CERTIFICATE OF NOTIFICATION
Filed by
ALABAMA POWER COMPANY
Pursuant to order of the Securities and Exchange Commission dated September 8,
1995 in the matter of File No. 70-8661.
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Alabama Power Company (the "Company") hereby certifies to said Commission,
pursuant to Rule 24, as follows:
1. A Seventh Supplementary Installment Sale Agreement was made
and entered into by and between the Company and The Industrial
Development Board of the Town of Columbia (Alabama) (the "Board"),
relating to $21,000,000 aggregate principal amount of the Board's
Pollution Control Revenue Refunding Bonds (Alabama Power Company
Project), 1996 Series A, and all transactions relating thereto were
carried out in accordance with the terms and conditions of and for the
purposes represented by the application, as amended, and of said order
with respect thereto.
2. Filed herewith are the following exhibits:
Exhibit A -- Copy of Seventh Supplementary
Installment Sale Agreement between the
Board and the Company, dated as of
November 1, 1996.
Exhibit B -- Copy of Indenture of Trust relating
to the Series A Bonds between the Board
and SouthTrust Bank of Alabama, National
Association, dated as of November 1, 1996.
Exhibit C -- Opinion of Balch & Bingham dated December 10,
1996.
Dated December 10, 1996 ALABAMA POWER COMPANY
By_/s/Wayne Boston_____
Wayne Boston
Assistant Secretary
Exhibit A
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE TOWN OF COLUMBIA
and
ALABAMA POWER COMPANY
SEVENTH SUPPLEMENTARY
INSTALLMENT SALE AGREEMENT
Dated as of November 1, 1996
Relating to
$21,000,000
Pollution Control Revenue Refunding Bonds, 1996 Series A
(Alabama Power Company Project)
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SEVENTH SUPPLEMENTARY INSTALLMENT SALE AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference
only and is not a part of this Seventh Supplementary
Installment Sale Agreement)
Page
Parties................................................................ 1
Recitals............................................................... 1
ARTICLE I................... 2
DEFINITIONS.................. 2
ARTICLE II.................. 4
RELATIONSHIP OF AGREEMENT TO THE ORIGINAL AGREEMENT;
ISSUANCE OF THE BONDS..................... 4
Section 2.1. Relationship of Agreement to the Original Agreement...... 4
Section 2.2. Issuance of Bonds........................................ 4
ARTICLE III..................... 5
PROVISIONS FOR PAYMENT................ 5
Section 3.1. Amounts Payable.......................................... 5
Section 3.2. Obligation of the Company Unconditional.................. 5
Section 3.3. Creation of Subordinated Security Interest............... 6
Section 3.4. Assignment and Pledge of Payments and Rights
Under this Agreement.................... 6
Section 3.5. Provision of Credit Agreement............................ 6
ARTICLE IV...................... 7
SPECIAL COVENANTS.................. 7
Section 4.1. No Warranty of Suitability by the Issuer................. 7
Section 4.2. Use of Project........................................... 7
Section 4.3. Indemnity Against Claims................................. 7
Section 4.4. Incorporation of Certain Provisions of the
Original Agreement........................ 7
Section 4.5. Further Assurances and Corrective Instruments............ 8
Section 4.6. Tax Covenants............................................ 8
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ARTICLE V....................... 8
EVENTS OF DEFAULT AND REMEDIES............ 8
Section 5.1. Events of Default........................................ 8
Section 5.2. Remedies on Default...................................... 10
Section 5.3. Agreement to Pay Attorneys' Fees and Expenses............ 10
Section 5.4. No Additional Waiver Implied by One Waiver............... 10
ARTICLE VI...................... 10
MISCELLANEOUS.................... 10
Section 6.1. Term of This Agreement................................... 10
Section 6.2. Notices.................................................. 11
Section 6.3. Binding Effect........................................... 11
Section 6.4. Severability............................................. 11
Section 6.5. Amounts Remaining Under the Indenture.................... 11
Section 6.6. Amendments............................................... 11
Section 6.7. Execution in Counterparts................................ 11
Section 6.8. Applicable Law........................................... 11
Section 6.9. Captions................................................. 11
Section 6.10. Other Financing.......................................... 11
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SEVENTH SUPPLEMENTARY INSTALLMENT SALE AGREEMENT dated as of November
1, 1996 between THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF COLUMBIA, a
public corporation duly created and validly existing pursuant to the
constitution and laws of the State of Alabama (the "Issuer"), and ALABAMA POWER
COMPANY, a corporation organized and existing under the laws of the State of
Alabama (the "Company"), evidencing the agreement of the parties hereto.
RECITALS
WHEREAS, the Issuer was organized pursuant to the provisions of Act No. 648
enacted at the 1949 Regular Session of the Legislature of Alabama, as heretofore
amended, and further supplemented by Act No. 1893 enacted at the 1971 Regular
Session of the Legislature of Alabama and Act No. 510 enacted at the 1982
Regular Session of the Legislature of Alabama (said Act No. 648, as amended and
supplemented being herein called the "Act"); and
WHEREAS, under the Act the Issuer has the following, among other, powers:
(a) to acquire, whether by construction, purchase, exchange,
gift, lease, or otherwise, and to enlarge, improve, replace, equip and
maintain, one or more pollution control facilities, including all real
and personal property deemed necessary or desirable in connection
therewith,
(b) to issue its revenue bonds to pay the cost of pollution
control facilities payable solely from the revenues and receipts
derived from the leasing or sale by the Issuer of such pollution
control facilities,
(c) to lease or sell to others and otherwise dispose of all or
any portion of such pollution control facilities, and
(d) to issue its refunding bonds for the purpose of paying the
principal of, premium, if any, and interest on, its outstanding
revenue bonds; and
WHEREAS, in order to promote the health, safety and prosperity of the
citizens of the State of Alabama through the protection of its air and water
resources, the Issuer has previously undertaken to acquire, construct, install,
equip, and sell to the Company facilities, or portions thereof, designed for the
abatement or control of air and water pollution and sewage treatment and
disposal at the site of the Company's Farley Plant, located within the
geographical area of operation of the Issuer in Houston County, Alabama, which
facilities comprise the Project (hereinafter defined); and
WHEREAS, at the request of the Company, the Issuer has agreed to issue
$21,000,000 aggregate principal amount of its Pollution Control Revenue
Refunding Bonds, 1996 Series A (Alabama Power Company Project) and to apply the
proceeds from the sale thereof toward the redemption of certain of the Issuer's
pollution control revenue bonds previously issued to provide financing for the
Project;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained the receipt and sufficiency of which are hereby
acknowledged, the parties hereto formally covenant, agree, and bind themselves
as follows:
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ARTICLE I
DEFINITIONS
The terms defined in the Indenture are used herein with the same
meanings given to such terms in the Indenture. In addition, the following terms
shall have the meanings set out below:
"Agreement" means this Seventh Supplementary Installment Sale Agreement
and any amendments and supplements hereto.
"Bonds" means the Pollution Control Revenue Refunding Bonds (Alabama
Power Company Project), 1996 Series A, issued by the issuer under the Indenture
in the aggregate principal amount of $21,000,000.
"Event of Default" means any of the occurrences enumerated in Section
5.1 of this Agreement.
"First Mortgage" means the Indenture dated as of June 1, 1942, as
heretofore and hereafter supplemented and amended, between the Company and
Chemical Bank, as Trustee, securing first mortgage bonds of the Company
heretofore or hereafter issued thereunder.
"Indenture" means the Indenture of Trust dated as of November 1, 1996,
relating to the Bonds, between the Issuer and SouthTrust Bank of Alabama,
National Association, as Trustee, pursuant to which the Bonds are authorized to
be issued, and including any indenture supplemental thereto.
"Original Agreement" means the Installment Sale Agreement dated as of
May 1, 1978 between the Issuer and the Company, as heretofore supplemented and
amended, excluding, however, the Supplementary Installment Sale Agreement dated
as of September 1, 1994, the Second Supplementary Installment Sale Agreement
dated as of May 1, 1995, the Third Supplementary Installment Sale Agreement
dated as of May 1, 1995, the Fourth Supplementary Installment Sale Agreement
dated as of October 1, 1995, the Fifth Supplementary Installment Sale Agreement
dated as of October 1, 1995, the Sixth Supplementary Installment Sale Agreement
dated as of October 1, 1995, and this Agreement.
"Original Indenture" means the Trust Indenture dated as of May 1, 1978
by and between the Issuer and the Trustee, as supplemented and amended by a
First Supplemental Indenture dated as of November 1, 1984, a Second Supplemental
Indenture dated as of December 1, 1984, a Third Supplemental Indenture dated as
of June 1, 1985, a Fourth Supplemental Indenture dated as of December 1, 1985, a
Fifth Supplemental Indenture dated as of December 31, 1985, a Sixth Supplemental
Indenture dated as of November 1, 1986 and a Seventh Supplemental Indenture
dated as of June 1, 1993.
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"Project" means the air and water pollution control and solid waste
disposal facilities financed and refinanced from the proceeds of the Series G
Bonds as described in Exhibit A to the Original Agreement.
"Series A Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series A (Alabama Power Company Farley Plant Project), dated May 1, 1978, in the
original aggregate principal amount of $1,650,000.
"Series B Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series B (Alabama Power Company Farley Plant Project), dated November 1, 1984,
in the original aggregate principal amount of $100,000,000.
"Series C Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series C (Alabama Power Company Farley Plant Project), dated December 1, 1984,
in the original aggregate principal amount of $50,000,000.
"Series D Bonds" means the Issuer's Pollution Control Revenue Refunding
Bonds, Series D (Alabama Power Company Farley Plant Project), dated June 1,
1985, in the original aggregate principal amount of $50,000,000, for the purpose
of refunding the Series C Bonds.
"Series E Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series E (Alabama Power Company Farley Plant Project), dated December 1, 1985,
issued in the original aggregate principal amount of $81,500,000.
"Series F Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series F (Alabama Power Company Farley Plant Project), dated December 31, 1985,
issued in the original aggregate principal amount of $21,000,000.
"Series G Bonds" means the Issuer's Pollution Control Revenue Refunding
Bonds, Series G (Alabama Power Company Farley Plant Project), dated November 1,
1986, issued in the original principal amount of $21,000,000, for the purpose of
refunding the Series F Bonds.
"Series H Bonds" means the Issuer's Pollution Control Revenue Bonds,
Series H (Alabama Power Company Farley Plant Solid Waste Project), dated June 1,
1993, issued in the original aggregate principal amount of $9,800,000.
"Series 1994 Bonds" means the Issuer's Pollution Control Revenue
Refunding Bonds, Series 1994 (Alabama Power Company Project), dated September 1,
1994, issued in the original aggregate principal amount of $101,650,000, for the
purpose of refunding the Series A Bonds and the Series B Bonds.
"Subordinated Security Interest" means the security interest in the
Project created in Section 3.3.
