant Secretary 20 Montchanin Road Wilmington, DE 19807 Richard A. Casali c/o The Columbia Gas System, Inc. Vice President 20 Montchanin Road Wilmington, DE 19807 Joyce K. Hayes c/o The Columbia Gas System, Inc. Assistant Secretary 20 Montchanin Road Wilmington, DE 19807 Richard E. Lowe c/o The Columbia Gas System, Inc. Vice President and Controller 20 Montchanin Road Wilmington, DE 19807 Michael W. O'Donnell c/o The Columbia Gas System, Inc. Senior Vice President 20 Montchanin Road and Chief Financial Officer Wilmington, DE 19807 Peter M. Schwolsky c/o The Columbia Gas System, Inc. Senior Vice President 20 Montchanin Road and Chief Legal Officer Wilmington, DE 19807
- 4 - 5 ITEM 5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information as to each person owning 10 percent or more of the voting securities of the applicant as of November 1, 1995: NONE. UNDERWRITERS ITEM 6. UNDERWRITERS. Give the name and complete mailing address of (a) each person who within three years prior to the date of filing the application, acted as an underwriter of any securities of the obligor which were outstanding on the date of filing the applications, and (b) each proposed principal underwriter of the securities proposed to be offered. As to each person specified in (a), give the title of each class of securities underwritten. NONE. CAPITAL SECURITIES ITEM 7. CAPITALIZATION. (a) Furnish the following information as to each authorized class of securities of the applicant. As of November 1, 1995. See Exhibit 2. (b) Give a brief outline of the voting rights of each class of voting securities referred to in paragraph (a) above. Subject to the rights of the holders of the Preferred Stock, the holders of Common Stock are entitled to one vote per share, in person or by proxy, upon all matters presented to the common stockholders. INDENTURE SECURITIES ITEM 8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of indenture provisions required under Section 305(a)(2) of the Act. - 5 - 6 The Indenture contains the following Events of Default; (i) default in payments of the Indenture Securities; (ii) failure to comply with covenants; (iii) failure to discharge or otherwise provide for final, non-appealable judgments for the payment of money exceeding $50 million in uninsured liability; and (iv) certain events of insolvency with respect to the applicant; all subject, as applicable, to customary grace periods (Article 5.01 of the Indenture). The holders of a majority in principal amount of Indenture Securities outstanding may waive any past default under the Indenture with respect to such securities, except a default not theretofore cured in the payment of the principal of or interest on any Indenture Securities or in respect of any provision which under the Indenture cannot be modified or amended without the consent of the holder of each security affected (Article 5.04 of the Indenture). Within 90 days after the Trustee becomes aware of the occurrence of any default under the Indenture, the Trustee shall transmit by mail to all holders of Indenture Securities notice of such default, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of principal and interest on any Indenture Security (including payments pursuant to the mandatory redemption provisions of such security), if any, the Trustee shall be protected in withholding such notice so long as a committee of its trust officers determines in good faith that the withholding of such notice is in the interests of the holders of Indenture Securities. The term "default" means any event which is, or after notice or lapse of time or both, would become, an Event of Default with respect to Indenture Securities (Section 6.05 of the Indenture). At any time and from time to time after the execution and delivery of the Indenture, the Applicant may execute and deliver Indenture Securities to the Trustee for authentication, together with an order for the authentication and delivery of such securities and the Trustee shall authenticate and deliver such securities. The Indenture Securities are not valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the security. Each Indenture Security shall be dated the date of its authentication. Pursuant to the applicant's Plan of Reorganization, the Trustee, upon receipt of a Company Order from the applicant, will authenticate the Indenture Securities for original issue in an aggregate principal amount of up to $2.1 billion. These Indenture Securities are being issued to certain creditors of the applicant in exchange for bankruptcy claims against the applicant pursuant to the applicant's Plan of Reorganization. (See Section 2.03 of the Indenture). The Indenture Securities will be general senior obligations of the applicant. Therefore, there will be no property subject to lien under the Indenture. When (i) the Applicant delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.09 of the Indenture) for cancellation or (ii) all outstanding Securities have become due and payable and the Applicant irrevocably deposits with the Trustee funds sufficient to pay at maturity all outstanding Securities, including interest thereon (other than Securities replaced pursuant to Section 2.09 of the Indenture), and if in either case the Applicant pays all other sums payable hereunder by the Applicant, then this Indenture shall, except with respect to certain continuing obligations of the Applicant under Section 7.01(c) of the Indenture, cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Applicant accompanied by an Officers' Certificate and an Opinion of Counsel (Section 7.01 of the Indenture). In addition, the applicant may, at any time, terminate (i) all its obligations under the Indenture Securities and the Indenture ("Legal Defeasance Option") or (ii) its obligations to comply with certain restrictive covenants, provided that the applicant irrevocably deposits in trust with the Indenture Trustee money or U.S. government obligations for the payment of principal of and interest on the Indenture Securities to maturity or redemption, as the case may be. The conditions to defeasance shall be that (i) no default exists or occurs, (ii) the applicant obtains a certificate from a firm of nationally recognized independent accountants that the deposited U.S. government obligations will be sufficient to pay principal of the interest on the Indenture Securities to be defeased when due and (iii) in the case of the Legal Defeasance Option, 91 days pass after the deposit is made and no event of bankruptcy with respect to the applicant is continuing at the end of the 91-day period (Sections 7.01 and 7.02 of the Indenture). - 6 - 7 The Applicant shall deliver to the Trustee within 120 days after the end of each fiscal year of the Applicant a certificate from its principal executive officer, principal financial officer or principal accounting officer stating that in the course of the performance by such signer of his duties as an officer of the Applicant he would normally have knowledge of any Default by the Applicant or any noncompliance with the conditions and covenants under the Indenture and whether or not he knows of any Default or any such noncompliance that occurred during such period. If such officer does, the certificate shall describe the Default or noncompliance, its status and what action the Applicant is taking or proposes to take with respect thereto. (Section 3.05 of the Indenture). The Indenture also requires the applicant to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such information, documents and reports with respect to compliance by the the applicant with the conditions and covenants of the Indenture as may be required from time to time by such rules and regulations (Section 3.02 of the Indenture). ITEM 9. OTHER OBLIGORS. Give the name and complete mailing address of any person, other than the applicant, who is an obligor upon the indenture securities. NOT APPLICABLE. CONTENTS OF APPLICATION FOR QUALIFICATION. This application for qualification comprises: (a) page number 1 to 7, consecutively. (b) the statement of eligibility and qualification of each trustee under the indenture to be qualified. See Exhibit 3. (c) the following exhibits in addition to those filed as a part of the statement of eligibility and qualification of each trustee. Subject to Rule 7a-29 permitting incorporation of exhibits by reference, the following exhibits are to be filed as a part of the application for qualification: EXHIBIT T3A. A copy of the charter as now in effect or if the applicant is not a corporation, a copy of the correlative instruments or organization. Restated Certificate of Incorporation (as amended) of The Columbia Gas System, Inc filed as Exhibit 3(a) to the applicant's annual report on Form 10-K for the year ending December 31, 1991, File No. 0-1098. EXHIBIT T3B. A copy of the existing bylaws or instruments corresponding thereto. Bylaws (as amended) of The Columbia Gas System, Inc. filed as Exhibit 3(b) to the applicant's annual report on Form 10-K for the year ending December 31, 1987, File No. 0-1098. EXHIBIT T3C. A copy of the Indenture to be qualified. The Indenture shall include, or be accompanied by, a reasonably itemized table of contents showing the articles, sections and subsections or other divisions of the Indenture, together with the subject matter thereof and the pages on which they appear. A Form of Indenture Supplement for the Debentures to be issued pursuant to the applicant's Plan of Reorganization are attached as Exhibit 1A to the Applicant's Amended Disclosure Statement incorporated by referenced hereto (Exhibit T3D(a)). - 7 - 8 EXHIBIT T3D. A copy of every prospectus, notice, circular, letter, or other written communication which is to be sent or given to security holders in connections with the issuance or distribution of the Indenture securities. Copies of replies to inquiries from security holders, however, need not be filed. (a) The Amended Disclosure Statement (with exhibits) pursuant to Section 1125 of the Bankruptcy Code for the third amended Plan of Reorganization of The Columbia Gas System, Inc. dated July 27, 1995 filed as an Exhibit to applicant's Form 8-K filed on August 4, 1995. (b) Memorandum Opinion Order of the U.S. Securities and Exchange Commission approving applicant's Plan of Reorganization dated August 25, 1995. EXHIBIT T3E. A cross reference sheet showing the location in the Indenture of the provision inserted therein pursuant to Section 310 through 318(a), inclusive, of the Act. Filed as Page 1 of Exhibit T3C filed herewith. - 8 - 9 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the applicant, THE COLUMBIA GAS SYSTEM, INC., a corporation organized and existing under the laws of Delaware, has duly caused this application to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the city of Wilmington, and State of Delaware on the 8th day of November, 1995. (SEAL) The Columbia Gas System, Inc. ----------------------------- By: /s/ L. J. Bainter --------------------------- L. J. Bainter --------------------------- Treasurer Attest: /s/ T.S. Bindra ------------------------- T.S. Bindra - 9 - EX-1 2 AFFILIATES OF THE COLUMBIA GAS SYSTEM INC 1 EXHIBIT 1 AFFILIATES OF THE COLUMBIA GAS SYSTEM, INC.** - -------------------------------------------------------------------------------- Columbia Atlantic Trading Corporation Columbia Coal Gasification Corporation Columbia Gas Development Corporation Columbia Gas of Kentucky, Inc. Columbia Gas of Maryland, Inc. Columbia Gas of Ohio, Inc. Columbia Gas of Pennsylvania, Inc. Columbia Gas System Service Corporation Columbia Gas Transmission Corporation Columbia Gulf Transmission company Overthrust Pipeline Company (18%) Trailblazer Pipeline Company (33%) Columbia LNG Corporation (91.8%) CLNG Corporation Cove Point LNG Limited Partnership (50%) Columbia Natural Resources, Inc. Columbia Propane Corporation Commonwealth Gas Services, Inc. Commonwealth Propane, Inc. Atlantic Energy, Inc. (50%) Columbia Energy Services Corporation Columbia Energy Marketing TriStar Capital Corporation TriStar Gas Technologies, Inc. Enertek Partners, L.P. (16.1%) TriStar Ventures Corporation TriStar Pedrick General Corporation Pedricktown Cogeneration Ltd. (15%) TriStar Pedrick Limited Corporation Pedricktown Cogeneration Ltd. (35%) TriStar Fuel Cells Corporation TriStar Binghamton General Corporation Binghamton Cogeneration Ltd (10%) TriStar Georgetown General Corporation Georgetown Cogeneration Ltd. (1%) TriStar Georgetown Limited Corporation Georgetown Cogeneration Ltd. (49%) TriStar Vineland General Corporation Vineland Cogeneration Ltd. (5%) TriStar Vineland Limited Corporation Vineland Cogeneration Limited Partnership (45%) TriStar Rumford Limited Corporation Rumford Cogeneration Company (10.2%) TriStar System, Inc. TriStar Ten Corporation (Inactive company) Cogeneration Partners of America (50%) Provided for information purposes only. The applicant disclaims any conclusion that the indicated entities are "affiliates" of the applicant within the meaning of the federal securities laws. - ------------------------------- ** Ownership of 100% of common stock or partnership interests unless otherwise indicated. EX-2 3 TABLE OF AMOUNT AUTHORIZED/AMOUNT OUTSTANDING 1 EXHIBIT 2 THE COLUMBIA GAS SYSTEM, INC. November 1, 1995
AMOUNT AMOUNT AUTHORIZED OUTSTANDING ---------- ----------- ($000) ($000) 6 1/4% Series Due Oct. 1991 . . . . . . . . . . . . . . . . 40,000 11,998 6 5/8% Series Due Oct. 1992 . . . . . . . . . . . . . . . . 25,000 7,404 7 1/4% Series Due May 1993 . . . . . . . . . . . . . . . . 50,000 14,990 7% Series Due Oct. 1993 . . . . . . . . . . . . . . . . . . 40,000 12,000 9% Series Due Oct. 1994 . . . . . . . . . . . . . . . . . . 50,000 20,232 8 3/4% Series Due Apr. 1995 . . . . . . . . . . . . . . . . 40,000 16,187 9 1/8% Series Due Oct. 1995 . . . . . . . . . . . . . . . . 50,000 22,000 8 3/8% Series Due Mar. 1996 . . . . . . . . . . . . . . . . 75,000 32,935 8 1/4% Series Due Sep. 1996 . . . . . . . . . . . . . . . . 60,000 26,392 7 1/2% Series Due Mar. 1997 . . . . . . . . . . . . . . . . 50,000 23,326 7 1/2% Series Due June 1997 . . . . . . . . . . . . . . . . 60,000 26,283 7 1/2% Series Due Oct. 1997 . . . . . . . . . . . . . . . . 60,000 28,389 7 1/2% Series Due May 1998 . . . . . . . . . . . . . . . . 50,000 23,731 9 7/8% Series Due June 1999 . . . . . . . . . . . . . . . . 40,000 21,800 10 1/8% Series Due Nov. 1995 . . . . . . . . . . . . . . . 75,000 18,600 9 1/8% Series Due May 1996 . . . . . . . . . . . . . . . . 75,000 18,600 10 1/4% Series Due May 1999 . . . . . . . . . . . . . . . . 75,000 25,000 10 1/4% Series Due Aug. 2011 . . . . . . . . . . . . . . . 100,000 100,000 9% Series Due Aug. 1993 . . . . . . . . . . . . . . . . . . 150,000 150,000 10 1/2% Series Due June 2012 . . . . . . . . . . . . . . . 200,000 200,000 10.15% Series Due Nov. 2013 . . . . . . . . . . . . . . . . 100,000 100,000 Medium-Term Notes, Series A . . . . . . . . . . . . . . . . 200,000 200,000 Medium-Term Notes, Series B . . . . . . . . . . . . . . . . 200,000 200,000 Medium-Term Notes, Series C . . . . . . . . . . . . . . . . 50,000 50,000 Employees' Thrift Plan of Columbia Gas System Trust 9.875% Amortizing Debentures, Series A, Due November 30, 2001 (Guaranteed on a subordinated basis by The Columbia Gas System, Inc.) . . . . . . . . . . . . . . . . . . . . . . . 91,750 86,993 Common Stock $10 Par Value (No. of shares) . . . . . . . . 100,000,000 50,575,835
EX-3 4 FORM T-1 1 EXHIBIT 3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------------------ MARINE MIDLAND BANK (Exact name of trustee as specified in its charter) New York 16-1057879 (Jurisdiction of incorporation (I.R.S. Employer or organization if not a U.S. Identification No.) national bank) 140 Broadway, New York, N.Y. 10005-1180 (212) 658-1000 (Zip Code) (Address of principal executive offices) Eric Parets Senior Vice President 140 Broadway New York, New York 10005-1180 Tel: (212) 658-6560 (Name, address and telephone number of agent for service) THE COLUMBIA GAS SYSTEM, INC. (Exact name of obligor as specified in its charter) Delaware 13-1594808 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 20 Montchanin Road Wilmington, Delaware 19807 (302) 429-5000 (Zip Code) (Address of principal executive offices) SENIOR DEBT SECURITIES (Title of Indenture Securities) - 12 - 2 GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervisory authority to which it is subject. State of New York Banking Department. Federal Deposit Insurance Corporation, Washington, D.C. Board of Governors of the Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 13 - 3 Item 16. List of Exhibits.