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ARTICLE II
RELATIONSHIP OF AGREEMENT TO THE ORIGINAL AGREEMENT;
ISSUANCE OF THE BONDS
Section 2.1. Relationship of Agreement to the Original Agreement. The
Original Agreement was initially executed and delivered by the Issuer and the
Company in connection with the issuance and sale of the Series A Bonds and was
supplemented and amended from time to time thereafter in connection with the
issuance and sale of the Series B, C, D, E, F, G and H Bonds. Under the terms of
the Original Agreement, the Issuer agreed to finance, acquire, construct,
install and equip the Project and to sell the Project to the Company. The
Company agreed, inter alia, to assist the Issuer in the implementation of the
Project and to purchase the Project for a purchase price payable in installments
due at such times and in such amounts as would provide funds sufficient to pay
the principal of, premium, if any, and interest on all bonds issued under the
Original Indenture when due, whether at stated maturity upon redemption or
acceleration, or otherwise. The Issuer and the Company have heretofore arranged
for the redemption of the Series A Bonds, the Series B Bonds, the Series C
Bonds, the Series D Bonds, the Series E Bonds and the Series F Bonds and as a
result, the installment payments currently required of the Company under the
Original Agreement relate only to the Series G and H Bonds. Upon the redemption
of the Series G Bonds from proceeds of the Bonds, the Company will no longer be
obligated to make installment payments under the Original Agreement with respect
to the Series G Bonds but will retain its obligations with respect to the Series
H Bonds. By their execution and delivery of this Agreement, which is intended to
be complementary to the Original Agreement, the Issuer and the Company ratify
and confirm the sale of the Project to the Company pursuant to the Original
Agreement, agree to continue the Original Agreement in full force and effect
except for the provisions thereof requiring the Company to make purchase price
payments related to bonds of the Issuer which have been fully paid and redeemed,
and agree that from and after the date of this Agreement the Company will make
additional purchase price payments in installments due at such times and in such
amounts as will provide funds sufficient to pay the principal of, premium, if
any, interest on, and purchase price of all Bonds issued under the Indenture.
The parties acknowledge and confirm that the Issuer's agreement to issue the
Bonds and to apply the proceeds thereof to the redemption of the Series G Bonds
(thereby reducing the Company's payment obligations under the Original
Agreement) constitutes fair and adequate consideration for the additional
obligations undertaken by the Company pursuant to this Agreement. To the extent
that any statement in, or provision of, this Agreement conflicts with the
Original Agreement, the provisions of this Agreement shall be deemed to control.
Section 2.2. Issuance of Bonds. In order to provide funds to refund the
Series G Bonds, the Issuer agrees that it will initially issue and deliver the
Bonds to the purchasers thereof at a price to be approved in advance by the
Company and will apply and deposit the proceeds thereof in accordance with the
terms of the Indenture. The Indenture shall be satisfactory in form and
substance to the Company and shall provide the manner in which, and the purposes
for which, proceeds of Bonds may be used and invested.
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ARTICLE III
PROVISIONS FOR PAYMENT
Section 3.1. Amounts Payable. The Company agrees to pay to the Trustee,
as assignee of the Issuer, in funds which will be immediately available on the
day payment is due, from time to time as the amount owed hereunder, including
interest thereon (which interest obligation shall equal the interest and
premium, if any, on the Bonds), amounts which, and at or before times which,
shall correspond (i) to the payments in respect of the principal of and premium,
if any, and interest on the Bonds whenever and in whatever manner the same shall
become due whether at stated maturity, upon redemption or acceleration or
otherwise, and (ii) the purchase price of the Bonds required or permitted to be
purchased under the Indenture. If (i) at the date any payment on the Bonds is
due, available moneys are held by the Trustee under the Indenture which are not
being held for the payment of Bonds due and payable but which have not been
presented for payment, or (ii) on any date on which Bonds are to be purchased
pursuant to Section 4.02 of the Indenture, there are any available moneys held
for the payment of the purchase price which are not being held for the purchase
of Bonds which have not been presented for purchase pursuant to Section 6 of the
form of Bonds, then, in each case, such moneys shall be credited against the
payment then due hereunder, first in respect of interest on the amount then due
and owing hereunder and then, to the extent of remaining moneys, in respect of
principal on the amount then due and owing hereunder.
The Company will also pay: (i) the fees, charges and reasonable
expenses of the Trustee, any paying agents and the Remarketing Agent under the
Indenture, such fees, charges, and reasonable expenses to be paid directly to
the Trustee, paying agents and Remarketing Agent for their respective accounts
as and when such fees, charges and reasonable expenses become due and payable,
(ii) any expenses and costs incurred or to be incurred by virtue of the issuance
of the Bonds, (iii) any expenses in connection with any redemption of the Bonds,
and (iv) any expenses in connection with the redemption of the Series G Bonds.
The Company also agrees that, on or before the date of redemption of
the Series G Bonds, it will pay to the Series G Trustee for deposit into the
Bond Fund held by the Series G Trustee in connection with the Series G Bonds, an
amount of funds which, when added to the proceeds of the Bonds (other than
proceeds, if any, representing accrued interest), plus any investment earnings
thereon, and any other funds available for such purpose, will be sufficient to
permit the Series G Trustee to pay the principal of, premium and accrued
interest on the Series G Bonds upon their redemption, which shall be on or
before February 11, 1997.
Section 3.2. Obligation of the Company Unconditional. The obligation of
the Company to make the payments as provided in this Agreement and to perform
and observe the other agreements on its part contained herein shall be absolute
and unconditional notwithstanding failure of the Issuer's title to the Project
or any part thereof, loss of title to (or the temporary use of) the Project by
virtue of the exercise by others of the power of eminent domain, any acts or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, any change in the tax
or other laws of the United States of America or of the State of Alabama or any
political subdivision of either
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thereof, or any failure of the Issuer to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement. Nothing contained in this Section 3.2 shall be
construed to release the Issuer from the performance of any of the agreements on
its part herein contained; and, in the event the Issuer should fail to perform
any such agreement on its part, the Company may institute such action against
the Issuer as the Company may deem necessary to compel performance or recover
its damages for nonperformance so long as such action shall not violate the
agreements on the part of the Company contained in the preceding sentence, but
in no event shall the Company be entitled to any diminution of the amounts
payable under Section 3.1 hereof. The Company may, however, at its own cost and
expense and in its own name or in the name of the Issuer, prosecute or defend
any action or proceeding or take any other action involving third persons which
the Company deems reasonably necessary in order to secure or protect its right
of possession, occupancy and use of the Project hereunder, and in such event the
Issuer hereby agrees to cooperate fully with the Company and to take all action
necessary to effect the substitution of the Company for the Issuer in any such
action or proceeding if the Company shall so request.
Section 3.3. Creation of Subordinated Security Interest. As security
for the performance by the Company of its obligations under Section 3.1 hereof,
the Company hereby grants to the Issuer a security interest in the Project and
in each component thereof which has been or will be acquired hereunder by the
Company from the Issuer. It is agreed that the security interest hereby granted
is hereby made, and shall at all times be, subject to the lien of the First
Mortgage and to the lien created pursuant to the Original Agreement. The rights
of the trustee and bondholders thereunder, shall be equal in rank to, but not
superior to, any future liens created for the benefit of any indebtedness of the
Company hereafter issued under an indenture providing that any lien for the
benefit of such indebtedness shall be equal in rank to the security interest
hereby granted. Such security interest shall remain in effect until the Company
shall have satisfied its obligations under Section 3.1 hereof at which time the
Issuer shall cause the execution and delivery to the Company of such documents
as shall be necessary to effect or evidence the termination of such security
interest.
Section 3.4. Assignment and Pledge of Payments and Rights Under this
Agreement. The Issuer shall assign and pledge to the Trustee as security under
the Indenture all rights, title and interests of the Issuer in and to this
Agreement, including the Subordinated Security Interest, and all moneys
receivable hereunder (except for payments under the second and third paragraphs
of Section 3.1 and under Sections 4.3 and 5.3 hereof). The Company assents to
such assignment and hereby agrees that, as to the Trustee, its obligations to
make such payments shall be absolute and shall not be subject to any defense or
any right of set-off, counterclaim, or recoupment arising out of any breach by
the Issuer or the Trustee of any obligation to the Company, whether hereunder or
otherwise, or out of any indebtedness or liability at any time owing to the
Company by the Issuer or the Trustee.
Section 3.5. Provision of Credit Agreement. On or before the date of
initial issuance of the Bonds, the Company shall enter into the Credit Agreement
for the purpose of providing the Company with a committed source of funds, if
needed, with which to perform its obligations under Section 3.1 hereof to
provide any funds necessary to purchase Bonds which have been
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tendered for purchase but not remarketed. The Company shall be under no
obligation to maintain the Credit Agreement in place during the term of the
Bonds, except that the Company shall not voluntarily terminate the Credit
Agreement at any time during which the Bonds are in a Commercial Paper Period.
In addition, the Company hereby agrees to notify the Trustee and the Remarketing
Agent in writing at least 20 Business Days prior to any termination of the
Credit Agreement at the request of the Company.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1. No Warranty of Suitability by the Issuer. THE ISSUER
MAKES NO WARRANTY EITHER EXPRESS OR IMPLIED AS TO THE PROJECT, INCLUDING ITS
SUITABILITY FOR THE COMPANY'S PURPOSES OR NEEDS.
Section 4.2. Use of Project. The Issuer hereby covenants and agrees
that it will not take any action, other than pursuant to the exercise of its
rights under Section 5.2 of this Agreement and under the corresponding
provisions of the Original Agreement, to prevent the Company from having
possession and enjoyment of the Project during the term of this Agreement and
will, at the request of the Company and at the Company's cost, cooperate with
the Company in order that the Company may have possession and enjoyment of the
Project.
Section 4.3. Indemnity Against Claims. The Company will pay and
discharge and will indemnify and hold harmless the Issuer from (a) any lien or
charge upon payments by the Company hereunder, (b) any taxes, assessments,
impositions, and other charges upon payments by the Company to the Issuer
hereunder, and (c) any and all liabilities, damages, costs, and expenses arising
out of or resulting from the transactions contemplated by this Agreement and the
Indenture, including the reasonable fees and expenses of counsel. If any such
lien or charge is sought to be imposed upon payments, or any such taxes,
assessments, impositions, or other charges are sought to be imposed, or any such
liability, damages, costs, and expenses are sought to be imposed, the Issuer
will give prompt notice to the Company, and the Company shall have the sole
right and duty to assume, and will assume, the defense thereof, with full power
to litigate, compromise or settle the same in its sole discretion.
Section 4.4. Incorporation of Certain Provisions of the Original
Agreement. The provisions of the following sections of the Original Agreement
are incorporated herein by reference with the effect that the terms of such
sections shall apply with the same force and effect as if set out in full
herein: Section 6.2 (relating to inspection of the Project); Section 6.3
(relating to maintenance of the Company's corporate existence); Section 6.4
(relating to the provision of certain financial statements); Section 5.1
(relating to maintenance of the Project); Section 5.2 (relating to removal of
portions of the Project); Section 5.3 (relating to the payment of taxes and
other governmental charges); Section 5.4 (relating to insurance); Section 5.5
(relating to eminent domain); and Section 7.1 (relating to the Company's right
to assign its interest in the Original Agreement and to lease the Project). The
provisions so incorporated shall remain in force throughout the term of this
Agreement notwithstanding any earlier termination of the Original Agreement.
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Section 4.5. Further Assurances and Corrective Instruments. The Issuer
and the Company agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged, and delivered, such
supplements hereto and such further instruments as may reasonably be required
for correcting any inadequate or incorrect description of the Project and for
carrying out the intention or facilitating the performance of this Agreement.
The Issuer will, upon the request and at the expense of the Company,
cause the execution and delivery from time to time to the Company of such
further instruments of conveyance as are deemed by the Company to be necessary
to effect or evidence the conveyance to the Company of good and marketable title
to the Project or any portion thereof, subject to no lien other than any
Permitted Encumbrances (as defined in the Original Agreement).