Exhibit - ------- T1A(i) * - Copy of the Organization Certificate of Marine Midland Bank. T1A(ii) * - Certificate of the State of New York Banking Department dated December 31, 1993 as to the authority of Marine Midland Bank to commence business. T1A(iii) - Not applicable. T1A(iv) * - Copy of the existing By-Laws of Marine Midland Bank as adopted on January 20, 1994. T1A(v) - Not applicable. T1A(vi) * - Consent of Marine Midland Bank required by Section 321(b) of the Trust Indenture Act of 1939. T1A(vii) - Copy of the latest report of condition of the trustee (June 30, 1995), published pursuant to law or the requirement of its supervisory or examining authority. T1A(viii) - Not applicable. T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange Commission with Registration No. 33-53693 and incorporated herein by reference thereto. - 14 - 4 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Marine Midland Bank, a banking corporation and trust company organized under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York on the 3rd day of November, 1995. MARINE MIDLAND BANK By: /s/ Metin Caner ----------------------------- Metin Caner Vice President - 15 - 5 EXHIBIT T1A (VII) Board of Governors of the Federal Reserve System OMB Number: 7100-0036 Federal Deposit Insurance Corporation OMB Number: 3064-0052 Office of the Comptroller of the Currency OMB Number: 1557-0081 FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 1996 - ------------------------------------------------------------------------------------------------------------------------------------ / 1 / Please refer to page i, Table of Contents, for the required disclosure of estimated burden. - ------------------------------------------------------------------------------------------------------------------------------------ CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031 REPORT AT THE CLOSE OF BUSINESS JUNE 30, 1995 (950630) ------------ (RCRI 9999)
This report is required by law; 12 U.S.C. Section 324 (State This report form is to be filed by banks with branches and member banks); 12 U.S.C. Section 1817 (State nonmember consolidated subsidiaries in U.S. territories and banks); and 12 U.S.C. Section 161 (National banks). possessions, Edge or Agreement subsidiaries, foreign branches, consoli-dated foreign subsidiaries, or International Banking Facilities. NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions. attested to by not less than two directors (trustees) for NOTE: These instructions may in some cases differ from State nonmember banks and three directors for State member generally accepted accounting principles. and National Banks. I, Gerald A. Ronning, Executive VP & Controller We, the undersigned directors (trustees), attest to the -------------------------------------------- correctness of this Report of Condition (including the Name and Title of Officer Authorized to Sign Report supporting schedules) and declare that it has been examined by of the named bank do hereby declare that these Reports of us and to the best of our knowledge and belief has been Condition and Income (including the supporting schedules) prepared in conformance with the instructions issued by the have been prepared in conformance with the instructions appropriate Federal regulatory authority and is true and issued by the appropriate Federal regulatory authority and correct. are true to the best of my knowledge and believe. /s/ James H. Cleave ------------------------------------- Director (Trustee) /s/ Gerald A. Ronning /s/ Northrup R. Knox - ------------------------------------- ------------------------------------- Signature of Officer Authorized to Sign Report Director (Trustee) 07/25/95 /s/ Bernard J. Kennedy - ------------------------------------- ------------------------------------- Date of Signature Director (Trustee) FOR BANKS SUBMITTING HARD COPY REPORT FORMS: - ------------------------------------------------------------------------------------------------------------------------------------ STATE MEMBER BANK: Return the original and one copy to the NATIONAL BANKS: Return the original only in the special return appropriate Federal Reserve District Bank. address envelope provided. If express mail is used in lieu of the special return address envelope, return the original only STATE NONMEMBER BANKS: Return the original only in the to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite special return address envelope provided. If express mail is 204, Crofton, MD 21114. used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. FDIC Certificate Number 0 0 5 8 9 -- -- -- -- -- (RCRI 9030)
- 16 - 6 NOTICE This form is intended to assist institutions with state publication requirements. It has not been approved by any state banking authorities. Refer to your appropriate state banking authorities for your state publication requirements. REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the Marine Midland Bank of Buffalo Name of Bank City in the state of New York, at the close of business June 30, 1995.
THOUSANDS ASSETS OF DOLLARS - ----------------------------------------------------------- ------------- Cash and balances due from depository institutions: Noninterest-bearing balances currency and coin . . . . . . . . . . . . . . . . . . . $ 865,542 Interest-bearing balances . . . . . . . . . . . . . . . 899,767 Held-to-maturity securities . . . . . . . . . . . . . . 1,855,665 Available-for-sale securities . . . . . . . . . . . . . 43,871 Federal Funds sold and securities purchased . . . . . . . . under agreements to resell in domestic . . . . . . . . . . offices of the bank and of its Edge and . . . . . . . . . . Agreement subsidiaries, and in IBFs: . . . . . . . . . . . Federal funds sold . . . . . . . . . . . . . . . . . . . 1,236,600 Securities purchased under . . . . . . . . . . . . . . . agreements to resell . . . . . . . . . . . . . . . . . . 236,688 Loans and lease financing receivables: . . . . . . . . . . Loans and leases net of unearned income . . . . . . . . 12,821,266 LESS: Allowance for loan and lease . . . . . . . . . . . losses . . . . . . . . . . . . . . . . . . . . . . . . . 487,904 LESS: Allocated transfer risk reserve . . . . . . . . . 0 Loans and lease, net of unearned . . . . . . . . . . . . income, allowance, and reserve . . . . . . . . . . . . . 12,333,362 Trading assets . . . . . . . . . . . . . . . . . . . . . 505,035 Premises and fixed assets (including . . . . . . . . . . capitalized leases) . . . . . . . . . . . . . . . . . . 175,557 Other real estate owned . . . . . . . . . . . . . . . . . . 18,821 Investments in unconsolidated . . . . . . . . . . . . . . . subsidiaries and associated companies . . . . . . . . . . . 0 Customers' liability to this bank on . . . . . . . . . . . acceptances outstanding . . . . . . . . . . . . . . . . . . 19,281 Intangible assets . . . . . . . . . . . . . . . . . . . . . 56,590 Other assets . . . . . . . . . . . . . . . . . . . . . . . 597,058 Total assets . . . . . . . . . . . . . . . . . . . . . . . 18,843,837
- 17 - 7 LIABILITIES Deposits: . . . . . . . . . . . . . . . . . . . . . . . . . In domestic offices . . . . . . . . . . . . . . . . . . 13,282,857 Noninterest-bearing . . . . . . . . . . . . . . . . . . 3,201,517 Interest-bearing . . . . . . . . . . . . . . . . . . . . 10,081,340 In foreign offices, Edge, and Agreement . . . . . . . . . . subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . 2,063,737 Noninterest-bearing . . . . . . . . . . . . . . . . . . 0 Interest-bearing . . . . . . . . . . . . . . . . . . . . 2,063,737 Federal funds purchased and securities sold . . . . . . . . under agreements to repurchase in domestic . . . . . . . . offices of the bank and its Edge and . . . . . . . . . . . Agreement subsidiaries, and in IBFs: . . . . . . . . . . . Federal funds purchased . . . . . . . . . . . . . . . . 670,610 Securities sold under agreements to . . . . . . . . . . repurchase . . . . . . . . . . . . . . . . . . . . . . . 296,580 Demand notes issued to the U.S. Treasury . . . . . . . . . 300,000 Trading Liabilities. . . . . . . . . . . . . . . . . . . . 33,836 Other borrowed money: . . . . . . . . . . . . . . . . . . . With original maturity of one year . . . . . . . . . . . or less . . . . . . . . . . . . . . . . . . . . . . . . 42,269 With original maturity of more than . . . . . . . . . . one year . . . . . . . . . . . . . . . . . . . . . . . . 0 Mortgage indebtedness and obligations . . . . . . . . . . . under capitalized leases . . . . . . . . . . . . . . . . . 36,162 Bank's liability on acceptances . . . . . . . . . . . . . . executed and outstanding . . . . . . . . . . . . . . . . . 19,281 Subordinated notes and . . . . . . . . . . . . . . . . . . 225,000 Other liabilities . . . . . . . . . . . . . . . . . . . . . 289,820 Total liabilities . . . . . . . . . . . . . . . . . . . . . 17,260,152 Limited-life preferred stock and . . . . . . . . . . . . . related surplus . . . . . . . . . . . . . . . . . . . . . . 0 EQUITY CAPITAL Perpetual preferred stock and related . . . . . . . . . . . surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Common Stock . . . . . . . . . . . . . . . . . . . . . . . 185,000 Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758,098 Undivided profits and capital reserves . . . . . . . . . . (359,413) Net unrealized holding gains (losses) . . . . . . . . . . . on available-for-sale securities . . . . . . . . . . . . . 0 Cumulative foreign currency translation . . . . . . . . . . adjustments . . . . . . . . . . . . . . . . . . . . . . . . 0 Total equity capital . . . . . . . . . . . . . . . . . . . 1,583,685 Total liabilities, limited-life . . . . . . . . . . . . . . preferred stock, and equity capital . . . . . . . . . . . . 18,843,837
- 18 - EX-99.T3C 5 INDENTURE 1 EXHIBIT T-3C PAGE 1 DRAFT ================================================================================ THE COLUMBIA GAS SYSTEM, INC. Senior Debt Securities ------------------------ INDENTURE Dated as of _________, 19__ ------------------------ Marine Midland Bank ------------------------------------------ Trustee ================================================================================ 2 CROSS-REFERENCE TABLE - -------------------------------------------------------------------------------- The Columbia Gas System, Inc. and Marine Midland Bank, Trustee Indenture dated ___________, 1995
TIA Section Indenture Section - ----------- ------------------ 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 (a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. (a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08, 6.10, 11.02 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06, 11.02 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05, 11.02 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06 (c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04 (c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02, 11.04 (c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05, 11.02 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a) (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c) (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11 316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05 (a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08 (a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.06 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
3 PAGE 2 TABLE OF CONTENTS 1/
Page ---- RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1] ARTICLE 1 Definitions and Incorporation by Reference ------------------------------------------ SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1] SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8] SECTION 1.03. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8] SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8] ARTICLE 2 The Securities -------------- SECTION 2.01. Amount; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . [9] SECTION 2.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11] SECTION 2.03. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11] SECTION 2.04. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [13] SECTION 2.05. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . [14] SECTION 2.06. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . . . . . . . . . . [14] SECTION 2.07. Securityholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15] SECTION 2.08. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15] SECTION 2.09. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [17] SECTION 2.10. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18] SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18] SECTION 2.12. Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
____________________ 1/ The Table of Contents is included herein for convenience only and is not to be considered a part of the Indenture. 4 PAGE 3
Page ---- ARTICLE 3 Covenants --------- SECTION 3.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19] SECTION 3.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19] SECTION 3.03. Limitation on Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19] SECTION 3.04. Limitation on Funded Debt of Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . [21] SECTION 3.05. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [22] ARTICLE 4 Successor Company ----------------- SECTION 4.01. When Company May Merge or Transfer Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [23] SECTION 4.02. Successor Entity Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . [23] ARTICLE 5 Defaults and Remedies --------------------- SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [24] SECTION 5.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25] SECTION 5.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25] SECTION 5.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26] SECTION 5.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26] SECTION 5.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26] SECTION 5.07. Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . [27] SECTION 5.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27] SECTION 5.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . [27] SECTION 5.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27] SECTION 5.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28] SECTION 5.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . [28]
5 PAGE 4
Page ---- ARTICLE 6 Trustee ------- SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28] SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30] SECTION 6.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . [30] SECTION 6.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30] SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30] SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . [31] SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . [31] SECTION 6.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [32] SECTION 6.09. Successor Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33] SECTION 6.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . [33] SECTION 6.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33] ARTICLE 7 Discharge of Indenture; Defeasance ---------------------------------- SECTION 7.01. Discharge of Liability on Securities; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33] SECTION 7.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [34] SECTION 7.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35] SECTION 7.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35] ARTICLE 8 Amendments ---------- SECTION 8.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35] SECTION 8.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [36] SECTION 8.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . [37] SECTION 8.04. Revocation and Effect of Consent and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [37] SECTION 8.05. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38] SECTION 8.06. Trustee To Sign Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
6 PAGE 5
Page ---- ARTICLE 9 Redemption ---------- SECTION 9.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38] SECTION 9.02. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38] SECTION 9.03. Selection of Securities To Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39] SECTION 9.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39] SECTION 9.05. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . [40] SECTION 9.06. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40] SECTION 9.07. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40] ARTICLE 10 Sinking Funds ------------- SECTION 10.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40] SECTION 10.02. Satisfaction of Sinking Fund Payment with Securities . . . . . . . . . . . . . . . . . . . . . . . . . . [41] SECTION 10.03. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [41] ARTICLE 11 Miscellaneous ------------- SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . [42] SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [42] SECTION 11.03. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43] SECTION 11.04. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43] SECTION 11.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43] SECTION 11.06. When Securities Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.07. Rules by Trustee, Paying Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.08. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44] SECTION 11.12. Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45] SECTION 11.13. Table of Contents; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
7 PAGE 6
Page ---- TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45] EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45] ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [46]
8 PAGE 7 THIS INDENTURE dated ____________________________ between The Columbia Gas System, Inc., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), having its principal office at 20 Montchanin Road, Wilmington, Delaware 19807-0020, and Marine Midland Bank, a banking corporation and trust company organized and existing under the laws of the State of New York (hereinafter called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the creation of an issue of its Securities (hereinafter called the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities, when executed by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all holders of the Securities as follows: ARTICLE 1 Definitions and Incorporation by Reference SECTION 1.01. Definitions. "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct the management and policies of such person directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors in respect hereof. "Board Resolution" means a resolution duly adopted by the Board of Directors of the Company, a copy of which shall be certified by the Secretary or an Assistant Secretary, as being in full force and effect on the date of such certification and delivered to the Trustee. 9 PAGE 8 "Business Day" means each day which is not a Legal Holiday. "Bylaws" means the "Bylaws of The Columbia Gas System, Inc." as amended from time to time. "Capital Lease Obligations" of a person means any obligation which is required to be classified and accounted for as a capital lease obligation on the balance sheet of such person prepared in accordance with generally accepted accounting principles; the amount of such obligation shall be the capitalized amount thereof, determined in accordance with generally accepted accounting principles; and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Capital Stock" means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) corporate stock, including any Preferred Stock. "Company" means The Columbia Gas System, Inc., a Delaware corporation, unless and until a successor replaces it pursuant to Article 4 and, thereafter, means the successor (or any subsequent successor pursuant to said Article) and, for purposes of any provision contained herein and required by the TIA, each other Obligor on the Securities. "Company Request", "Request of the Company", "Company Order" or "Order of the Company" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Debt" of any person means, without duplication, (i) the principal of and premium, if applicable, in respect of (a) indebtedness of such person for money borrowed and (b) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such person is responsible or liable; (ii) all Capital Lease Obligations of such person; (iii) all obligations of such person issued or assumed as the deferred purchase price of property (but excluding trade accounts payable arising in the ordinary course of business); (iv) all obligations of such person for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction (other than obligations 10 PAGE 9 with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of such person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third Business Day following receipt by such person of a demand for reimbursement following payment on the letter of credit); (v) all obligations of the type referred to in clauses (i) through (iv) of other persons for the payment of which such person is responsible or liable as obligor or guarantor; and (vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by any Lien on any asset of such person (whether or not such obligation is assumed by such person), the amount of any such obligation which is not assumed being deemed to be the lesser of the amortized cost of such assets or the amount of the obligation so secured. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default as more fully described in Section 5.01 of this Indenture. "Depository" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depository by the Company pursuant to Section 2.01 until a successor Depository shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depository" shall mean or include each person who is then a Depository hereunder, and if at any time there is more than one such person, "Depository" as used with respect to the Securities of any such series shall mean the Depository with respect to the Securities of that series. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Funded Debt" means all Debt created, assumed or guaranteed by a Significant Subsidiary which matures by its terms, or is renewable at the option of such Subsidiary to a date, more than one year after the date of the original creation, assumption or guarantee of such Debt by such Subsidiary. "Global Security" means with respect to any series of Securities issued hereunder, a Security which is executed by the Company and authenticated and delivered by the Trustee to the Depository or pursuant to the Depository's instruction, all in accordance with this Indenture, an indenture supplemental hereto, if any, or Board Resolution and pursuant to a Company Order, which shall be registered in the name of the Depository or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate Principal Amount of, all of the outstanding Securities of such series or any portion thereof, in either case having the same Terms, including, without limitation, the same issue date, date or dates on which principal is due, and interest rate or method of determining interest. 11 PAGE 10 "Holder" or "Securityholder" means the person in whose name a Security is registered on the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time. "Interest Payment Date" means the date specified in the Securities as the fixed date on which interest is due and payable. "Issue" or "issue" means, with respect to Debt, issue, assume, guarantee, incur or otherwise become liable for. "Lien" means any mortgage, pledge, deposit for security, security interest or other similar lien, other than the following: (i) liens for taxes or assessments or other local, state or federal governmental charges or levies; (ii) any lien to secure obligations under workmen's compensation or unemployment insurance laws or similar legislation, including liens of judgments thereunder which are not currently dischargeable; (iii) any lien to secure performance in connection with bids, tenders, contracts (other than contracts for the payment of Debt) or leases made in the ordinary course of business; (iv) liens to secure public or statutory obligations; (v) materialmen's, mechanics', carriers', workmen's, repairmen's, construction, or other liens or charges arising in the ordinary course of business, which may or may not be filed or asserted or the payment of which has been adequately secured or which are not material in amount; or deposits to obtain the release of such liens; (vi) any lien to secure indemnity, performance, surety or similar bonds to which the Company or any Affiliate of the Company is a party; (vii) liens created by or resulting from court or administrative proceedings which are currently being contested in good faith by appropriate actions or proceedings or for the purpose of obtaining a stay or discharge in the course of any court or legal proceedings; (viii) leases made, or existing on property acquired, constructed or improved, in the ordinary course of business, together with repairs and additions thereto and improvements thereof; (ix) landlords' liens; (x) zoning restrictions, easements, licenses, reservations or restrictions in respect of currently owned or hereafter acquired, constructed, or improved tangible property or defects or irregularities (including any terms, conditions, agreements, covenants, exceptions and reservations expressed or provided in deeds or other agreements) in title thereto, which do not materially impair the business of the Company; (xi) any lien on accounts receivable, inventories or customers' installment paper or the proceeds thereof incurred to secure Debt permitted under Section 3.03; (xii) any of such liens, whether or not delinquent, whose validity or applicability is at the time being contested in good faith by the Company or any Subsidiary; (xiii) liens securing obligations neither assumed by the Company or any Subsidiary nor on account of which any of them customarily pays interest directly or indirectly, existing, either at the date hereof, or, as to property hereafter acquired, constructed, or improved at the time of acquisition construction or improvement by the Company or a Subsidiary; (xiv) any right which any municipal or governmental body or agency may have by virtue of any franchise, license, contract or statute to purchase, or designate a purchaser of or order the sale of, any property of the Company or any Subsidiary upon payment of reasonable compensation therefor, or to terminate any franchise, 12 PAGE 11 license or other rights or to regulate the property and business of the Company or any Subsidiary; (xv) the lien of judgments covered by insurance, or upon appeal and covered, if necessary, by the filing of an appeal bond, or if not so covered, not exceeding at any one time [$1,000,000] in aggregate amount; (xvi) any lien or encumbrance, moneys sufficient for the discharge of which have been deposited in trust with the Trustee hereunder or with the trustee or mortgagee under the instrument evidencing such lien or encumbrance, with irrevocable authority to the Trustee hereunder or to such other trustee or mortgagee to apply such moneys to the discharge of such lien or encumbrance to the extent required for such purpose; (xvii) rights reserved to or vested in others to take or receive any part of the gas, by-products of gas or steam generated or produced by or from any properties of the Company or any Subsidiary with respect to any other rights concerning gas supply, transportation, or storage which are in use in the ordinary course of the natural gas business; (xviii) liens created or assumed by the Company or a Subsidiary in connection with (a) the issuance of debt securities, the interest on which is excludable from the gross income of the holders of such securities pursuant to Section 103 of the Internal Revenue Code of 1986, or any successor section, or (b) the issuance of other debt securities, whether or not the interest thereon is excluded from the gross income of the holders of such securities, through any public or governmental authority, in each case for purpose of financing, in whole or in part, the acquisition or construction of the property to be used by the Company or a Subsidiary, but such liens shall be limited to the property so financed (and the real estate on which such property is to be located), together with repairs and additions thereto and improvements thereof; and (xix) liens attaching to property of the Company or a Subsidiary at the time a person consolidates with or merges into, or transfers all or substantially all of its assets to, the Company or a Subsidiary, together with repairs and additions thereto and improvements thereon, provided that, based on an Officers' Certificate such property acquired pursuant to the consolidation, merger or asset transfer is adequate security for the lien. "Officer" means the Chairman of the Board, the President, any Vice President, the Treasurer, the Secretary, the Controller, any Assistant Treasurer, any Assistant Secretary, any Assistant Controller, or any officers of the Company designated by Board Resolution or the Bylaws. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who may be an employee of or counsel to the Company (or any subsidiary or affiliate) or other counsel acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02. 13 PAGE 12 "Principal Amount" of a Security means the principal amount of the Security plus the premium, if applicable, payable on the Security which is due or overdue or is to become due at the relevant time. "Production Payment" means any economic interest in oil, gas or mineral reserves which (a) entitles the holder thereof to a specified share of future production from such reserves, free of the costs and expenses of such production, and (b) terminates when a specified quantity of such share of future production from such reserves has been delivered or a specified sum has been realized from the sale of such share of future production from such reserves. "SEC" means the United States Securities and Exchange Commission. "Secured Debt" means Debt secured by a Lien. "Securities" means the Securities issued under this Indenture. "Significant Subsidiary" means a Subsidiary that meets the conditions for being classified as a "significant subsidiary" under Regulation S-X of the SEC as such regulation reads as of the date of this Indenture. "Subsidiary" means a corporation or limited liability company of which a majority of the Capital Stock, having voting power under ordinary circumstances to elect directors, is owned by the Company and/or one or more Subsidiaries. "Terms" means the maturity date, interest rate or method of determining the interest rate, interest payment dates, redemption provisions (optional or mandatory) and any other terms of any Securities established pursuant to Sections 2.01 and 2.03. "TIA" means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (15 U.S.C. Section Section 77aaa-77bbbb), as in effect on the date of this Indenture. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option. SECTION 1.02. Other Definitions. 14 PAGE 13
Defined in Term Section ---- ---------- "Bankruptcy Law" ............................................ 5.01 "Consolidated Tangible Assets" .............................. 3.03 "Covenant Defeasance Option" ................................ 7.01(b) "Custodian" ................................................. 5.01 "Event of Default" .......................................... 5.01 "Legal Defeasance Option" ................................... 7.01(b) "Legal Holiday" ............................................. 11.08 "Mandatory Sinking Fund Payment ............................. 10.01 "Notice of Default" ......................................... 5.01 "Optional Sinking Fund Payment .............................. 10.01
15 PAGE 14
Defined in Term Section ---- ---------- "Paying Agent" .............................................. 2.05 "Registrar" ................................................. 2.05 "Tangible Assets" ........................................... 3.03
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA or a provision of the TIA provides that an indenture to be qualified thereunder shall be deemed to include such provision, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings as if fully set forth herein and in any supplement hereto: "Commission" means the SEC. "Obligor" on the Securities means the Company and any other obligor on the Securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions. SECTION 1.04. 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 generally accepted accounting principles as in effect from time to time; (3) "including" means including, without limitation; (4) "person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. (5) "or" is not exclusive; (6) words in the singular include the plural and words in the plural include the singular; and (7) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of 16 PAGE 15 the issuer dated such date prepared in accordance with generally accepted accounting principles and accretion of principal on such security shall not be deemed to be the issuance of Debt. ARTICLE 2 The Securities SECTION 2.01. Amount; Issuable in Series. The aggregate Principal Amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series and Securities of the same series may have different Terms. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, except as contemplated by the fourth paragraph of Section 2.03: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all Securities of other series); (2) any limit upon the aggregate Principal Amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 2.04, 2.08, 2.09, 8.05 and 9.07; (3) the date or dates on which the principal and premium, if applicable, of any of the Securities of the series are payable or the method of determination thereof; (4) the rate or rates, or the method of determination thereof, at which any of the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the regular record date for the interest payable on any Interest Payment Date; (5) the place or places where the principal of and interest, if any, on any of the Securities of the series shall be payable and the office or agency for the Securities of the series maintained by the Company pursuant to Section 2.05; (6) the period or periods within which, the price or prices at which and the Terms and conditions upon which any of the Securities of the series may be redeemed, in whole or in part, at the option of the Company; 17 PAGE 16 (7) the Terms of any sinking fund and the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the Terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part; (8) if other than denominations authorized by Section 2.02, the denominations in which the Securities of the series shall be issuable; (9) if other than the Principal Amount thereof, the portion of the Principal Amount of any of the Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 5.02; (10) any deletions or modifications of or additions to the Events of Default set forth in Section 5.01 or covenants of the Company set forth in Article 3 pertaining to the Securities of the series; (11) Whether the Securities are secured or unsecured obligations of the Company; (12) the forms of the Securities of the series; (13) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depository for such Global Security or Securities; (14) if Securities of the series are to be convertible into other securities, the Terms of such conversion; and (15) any other Terms of any of the Securities of the series. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above, or the Company Order contemplated by the fourth paragraph of Section 2.03, and set forth in the Officers' Certificate referred to above or in any such indenture supplemental hereto. At the option of the Company, interest on any series that bears interest may be paid by mailing a check to the address of, or making a wire transfer to the account of, any Holder as such address shall appear in the register maintained pursuant to Section 2.05. 