Section 4.6. Tax Covenants. The Company and the Issuer covenant and
agree that they will not use or permit the use by any person of any of the funds
provided by the Issuer hereunder or any other of its funds, directly or
indirectly, or direct the Trustee to invest any funds held by it under the
Indenture or this Agreement, in such manner as would, or enter into, or allow
any "related person" to enter into, any arrangement, formal or informal, that
would, or take or omit to take any other action that would, cause any Bond to be
an "arbitrage bond" within the meaning of Section 148(a) of the Code or result
in the loss of the exclusion from gross income for federal income tax purposes
of the interest paid on the Bonds. Without limiting the generality of the
foregoing, the Company covenants and agrees to comply with the requirements of
Sections 148(d) and 148(f) of the Code and any proposed, temporary, or final
regulations thereunder as may be applicable to the Bonds or the proceeds derived
from the sale of the Bonds or any other moneys. The Company acknowledges Section
6.03 of the Indenture and agrees to perform all duties imposed upon it by such
Section. Insofar as said Section imposes duties and responsibilities on the
Company, it is specifically incorporated herein by reference.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.1. Events of Default. Each of the following shall be an
"Event of Default" under this Agreement:
(a) Failure by the Company to pay or cause to be paid that
portion of the amounts payable hereunder which is attributable to the
interest due or becoming due on any of the Bonds for a period of five
days after the same shall become due and payable.
(b) Failure by the Company to pay or cause to be paid that
portion of the amounts payable hereunder which is attributable to the
principal of, or premium, if any, on any of the Bonds when the same
shall become due and payable.
(c) Failure by the Company to pay or cause to be paid that
portion of the amounts payable hereunder which is attributable to the
purchase price on any of the Bonds after the same shall become due and
payable.
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(d) Failure by the Company to observe and perform any
covenant, condition, or agreement in this Agreement on its part to be
observed or performed, other than as referred to in subsections (a),
(b), and (c) of this Section, for a period of 90 days after written
notice, specifying such failure and requesting that it be remedied, is
given to the Company by the Issuer or the Trustee.
(e) The dissolution or liquidation of the Company, except as
permitted by Section 4.4 hereof, or the commencement by the Company of
any case or proceeding seeking to have an order for relief entered on
its behalf as a debtor or to adjudicate it as bankrupt or insolvent or
seeking reorganization, liquidation, dissolution, winding-up,
arrangement, composition, readjustment of its debts or any other relief
under any bankruptcy, insolvency, reorganization or other similar law
of the United States or any state, or adjudication of the Company as
bankrupt, or an assignment by the Company for the benefit of its
creditors, or the entry by the Company into an agreement of composition
with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the Company in any proceeding
for its reorganization instituted under the provisions of Title 11 of
the United States Code, as amended, or under any similar statutory
provision which may hereafter be enacted.
(f) An "event of default" as defined in Section 8.01 of
the Indenture shall have occurred and be continuing.
A default under clause (d) of this Section is not an Event of Default until the
Trustee or the holders of at least 25% in principal amount of the Bonds then
outstanding give the Issuer and the Company a notice specifying the default,
demanding that it be remedied and stating that the notice is a "Notice of
Default" and the Company does not cure the default within 90 days after receipt
of the notice, or within such longer period as the Trustee shall agree to. The
Trustee shall not unreasonably refuse to agree to a longer period if the default
cannot reasonably be cured within 90 days after receipt of the notice and the
Company has begun within 90 days and continued diligent efforts to correct the
default. The foregoing provisions of clause (d) of this Section are subject to
the further qualification that if by reason of force majeure the Company is
unable in whole or in part to carry out its agreements herein contained, other
than the obligations on the part of the Company contained in Section 6.3 of the
Original Agreement (incorporated by reference in Section 4.4 hereof) and Section
4.6 hereof, the Company shall not be deemed in default during the continuance of
such inability. The term "force majeure" as used herein shall mean the
following: acts of God; strikes, lockouts or other industrial disturbances; acts
of public enemies; orders of any kind of the government of the United States or
of the State or of any of their departments, agencies or officials, or of any
civil or military authority; insurrections; riots; epidemics; landslides;
lightning; earthquake; fire; hurricanes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances; explosions;
breakage or accident to machinery; partial or entire failure of utilities; or
any other cause or event not reasonably within the control of the Company. The
Company agrees, however, to remedy with all reasonable dispatch the cause or
causes preventing the Company from carrying out its agreements; provided that
the settlement of strikes, lockouts, and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company shall not be
required
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to make settlement of strikes, lockouts, and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is in
the judgment of the Company unfavorable to the Company.
Section 5.2. Remedies on Default. Whenever any Event of Default shall
have occurred and be continuing, the Issuer may, in addition to any other remedy
now or hereafter existing at law, in equity or by statute, take either or both
of the following remedial steps:
(a) By written notice to the Company, the Issuer may declare
the total amount payable under clause (i) of the first sentence of the
first paragraph of Section 3.1 of this Agreement, including the
interest thereon, to be immediately due and payable, whereupon the same
shall become immediately due and payable.
(b) The Issuer may take whatever action at law or in equity
may appear necessary or desirable to collect the amounts referred to in
(a) above then due and thereafter to become due, or to enforce
performance and observance of any obligation, agreement, or covenant of
the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section 5.2 shall be
paid to the Trustee and applied in accordance with the provisions of the
Indenture or, if the Bonds have been fully paid (or provision for payment
thereof has been made in accordance with the provisions of the Indenture) and
the fees and expenses of the Trustee, the paying agents, and the Remarketing
Agent and all other amounts required to be paid under the Indenture shall have
been paid, to the Company.
Section 5.3. Agreement to Pay Attorneys' Fees and Expenses. If the
Company should breach any of the provisions of this Agreement and the Issuer or
the Trustee should employ attorneys or incur other expenses for the collection
of amounts payable hereunder or the enforcement of performance or observance of
any obligation or agreement on the part of the Company herein contained, the
Company agrees that it will on demand therefor pay to the Issuer or the Trustee
the reasonable fees of such attorneys and such other reasonable expenses so
incurred by the Issuer or the Trustee.
Section 5.4. No Additional Waiver Implied by One Waiver. If any
provision contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Term of This Agreement. This Agreement shall remain in
full force and effect from the date hereof until such time as all of the
outstanding Bonds shall have been fully paid or provision made therefor in
accordance with the provisions of the Indenture, whichever shall first occur,
and the fees and expenses of the Trustee, any paying agents and the
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<PAGE>
Remarketing Agent and all other amounts payable by the Company under this
Agreement shall have been paid.
Section 6.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
follows: if to the Issuer, if by mail to the Chairman of the Board of Directors,
at Town Hall, Columbia, Alabama 36319; if to the Trustee, to P. O. Box 2554,
Birmingham, Alabama 35290, Attention: Corporate Trust Department; if to the
Company, to 600 North 18th Street, Birmingham, Alabama 35203, Attention:
Treasurer; and if to the Remarketing Agent, to Merchant Capital, L.L.C., 250
Commerce Street, Montgomery, Alabama 36104, Attention: Muni Syndicate. A
duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Company to the other shall also be given
to the Trustee. The Issuer, the Company, and the Trustee may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, certificates, or other communications shall be sent.
Section 6.3. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company, and their respective
successors and assigns.
Section 6.4. Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
Section 6.5. Amounts Remaining Under the Indenture. Any amounts remaining
under the Indenture upon termination of this Agreement shall, to the extent
provided by Section 7.03 of the Indenture, belong to and be paid to the Company
by the Trustee.
Section 6.6. Amendments. This Agreement may not be effectively terminated
except in accordance with the provisions hereof and may not be effectively
amended except by a written agreement in accordance with Article XI of the
Indenture and signed by the parties hereto.
Section 6.7. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 6.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Alabama.
Section 6.9. Captions. The captions or headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement.
Section 6.10. Other Financing. Notwithstanding anything in this Agreement
to the contrary, the Issuer and the Company may hereafter enter into agreements
to provide for the
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<PAGE>
financing or refinancing of costs of the Project or any portion thereof in lieu
of or in addition to the provisions herein.
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
[SEAL]
By:
Chairman of the Board of Directors
ATTEST:
Secretary
ALABAMA POWER COMPANY
By:
Vice President
ATTEST:
Secretary
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<PAGE>
STATE OF ALABAMA
COUNTY OF JEFFERSON
I, , a Notary Public in and for said county in said state, hereby
certify that William D. Lanford, Jr., whose name as Chairman of the Board of
Directors of The Industrial Development Board of the Town of Columbia, a public
corporation and instrumentality under the laws of the State of Alabama, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the within instrument,
he, as such officer and with full authority executed the same voluntarily for
and as the act of said public corporation.
Given under my hand and official seal of office this 14th day of
November, 1996.
Notary Public
My Commission Expires:
[SEAL]
STATE OF ALABAMA
COUNTY OF JEFFERSON
I, , a Notary Public in and for said county in said state, hereby
certify that , whose name as _______________________ of Alabama Power Company, a
corporation organized and existing under the laws of the State of Alabama, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the within instrument,
he, as such officer and with full authority executed the same voluntarily for
and as the act of said corporation.
Given under my hand and official seal of office this 14th day of
November, 1996.