18 PAGE 17 The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). If any of the Terms of the series are established by action taken pursuant to a Board Resolution, except as to those contemplated by the fourth paragraph of Section 2.03, a copy of an appropriate record of such action together with such Board Resolution shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the Terms of the series. SECTION 2.02. Denominations. The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and in any integral multiple thereof. Securities of each series shall be numbered, lettered or otherwise distinguished in such manner in accordance with such plan as the Officers of the Company executing the same may determine with the approval of the Trustee. SECTION 2.03. Execution, Authentication and Delivery. One Officer shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. At any time after the execution and delivery of this Indenture, the Company may execute and deliver to the Trustee Securities of any series, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities; provided that, if all Securities of a series are not to be originally issued at one time, the Trustee shall authenticate and deliver Securities of such series for original issue from time to time in the aggregate Principal Amount established for such series pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by Company Order. The maturity date, original issuance date, interest rate and any other Terms of the Securities of such series shall be determined by or pursuant to such Company Order and procedures. If provided for in such procedures, such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agents, which instructions, if given orally, shall be promptly confirmed in writing. 19 PAGE 18 If the forms or Terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Section 2.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating: (a) that such forms and/or Terms have been established in conformity with the provisions of this Indenture; and (b) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, subject to such exceptions as counsel may specify. If such forms or Terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 2.01 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 2.01 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued; provided that paragraph (a) of said Opinion of Counsel shall, in such case, read as follows: "(a) that such forms have been established in conformity with the provisions of this Indenture and the procedures for determining the Terms of such Securities as set forth in the procedures hereinabove referred to have been established in conformity with the provisions of this Indenture." If the Company shall establish pursuant to Section 2.01 that the Securities of a series are to be issued in whole or in part in the form of a Global Security, then the Company shall execute and the Trustee shall in accordance with this Section and the Company Order with respect to such series authenticate and deliver the Global Security that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of Outstanding Securities of such series to be represented by the Global Security, (ii) shall be registered in the name of the Depository or its nominee, and (iii) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instruction. 20 PAGE 19 Each Depository designated pursuant to Section 2.01 for a Global Security in registered form must, at the time of its designation and at all times while it serves as Depository, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation. SECTION 2.04. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Securities may determine, as evidenced conclusively by their execution of such Securities. Such temporary Securities may be in global form. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company maintained pursuant to Section 2.05 for the purpose of exchanges of Securities of such series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate Principal Amount of definitive Securities of the same series and of like tenor or authorized denominations and having the same Terms and conditions. Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder. SECTION 2.05. Registrar and Paying Agent. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 6.07. The Company or any 21 PAGE 20 Subsidiary or Affiliate of the Company may act as Paying Agent, Registrar, co-registrar or transfer agent. The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities. SECTION 2.06. Paying Agent To Hold Money in Trust. On or prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or any Subsidiary or Affiliate of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.07. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each May 15 and November 15 and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.08. Transfer and Exchange. The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security with similar Terms of the same series for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested, subject to compliance with this paragraph. When Securities of a series are presented to the Registrar or a co-registrar with a request to exchange them for an equal Principal Amount of Securities of such series with similar Terms of other denominations, the Registrar shall make the exchange as requested, subject to such compliance. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities of the applicable series with similar Terms at the Registrar's or co-registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. The Company shall not be required (i) to Issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of 22 PAGE 21 Securities of that series selected for redemption under Section 9.03 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. If at any time the Depository for the whole or part of the Securities of a series notifies the Company that it is unwilling or unable to continue as Depository for such Securities or if at any time the Depository for such Securities shall no longer be eligible under Section 2.03, the Company shall appoint a successor Depository with respect to such Securities. If a successor Depository for such Securities is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 2.01 shall no longer be effective with respect to such Securities and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, corresponding Securities in definitive form in an aggregate principal amount equal to the Principal Amount of the Global Security representing such Securities in exchange for such Global Security. If specified by the Company pursuant to Section 2.01 with respect to a series of Securities, the Company may at any time and in its sole discretion determine that Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of corresponding definitive Securities, will authenticate and deliver such Securities in definitive form and in an aggregate Principal Amount equal to the Principal Amount of such Global Security or Securities in exchange for such Global Security or Securities. If specified by the Company pursuant to Section 2.01 with respect to the whole or part of a series of Securities, the Depository for such Securities may surrender a Global Security for such Securities with similar Terms in exchange in whole or in part for Securities of such series with similar Terms in definitive form on such terms as are acceptable to the Company and such Depository. Thereupon, the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series with similar Terms, shall authenticate and deliver, without charge to the Holders, 23 PAGE 22 (i) to each person specified by such Depository a new Security or Securities of the series with similar Terms of any authorized denomination as requested by such person in aggregate Principal Amount equal to and in exchange for such person's beneficial interest in the Global Security; and (ii) to such Depository a new Global Security in a denomination equal to the difference, if any, between the Principal Amount of the surrendered Global Security and the aggregate Principal Amount of Securities with similar Terms delivered to Holders thereof. In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee will authenticate and deliver Securities in definitive form in authorized denominations. Upon the exchange of a Global Security for Securities in definitive form, such Global Security shall be cancelled by the Trustee. Securities issued in exchange for a Global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depository for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the persons in whose names such Securities are so registered. Notwithstanding any other provision of this Section to the contrary, unless and until a Global Security is exchanged in whole for Securities in definitive form, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depository for such series to a nominee of such Depository or by a nominee of such Depository to such Depository or another nominee of such Depository or by such Depository or any such nominee to a successor Depository for such series or a nominee of such successor Depository. SECTION 2.09. Replacement Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall Issue and the Trustee shall authenticate a replacement Security of the applicable series with similar Terms if the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish evidence to their satisfaction of the destruction, loss or wrongful taking of any Security so claimed to be lost, destroyed or wrongfully taken, and an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Security. Every replacement Security is an additional obligation of the Company. 24 PAGE 23 SECTION 2.10. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. If a Security is replaced pursuant to Section 2.09, 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 the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal, premium (if applicable) and interest payable on that date with respect to the Securities to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities cease to be outstanding and interest on them ceases to accrue. In determining whether the Holders of the requisite Principal Amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder the Principal Amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02. SECTION 2.11. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver cancelled Securities to the Company. The Company may not Issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation. SECTION 2.12. Default Interest. If the Company defaults in a payment of interest on the Securities, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful at the rate or rates prescribed therefor in the Securities) in any lawful manner. The Company may also pay the defaulted interest to the persons who are Securityholders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date in which case the Company shall fix or cause to be fixed any such special record date and payment date, and, at least 15 days before any such special record date, the Company shall mail to each Securityholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. 25 PAGE 24 ARTICLE 3 Covenants SECTION 3.01. Payment of Securities. The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture. SECTION 3.02. SEC Reports. The Company shall file with the Trustee, within 30 days after it files them with the SEC, copies of its annual report and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the other provisions of TIA Section 314(a)(1),(2) and (3). SECTION 3.03. Limitation on Secured Debt. The Company shall not issue any Secured Debt unless contemporaneously therewith effective provision is made to secure the Securities equally and ratably with such Secured Debt for so long as such Secured Debt is secured by a Lien. The preceding sentence shall not require the Company to equally and ratably secure the Securities upon the incurrence of the following Secured Debt: (1) Debt of the Company which is incurred to finance the acquisition, construction or improvement of assets of the Company and its Subsidiaries, which acquisition is consummated, or which construction or improvement is commenced, after the date of this Indenture; provided, however, that such Debt shall not be secured by any assets of the Company other than assets so acquired, constructed or improved (together with (i) to the extent the terms of Secured Debt so provides, repairs and additions thereto and improvements thereof, and (ii) with respect to construction and improvement, if any theretofore unimproved real property on which the property so constructed or improved is located); (2) Debt of the Company which is secured by assets of a person where such Debt was existing at the time such person was merged or consolidated with the Company or at the time of sale, other disposition, or lease, of the properties of such person as an entirety (or substantially as an entirety) to the Company; provided, however, that such Debt shall not be secured by any assets of the Company other than the assets subject thereto at the time of the acquisition (together with, to the extent the terms of Secured Debt so provides, repairs and additions thereto and improvements thereof); 26 PAGE 25 (3) Debt of the Company issued to refinance such Debt incurred under paragraphs (1) and (2) provided that the Debt so issued is not secured by a Lien on assets other than those which secure the Debt being refinanced (together with, to the extent the terms of new Secured Debt so provides, repairs and additions thereto and improvements thereof); (4) Debt of the Company which is secured by inventory, accounts receivable, or customers' installment paper including by means of asset securitizations; (5) Obligations arising with respect to Production Payments; and (6) Other Debt with a Principal Amount not exceeding, in the aggregate at any one time outstanding, ten percent (10%) of the Consolidated Tangible Assets of the Company and its consolidated subsidiaries, as of the end of the most recent fiscal quarter of the Company ending not less than 45 days from the date of determination. The term "Consolidated Tangible Assets" means that sum of the Tangible Assets of the Company and its consolidated Subsidiaries after eliminating intercompany items. The term "Tangible Assets", as applied to any person on any date shall mean the gross book value as shown on the books of such person of all its property both real and personal (exclusive of licenses, patents, patent applications, copyrights, trademarks, trade names, good will, experimental or organizational expense and other like intangibles, treasury stock and unamortized debt discount and expense but including regulatory assets properly recorded on the balance sheet of such person.) SECTION 3.04. Limitations on Funded Debt of Significant Subsidiaries. The Company shall not permit any Significant Subsidiary to issue, directly or indirectly, any Funded Debt except: (1) Funded Debt issued and outstanding on or prior to the date of this Indenture; (2) Funded Debt issued to and held by the Company or a Subsidiary; provided, however, that any subsequent issuance or transfer of any common stock which results in any such Subsidiary ceasing to be a Subsidiary and any subsequent transfer of such Debt (other than to the Company or a Subsidiary) shall be deemed the issuance of such Debt by the issuer thereof; (3) Funded Debt of a Significant Subsidiary issued and outstanding on or prior to the date on which such Subsidiary was acquired by the Company or on which it became a Significant Subsidiary; 27 PAGE 26 (4) Funded Debt issued to finance the acquisition by such Significant Subsidiary of any assets or Capital Stock of any person or the construction or improvement of assets of such Significant Subsidiary, which acquisition is consummated, or which construction or improvement is commenced, after the date of this Indenture; (5) Funded Debt issued in exchange for, or the proceeds of which are used to refund or refinance, Debt referred to in the foregoing clauses (1) through (4) or to reacquire equity of such Significant Subsidiary held by the Company or a Subsidiary; (6) Funded Debt issued with respect to (a) obligations that are tax-exempt pursuant to Section 103 of the Internal Revenue Code of 1986 as from time to time amended and that are issued in connection with pollution control or other facilities of such Significant Subsidiary or (b) other obligations, whether taxable to tax-exempt, that are issued through any public or governmental authority in connection with pollution control or other facilities of such Significant Subsidiary; (7) Funded Debt in an aggregate amount not exceeding the sum of (a) total inventory of the Significant Subsidiary; (b) total accounts receivable of the Significant Subsidiary; and (c) the total amount of customers' installment paper of such Significant Subsidiary, in accordance with generally accepted accounting principles, in each case, as of the end of the most recent fiscal quarter of such Significant Subsidiary ending not less than 45 days from the date of determination; (8) Obligations with respect to Production Payments; and (9) Funded Debt in an aggregate Principal Amount which, when added to the aggregate Principal Amount of Funded Debt of all other Significant Subsidiaries (other than Funded Debt referred to in clauses (1) through (8) above) does not exceed, at any one time outstanding, ten percent (10%) of the sum of the Tangible Assets of such Significant Subsidiary and all other Significant Subsidiaries determined on a consolidated basis, as of the end of the most recent fiscal quarter of each such Significant Subsidiary ending not less than 45 days from the date of determination. SECTION 3.05. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company a certificate from its principal executive officer, principal financial officer or principal accounting officer stating that in the course of the performance by such signer of his duties as an officer of the Company he would normally have knowledge of any Default by the Company or any noncompliance with the conditions and covenants under the Indenture and whether or not he knows of any Default or any such noncompliance that occurred during such period. If such officer does, the certificate shall describe the Default or non-compliance, its status and what action the Company is taking or proposes to take with respect thereto. For purposes of this Section 3.05, such noncompliance 28 PAGE 27 shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. ARTICLE 4 Successor Company SECTION 4.01. When Company May Merge or Transfer Assets. The Company shall not consolidate with or merge with or into, or convey or otherwise transfer, or lease, its assets as an entirety (or substantially as an entirety) to, any person, unless: (i) the resulting, surviving or transferee person (if not the Company) shall be a person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture; (ii) immediately after giving effect to such transaction (and treating any Debt, other than Debt referred to in clause (2) of Section 3.03, which becomes an obligation of the resulting, surviving or transferee person as a result of such transaction as having been incurred by such person at the time of such transaction and, in the case of Debt of the type described in clause (1) of Section 3.03, the relevant acquisition, construction or improvement as having then occurred no Default shall have happened and be continuing; and (iii) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer, or lease and such supplemental indenture (if any) comply with this Indenture. SECTION 4.02. Successor Entity Substituted. Upon any consolidation by the Company with or merger by the Company into any other entity or any conveyance or other transfer, or lease, of the assets of the Company as an entirety (or substantially as an entirety) in accordance with Section 4.01, the successor entity formed by such consolidation or into which the Company is merged or to which such conveyance or other transfer, or lease, is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor entity had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor entity shall be relieved of all obligations and covenants under this Indenture and the Securities. 29 PAGE 28 ARTICLE 5 Defaults and Remedies SECTION 5.01. Events of Default. An "Event of Default" occurs if: (1) the Company defaults in any payment of interest on any Security when the same becomes due and payable and such default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of any Security when the same becomes due and payable at its stated maturity, upon declaration or otherwise; (3) the Company fails to comply with Section 4.01; (4) the Company fails to comply with any of its agreements in the Securities or this Indenture (other than those referred to in (1), (2), or (3) above) and such failure continues for 60 days after the notice specified below; (5) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors; or (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 of the Company or for any substantial part of its property; or (C) orders the winding up or liquidation of the Company; and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. 30 PAGE 29 A Default under clause (4) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the Securities notify the Company of the Default and the Company does not cure such Default within the time specified after receipt of such Notice. Such Notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default". The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (4), its status and what action the Company is taking or proposes to take with respect thereto. SECTION 5.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 5.01(5) or (6)) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Securities by notice to the Company and the Trustee, may declare the principal of (or, in connection with Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) and accrued interest on all the Securities to be due and payable. Upon such a declaration, such principal (or portion thereof) and interest shall be due and payable immediately. If an Event of Default specified in Section 5.01(5) or (6) occurs and is continuing, the principal of and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholders. If all existing Events of Default have been cured or waived, except nonpayment of principal or interest that has become due solely because of acceleration, any such acceleration and its consequences shall be automatically rescinded unless such rescission would conflict with any judgment or decree. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 5.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities 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. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 5.04. Waiver of Past Defaults. The Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except (1) a Default in the payment of the principal of or interest on a Security or (2) a Default in respect of a provision that under Section 8.02 cannot be amended without the 31 PAGE 30 consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 5.05. Control by Majority. The Holders of a majority in Principal Amount of the Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 6.01, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 5.06. Limitation on Suits. A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in Principal Amount of the Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity 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 security or indemnity; and (5) the Holders of a majority of Principal Amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. 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 5.07. Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 5.08. Collection Suit by Trustee. If an Event of Default in payment of interest or principal specified in Section 5.01(1) or (2) occurs and is continuing, the Trustee 32 PAGE 31 may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid (together with interest on such unpaid interest as provided in Section 3.01, to the extent lawful) and the amounts provided for in Section 6.07. SECTION 5.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 6.07. SECTION 5.10. Priorities. If the Trustee collects any money pursuant to this Article 5, it shall pay out the money in the following order: FIRST: to the Trustee for amounts due under Section 6.07; SECOND: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and THIRD: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Company shall mail to each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION 5.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.07 or a suit by Holders of more than 10% in Principal Amount of the Securities. SECTION 5.12. Waiver of Stay or Extension Laws. The Company (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever 33 PAGE 32 claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 6 Trustee SECTION 6.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. 34 PAGE 33 (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 6.02. Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) 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 Officers' Certificate or Opinion of Counsel, subject to Section 6.02(e). (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. SECTION 6.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 6.10 and 6.11. 35 PAGE 34 SECTION 6.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in the Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder notice of the Default within 90 days after it occurs. Except in the case of a Default in payment of principal of or interest on any Security (including payments pursuant to the mandatory redemption provisions of such Security), 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 interests of Securityholders. SECTION 6.06. Reports by Trustee to Holders. Prior to November 1 in each year, the Trustee shall mail to each Securityholder a brief report dated as of the preceding September 1 that complies with TIA Section 313(a), if so required by such Section of the TIA. The Trustee also shall comply with TIA Section 313(b). 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 the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 6.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its services, including those arising in the Trustee's performance of its duties under Sections 5.02, 5.03 and 5.08 hereof, and to the extent permitted by law, Section 5.09 hereof. The Trustee's compensation 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 or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company shall indemnify the Trustee against any and all loss, liability or expense (including attorneys' fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Company promptly of any claim for which it believes it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense to the extent incurred by the Trustee through the Trustee's own willful misconduct, negligence or bad faith. 36 PAGE 35 To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities. The Company's payment obligations pursuant to this Section shall survive the discharge of this Indenture. For purposes of this Section, the term "Trustee" shall include any predecessor Trustee, provided that any Trustee hereunder shall not be liable for the willful misconduct, negligence or bad faith of any other Trustee hereunder. SECTION 6.08. Replacement of Trustee. The Trustee may resign at any time 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 shall remove the Trustee if: (1) the Trustee fails to comply with Section 6.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint 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 Securityholders. 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 6.07. If a successor Trustee does not take office within 60 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. 37 PAGE 36 If the Trustee fails to comply with Section 6.10, any Securityholder (subject to compliance with TIA Section 310(b)(iii)) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 6.07 shall continue for the benefit of the retiring Trustee. SECTION 6.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 6.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report. The Trustee shall comply with TIA Section 310(b). SECTION 6.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. ARTICLE 7 Discharge of Indenture; Defeasance SECTION 7.01. Discharge of Liability on Securities; Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.09) for cancellation or (ii) all outstanding Securities have become due and payable and the Company irrevocably deposits with the Trustee funds sufficient to pay at maturity all outstanding Securities, including interest thereon (other than Securities replaced pursuant to Section 2.09), and if in either case the Company pays all other sums payable hereunder by the 38 PAGE 37 Company, then this Indenture shall, subject to Section 7.01(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel. (b) Subject to Sections 7.01(c) and 7.02, the Company at any time may terminate (i) all its obligations under this Indenture with respect to the Securities of a series ("Legal Defeasance Option") or (ii) its obligations under Sections 3.03 and 3.04 and the operation of Section 5.01(4) ("Covenant Defeasance Option") with respect to a series of Securities. The Company may exercise its Legal Defeasance Option notwithstanding its prior exercise of its Covenant Defeasance Option. If the Company exercises its Legal Defeasance Option, payment of the Securities of such series may not be accelerated because of an Event of Default. If the Company exercises its Covenant Defeasance Option, payment of the Securities of such series may not be accelerated because of an Event of Default specified in Section 5.01(4). Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates. (c) Notwithstanding clauses (a) and (b) above, the Company's obligations with respect to such series in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 6.07, 6.08, 7.03 and 7.04 shall survive until the Securities of such series have been paid in full. Thereafter, the Company's obligations in Sections 6.07 and 7.04 with respect to such series shall survive. SECTION 7.02. Conditions to Defeasance. The Company may exercise its Legal Defeasance Option or its Covenant Defeasance Option only if: (1) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities of the series to be defeased to maturity or redemption, as the case may be; (2) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing its opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay principal and interest when due on all the Securities of such series to maturity or redemption, as the case may be; (3) in the case of the Legal Defeasance Option, 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 5.01(5) or (6) occurs which is continuing at the end of the period; 39 PAGE 38 (4) no Default has occurred and is continuing on the date of such deposit and after giving effect thereto; and (5) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities of such series as contemplated by this Article 7 have been complied with. Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 9. SECTION 7.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 7. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the relevant Securities. SECTION 7.04. 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 not required for the payment of the Securities. With respect to the money or securities held under Sections 7.01 and 7.02, in determining whether such money or securities are excess, the Trustee may rely on the certificate provided to it under Section 7.02(2). Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look to the Company for payment as general creditors. ARTICLE 8 Amendments SECTION 8.01. Without Consent of Holders. The Company and the Trustee may amend this Indenture or the Securities without notice to or consent of any Securityholder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Article 4; (3) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered 40 PAGE 39 form for purposes of Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Internal Revenue Code of 1986, as amended; (4) to add guarantees with respect to the Securities; (5) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; (6) to comply with any requirements of the SEC in connection with qualifying this Indenture under the TIA; or (7) to make any change that does not adversely affect the rights of any Securityholder in any material respect. After an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 8.02. With Consent of Holders. The Company and the Trustee may amend this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in principal amount of the Securities. However, without the consent of each Securityholder affected, an amendment may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the rate of or extend the time for payment of interest on any Security; (3) reduce the principal of or extend the fixed maturity of any Security; (4) reduce the premium payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (5) make any Security payable in money other than that stated in the Security; or (6) make any change in Section 5.04 or this Section; and, provided further, that in case more than one series of Securities (or Securities of a single series which have different Terms) shall be outstanding under this Indenture, and any such proposed amendment shall affect the rights of Holders of the Securities of one or more series (or Securities of a single series which have different Terms) and shall not affect the rights of Holders of the Securities of one or more of the other series (or Securities of a single series which have 41 PAGE 40 different Terms), then only Holders of Securities to be affected shall have authority or be required to consent to or approve such amendment. Any waiver of a default provided for in Section 5.04 shall be deemed to affect the Securities of all series, and, subject to the foregoing, any modification of the provisions of any sinking fund or covenant established in respect of Securities of a particular series (or Securities of a single series having the same Terms) shall be deemed to affect only such Securities. It shall not be necessary for the consent of the Holders under this Section 8.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Company shall mail to Holders of the affected Securities a notice briefly describing such amendment. The failure to give such notice to all Securityholders (or all Holders of the affected Securities), or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 8.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 8.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or any other action hereunder or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to take any action under this Indenture by vote or consent. Such record date shall be the later of 30 days prior to the first solicitation of such consent or vote or the date of the most recent list of Holders of the affected Securities furnished to the Trustee pursuant to Section 2.07 prior to such solicitation. If a record date is fixed, those persons who were Securityholders at such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Securityholders after such record date. SECTION 8.05. Notation on or Exchange of Securities. If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new 42 PAGE 41 Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 8.