Notary Public
My Commission Expires:
[SEAL]
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Exhbit B
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
to
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION,
as Trustee
INDENTURE OF TRUST
Dated as of November 1, 1996
Relating to
$21,000,000
Pollution Control Revenue Refunding Bonds, 1996 Series A
(Alabama Power Company Project)
<PAGE>
TABLE OF CONTENTS
GRANTING CLAUSE........................................................... 3
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION..................................... 4
Section 1.01. Definitions.............................................. 4
Section 1.02. Rules of Construction.................................... 8
ARTICLE II
THE BONDS................................................................. 8
Section 2.02. Interest on the Bonds.................................... 8
Section 2.03. Execution and Authentication............................. 15
Section 2.04. Bond Register............................................ 15
Section 2.05. Registration and Exchange of Bonds; Persons
Treated as Owners................... 15
Section 2.06. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds.. 16
Section 2.07. Cancellation of Bonds.................................... 16
Section 2.08. Temporary Bonds.......................................... 17
ARTICLE III
REDEMPTION, PURCHASES IN LIEU OF REDEMPTION AND REMARKETING............... 17
Section 3.01. Notices to Trustee....................................... 17
Section 3.02. Redemption Dates......................................... 17
Section 3.03. Selection of Bonds to Be Redeemed........................ 17
Section 3.04. Redemption Notices....................................... 17
Section 3.05. Payment of Bonds Called for Redemption................... 19
Section 3.06. Bonds Redeemed in Part................................... 19
Section 3.07. Purchase of Bonds in Lieu of Redemption.................. 19
Section 3.08. Disposition of Purchased Bonds........................... 19
ARTICLE IV
APPLICATION OF PROCEEDS AND PAYMENT OF BONDS.............................. 21
Section 4.01. Application of Proceeds.................................. 21
Section 4.02. Payments of Bonds........................................ 21
Section 4.03. Investments of Moneys.................................... 22
Section 4.04. Moneys Held in Trust..................................... 22
ARTICLE V
BOOK-ENTRY SYSTEM......................................................... 23
Section 5.01. Book-Entry System........................................ 23
ARTICLE VI
COVENANTS................................................................. 24
Section 6.01. Payment of Bonds......................................... 24
Section 6.02. Recording and Filing; Further Assurances................. 24
Section 6.03. Tax Covenants............................................ 25
Section 6.04. Termination of Subordinated Security Interest............ 25
i
<PAGE>
ARTICLE VII
DISCHARGE OF INDENTURE.................................................... 26
Section 7.01. Bonds Deemed Paid; Discharge of Indenture................ 26
Section 7.02. Application of Trust Money............................... 27
Section 7.03. Repayment to Company..................................... 27
ARTICLE VIII
DEFAULTS AND REMEDIES..................................................... 27
Section 8.01. Events of Default........................................ 27
Section 8.02. Acceleration............................................. 27
Section 8.03. Other Remedies........................................... 27
Section 8.04. Waiver of Past Defaults.................................. 28
Section 8.05. Control by Majority...................................... 28
Section 8.06. Limitation on Suits...................................... 28
Section 8.07. Rights of Holders to Receive Payment..................... 28
Section 8.08. Collection Suit by Trustee............................... 28
Section 8.09. Trustee May File Proofs of Claim......................... 28
Section 8.10. Priorities............................................... 29
Section 8.11. Undertaking for Costs.................................... 29
ARTICLE IX
TRUSTEE AND REMARKETING AGENT............................................. 29
Section 9.01. Duties of Trustee........................................ 29
Section 9.02. Rights of Trustee........................................ 30
Section 9.03. Individual Rights of Trustee............................. 31
Section 9.04. Trustee's Disclaimer..................................... 31
Section 9.05. Notice of Defaults....................................... 31
Section 9.06. Compensation and Indemnity of Trustee.................... 31
Section 9.07. Eligibility of Trustee................................... 31
Section 9.08. Replacement of Trustee................................... 32
Section 9.09. Acceptance of Trust by Successor Trustee................. 33
Section 9.10. [reserved]............................................... 33
Section 9.11. Duties of Remarketing Agent.............................. 33
Section 9.12. Eligibility of Remarketing Agent......................... 33
Section 9.14. Compensation of Remarketing Agent........................ 34
Section 9.15. Successor Trustee or Remarketing Agent by Merger......... 34
ARTICLE X
AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE................................ 34
Section 10.01. Without Consent of Bondholders........................... 34
Section 10.02. With Consent of Bondholders.............................. 35
Section 10.03. Effect of Consents....................................... 35
Section 10.04. Notation on or Exchange of Bonds......................... 36
Section 10.05. Signing by Trustee of Amendments and Supplements......... 36
Section 10.06. Company Consent Required................................. 36
Section 10.07. Notice to Bondholders.................................... 36
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<PAGE>
ARTICLE XI
AMENDMENTS OF AND SUPPLEMENTS TO THE AGREEMENT............................ 36
Section 11.01. Without Consent of Bondholders........................... 36
Section 11.02. With Consent of Bondholders.............................. 36
Section 11.03. Consents by Trustee to Amendments or Supplements......... 37
ARTICLE XII
[reserved]................................................................ 37
ARTICLE XIII
MISCELLANEOUS............................................................. 37
Section 13.01. Notices.................................................. 37
Section 13.02. Bondholders' Consents.................................... 37
Section 13.03. Appointment of Separate Paying Agent and/or
Tender Agent........................ 38
Section 13.04. Limitation of Rights..................................... 38
Section 13.05. Severability............................................. 38
Section 13.06. Payments Due on Non-Business Days........................ 38
Section 13.07. Governing Law............................................ 38
Section 13.08. Captions................................................. 38
Section 13.09. No Recourse Against Issuer's Officers.................... 38
Section 13.10. Limitation of Liability.................................. 39
Section 13.11. Counterparts............................................. 39
EXHIBIT A..........................................................Form of Bond
iii
<PAGE>
INDENTURE OF TRUST
THIS INDENTURE OF TRUST made and entered into as of November 1, 1996,
by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF COLUMBIA, a
public corporation organized and existing under the laws of the State of Alabama
(the "Issuer"), and SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a national
banking association duly organized, existing and authorized to accept and
execute trusts of the character herein set out under and by virtue of the laws
of the United States of America, as trustee (the "Trustee");
W I T N E S E T H:
WHEREAS, under Act No. 648 enacted at the 1949 Regular Session of the
Alabama Legislature, as heretofore amended and supplemented by Act No. 1893
enacted at the 1971 Regular Session of the Alabama Legislature and Act No. 510
enacted at the 1982 Regular Session of the Alabama Legislature (Act No. 648, as
amended and supplemented, being herein called the "Act") the Issuer has the
following, among other powers:
(a) to acquire, whether by construction, purchase, exchange,
gift, lease or otherwise, and to enlarge, improve, replace, equip and
maintain, one or more pollution control facilities, including all real
and personal property deemed necessary or desirable in connection
therewith,
(b) to issue its revenue bonds to pay the cost of pollution
control facilities, such bonds to be payable solely from the revenues
and receipts derived from the leasing or sale by the Issuer of such
pollution control facilities,
(c) to lease or sell to others and otherwise dispose of all or
any portion of such pollution control facilities, and
(d) to issue its refunding bonds for the purpose of paying the
principal of, premium, if any, and accrued interest on, its
outstanding revenue bonds;
WHEREAS, in order to promote the health, safety and prosperity of the
citizens of the State of Alabama through the protection of its air and water
resources, the Issuer has undertaken to acquire, construct, install, equip and
sell to Alabama Power Company (the "Company") facilities or portions thereof,
designed for the abatement or control of air and water pollution, and the
disposal of sewage and solid wastes at the Company's Joseph M. Farley Nuclear
Plant, which is located within the geographical area of operation of the Issuer
in Houston County, Alabama, which facilities comprise the Project and are
generally described in Exhibit A to the Original Agreement described below, and
in furtherance of the above-mentioned purposes, the Issuer entered into an
Installment Sale Agreement dated as of May 1, 1978 (the "Initial Agreement"), a
First Supplemental Agreement thereto dated as of November 1, 1984, a Second
Supplemental Agreement thereto dated as of December 1, 1984, a Third
Supplemental Agreement dated as of June 1, 1985, a Fourth Supplemental Agreement
dated as of December 1, 1985, a Fifth Supplemental Agreement dated as of
December 31, 1985, a Sixth Supplemental Agreement dated as of November 1, 1986
and a Seventh Supplemental Agreement dated as of June 1, 1993 (the Initial
Agreement, as so supplemented, being hereinafter called the "Original
Agreement"), a Supplementary Installment Sale Agreement dated as of September 1,
1994 (the "First Supplementary Agreement"), a Second Supplementary Installment
Sale Agreement dated
<PAGE>
as of May 1, 1995 (the "Second Supplementary Agreement"), a Third Supplementary
Installment Sale Agreement dated as of May 1, 1995 (the "Third Supplementary
Agreement"), a Fourth Supplementary Installment Sale Agreement dated as of
October 1, 1995 (the "Fourth Supplementary Agreement"), a Fifth Supplementary
Installment Sale Agreement dated as of October 1, 1995 (the "Fifth Supplementary
Agreement") and a Sixth Supplementary Installment Sale Agreement dated as of
October 1, 1995 (the "Sixth Supplementary Agreement"), with the Company
providing for the undertaking by the Issuer to acquire, construct, install,
equip and sell to the Company the Project;
WHEREAS, the Original Agreement provided that, in order to finance the
Project, the Issuer would issue and sell its Pollution Control Revenue Bonds
(Alabama Power Company Farley Plant Project) in one or more series and that the
Issuer would sell the Project (including improvements with respect to the
Project) to the Company for the purchase price stated in the Original Agreement;
WHEREAS, in order to finance and refinance a portion of the costs of
the Project, the Issuer has heretofore issued various series of its revenue
bonds including $21,000,000 aggregate principal amount of its Pollution Control
Revenue Refunding Bonds, Series G (Alabama Power Company Farley Plant Project)
(the "Series G Bonds");
WHEREAS, the Issuer and the Company have entered into a Seventh
Supplementary Installment Sale Agreement dated of as November 1, 1996 (the
"Agreement") providing that for the purposes therein set forth, the Issuer will
issue and sell its Pollution Control Revenue Refunding Bonds, 1996 Series A
(Alabama Power Company Project);
WHEREAS, pursuant to and in accordance with the provisions of the Act,
the Issuer now intends to issue its Pollution Control Revenue Refunding Bonds,
1996 Series A (Alabama Power Company Project) in the aggregate principal amount
of $21,000,000 (the "Bonds") for the purpose of refunding the Series G Bonds;
WHEREAS, the execution and delivery of this Indenture of Trust (the
"Indenture"), and the issuance of the Bonds under the Act as herein provided
have been in all respects duly and validly authorized by proceedings duly passed
on and approved by the Issuer;
WHEREAS, all other acts, conditions and things required by the
Constitution and laws of the State of Alabama to happen, exist and be performed
precedent to and in connection with the execution and delivery of this Indenture
and the Agreement have happened, exist and have been performed as so required,
in order to make this Indenture a valid and binding trust indenture for the
security of the Bonds in accordance with its terms and in order to make the
Agreement a valid and binding agreement in accordance with its terms;
WHEREAS, the Company has agreed to make installment purchase payments
to the Issuer pursuant to the Agreement in amounts sufficient to pay the
principal, purchase price, premium, if any, and interest on the Bonds, all as
hereinafter defined;
Accordingly, the Issuer and the Trustee agree as follows for the
benefit of each other and for the benefit of the holders of the Bonds issued
pursuant to this Indenture.
2
<PAGE>
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in consideration of the
premises, of the acceptance by the Trustee of the trusts hereby created, and the
purchase and acceptance of the Bonds by the holders thereof, and also for and in
consideration of the sum of One Dollar ($1.00) to the Issuer in hand paid by the
Trustee at or before the execution and delivery of this Indenture, the receipt
of which is hereby acknowledged, and for the purpose of fixing and declaring the
terms and conditions upon which the Bonds are to be issued, authenticated,
delivered, secured and accepted by all persons who shall from time to time be or
become holders thereof, and in order to secure the payment of all Bonds at any
time issued and outstanding hereunder and the interest and the redemption
premiums, if any, thereon and the Purchase Price (hereinafter defined) therefor
according to their tenor, purport and effect, and in order to secure the
performance and observance of all the covenants, agreements and conditions
therein or herein contained, the Issuer has executed and delivered this
Indenture, and does hereby bargain, sell, convey, assign and pledge to the
Trustee, and grant to the Trustee a security interest in, all other rights,
title and interests of the Issuer in, to and under the Agreement, including the
Subordinated Security Interest provided for in the Agreement, and all moneys
receivable thereunder, except for the Unassigned Rights, and all funds held by
the Trustee hereunder (other than moneys held for the purchase of Bonds which
have not been presented for payment) as security for the payment of the Bonds
and the fees, charges and expenses of the Trustee as aforesaid and the
satisfaction of any other obligation assumed by the Issuer in connection with
all outstanding Bonds at any time issued hereunder;
TO HAVE AND TO HOLD the same unto the Trustee and its successors in
trust forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth, for
the equal and proportionate benefit and security of all and singular present and
future holders of the Bonds issued and to be issued under this Indenture,
without preference, priority or distinction as to lien or otherwise, except as
otherwise hereinafter provided, of any one Bond over any other Bond, by reason
of priority in the issue, sale or negotiation thereof or otherwise;
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns shall
pay or cause to be paid the principal and purchase price of, premium, if any,
and interest on the Bonds due or to become due thereon, at the times and in the
manner mentioned in the Bonds, and shall perform all the covenants and
conditions required of it by this Indenture, and shall pay or cause to be paid
to the Trustee, any additional paying agents and the Remarketing Agent all sums
of money due or to become due to them in accordance with the terms and
provisions hereof, then upon such final payments this Indenture and the rights
hereby granted shall terminate and the Trustee shall release this Indenture and
shall execute such documents to evidence such termination and release as may be
reasonably required by the Issuer; otherwise this Indenture to be and remain in
full force and effect.
THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that
all Bonds from time to time issued and secured hereunder are to be issued,
authenticated and delivered, and all said property, rights and interests,
including, without limitation, the amounts hereby assigned and pledged, are to
be dealt with and disposed of subject to the terms of this
3
<PAGE>
Indenture, and the Issuer agrees with the Trustee and with the respective
holders and owners, from time to time, of said Bonds, or part thereof, as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Definitions. For all purposes of this Indenture, unless the
context requires otherwise, the following terms shall have the following
meanings:
"Act" means Act No. 648 enacted at the 1949 Regular Session of the Alabama
Legislature, as amended from time to time, and presently codified as Chapter 54
of Title 11 of the Code of Alabama 1975.
"Agreement" means the Seventh Supplementary Installment Sale Agreement
dated as of November 1, 1996, between the Issuer and the Company, as amended and
supplemented from time to time.
"Beneficial Owner" means the purchaser of a beneficial interest in the
Bonds when the Bonds are held by the Securities Depository in the Book-Entry
System, and otherwise means a Bondholder.
"Bondholder" or "holder" means the registered owner of any Bond.
"Bonds" means the Pollution Control Revenue Refunding Bonds, 1996 Series A
(Alabama Power Company Project) issued by the Issuer hereunder in the aggregate
principal amount of $21,000,000.
"Book-Entry System" means the system maintained by the Securities
Depository described in Section 5.01.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which commercial banks in New York, New York, or the city in which the
principal corporate trust office of the Trustee is located, are authorized by
law to close or (iii) a day on which the New York Stock Exchange is closed.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury regulations thereunder.
"Commercial Paper Mode" means each period of time, comprised of Commercial
Paper Periods, during which Commercial Paper Rates are in effect.
"Commercial Paper Period" means, with respect to any Bond, each period set
under Section 2.02(a)(3).
"Commercial Paper Rate" means the interest rate on each Bond set under
Section 2.02(a)(3).
4
<PAGE>
"Company" means Alabama Power Company, an Alabama corporation, and its
successors and assigns, and any surviving, resulting or transferee entity as
provided in Section 6.3 of the Original Agreement.
"Company Representative" means any person at the time designated as
such pursuant to the provisions of Section 6.7 of the Original Agreement by a
written certificate furnished to the Trustee and the Issuer containing the
specimen signature of such person and signed on behalf of the Company by any of
its officers. The certificate may designate an alternate or alternates.
"Credit Agreement" means the Committed Line of Credit Agreement, dated
November 13, 1996, between the Company and The Industrial Bank of Japan,
Limited, Atlanta Agency, arranged by the Company pursuant to the provisions of
Section 3.5 of the Agreement, or any line of credit or similar facility or
facilities that the Company may enter into in substitution or replacement of
such Committed Line of Credit Agreement from time to time.
"Daily Rate" means an interest rate on the Bonds set under Section
2.02(a)(1).
"Event of Default" is defined in Section 8.01.
"Favorable Opinion of Tax Counsel" means an Opinion of Tax Counsel
addressed to the Issuer and to the Trustee to the effect that the action
proposed to be taken is permitted by the laws of the State and by this Indenture
and will not adversely affect any exclusion from gross income for federal income
tax purposes of interest on the Bonds.
"Government Obligations" means (i) noncallable direct obligations of
the United States for which its full faith and credit are pledged, (ii)
noncallable obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation of the United
States, or (iii) securities or receipts evidencing ownership interests in
obligations or specified portions (such as principal or interest) of obligations
described in (i) or (ii).
"Indenture" means this Indenture of Trust, as it may be amended or
supplemented from time to time in accordance with its terms.
"Interest Payment Date" is defined in the form of the Bonds appearing
in Exhibit A hereto.
"Interest Period" is defined in the form of the Bonds appearing in Exhibit
A hereto.
"J.J. Kenny Index" means, as of any date, the index of 7-day yields on high
grade tax exempt municipal bonds as determined by J.J. Kenny Co., Inc. or any
successor thereto and published on such date (or, if not published on said date,
on the most recent day prior thereto on which such index shall have been so
published).
"Long-Term Interest Rate" means an interest rate on the Bonds set under
Section 2.02(a)(4).
5
<PAGE>
"Long-Term Interest Rate Period" is defined in Section 2.02(a)(4).
"Maturity Date" means the stated maturity for the Bonds as set forth in
Section 2.01.
"1954 Code" means the Internal Revenue Code of 1954, as amended, and
the Treasury regulations thereunder.
"Opinion of Counsel" means a written opinion of counsel who is
acceptable to the Issuer and the Trustee. The counsel may be an employee of or
counsel to the Issuer, the Trustee or the Company.
"Opinion of Tax Counsel" means an Opinion of Counsel by counsel of
nationally recognized standing in matters relating to the exclusion of interest
from gross income on obligations issued by states and their political
subdivisions or agencies.
The term "outstanding" when used with reference to Bonds, or "Bonds
outstanding" means all Bonds which have been authenticated and delivered by the
Trustee under this Indenture, except the following:
a. Bonds canceled or purchased by or delivered to the Trustee for
cancellation.
b. Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including interest
accrued to the due date, of which sufficient moneys are held by the
Trustee.
c. Bonds deemed paid by Section 7.01.
d. Bonds in lieu of which others have been authenticated under
Section 2.05 (relating to registration and exchange of Bonds) or
Section 2.06 (relating to mutilated, lost, stolen, destroyed or
undelivered Bonds).
Bonds purchased by the Trustee or the Company pursuant to tenders or in lieu of
redemption under Article III will continue to be outstanding until the Company
directs the Trustee to cancel them. Bonds purchased pursuant to tenders or in
lieu of redemption and not delivered to the Trustee for payment are not
outstanding, but there will be outstanding Bonds authenticated and delivered in
lieu of such undelivered Bonds as provided in the second paragraph of Section
2.06.
"Participant" means one of the entities which deposit securities,
directly or indirectly, in the Book-Entry System.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Plant" means the Company's Farley Nuclear Plant located near the Town of
Columbia, Alabama.
6
<PAGE>
The term "principal," when used with reference to any Bonds, includes
any premium payable on those Bonds.
The term "principal corporate trust office", when used with respect to
the Trustee, means the corporate trust office of the Trustee located at 100
Office Park Drive, Birmingham, Alabama 35223.
"Prior Indenture" means the Trust Indenture dated as of May 1, 1978, as
supplemented and amended, under which the Series G Bonds were issued.
"Project" means the air and water pollution control and sewage and
solid waste disposal facilities refinanced from the proceeds of the Series G
Bonds, all as described in Exhibit A to the Original Agreement.
"Purchase Price" means an amount equal to 100% of the principal amount
of any Bond tendered or deemed tendered pursuant to the provisions of paragraph
6 in the form of the Bonds appearing as Exhibit A hereto, plus accrued and
unpaid interest thereon to the date of purchase.
"Record Date" is defined in the form of the Bonds appearing as Exhibit A
hereto.
"Remarketing Agent" means Merchant Capital L.L.C., and its successors
under this Indenture.
"Responsible Officer" means any officer or trust officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Securities Depository" means The Depository Trust Company, New York,
New York or its nominee, and its successors and assigns, or any successor
appointed under Section 5.01.
"Series G Bonds" means the Issuer's Pollution Control Revenue Refunding
Bonds, Series G (Alabama Power Company Farley Plant Project) issued and
outstanding in the aggregate principal amount of $21,000,000.
"Series G Trustee" means SouthTrust Bank of Alabama, National
Association, in its capacity as Trustee for the Series G Bonds.
"State" means the State of Alabama.
"Tax Agreement" means the Tax and Non-Arbitrage Certificate of the
Company dated the date of issuance of the Bonds.
"Trustee" means the entity identified as such in the heading of this
Indenture and its successors under this Indenture.
"Unassigned Rights" means the rights of the Issuer under the second and
third paragraphs of Section 3.1 (relating to fees and expenses and amounts
payable to redeem the Series G Bonds), Section 4.3 (relating to indemnification)
and Section 5.3 (relating to expenses of collection) of the Agreement.
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"Weekly Rate" means an interest rate on the Bonds set under Section
2.02(a)(2).
Section 1.02. Rules of Construction. Unless the context otherwise requires,
a. an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles,
b. references to Articles and Sections are to the Articles and
Sections of this Indenture, and
c. the singular form of any word, including the terms defined in
Section 1.01, includes the plural, and vice versa, and any reference
to the male gender includes the female gender.
ARTICLE II
THE BONDS
Section 2.01. Issuance of Bonds: Form; Dating. The Bonds shall be
designated "The Industrial Development Board of the Town of Columbia, Pollution
Control Revenue Refunding Bonds, 1996 Series A (Alabama Power Company Project)."
The total principal amount of Bonds that may be outstanding shall not exceed
$21,000,000. The Bonds shall be substantially in the form of Exhibit A, which is
part of this Indenture, in the denominations provided for in the Bonds. The
Bonds may have notations, legends or endorsements required by law or usage.
All Bonds will be dated the date of original issuance and delivery and
shall mature, subject to prior redemption, on November 1, 2021.
Bonds issued in exchange for Bonds surrendered for transfer or exchange
or in place of mutilated, lost, stolen, destroyed or undelivered Bonds will bear
interest from the last date to which interest has been paid on the Bonds being
transferred, exchanged or replaced or, if no interest has been paid, as of the
date of their original issuance and delivery. Bonds will be numbered as
determined by the Trustee.
Upon the execution and delivery of this Indenture, the Issuer will
execute and deliver to the Trustee and the Trustee will authenticate the Bonds
and deliver them to the purchaser or purchasers as directed by the Issuer.
Section 2.02. Interest on the Bonds. Interest on the Bonds will be
payable as provided in the Bonds and in this Section. Interest on the Bonds will
initially be payable at the Daily Rate. The interest rate determination method
may be changed by the Company as described in paragraph (b) below. The methods
of determining the various interest rates are as provided in the following
paragraph (a).
(a) Interest Rate Determination Methods. While there exists an Event of
Default under the Indenture, the interest rate on the Bonds will be the rate on
the Bonds on the day before the Event of Default occurred, except that if
interest on any Bond was then payable at a Commercial Paper Rate, the interest
rate for all Bonds then bearing interest at a Commercial Paper Rate will be the
highest Commercial Paper Rate then in effect for any Bond.
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(1) Daily Rate. When interest on the Bonds is payable at a
Daily Rate, the Remarketing Agent will set a Daily Rate on or before
11:00 a.m., New York City time, on each Business Day for that Business
Day. Each Daily Rate will be the minimum rate necessary (as determined
by the Remarketing Agent based on the examination of tax-exempt
obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under then-prevailing market conditions) for
the Remarketing Agent to sell the Bonds on the day the rate is set at
their principal amount (without regard to accrued interest). The Daily
Rate for any non-Business Day will be the rate for the last day for
which a rate was set.
(2) Weekly Rate. When interest on the Bonds is payable at a
Weekly Rate, the Remarketing Agent will set a Weekly Rate on or before
5:00 p.m., New York City time, on the last Business Day before the
commencement of a period during which the Bonds bear interest at a
Weekly Rate and on each Tuesday thereafter so long as interest on the
Bonds is to be payable at a Weekly Rate or, if any Tuesday is not a
Business Day, on the next preceding Business Day. Each Weekly Rate will
be the minimum rate necessary (as determined by the Remarketing Agent
based on the examination of tax-exempt obligations comparable to the
Bonds known by the Remarketing Agent to have been priced or traded
under then prevailing market conditions) for the Remarketing Agent to
sell the Bonds on the date the rate is set at their principal amount
(without regard to accrued interest). Thereafter, each Weekly Rate
shall apply to (i) the period beginning on the Wednesday after the
Weekly Rate is set and ending on the following Tuesday or, if earlier,
ending on the day before the effective date of a new method of
determining the interest rate on the Bonds or (ii) the period beginning
on the effective date of the change to a Weekly Rate and ending on the
next Tuesday.