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 8 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture. ARTICLE 9 Redemption SECTION 9.01. Applicability. Securities of any series which are redeemable before their final maturity shall be redeemable in accordance with their Terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article. SECTION 9.02. Notice to Trustee. The Company may, with respect to any series of Securities (or Securities of a series having the same Terms), reserve the right to redeem and pay such Securities or any part thereof, or may covenant to redeem and pay the series of Securities (or Securities of a series having the same Terms) or any part thereof, before maturity at such time and on such terms as provided for in such Securities. If a series of Securities (or Securities of a series having the same Terms) is redeemable and the Company wants or is obligated to redeem all or part of the series of Securities (or Securities of a series having the same Terms) pursuant to the Terms of such Securities, the Company shall notify the Trustee of the redemption date and the Principal Amount of the series of Securities (or Securities of a series having the same Terms) to be redeemed. The Company shall give such notice at least 60 days before the redemption date (or such shorter notice as may be acceptable to the Trustee in its sole discretion). SECTION 9.03. Selection of Securities To Be Redeemed. If less than all the Securities of a series (or Securities of a series having the same Terms) are to be redeemed, the Trustee, not more than 60 days prior to the redemption date, shall select the Securities of the series (or Securities of a series having the same Terms) to be redeemed pro rata or by lot or by such other method as the Trustee shall deem fair and appropriate. The Trustee shall make the selection from Securities that are outstanding and that have not previously been called for redemption. Securities of the series (or Securities of a series having the same Terms) and portions of them selected by the Trustee shall be in amounts of $1,000 or integral multiples of $1,000 or with respect to Securities of any Series issuable in other denominations pursuant to Section 2.01(8), in amounts equal to the minimum principal denomination for each such series 43 PAGE 42 and in integral multiples thereof. Provisions of this Indenture that apply to Securities of that series (or Securities of a series having the same Terms) called for redemption also apply to portions of Securities of that series (or Securities of a series having the same Terms) called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the Principal Amount thereof to be redeemed. SECTION 9.04. Notice of Redemption. (a) At least 30 days but not more than 60 days before a redemption date, unless a shorter period is specified in the Terms of the Securities to be redeemed, the Company shall cause to be mailed a notice of redemption by first-class mail to each Holder of Securities that are to be redeemed. (b) All notices of redemption shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price and interest, if any, payable upon such redemption; (3) if less than all the outstanding Securities of a series (or Securities of a series having the same Terms) are to be redeemed, the identification (and, in the case of partial redemption, the Principal Amounts) of the particular Securities to be redeemed; (4) the name and address of the Paying Agent; (5) that the Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; and (6) that interest on Securities called for redemption ceases to accrue on and after the redemption date. (c) If at the time of any notice of redemption the Company shall not have deposited or caused to be deposited with the Trustee moneys sufficient to redeem all the Debentures called for redemption, such notice shall state that it is subject to the deposit of the redemption moneys with the Trustee not later than the opening of business on the redemption date and shall be of no effect unless such moneys are so deposited. If such moneys are not deposited by such date and time, the Trustee shall promptly notify the holders of all Debentures called for redemption of such fact. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. SECTION 9.05. Effect of Notice of Redemption. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the redemption price. Any failure to mail notice of redemption or any defect therein shall not affect the redemption of any other Securities called for redemption. Upon surrender to the Paying Agent of such Securities, such Securities shall be paid at the redemption price plus accrued interest to the redemption date, but installments of interest due on or prior to the redemption date will be payable to the Holders of such Securities of record at the close of business on the relevant record dates, unless otherwise specified in the Terms of such Securities. 44 PAGE 43 SECTION 9.06. Deposit 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 interest accrued to the redemption date on all Securities to be redeemed on that date. SECTION 9.07. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder of that Security a new Security or Securities of the same series and terms in authorized denominations equal in aggregate principal amount to the unredeemed portion of the Security surrendered. ARTICLE 10 Sinking Funds SECTION 10.01. Applicability. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities, except as otherwise specified as contemplated by Section 2.01 for Securities of any series. The minimum amount of any sinking fund payment provided for by the Terms of any Securities is herein referred to as a "Mandatory Sinking Fund Payment", and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an "Optional Sinking Fund Payment". If provided for by the Terms of Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 10.02. Each sinking fund payment shall be applied to the redemption of Securities of any series (or Securities of a series having the same Terms) as provided for by the Terms of such Securities. SECTION 10.02. Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities to be made pursuant to the Terms of such Securities as provided for by such Terms, (1) deliver outstanding Securities of such series having the same Terms (other than any of such Securities previously called for redemption) and (2) apply as credit Securities of such series having the same Terms which have been redeemed either at the election of the Company pursuant to the Terms of such Securities or through the application of permitted Optional Sinking Fund Payments pursuant to the Terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 10.02, the Principal Amount of Securities to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment with 45 PAGE 44 respect to such series of Securities (or Securities of such series having the same Terms), provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that series having the same Terms purchased by the Company having an unpaid Principal Amount equal to the cash payment required to be released to the Company. SECTION 10.03. Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Securities (or Securities of such series having the same Terms), the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing Mandatory Sinking Fund Payment for that series (or Securities of such series having the same Terms) pursuant to the Terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that series (or Securities of such series having the same Terms) pursuant to Section 10.02, and the optional amount, if any, to be added in cash to the next ensuing Mandatory Sinking Fund Payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 9.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 9.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 9.05, 9.06 and 9.07. 46 PAGE 45 ARTICLE 11 Miscellaneous SECTION 11.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control. SECTION 11.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: if to the Company: The Columbia Gas System, Inc. 20 Montchanin Road Wilmington, DE 19807 Attention: Corporate Secretary if to the Trustee: Marine Midland Bank 140 Broadway New York, NY 10005 Attention: Corporate Trust Administrator The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 11.03. Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee: 47 PAGE 46 (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 11.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such covenant or condition has been complied with. SECTION 11.06. When Securities Disregarded. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose 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. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders or for evidencing the due execution of consents or waivers by Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not 48 PAGE 47 a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 11.09. Governing Law. This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of Delaware but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. SECTION 11.10. 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 of this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 11.11. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 11.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 11.13 Table of Contents; Headings. The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 49 PAGE 48 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. THE COLUMBIA GAS SYSTEM, INC., Attest: by - ------------------------- --------------------------- Title: Title: MARINE MIDLAND BANK, as Trustee Attest: by - ------------------------- --------------------------- Title: Title: 50 PAGE 49 STATE OF DELAWARE ) ) ss.: COUNTY OF NEW CASTLE ) On this ____ day of ______, 199_, before me personally came _________________, to me known, who, being by me duly sworn, did depose and say that he resides at Wilmington, Delaware 19807; that he is Executive Vice President of THE COLUMBIA GAS SYSTEM, INC., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument bearing the corporate name of said corporation is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. ---------------------------- Notary Public STATE OF ___________ ) ) ss.: COUNTY OF ___________ ) On the ____ day of ________, 199_, before me personally came ______________________, to me known, who, being by me duly sworn, did depose and say that he resides at __________________________, and that he is an ____________________________________________ of _______________________________ , one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument bearing the corporate name of said corporation is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. --------------------------- Notary Public EX-99.T3DB 6 MEMORANDOM OPINION AND ORDER 1 EXHIBIT T-3D(b) SECURITIES AND EXCHANGE COMMISSION (Release No. 35-26361; 70-8627) The Columbia Gas System, Inc. Memorandum Opinion and Order Approving Plan of Reorganization of Registered Holding Company Under Section 11(f) and Registered Holding Company's Participation in Subsidiary's Plan of Reorganization and Related Transactions; Issuing Report Under Section 11(g); and Reserving Jurisdiction August 25, 1995 THIS ORDER AND REPORT IS REQUIRED BY THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935. SECURITY HOLDERS SHOULD READ THE DISCLOSURE STATEMENTS PROVIDED TO THEM BY THE DEBTORS-IN-POSSESSION BEFORE DETERMINING WHETHER OR NOT TO ACCEPT THE PLANS. The Columbia Gas System, Inc. ("Columbia"), a registered holding company, Wilmington, Delaware, has filed an application-declaration, as amended, with the Commission under sections 6, 7, 9, 10, 11(f), 11(g), 12(b), 12(c) and 12(e) of the Public Utility Holding Company Act of 1935, as amended ("Act"), and rules 42, 43, 45, 49, 54, 62, 64 and 65 thereunder, seeking approval of its Plan of Reorganization, as amended ("Columbia Plan"), first filed with the U.S. Bankruptcy Court for the District of Delaware ("Bankruptcy Court") on April 17, 1995 and its participation in a plan of reorganization ("TCO Plan") filed with the Bankruptcy Court on the same date by its wholly owned nonutility subsidiary, Columbia Gas Transmission Corporation ("Columbia Transmission").(1) The Commission issued a notice of the filing on June 23, 1995 (Holding Co. Act Release No. 26318). No request for a hearing was received. - -------------------- (1) The plans and the respective disclosure statements were filed pursuant to the provisions of Chapter 11 of the United States Bankruptcy Code ( Bankruptcy Code"), 11 U.S.C. Section 101 et seq. Rule 49(c) exempts the TCO Plan from the requirement of Commission approval. 2 I. BACKGROUND Columbia is engaged, through subsidiary companies, in the exploration, production,purchase, marketing, storage, transmission and distribution of natural gas, and in other energy operations, such as electric power generation and propane distribution.(2) Columbia Transmission owns and operates an approximately 19,000 mile natural gas transmission pipeline network and related extensive underground gas storage fields that serve parts of thirteen states in the Northeastern, Mid-Atlantic, Midwestern and Southeastern regions of the United States and the District of Columbia.(3) Columbia Transmission is currently engaged almost entirely in the business of transporting and storing gas for various affiliated and nonaffiliated gas distribution companies, gas marketers, producers and end users of gas ("Customers").(4) Columbia, as a holding company, has provided debt and equity financing for all its operating subsidiaries, including Columbia Transmission, and has served as the principal vehicle for raising funds in the capital markets for the Columbia system companies. Columbia has generally reinvested in its operating subsidiaries the proceeds of its equity and debt issues, as well as cash flows from its subsidiaries. - -------------------- (2) Columbia has five wholly owned public-utility subsidiary companies: Columbia Gas of Ohio, Inc., Columbia Gas of Kentucky, Inc., Columbia Gas of Maryland, Inc., Columbia Gas of Pennsylvania, Inc. and Commonwealth Gas Service, Inc. (3) Columbia Transmission is one of two interstate pipeline companies owned by Columbia. (4) The rates, charges, services and facilities of Columbia Transmission are subject to relation by the Federal Energy Regulatory Commission ("FERC"), primarily pursuant to the Natural Gas Act, 15 U.S.C. Section Section I7 et seq. 3 Prior to June 1985, Columbia made loans to Columbia Transmission on an unsecured basis and, at the Petition Date, held unsecured obligations of Columbia Transmission aggregating $351 million, including prepetition accrued interest. Loans made to Columbia Transmission after June 1985 were secured by first mortgage liens on substantially all of Columbia Transmission's assets. As of July 31, 1991 ("Petition Date"), Columbia held secured obligations of Columbia Transmission aggregating approximately $1.34 billion in principal. Prepetition and postpetition interest accrued through December 31, 1995 (the assumed "Effective Date" of the Columbia and TCO Plans and the date to which all financial projections have been made in this filing)(5) on such secured obligations are projected to be approximately $644 million. Both Columbia and Columbia Transmission have been debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code since the Petition Date.(6) The Chapter 11 filings were precipitated by a combination of events that adversely affected Columbia Transmission's physical operations and financial viability and, in turn, caused a liquidity shortfall for Columbia and the Columbia system.(7) - -------------------- (5) The Plans allow for the Effective Date to occur as late as June 28, 1996. (6) The Commission filed a Notice of Appearance under Section 1109 of the Bankruptcy Code in each proceeding. Except for the appointment of a fee examiner to review the reasonableness of fees and expenses incurred by certain professionals involved in the case, no trustee or examiner has been appointed by the Bankruptcy Court. (7) As chief among these events, Columbia identifies federal legislative and regulatory actions affecting Columbia Transmission's ability to sell the gas it had contracted to buy and to recover its costs from its Customers, and Columbia Transmission's continuing contractual obligations to purchase gas at prices above those at which it was able to market gas. These problems were exacerbated by record-setting warm weather that led to an unexpected and persistent oversupply of gas. 4 As a result of Columbia Transmission's bankruptcy filing and its rejection of more than 4,800 above-market gas purchase contracts with producers ("Producers"), Columbia Transmission recorded liabilities of approximately $1 billion for estimated contract rejection costs. In addition, approximately $200 million of take-or-pay and other miscellaneous Producer claims were recorded. The Producer counterparties to those contracts filed claims for rejection damages and other prepetition contractual amounts in excess of $13 billion. II. COLUMBIA'S SUPPORT OF THE TCO PLAN The TCO Plan incorporates terms of an agreement reached by Columbia Transmission with its major Producer creditors ("Producer Agreement") and approved by the Bankruptcy Court on June 16, 1995.(8) The Producer Agreement also provides for Columbia Transmission's agreement, backed by Columbia, as to the minimum distribution to be paid to Producers and other creditors under the TCO Plan. Distributions to these producers ("Initial Accepting Producers") represent more than 80 of the approximately $1.2 billion that would be distributed to Producer creditors under the TCO Plan to resolve all Producer claims. The TCO Plan offers to all the remaining Producers proposals for settlement of the allowable amounts of their claims. Remaining Producers that ultimately reject the settlement offers ("Dissenting Producers") will be free to litigate the amount of their claims before the Bankruptcy Court and will receive the same percentage payout ultimately allowed by the Bankruptcy Court on their claims as that received by the Initial Accepting Producers and subsequent settling Producers (together, "Accepting - -------------------- (8) The Producer Agreement reflects settlements of the allowable amount of the claims filed against Columbia Transmission by 17 major Southwest gas producers and a large group of Appalachian producers. 5 Producers"). As of June 30, 1995, Accepting Producers represented approximately 92% of the aggregate amount of allowed claims proposed in the TCO Plan.