(3) Commercial Paper Rate. During a Commercial Paper Mode, each
Bond will bear interest during the Commercial Paper Period for such
Bond at the Commercial Paper Rate for such Bond. Different Commercial
Paper Periods may apply to different Bonds at any time and from time to
time. Except as otherwise described in this subparagraph (3), the
Commercial Paper Period and Commercial Paper Rate for each Bond will be
determined by the Remarketing Agent no later than 12:15 p.m., New York
City time, on the first day of each Commercial Paper Period.
(i) Determination of Commercial Paper Periods. Each
Commercial Paper Period will be a period of at least one day
and not more than 365 days, determined by the Remarketing Agent
to be the period which, together with all other Commercial
Paper Periods for all Bonds then outstanding, will, in the
judgment of the Remarketing Agent, result in the lowest overall
interest expense on the Bonds over the next 365 days; provided,
however, that at any time at which a Credit Agreement is in
effect, the Remarketing Agent shall not establish any
Commercial Paper Period which would end at a time when no
Credit Agreement is in effect. Each Commercial Paper Period
will end on either the day before a Business Day or on the day
before the Maturity Date for such Bond. However, any Bond
purchased on behalf of the Company and remaining unsold by the
Remarketing Agent as of the close of business on the first day
of the Commercial Paper Period for that Bond will have a
Commercial Paper Period of one day or,
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if that Commercial Paper Period would not end on a day before a
Business Day, a Commercial Paper Period of the shortest
possible duration greater than one day ending on a day before a
Business Day.
In determining the number of days in each Commercial Paper
Period, the Remarketing Agent shall take into account the
following factors: (I) existing short-term tax-exempt market
rates and indices of such short-term rates, (II) the existing
market supply and demand for short-term tax-exempt securities,
(III) existing yield curves for short-term and long-term
tax-exempt securities for obligations of credit quality
comparable to the Bonds, (IV) general economic conditions, (V)
industry economic and financial conditions that may affect or
be relevant to the Bonds, (VI) the number of days in other
Commercial Paper Periods applicable to the Bonds and (VII) such
other facts, circumstances and conditions as the Remarketing
Agent, in its sole discretion, shall determine to be relevant.
(ii) Determination of Commercial Paper Rates. The
Commercial Paper Rate for each Commercial Paper Period for each
Bond shall be the minimum rate necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt
obligations comparable to the Bonds known by the Remarketing
Agent to have been priced or traded under the then-prevailing
market conditions) for the Remarketing Agent to sell such Bond
on the date and at the time of such determination at its
principal amount (without regard to accrued interest).
(4) Long-Term Interest Rate. The Remarketing Agent will set a
Long-Term Interest Rate on a date no more than 15 days before the
beginning of any period (a "Long-Term Interest Rate Period") in which
interest on any of the Bonds will be payable at a Long-Term Interest
Rate. Each Long-Term Interest Rate will be the minimum rate necessary
(as determined by the Remarketing Agent based on the examination of
tax-exempt obligations comparable to the Bonds known by the Remarketing
Agent to have been priced or traded under then-prevailing market
conditions) for the Remarketing Agent to sell the Bonds on the
effective date of the Long-Term Interest Rate at their principal amount
(without regard to accrued interest).
(5) Failure of Remarketing Agent to Announce Interest Rates on
the Bonds. If the appropriate interest rate or Commercial Paper Period
is not or cannot be determined for whatever reason, the method of
determining interest on the Bonds shall be automatically converted to
the Weekly Rate (without the necessity of complying with the
requirements of Section 2.02(b)) and the interest rate shall be equal
to the J.J. Kenny Index, or such other index (or percentage of an
index) deemed appropriate for tax-exempt securities of the nature of
the Bonds as the Remarketing Agent, with the consent of the Trustee,
may have previously selected, until such time as the method of
determining interest on the Bonds can be changed in accordance with
Section 2.02(b); provided, that if the Bonds are then in a Long-Term
Interest Rate Period, the Bonds shall bear interest at a Weekly Rate,
but only if a Favorable Opinion of Tax Counsel with respect to the
change to a Weekly Rate has been delivered to the Trustee. If such
Favorable Opinion of Tax Counsel has not been delivered, the Bonds
shall remain in a Long-Term Interest Rate Period with an interest rate
equal to the interest rate for the
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prior Long-Term Interest Rate Period and with a duration equal to the
prior Long-Term Interest Rate Period (or, if earlier, a Long-Term
Interest Rate Period ending on the day before the Maturity Date for
such Bond). The Trustee shall promptly notify the Bondholders of any
such automatic change as set forth in Section 2.02(c).
While Bonds are in a Commercial Paper Mode, during any
transition period caused by an automatic conversion of such Bonds to a
Weekly Rate in accordance with this Subsection (5), Bonds bearing
interest at a Weekly Rate and Bonds bearing interest at a Commercial
Paper Rate, as applicable, shall be governed by the provisions of this
Indenture applicable to such methods of determining interest on the
Bonds.
(b) (1) Change in Interest Rate Determination Method. The Company may
change the method of determining the interest rate on the Bonds by notifying the
Issuer, the Trustee, the Remarketing Agent and, if a Book-Entry System is then
in effect for the Bonds, the Securities Depository. Such notice shall contain
(a) the effective date, (b) the proposed interest rate determination method, (c)
if the change is to a Long-Term Interest Rate or Rates, the last day of the
first such Long-Term Interest Rate Period and, at the option of the Company, the
effective date and last day of any successive Long-Term Interest Rate Periods
(which last day for each Long-Term Interest Rate Period must be either the day
before the related Maturity Date for such Bonds or a day which is before a
Business Day and is at least 365 days after the effective date), and (d) if the
change is to a Commercial Paper Rate, the termination date of any Credit
Agreement which will be in effect during the Commercial Paper Period. The
Long-Term Interest Rate Period shall be the same duration for all of the Bonds.
The notice must be accompanied by a Favorable Opinion of Tax Counsel, except as
described below. Except in the case of the rescission of the Favorable Opinion
of Tax Counsel described in Section 2.02(e), if the Company's notice complies
with this paragraph, the interest rate on the Bonds will be payable at the new
rate on the effective date specified in the notice until there is another change
as provided in this Section. Notwithstanding anything in this Indenture to the
contrary, the Company must deliver a Favorable Opinion of Tax Counsel whenever
there is a change from a period during which the interest rate on the Bonds is
set at intervals of 365 days or less to a period during which the interest rate
on the Bonds is set at intervals in excess of 365 days, or vice versa.
If the Company wishes to designate successive Long-Term Interest Rate
Periods without specifying the effective dates and last days as described in the
preceding paragraph for the second or any subsequent Long-Term Interest Rate
Periods, it may do so by following the same procedure as for a change in the
interest rate determination method as provided in the foregoing paragraph.
If, 30 days before the end of a Long-Term Interest Rate Period, the
Company has not provided for the next interest rate period, a new Long-Term
Interest Rate Period of the same duration will follow (or if shorter, a
Long-Term Interest Rate Period ending on the day before the Maturity Date for
the Bonds).
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When one Long-Term Interest Rate Period follows another, all provisions
of this Indenture applying to a change in the interest rate determination method
will apply, except:
(A) the redemption described under "Mandatory Redemption Upon a
Change in the Method of Determining the Interest Rate on the Bonds" in
the Bonds;
(B) the Company will not be required to deliver a Favorable
Opinion of Tax Counsel if a new Long-Term Interest Rate Period begins
as a result of the Company failing to provide for the next interest
rate period; and
(C) the Company will not be required to deliver a Favorable
Opinion of Tax Counsel if the Company has previously designated a
series of successive Long-Term Interest Rate Periods which, together
with the current Long-Term Interest Rate Period, are substantially
equal in length, and if a Favorable Opinion of Tax Counsel was
delivered before the first such Long-Term Interest Rate Period in that
series which applies to each successive Long-Term Interest Rate Period.
(2) Limitations. Any change in the method of determining interest on the
Bonds pursuant to paragraph (1) above must comply with the following:
(i) the effective date of a change (or each effective date in the
case of a change from a Commercial Paper Mode) shall be a Business Day
which is at least 15 days (30 days if a Long-Term Interest Rate is
then in effect and the effective date is before the day after the last
day of a Long-Term Interest Rate Period) after the twelfth Business
Day after receipt by the Trustee of the Company's notice of the
change;
(ii) if a Long-Term Interest Rate is then in effect, the
effective date of any change must be either the day after the last day
of the Long-Term Interest Rate Period or, except as described in
clause (iii) below, a day on which the Bonds would otherwise be
subject to redemption under the paragraph "Optional Redemption at a
Premium During Long-Term Interest Rate Period" in Section 8 of the
Bonds if the change did not occur; provided that if the effective date
of the change is before the day after the last day of the Long-Term
Interest Rate Period, the Company must also deliver an Opinion of Tax
Counsel stating that, as of the first day on which the Bonds were
subject to optional redemption during such Long-Term Interest Rate
Period, the Company's ability to terminate such Long-Term Interest
Rate Period prior to the day after the last day of such Long-Term
Interest Rate Period did not and does not adversely affect the
exclusion of interest on the Bonds from federal gross income;
(iii) if the Company has previously designated successive
Long-Term Interest Rate Periods, the effective date of each Long-Term
Interest Rate Period must be the day after the last day of the
previous Long-Term Interest Rate Period;
(iv) if a Commercial Paper Mode is then in effect, the effective
date of any change must be either the day after the last day of the
Commercial Paper Mode or, as
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to any Bond, the day after the last day of the Commercial Paper Period
then in effect (or to be in effect) with respect to that Bond;
(v) if any Bonds have been called for redemption and the
redemption has not yet occurred, the effective date of the change
cannot be before such redemption date;
(vi) if a Long-Term Interest Rate or a Daily Rate is then in
effect, the effective date of any change cannot occur during the
period after a Record Date and to, but not including, the related
Interest Payment Date; and
(vii) if a Commercial Paper Mode is then in effect, the
Remarketing Agent shall determine Commercial Paper Periods of such
duration that will, in the judgment of the Remarketing Agent, best
promote an orderly transition on the effective date. After the receipt
by the Trustee of the Company's notice of such change, the day after
the last day of each Commercial Paper Period shall be, with respect to
such Bond, the effective date of the change. The Remarketing Agent
shall promptly give written notice of each such last date and each
such effective date with respect to each Bond to the Issuer, the
Company, and the Trustee.
During any such transition period, Bonds bearing interest at a
Commercial Paper Rate shall be governed by the provisions of this
Indenture applicable to a Commercial Paper Mode and Bonds bearing
interest at a Daily Rate, Weekly Rate or Long-Term Interest Rate, as
applicable, shall be governed by the provisions of this Indenture
applicable to such methods of determining interest on the Bonds.
(c) Notice to Bondholders of Change in Interest Rate Determination
Method. When a change in the interest rate determination method is to be made,
or upon commencement of a new Long-Term Interest Rate Period, the Trustee will,
upon notice from the Company pursuant to Section 2.02(b), notify the Bondholders
by first class mail at least 15 days before the effective date (or each
effective date in the case of an adjustment from a Commercial Paper Mode) of the
change, except that such notice shall be given at least 30 days prior to the
effective date if a Long-Term Interest Rate is in effect and the effective date
is on or before the end of the Long- Term Interest Rate Period. The notice shall
be effective when sent and shall state:
(1) that the interest rate determination method will be changed
and what the new method will be;
(2) the effective date of the new rate; and
(3) that a mandatory redemption or mandatory purchase in lieu of
redemption will result on the effective date of the change as provided
in the Bonds and all the information required by this Indenture to be
included in a notice of redemption set forth in Section 3.04.