(9) The TCO Plan also incorporates the terms of a settlement among Columbia Transmission and virtually all of its Customers ("Customer Settlement") on numerous FERC Order No. 636 transition cost, rate and other bankruptcy matters. Remaining Customers can either accept a settlement on terms similar to those of the Customer Settlement, or dissent and litigate the amount and priority of their claims.(10) To facilitate the TCO Plan, and in exchange for settlement of the claims asserted in a complaint filed with the Bankruptcy Court on March 18, 1992 by the Official Committee of Unsecured Creditors of Columbia Transmission ("Intercompany Complaint")(11) and - -------------------- (9) It is a waivable condition to the TCO Plan that the settlement values of Accepting Producers as of the Effective Date equal 90% of the total settlement values proposed therein. (10) Columbia states that Columbia Transmission's Customer Settlement has the support of all of its major customers. While the settlement permits non-supporting parties to litigate their claims, Columbia Transmission's financial exposure from such litigation is considered de minimis. (11) The complaint, filed against Columbia and Columbia Natural Resources, Inc. ("CNR"), its oil and gas exploration and development subsidiary, alleged that the $1.7 billion of Columbia Transmission's secured and unsecured debt securities held by Columbia should be recharacterized as capital contributions (rather than loans) and equitably subordinated to the claims of Columbia Transmission's other creditors. The complaint also challenged interest and dividend payments of approximately $500 million by Columbia Transmission to Columbia during the period from 1988 to the Petition Date. Finally, the complaint alleged that a 1990 transfer of gas properties from Columbia Transmission to CNR was a fraudulent transfer. At the Bankruptcy Court's request, the trial proceedings for the Intercompany Complaint were transferred to and tried by the U.S. District Court for the District of Delaware. The District 6 Columbia's retention of the ownership of Columbia Transmission, the Columbia Board of Directors authorized a settlement ("Columbia Omnibus Settlement"), whereby Columbia will: (1) make a capital infusion of approximately $1 billion into Columbia Transmission. The capital infusion will have two components. First, Columbia will agree to a restructuring of Columbia Transmission's secured debt. As part of a recapitalization of Columbia Transmission, Columbia will accept an aggregate amount of up to $1.5 billion short-term and long-term first mortgage bonds ("TCO Mortgage Bonds"), described below, in settlement of the approximately $2 billion claim held by Columbia under existing Columbia Transmission first mortgage bonds.(12) The restructuring will result in an approximately $500 million capital contribution to Columbia Transmission of the balance of the claim. - -------------------- Court was expected to render a decision in June 1995, but has agreed at the parties' request to defer issuing its ruling pending the parties' pursuit of consensual reorganization plans. In connection with the approval of the TCO Plan, the District Court's approval of the Columbia Omnibus Settlement will be sought. (12) The short-term TCO Mortgage Bonds must be repaid no later than April 30 of the year following their issuance and will bear interest on a monthly basis equivalent to the composite weighted average effective cost incurred by Columbia on its short-term borrowings. The bonds may be prepaid or redeemed at any time without prepayment penalty. The long-term TCO Mortgage Bonds will be dated the date of their issue and be repaid in equal annual installments over a period not to exceed 30 years or at maturity. The bonds may be issued in multiple series with terms similar to the New Indenture Securities (as described below) issued by Columbia under the Columbia Plan. Interest on the bonds will accrue from the date of issuance and will be paid semi-annually on the unpaid principal thereof. The interest rate will be the actual cost of money to Columbia with respect to the issuance by Columbia of its long- term debt securities. A default rate equal to 2% per annum in excess of the stated rate on the unpaid principal or interest amounts of the bonds would be assessed if any interest or principal becomes past due. If Columbia Transmission is not a subsidiary of Columbia at the time of prepayment, the bonds may be prepaid with a prepayment penalty equal to the interest rate on the bonds, declining ratably on each anniversary date over the life of the issue. 7 The TCO Mortgage Bonds will be issued under the Indenture and Deed of Trust between Columbia Transmission and Wilmington Trust Company, dated August 30, 1985, as amended ("Wilmington Trust Indenture"), previously authorized by order of the Commission.(13) The TCO Mortgage Bonds will be secured by a perfected first security interest in all of Columbia Transmission's property with certain exceptions pursuant to the Wilmington Trust Indenture. Second, Columbia will agree to provide cash to Columbia Transmission necessary to ensure that the total amount distributable under the TCO Plan equals approximately $3.9 billion as of December 31, 1995. It is anticipated that Columbia would provide an additional capital contribution to Columbia Transmission of approximately $500 million.(14) (2) guarantee the settlement reached by Columbia Transmission with its Customers and payments to dissenting Customers with respect to the Customer Settlement ("TCO Guarantee"), and guarantee the payment of the distribution percentage of ultimately allowed claims of other unsecured creditors, including Dissenting Producers. In the event that payments required by the TCO Plan to Dissenting Producers (and dissenting Customers) increase the total required distributions over the projected $3.9 billion by - ------------------- (13) Columbia Gas Transmission Corp., Holding Co. Act Release No. 23813 (Aug. 30, 1985). (14) Approximately $300 million of this amount could be met by Columbia's proportionate recovery on the Columbia Transmission unsecured debt held by it, together with a dividend out of retained earnings by CNR to Columbia following CNR's recovery on its claims. 8 an amount that requires external funding, Columbia will have the option to deliver its common stock in lieu of cash payments, as well as the option to sell its common stock in the marketplace and use the proceeds for such excess distributions. Under these circumstances, whichever technique is employed, Columbia's investment in Columbia Transmission will be correspondingly increased. Initial Accepting Producers have agreed that 5% of the distributions due to them will be held back, and, to the extent that claim values in excess of the settlement values contained in the TCO Plan are agreed to or allowed, the amount held back will be applied, with dollar-for-dollar matching by Columbia Transmission and Columbia under the TCO Guarantee, to pay the ultimate distributions to Dissenting Producers. Thus, there is a sharing by Accepting Producers of a portion of the risk that the aggregate distribution to Producers pursuant to the TCO Plan may exceed $1.2 billion, the settlement amount contained in the Plan. If the holdback were to be exhausted, Columbia Transmission would be required to pay the entire amount of any excess distributions. Columbia states that although there is insufficient information at present for Columbia Transmission to evaluate fully all claims, and the outcome of litigation is subject to uncertainty, Columbia Transmission currently estimates that its ultimate payment to Producers, after any litigation and after giving effect to the Producer holdback, may exceed the $1.2 billion distribution projected in the TCO Plan (which is based on 100% Producer acceptance) but should not exceed $1.3 billion. To the extent that additional funds are necessary to fund allowed claims of Dissenting Producers, Columbia or Columbia Transmission may distribute cash, or Columbia may issue its 9 common stock to the Dissenting Producers on behalf of Columbia Transmission in exchange for consideration from Columbia Transmission equal to the then current market value of the Common Stock. Columbia may also issue its common stock or other securities on the open market and distribute the proceeds to Columbia Transmission as a capital contribution. To the extent that the TCO Plan reserves the right to Columbia to issue securities other than its common stock, Columbia requests the Commission to reserve jurisdiction over the terms of such securities issues. The aggregate capital contribution to Columbia Transmission by Columbia of approximately $1 billion will result in an approximately 70%-30% debt-equity structure for Columbia Transmission. Columbia Transmission's debt-to-equity ratio is projected to become approximately 60%/40% by 1997 upon the repayment of borrowings used to finance certain contingent assets created as a result of emergence from bankruptcy. Columbia states that in the aggregate, the consideration that it will pay for the settlement of the claims asserted in the Intercompany Complaint and the retention of ownership of Columbia Transmission cannot be expressed as a precise dollar amount, but reflects substantial additional consideration from Columbia to the Columbia Transmission estate to facilitate the reorganization of Columbia and Columbia Transmission. Columbia further states that the Columbia Omnibus Settlement will provide substantial benefits to Columbia, in addition to the retention of ownership of Columbia Transmission, by resolving numerous disputes with Customers and Producers affecting the economic value of the Columbia Transmission estate on terms Columbia believes to be fair and reasonable. Finally, settlement will permit both Columbia and Columbia 10 Transmission to emerge from bankruptcy as promptly as possible, to pay their creditors, and to pursue ongoing business objectives free of the burdens and constraints of Chapter 11. III. THE COLUMBIA PLAN A. Introduction Under the Columbia Plan, Columbia proposes to issue up to an aggregate of $3.65 billion in new securities, consisting of up to $3.25 billion in debt and up to $400 million in equity.(15) The Columbia Plan is intended to provide for payment of substantially all liquidated allowed claims of Columbia's creditors on the Effective Date. Holders of claims for borrowed money generally will receive a combination of (i) cash, to the extent available (as determined by Columbia), (ii) new debentures of Columbia, to be issued under a new form of indenture, and (iii) equity securities of Columbia, consisting of preferred stock and dividend enhanced convertible stock. Holders of Columbia common stock will retain their equity interests under the Columbia Plan. The debt and equity securities proposed to be issued are discussed hereinafter. Under certain circumstances provided in the Columbia Plan, Columbia may redeem the equity securities for cash.(16) - -------------------- (15) Columbia may issue additional common stock to satisfy certain of its obligations under the Columbia Omnibus Settlement, as discussed in Part II above, and to fund the settlement of securities litigation, described below. (16) The amount of cash consideration to be distributed to holders of borrowed money claims pursuant to the Columbia Plan will be determined by Columbia shortly before the Effective Date, and will be dependent upon the cash available at that time. The financial projections contained in the Columbia disclosure statement project the distribution of $900 million of available cash as of the Effective Date (the majority of which is assumed to be borrowed under the Term Facility described below) in respect of such claims. The balance of the distribution in respect of such claims will be in the form of New Indenture Securities, DECS and Preferred Stock, as defined below. If the Term Facility is available for borrowing at a cost less than the cost of issuing new debentures, Columbia has agreed to borrow $350 million for 11 In addition to the proposed issuances of debt and equity securities by Columbia, the Columbia Plan also contemplates certain amendments to Columbia's Certificate of Incorporation and the assumption by Columbia and Columbia Transmission of the Tax Allocation Agreement that provides for the allocation of tax benefits and liabilities among Columbia system companies. B. Debt Securities As noted previously, Columbia proposes to issue up to $3.25 billion in debt securities under the Columbia Plan. 1. Debentures Columbia seeks to issue up to $2.1 billion in debentures ("New Indenture Securities") under a new indenture ("New Indenture").(17) The New Indenture Securities will be general, unsecured senior obligations of Columbia, issued in seven series with maturities of approximately five, seven, ten, twelve, fifteen, twenty and thirty years, respectively. Each New Indenture Security will bear interest, payable semi-annually, from the Effective Date (or from the most recent interest payment date to which interest has been paid). The annual interest rate for each series of New Indenture Securities will be based on market rates for comparable securities at the time of issue. It is expected that the interest rate on any series will not exceed 10 - -------------------- distribution to creditors in lieu of New Indenture Securities, DECS and Preferred Stock. (17) The New Indenture is similar to that authorized by the Commission in Consolidated Natural Gas Holding Co. Act Release No. 26245 (Mar. 6, 1995). Columbia states that an application on Form T-3 for qualification of the New Indenture under the Trust Indenture Act of 1939, as amended, will be filed and become effective by the Effective Date. 12 percent per annum. The principal amount of each series of New Indenture Securities will be payable on their respective maturity dates. Certain series of New Indenture Securities may be redeemable at a premium at the option of Columbia. 2. Bank Borrowings For the purpose of Financing shorter-term requirements under the TCO Plan and Columbia Plan, Columbia expects to arrange two types of bank credit facilities ("Bank Facilities") on or before the Effective Date, to permit aggregate borrowings of up to $1.15 billion. If cash available through the Bank Facilities or from operations is reduced from currently projected levels, the principal amount of New Indenture Securities to be issued pursuant to the Columbia Plan would be increased proportionately. Under no circumstances would the aggregate of New Indenture Securities and Bank Facilities under the Columbia Plan exceed $3.25 billion. a. Term Facility The first type would be a senior, unsecured term credit facility in an aggregate principal amount of up to $450 million ("Term Facility"). Amounts available to be borrowed under the Term Facility would be applied to payments in respect of claims of Columbia creditors, to fund obligations of Columbia under the Columbia Omnibus Settlement and for general corporate purposes. Amounts borrowed under the Term Facility would rank pari passu with all other senior, unsecured obligations of Columbia, including the New Indenture Securities. 13 It is anticipated that the initial term of the Term Facility will be two years. Interest rates on borrowings under the facility, depending on the nature of the borrowing, will be the prime rate or the applicable LIBOR rate plus no more than .75% or the applicable certificate of deposit rate plus no more than .875%. b. Revolving Facility Columbia also expects to arrange one or more senior, unsecured revolving Bank Facilities in an aggregate principal amount of up to $700 million ("Revolving Facility") to provide (i) working capital for Columbia and its subsidiaries and (ii) up to $100 million face amount of letters of credit to be issued for the account of Columbia and its subsidiaries in the ordinary course of business. Amounts borrowed under the Revolving Facility and reimbursement for drawings under letters of credit issued thereunder would rank pari passu with all other senior, unsecured obligations of Columbia, including the New Indenture Securities. At the option of Columbia, the Term Facility and Revolving Facility may be combined in a single facility or may be multiple facilities. The initial term of the Revolving Facility is expected not to exceed five years. Up to $100 million of the facility is expected to be used solely for letters of credit to be issued for the account of Columbia (a portion of which may be denominated in Canadian dollars) in the ordinary course of' its business. Interest rates on borrowings under the Revolving Facility, depending on the nature of the borrowing, will be the prime rate or specified margins over the applicable LIBOR rate or applicable certificate of deposit rate on the same or similar margin and maturity terms as the 14 Term Facility. The specific terms of the Revolving Facility, including, without limitation, interest rates, repayment terms, conditions to borrowings, representations and warranties, covenants and events of default will be negotiated by Columbia and prospective providers of the Revolving Facility. B. Equity Securities The Columbia Plan contemplates the issuance by Columbia of up to $400 million of equity through the issuance of up to $200 million each of preferred stock ("Preferred Stock") and of Dividend Enhanced Convertible Stock ("DECS"). Columbia proposes the possible issuance of its common stock (in addition to any LESOP Shares, as defined below) on behalf of Columbia Transmission in connection with the TCO Guarantee and, as described below, to fund the Securities Litigation Settlement. 1. Preferred Stock The Preferred Stock will have a liquidation value of $25 per share and, as to dividend and liquidation rights, will rank equally with the DECS but prior to the common stock. Holders of Preferred Stock will be entitled to receive, when, as and if declared by Columbia's board of directors, cumulative preferential cash dividends accruing from the Effective Date at a rate per share that is to be determined at the time of issuance in accordance with a pricing formula. It is currently expected that the dividend rate for Preferred Stock will not exceed 11 percent per annum. 15 Columbia may, at its option, redeem the Preferred Stock, in whole or in part, on or prior to the 120th day after the Effective Date, if, after giving effect to the redemption, either (i) the aggregate liquidation value of the Preferred Stock outstanding would be $50 million or more, unless after giving effect thereto, no Preferred Stock would be outstanding, or (ii) no DECS would be outstanding. If the Preferred Stock is not so redeemed, the annual dividend rate per share will be reset and increased by 100 basis points, effective as of the 120th day after the Effective Date. Columbia may also redeem the Preferred Stock in whole or in part on or after the fifth anniversary of the Effective Date. Upon any such redemption by Columbia, a holder of Preferred Stock will receive, in exchange for each share so redeemed, cash in an amount equal to the sum of the liquidation value thereof and all accrued and unpaid dividends thereon to the date fixed for redemption. The holders of Preferred Stock shall not have voting rights except as required by law and as follows: (i) if dividends on the Preferred Stock are in arrears and unpaid for six quarterly dividend periods, the holders of the Preferred Stock will be entitled to vote, on the basis of one vote for each share, for the election of two directors of Columbia, such directors to be in addition to the number of directors constituting the board of directors immediately prior to the accrual of such right; and (ii) the holders of Preferred Stock will have voting rights with respect to certain modifications of Columbia's certificate of incorporation. 16 2. DECS The proposed DECS will be shares of convertible preferred stock of Columbia and will have dividend, liquidation and voting rights similar to those of the Preferred Stock described above. The annual dividend rate will be that required to make the market value of the DECS comparable to the market value of the common stock and the liquidation value will be based on the market value of the common stock, each as of a specified date. It is currently expected that the dividend rate on the DECS will not exceed 11 percent per annum. Columbia will have the right to redeem the DECS, in whole or in part, on or prior to the 120th day after the Effective Date if, after giving effect to the redemption, either no DECS are outstanding or the aggregate liquidation value of outstanding DECS is at least $50 million. Upon such redemption, each holder will receive for each redeemed share cash in an amount equal to the liquidation value plus accrued and unpaid dividends. If Columbia fails to redeem the DECS in whole, the annual dividend rate per unredeemed share will increase by 100 basis points effective as of the 120th day after the Effective Date. Columbia will also have the right to redeem the DECS, in whole or in part, on or after either the fourth anniversary of the Effective Date or one month prior to the fifth anniversary of the Effective Date (as determined by Columbia), and prior to the fifth anniversary of the Effective Date. Upon such redemption, each holder will receive for each share a number of shares of Columbia common stock equal to the lesser of (a) the redemption price of the DECS on the date of redemption (which reflects liquidation price plus accrued dividends 17 and, in some cases, a premium) divided by the current market price of common stock as of the trading day prior to the public announcement of the call for redemption, and (b) the number of shares that would be received upon conversion into common stock (described below), as adjusted to reflect any accrued dividends and premium payable upon redemption. After the 120th day following the Effective Date and before the fifth anniversary of the Effective Date ("Mandatory Conversion Date"), a holder of DECS has the option to convert his DECS, in whole or in part, into shares of Columbia common stock, at a conversion rate based on the liquidation value of the DECS and the market value of the common stock. If the DECS have not already been converted by the holder or redeemed by Columbia as described above, all outstanding DECS will convert automatically on the Mandatory Conversion Date into shares of common stock at the applicable conversion rate. 3. Public Offering of Additional Columbia Equity In the event that Columbia elects to redeem the Preferred Stock and DECS on or prior to the 120th day after the Effective Date and elects to fund such redemption through the issuance and sale of up to 16 million shares of its common stock or preferred stock, Columbia requests authorization for the issuance of such securities, subject to a reservation of jurisdiction over the terms of any such issuance and sale of common stock and preferred stock. 18 C. Other Proposed Securities Transactions 1. Disposition of LESOP Shares Columbia expects to repurchase from the leveraged employee stock ownership ("LESOP") portion of the Employees' Thrift Plan ("Thrift Plan") of Columbia Gas System all shares ("LESOP Shares") held in the common stock fund that have not been allocated to employees,(18) to hold the LESOP Shares as treasury shares and to use the LESOP Shares for one or more of the following purposes as deemed appropriate by Columbia: (i) to sell the LESOP Shares on the open market for cash, (ii) to reissue all or part of the LESOP Shares to fund additional requirements under the TCO Guarantee, (iii) to reissue all or part of the LESOP Shares to fund the Securities Litigation Settlement, as described below, and (iv) to fund an employee benefit plan. 2. Potential Offering of Columbia Common Stock in Connection with Settlement of Securities Action The Columbia Plan also contemplates Columbia's participation in a settlement of securities class action litigation ("Securities Litigation Settlement") brought against Columbia, certain present and former officers and directors of Columbia and - -------------------- (18) The Commission authorized Columbia to establish the LESOP by the order dated February 28, 1990 in Holding Co. Act Release No. 25047. The LESOP was designed to prefund a portion of the matching obligation under the terms of the Thrift Plan and to utilize tax advantages afforded under the Internal Revenue Code. Columbia proposes, on the Effective Date, that the LESOP be terminated pursuant to the terms of the Trust Agreement dated as of October 17, 1991 between Columbia and First Fidelity Bank, N. A., as Successor Trustee. Columbia will repurchase the LESOP Shares for cash and at the average price for Columbia common stock over a specified period preceding the Effective Date. The proceeds of the repurchase will be paid to the LESOP Debenture Trustee and, in turn, to the LESOP debentureholders as required by the LESOP Trust Agreement. The balance would be subject to the existing guarantee by Columbia and would be paid under the Columbia Plan. 19 Columbia Transmission, the public accounting Firm of Arthur Andersen, L.L.P. and certain underwriters for Columbia's 1990 common stock offering. Pursuant to the Securities Litigation Settlement, Columbia and the various other defendants will establish a settlement fund of $36.5 million (approximately $16.5 million of which will be contributed by Columbia) to settle the class action claims. The settlement fund will be applied to pay District Court-approved counsel fees and costs of administration, and the remainder of the fund will be distributed to holders of the claims based on acquisitions of Columbia common stock from January 19, 1990 to June 19, 1991. The Securities Litigation Settlement is conditioned upon the approval of the District Court and the Bankruptcy Court. Holders of securities claims may elect, by submitting a form, to opt out of the class action and not participate in, or be bound by, the Securities Litigation Settlement. In order to preserve any securities claims it may have against Columbia, an opt-out securities claimant must indicate on its opt-out form that it elects to pursue its claim against Columbia in the District Court sitting in bankruptcy. Columbia intends to object to, and/or seek estimation of, the claims of opt-out claimants. If and when such claims are allowed, they will he paid by Columbia in Columbia common stock valued at then current market prices or, at Columbia's option, in cash, or any combination of the two. Columbia seeks Commission authorization to issue Columbia common stock, valued at the then current market value, in an aggregate amount equal to all allowed 20 amounts for opt-out claimants in excess of $1.5 million. Authorization for the issuance of Columbia common stock will thus commence when the combination of Columbia's contribution to the settlement fund and allowed claims of opt-out claimants exceeds $18 million. The Securities Litigation Settlement provides for termination of the settlement by the defendants in the amount of securities as to which opt-out forms have been submitted exceeds an undisclosed specified amount. D. Restated Certificate of Incorporation The Columbia Plan provides that Columbia's certificate of incorporation will he amended and restated ("Restated Certificate of Incorporation") in accordance with applicable provisions of the Delaware General Corporation Law and the Bankruptcy Code. The Restated Certificate of Incorporation, as more specifically described in the application, would, among other things, prohibit the issuance of non-voting equity securities as required by the Bankruptcy Code and increase the number of authorized shares of preferred (some of which may he issued on and after the Effective Date in order to effectuate the Columbia Plan, as described above). The Restated Certificate of Incorporation also includes various provisions that are necessary to permit the issuance of Preferred Stock and DECS under the Columbia Plan. These provisions differ from the similar provisions in the current Certificate of Incorporation in that they (i) decrease the par value of Preferred Stock from fifty dollars ($50) to ten dollars ($10); (ii) delete the restriction on common stock dividends and amounts of secured debt; (iii) remove and conform specific provisions regarding preferred voting 21 rights, dividend rights and liquidation rights; and (iv) permit the board of directors to determine the specific rights, powers and preferences of each series of Preferred Stock, and the limitations thereon, at the time of issuance. IV. ANALYSIS The Columbia Plan requires Commission approval under Section 11(f) of the Act.(19) The solicitation of consents or authorizations in respect of the Columbia Pland is subject to section 11(g) of the Act and rule 62 thereunder.(20) The issuance by Columbia of New Indenture Securities, DECS, Preferred Stock and common stock are subject to sections 6 and 7 of the Act, as is Columbia's entering into the Bank Facilities.(21) The amendment of Columbia's Certificate of Incorporation is subject to sections 6, 7 and 12(e) of the Act, and rules 62 and 65 thereunder. The TCO Guarantee and the guarantee by Columbia of the payment of the distribution percentage of ultimately allowed claims of other unsecured creditors of Columbia Transmission - -------------------- (19) Section 11(f) of the Act requires that the Commission approve a reorganization plan of a registered holding company or its subsidiary. As noted previously, rule 49(c) exempts the TCO Plan from the requirement of Commission approval. (20) Section 11(g), in pertinent part, requires, among other things, that the solicitation of consents or authorizations in respect of plans be accompanied by such information as the Commission deems necessary and appropriate in the public interest or for the protection of investors or consumers, and that such solicitation be accompanied by "a copy of a report on the plan which shall be made by the Commission after an opportunity for a being on the plan . . ., or by an abstract of such report made or approved by the Commission. Columbia requests that the Commission waive the filing of a separate Form U-R-1, as all the requisite information will be included in the disclosure statements filed as exhibits to the application. (21) Rule 49(c) exempts the amendment of the Wilmington Trust Indenture by Columbia Transmission from the requirements of sections 6 and 7 of the Act and rule 43 thereunder. 22 are subject to section 12(b) of the Act and rule 45 thereunder.(22) Section 9 and 10 of the Act, and rule 43 thereunder are applicable to the acquisition of TCO Mortgage Bonds by Columbia. The Commission has reviewed the proposed transactions and finds that the applicable standards of the Act are satisfied. Our review has focused in particular on the proposed securities issuances by Columbia and Columbia's proposed participation in the TCO Plan. Columbia projects an 8% average annual growth in operating revenues from 1996 through 1999. Earnings are expected to increase by more than 4% a year during this period. Columbia Transmission projects a 12% annual growth in earnings over the same four year period. It appears that the Columbia system as a whole will be able to achieve a sustained level of financial performance. The Commission has generally favored a consolidated debt to equity ratio of 65%/30% for registered holding companies, the balance generally being preferred equity.(23) Assuming that the Effective Date will, in fact, be December 31, 1995, the ratio of Columbia's consolidated debt to equity is expected to decline from 65% to 56.7% by 1999. Columbia's consolidated common stock equity of 25.5% as of December 31, 1995 is expected to rise to 31% two years after the - -------------------- (22) Rule 45(b)(4) exempts the proposed capital contributions by Columbia to Columbia Transmission from the requirements of section 12(b) and rule 45. The repurchase by Columbia of DECS, Preferred Stock and LESOP Shares is exempt from section 12(c) of the Act pursuant to Rule 42. (23) This requirement is drawn from section 7(d), which requires the Commission, in reviewing an issuance of securities, to consider whether the security is reasonably adapted to the security structure of the company issuing the security and the other companies in the registered holding company system. Holding Co. Act Release No. 25574 (July 7, 1992) (proposing rule 52 under the Act) and cases cited therein. 23 Effective Date, and to 34.7% by 1999.(24) The increase is largely attributable to a projected increase in Columbia's retained earnings. Under the circumstances, the Commission does not find that Columbia's projections reflect any excessive leveraging that could affect the Columbia system public-utility subsidiaries and their consumers, and so require an adverse finding. Under the TCO Plan, Columbia would guarantee the payment of all third-party distributions require under the Plan. The principal consideration in this regard is the value of Columbia Transmission's settlement with its Producers. Although this amount cannot be precisely quantified at present, it appears from the general trend of settlement of Producer claims that the financial exposure to Columbia under the guarantee will not exceed $100 million. This amount could be financed by internally generated funds and borrowings under the Bank Facilities. In view of these considerations, and on the basis of the record as a whole, the Commission does not find that any adverse findings are required under section 7 of the Act. In particular, the Commission does not find that the security issuances are not reasonably adapted to Columbia's earning power, or that the guarantees contemplated by the TCO Plan would constitute an improper risk for Columbia. V. CONCLUSION The Commission has carefully examined the foregoing transactions as proposed by Columbia and has concluded, based on the complete record before it, that the applicable - -------------------- (24) The balance of Columbia's capital structure will be comprised of approximately $400 million of Preferred Stock and DECS. 24 standards of the Act are satisfied and that no adverse findings are warranted. Fees and expenses in the estimated amount of $8,072,000 are expected to be incurred in connection with this transaction.(25) It is stated that no state or federal commission, other than this Commission, has jurisdiction over the proposed transaction. Due notice of the Filing of said application-declaration has been given in the manner prescribed in Rule 23 promulgated under the Act and no hearing has been requested of or ordered by the Commission. Upon the basis of the facts in the record, it is hereby found that, except as to those matters over which jurisdiction has been reserved, the applicable standards of the Act, and rules thereunder are satisfied, and that no adverse findings are necessary: IT IS ORDERED, pursuant to the applicable provisions of the Act and rules thereunder, that, except as to those matters over which jurisdiction has been reserved, the application-declaration be, and it hereby is, granted and permitted to become effective forthwith, subject to the terms and conditions prescribed in rule 24 under the Act, except that certificates under Rule 24 may be Filed on a quarterly basis after the Effective Date with respect to the proposed transactions hereafter consummated pursuant to this application-declaration, not later than 30 days following the end of each quarter. Furthermore, because certain contemplated transactions may be accomplished over a period of time after this order is issued, authorization is granted to implement the proposed transactions as described in the application-declaration. - -------------------- 25 Under Rule 63, fees and expenses approved by the Bankrkuptcy Court need not be approved by the Commission. 25 IT IS FURTHER ORDERED, that jurisdiction be and hereby is reserved over the issuance and sale of securities, except common stock, DECS and Preferred Stock, under the Columbia Plan to the extent not specifically authorized pending completion of the record. By the Commission. Jonathan G. Katz Secretary -----END PRIVACY-ENHANCED MESSAGE-----