The information required in any notice pursuant to this subsection (c)
and the information referred to in any redemption notice (including an
Additional Notice) pursuant to Section 3.04
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may be combined in a single notice if it is sent to Bondholders in the manner
and at the time specified under "Notice of Redemption" in Section 8 of the form
of the Bonds.
(d) Calculation of Interest. The Remarketing Agent shall provide the
Trustee and the Company with notice in writing or by telephone (any such notice
by telephone to be delivered to a Responsible Officer of the Trustee) promptly
confirmed by facsimile transmission by 12:30 p.m., New York City time,
(1) on the first Business Day after a month in which interest on
the Bonds was payable at a Daily Rate, of the Daily Rate for each day
in such month;
(2) on each day on which a Weekly Rate becomes effective, of the
Weekly Rate;
(3) on the first day of each Commercial Paper Period, of the
length thereof and the Commercial Paper Rate, and, if there is more
than one Commercial Paper Rate then in effect, of the related
applicable principal amounts;
(4) on the first Business Day of a Long-Term Interest Rate
Period, of the Long-Term Interest Rate or Long-Term Interest Rates set
for that period and the related applicable principal amounts; and
(5) on any Business Day preceding any redemption or purchase
date, any interest rate requested by the Trustee in order to enable it
to calculate the accrued interest, if any, due on such redemption or
purchase date.
Using the rates supplied by the notice required by this subsection (d),
the Trustee will calculate the interest payable on the Bonds. The Remarketing
Agent will inform the Trustee and the Company orally at the oral request of
either of them of any interest rate set by the Remarketing Agent. The Trustee
will confirm the effective interest rate by telephone or in writing to any
Bondholder who requests it in any manner.
The setting of the rates and the calculation of interest payable on the
Bonds as provided in this Indenture will be conclusive and binding on all
parties.
(e) Change in Rate Determination Method-Opinions of Counsel.
Notwithstanding any provision of this Section 2.02, no change shall be made in
the interest rate determination method at the direction of the Company pursuant
to Section 2.02(b)(1) hereof if the Trustee shall receive written notice prior
to such change that the Favorable Opinion of Tax Counsel required under Section
2.02(b)(1) or Section 2.02(a)(5) or, if applicable, the Opinion of Tax Counsel
required by Section 2.02(b)(2)(ii), has been rescinded. If the Trustee shall
have sent any notice to the Bondholders regarding a change in rate under Section
2.02(c), then in the event of such rescission of, or failure to deliver, such
opinion, the Trustee shall promptly notify all Bondholders of such rescission.
(f) Notice to Bondholders of Voluntary Termination of Credit Agreement. If
the Trustee receives notice from the Company as provided in Section 3.5 of the
Agreement to the
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effect that the Company intends to terminate either or both of the Credit
Agreements prior to its or their stated termination date, the Trustee shall
notify the Bondholders by first class mail at least 15 Business Days prior to
the effective date of such termination. The notice shall be effective when sent
and shall state:
(1) that the Company has notified the Trustee that it intends to
terminate either or both of the Credit Agreements;
(2) the effective date of such termination; and
(3) if the interest is then payable at a Daily Rate or a Weekly
Rate, that the Bondholders have the right to tender Bonds to the
Trustee for purchase as provided in Section 6 of the form of the Bonds
set out in Exhibit A hereto.
Section 2.03. Execution and Authentication. The Bonds shall be signed
on behalf of the Issuer with the manual or facsimile signature of the Chairman
or Vice Chairman of its board of directors, and attested by the manual or
facsimile signature of its Secretary or Assistant Secretary, and the seal of the
Issuer shall be impressed or imprinted on the Bonds by facsimile or otherwise.
All authorized facsimile signatures shall have the same effect as if manually
signed. If an officer of the Issuer whose signature is on a Bond no longer holds
that office at the time the Trustee authenticates the Bond, the Bond shall
nevertheless be valid. Also, if a person signing a Bond is the proper officer on
the actual date of execution, the Bond shall be valid even if that person is not
the proper officer on the nominal date of action.
A Bond shall not be valid for any purpose under this Indenture until
the Trustee manually signs the certificate of authentication on the Bond. Such
signature shall be conclusive evidence that the Bond has been authenticated
under this Indenture.
As a precondition to the initial authentication and delivery of the
Bonds, the Trustee shall receive a request and authorization to the Trustee from
the Issuer, signed by the Chairman or Vice Chairman of the board of directors of
the Issuer, to authenticate and deliver the Bonds to the persons and in the
manner therein described.
Section 2.04. Bond Register. Bonds must be presented at the principal
corporate trust office of the Trustee for registration, transfer, exchange and
payment. Bonds tendered by their holders must be delivered as specified in the
Bonds. The Trustee shall keep a register of Bonds and of their transfer and
exchange, which register shall be open to inspection by the Issuer and the
Company during normal business hours.
Section 2.05. Registration and Exchange of Bonds; Persons Treated as
Owners. Bonds may be transferred only on the register maintained by the Trustee.
Upon surrender for transfer of any Bond to the Trustee, duly endorsed for
transfer or accompanied by an assignment duly executed by the holder or the
holder's attorney duly authorized in writing, the Trustee will authenticate a
new Bond or Bonds of the same maturity, in an equal total principal amount and
registered in the name of the transferee.
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Bonds may be exchanged for an equal total principal amount of Bonds of
the same maturity but of different authorized denominations. The Trustee will
authenticate and deliver Bonds that the Bondholder making the exchange is
entitled to receive, bearing numbers not then outstanding.
Except in connection with the purchase of Bonds tendered for purchase
or purchased in lieu of redemption, the Trustee will not be required to transfer
or exchange any Bond called for redemption or during the period beginning 15
days before the mailing of notice calling the Bonds or any portion of the Bonds
for redemption and ending on the redemption date.
The holder of a Bond shall be the absolute owner of the Bond for all
purposes, and payment of principal, interest or purchase price shall be made
only to or upon the written order of the holder or the holder's legal
representative.
The Trustee will require the payment by a Bondholder requesting
exchange or transfer of any tax or other governmental charge required to be paid
in respect of the exchange or transfer but will not impose any other charge.
Section 2.06. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds.
If any Bond is mutilated, lost, stolen or destroyed, the Trustee will
authenticate a new Bond of the same maturity and denomination if any mutilated
Bond shall first be surrendered to the Trustee, and if, in the case of any lost,
stolen or destroyed Bond, there shall first be furnished to the Issuer, the
Trustee and the Company evidence of such loss, theft or destruction, together
with an indemnity, satisfactory to them. If the Bond has matured, instead of
issuing a replacement Bond, the Trustee may with the consent of the Company pay
the Bond without requiring surrender of the Bond and make such requirements as
the Trustee deems fit for its protection, including a lost instrument bond. The
Issuer, the Company and the Trustee may charge their reasonable fees and
expenses in this connection.
If a Bond is called for redemption and the Company elects to purchase
the Bond in lieu of redemption as provided in Article III, or if the holder of a
Bond gives irrevocable instructions to the Remarketing Agent for purchase, and
in each case funds are deposited with the Trustee sufficient for the purchase,
the Trustee upon request of the Company or the Remarketing Agent will
authenticate a new Bond in the same maturity and in the same denomination
registered as the Company or the Remarketing Agent may direct and deliver it to
the Company or upon the Company's order, whether or not the Bond purchased or
called for redemption is ever delivered, and the Bond purchased or called for
redemption shall be cancelled on the books of the Trustee, whether or not said
Bond has been delivered to the Trustee. From and after the purchase date,
interest on such Bond shall cease to be payable to the prior holder thereof,
such holder shall cease to be entitled to the benefits or security of this
Indenture and shall have recourse solely to the funds held by the Trustee for
the purchase of such Bond and the Trustee shall not register any further
transfer of such Bond by such prior holder. All funds held by the Trustee for
the purchase of undelivered Bonds shall be held uninvested.
Section 2.07. Cancellation of Bonds. Whenever a Bond is delivered to the
Trustee for cancellation (upon payment, redemption or otherwise), or for
transfer, exchange or replacement pursuant to Section 2.05 or Section 2.06, the
Trustee will promptly cancel and dispose of the
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Bond in accordance with the Trustee's policy of disposal; provided, however,
that the Trustee shall not be required to destroy cancelled Bonds.
Section 2.08. Temporary Bonds. Until definitive Bonds are ready for
delivery, the Issuer may execute and the Trustee will authenticate temporary
Bonds substantially in the form of the definitive Bonds, with appropriate
variations. The Issuer will, without unreasonable delay, prepare and the Trustee
will authenticate definitive Bonds in exchange for the temporary Bonds.
Such exchange shall be made by the Trustee without charge.
ARTICLE III
REDEMPTION, PURCHASES IN LIEU OF REDEMPTION AND REMARKETING
Section 3.01. Notices to Trustee. If the Company wishes that any Bonds
be redeemed pursuant to any optional redemption provision in the Bonds, the
Company will notify the Trustee of the applicable provision, the redemption
date, the principal amount of the Bonds to be redeemed and other necessary
particulars. The Company will give the notice at least 45 days before the
redemption date, or such shorter period of time agreed to by the Trustee.
Section 3.02. Redemption Dates. The redemption date of Bonds to be
redeemed pursuant to any optional redemption provision in the Bonds will be a
date permitted by the Bonds and specified by the Company in the notice delivered
pursuant to the preceding Section. The redemption date for mandatory redemptions
will be as specified in the Bonds to be redeemed or determined by the Trustee
consistently with the provisions of the Bonds.
Section 3.03. Selection of Bonds to Be Redeemed. Except as provided in
the Bonds, if fewer than all the Bonds are to be redeemed, the Trustee will
select the Bonds to be redeemed by lot or other method it deems fair and
appropriate, except that the Trustee will first select any Bonds owned by the
Company or any of its nominees or held by the Trustee for the account of the
Company or any of its nominees. The Trustee will make the selection from Bonds
not previously called for redemption. For this purpose, the Trustee will
consider each Bond in a denomination larger than the minimum denomination
permitted by the Bonds at the time to be separate Bonds each in the minimum
denomination. Provisions of this Indenture that apply to Bonds called for
redemption also apply to portions of Bonds called for redemption.
Section 3.04. Redemption Notices.
(a) Official Notice of Redemption. The Trustee will give notice of each
redemption as provided in the Bonds and will at the same time give a copy of the
notice to the Remarketing Agent, provided that no redemption notice shall be
given with respect to a redemption under "Mandatory Redemption on Each Interest
Payment Date During Commercial Paper Mode" in Section 8 of the form of the
Bonds. The notice shall identify the Bonds to be redeemed and will state (1) the
redemption date (and, if the Bonds provide that accrued interest will not be
paid on the redemption date, the date it will be paid), (2) the redemption
price, (3) that the Bonds called for redemption must be surrendered to collect
the redemption price, (4) the address at which the
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Bonds must be surrendered and (5) that interest on the Bonds called for
redemption ceases to accrue on the redemption date.
With respect to an optional redemption of any Bonds under "Optional
Redemption at a Premium During Long-Term Interest Rate Period," "Extraordinary
Optional Redemption" or "Optional Redemption During Daily or Weekly Rate Period"
in Section 8 of the form of the Bonds, unless moneys sufficient to pay the
principal of, redemption premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Trustee prior to the giving of such
notice of redemption, such notice may state that said redemption shall be
conditional upon the receipt of such moneys by the Trustee on or prior to the
date fixed for redemption. If such moneys are not received, such notice shall be
of no force and effect, the Issuer shall not redeem such Bonds, the redemption
price shall not be due and payable, and the Trustee shall give notice, in the
same manner in which the notice of redemption was given, that such moneys were
not so received and that such Bonds will not be redeemed.
Failure to give any required notice of redemption as to any particular
Bonds will not affect the validity of the call for redemption of any Bonds in
respect of which no such failure has occurred. Any notice mailed as provided in
the Bonds shall be effective when sent and will be conclusively presumed to have
been given whether or not actually received by any holder.
(b) Additional Notice of Redemption. In addition to the redemption
notice required above, if there is not a Book-Entry System in effect for the
Bonds, further notice (the "Additional Notice") shall be given by the Trustee as
set out below. No defect in the Additional Notice nor any failure to give all or
any portion of the Additional Notice shall in any manner defeat the
effectiveness of a call for redemption if notice is given as prescribed in
paragraph (a) above.
(1) Each Additional Notice of redemption shall contain the
information required in paragraph (a) above for an official notice of
redemption plus (i) the CUSIP numbers of all Bonds being redeemed; (ii)
the date of the Bonds as originally issued; (iii) the interest rate
determination method for, or the rate of interest borne by each Bond
being redeemed; (iv) the maturity date of each Bond being redeemed: and
(v) any other descriptive information needed to identify accurately the
Bonds being redeemed.
(2) Upon the payment of the redemption price of the Bonds being
redeemed, each check or other transfer of funds issued for such purpose
shall bear the CUSIP number identifying, by issue and maturity, the
Bonds being redeemed with the proceeds of such check or other transfer.
(3) Each Additional Notice of redemption shall be sent at least
30 days before the redemption date by registered or certified mail or
overnight delivery service (or by such other means as the Trustee may
have established with the securities depository or information service)
to all registered securities depositories then in the business of
holding substantial amounts of obligations similar to the Bonds (such
depositories now being Depository Trust Company of New York, New York,
Midwest Securities Trust Company of Chicago, Illinois, and Philadelphia
Depository Trust Company of Philadelphia, Pennsylvania) and to one or
more national information services that disseminate notices of
redemption of obligations such as the Bonds.
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The information required in any redemption notice (including an
Additional Notice) pursuant to this Section and the information required in any
notice pursuant to Section 2.02(c) may be combined in a single notice if it is
sent to Bondholders in the manner and at the time specified under "Notice of
Redemption" in Section 8 of the form of the Bonds.
Section 3.05. Payment of Bonds Called for Redemption. Upon surrender to
the Trustee, Bonds called for redemption shall be paid or purchased in lieu of
redemption as provided in this Article at the redemption price stated in the
notice, plus interest accrued to the redemption date, or at a purchase price
equal to principal plus accrued interest to the purchase date, except that
interest payable on Bonds bearing interest at a Daily Rate will be paid on the
fifth Business Day following the redemption date. Bonds called for redemption
and purchased pursuant to a tender before the redemption date will not be
redeemed but will be dealt with as provided below in this Article.
Section 3.06. Bonds Redeemed in Part. Upon surrender of a Bond redeemed
or purchased in lieu of redemption in part, the Trustee will authenticate for
the holder a new Bond or Bonds in authorized denominations equal in principal
amount to the unredeemed or unpurchased portion of the Bond surrendered.
Section 3.07. Purchase of Bonds in Lieu of Redemption. When Bonds are
called for redemption pursuant to the paragraphs captioned, "Mandatory
Redemption at Beginning of a New Long-Term Interest Rate Period" or "Mandatory
Redemption Upon a Change in the Method of Determining the Interest Rate on the
Bonds" in Section 8 of the form of the Bonds, the Company may purchase some of
or all the Bonds called for redemption for a price equal to the otherwise
applicable redemption price, if it (or the Remarketing Agent) gives written
notice to the Trustee by 5:00 p.m. New York City Time on the day before the
redemption date that it wishes to purchase the Bonds the principal amount of
which is specified in the notice and furnishes the Trustee sufficient money in
sufficient time for the Trustee to make the purchase on the redemption date. The
Trustee will purchase Bonds called for redemption pursuant to the paragraph
captioned "Mandatory Redemption on Each Interest Payment Date During Commercial
Paper Mode" unless otherwise instructed in writing by the Company, or unless the
Indenture otherwise requires that they be redeemed and cancelled, before the
redemption date. The Trustee will purchase the Bonds pursuant to this Section
only as provided in Section 4.02.
Section 3.08. Disposition of Purchased Bonds. (a) Bonds to be Remarketed.
Bonds purchased pursuant to tenders as provided in the Bonds or in lieu of
redemption as provided in the foregoing Section will be offered for sale by the
Remarketing Agent as provided in this Section except as follows:
(1) Bonds purchased pursuant to a tender after having been
called for redemption under a provision in the Bonds that does not
provide the Company an option to purchase in lieu of redemption will be
canceled.
(2) Bonds called for redemption under "Mandatory Redemption
Upon a Change in the Method of Determining the Interest Rate on the
Bonds" in Section 8 of the Bonds, which are tendered between the date
notice of redemption is given and the
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redemption date, may be remarketed before the redemption date only if
the buyer receives a copy of the redemption notice from the Remarketing
Agent.
(3) Bonds will not be offered for sale under this Section
during the continuance of an Event of Default.
(b) Remarketing Effort. Except to the extent the Company directs the
Remarketing Agent not to do so, the Remarketing Agent will offer for sale and
use reasonable efforts to sell all Bonds to be sold as provided in paragraph (a)
above and, when directed by the Company, any Bonds held by the Company. The sale
price of each Bond must be equal to the principal amount of each Bond plus
accrued interest to the purchase date. The Company may direct the Remarketing
Agent from time to time to cease and to resume sales efforts with respect to
some of or all the Bonds. The Remarketing Agent may buy as principal any Bonds
to be offered under this Section.
(c) Notices in Respect of Tenders. When the Trustee receives a notice
from a Bondholder (or a Beneficial Owner through its direct Participant) as
specified in Section 6 of the Bonds for the bondholder (or a Beneficial Owner
through its direct Participant) to tender Bonds, the Trustee will promptly
notify the Remarketing Agent and the Company by facsimile transmission or
telephone, promptly confirmed in writing, of the receipt of such notice, but in
no event later than the following times:
(i) When the Bonds bear interest at a Daily Rate, no later than
11:15 a.m. (New York City time) on the same Business Day; and
(ii) When the Bonds bear interest at a Weekly Rate, no later than
11:15 a.m. (New York City time) on the Business Day next succeeding
receipt of such notice.
(d) Delivery of Remarketed Bonds.
(i) The Trustee shall hold all Bonds delivered pursuant to this
Section in trust for the benefit of the owners thereof until moneys
representing the Purchase Price of such Bonds shall have been delivered
to or for the account of or to the order of such Bondholders, and
thereafter, if such Bonds are remarketed, shall deliver replacement
Bonds, prepared by the Trustee in accordance with the directions of the
Remarketing Agent and authenticated by the Trustee, for any Bonds
purchased in accordance with the written directions of the Remarketing
Agent to the Remarketing Agent for delivery to the purchasers thereof.
(ii) The Remarketing Agent shall advise the Trustee and the
Company in writing or by facsimile transmission, promptly confirmed in
writing, of the principal amount of Bonds which have been remarketed,
together with the denominations and registration instructions
(including taxpayer identification numbers) in accordance with the
following schedule (all times of which are New York City time):
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CURRENT METHOD OF INTEREST
RATE DETERMINATION OR, IN
CONNECTION WITH A CHANGE IN
SUCH METHOD, THE NEW METHOD TIME BY WHICH INFORMATION TO BE
OF INTEREST RATE DETERMINATION FURNISHED TO TRUSTEE
Commercial Paper Period 12:15 p.m. on the purchase date
Daily Rate Period 12:15 p.m. on the purchase date
Weekly Rate Period 12:15 p.m. on the purchase date
Long-Term Interest Rate Period 12:15 p.m. on the purchase date
(iii) The terms of any sale by the Remarketing Agent shall
provide for the authorization of the payment of the Purchase Price by
the Remarketing Agent to the Trustee in exchange for Bonds registered
in the name of the new Bondholder which shall be delivered by the
Trustee to the Remarketing Agent at or before 2:00 p.m. (New York City
time) on the purchase date if the Purchase Price has been received from
the Remarketing Agent by the time set forth in Section 3.08(e) on the
purchase date. Such payment by the Remarketing Agent pursuant to such
authorization shall be made on such date.
(e) Delivery of Proceeds of Sale. The Remarketing Agent shall deliver
directly to the Trustee an amount equal to the principal amount thereof plus
accrued interest, if any, of the Bonds which the Remarketing Agent has advised
the Trustee have been remarketed pursuant to Section 3.08(d)(ii) no later than
12:30 p.m. (New York City time) on the purchase date.
ARTICLE IV
APPLICATION OF PROCEEDS AND PAYMENT OF BONDS
Section 4.01. Application of Proceeds. The Issuer will cause the
proceeds of the initial sale of the Bonds to be deposited with the Trustee. On a
date to be designated by the Company (but in no event later than February 11,
1997) the Trustee will disburse the proceeds of the initial sale of the Bonds to
the Series G Trustee for deposit in the bond fund under the Prior Indenture, to
be applied to pay the outstanding principal amount of the Series G Bonds upon
call for redemption.
Pursuant to Section 3.1 of the Agreement, the Company has agreed to pay
to the Series G Trustee the amount in excess of the proceeds of the Bonds needed
to accomplish the refunding described in this Section. Any investment earnings
remaining after the transfer of moneys to the Series G Trustee, will be applied
to the payment of interest on the Bonds on the next Interest Payment Date.
Section 4.02. Payments of Bonds. The Trustee will make payments of
principal of, premium, if any, and interest on the Bonds from moneys available
to the Trustee under this Indenture for that purpose. The Trustee will pay the
Purchase Price of tendered Bonds first from the proceeds of the sale of Bonds
under Section 3.08 and second from other moneys available to the Trustee for
that purpose. All moneys received as proceeds of remarketing the Bonds
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under Section 3.08 shall be held segregated by the Trustee in a separate and
segregated account.
Section 4.03. Investments of Moneys. The Trustee will invest and reinvest
moneys held by the Trustee as directed by a Company Representative in writing,
to the extent permitted by law, in:
(a) Government Obligations;
(b) Bonds and notes of the Federal Land Bank;
(c) Obligations of the Federal Intermediate Credit Bank;
(d) Obligations of the Federal Bank for Cooperatives;
(e) Bonds and notes of Federal Home Loan Banks;
(f) Negotiable or non-negotiable certificates of deposit, time deposits
or similar banking arrangements, issued by a bank or trust company (which may be
the commercial banking department of the Trustee or any bank or trust company
under common control with the Trustee) or savings and loan association which are
insured by the Federal Deposit Insurance Corporation or secured as to principal
by Government Obligations;
(g) Investments made in or through the Trustee's cash sweep accounts or
other short term investment funds, the assets of which consist of investments
described in clause (a) above; or
(h) Other investments then permitted by law.
The Trustee may make investments permitted by this Article through its
own bond department or the bond department of any bank or trust company under
common control with the Trustee. Investments will be made so as to mature or be
subject to redemption at the option of the holder on or before the date or dates
that the Trustee anticipates that moneys from the investments will be required.
The Trustee, when authorized by the Company, may trade with itself in the
purchase and sale of securities for such investment. Investments will be
registered in the name of the Trustee and held by or under the control of the
Trustee. The Trustee will sell and reduce to cash a sufficient amount of
investments whenever the cash held by the Trustee is insufficient. The Trustee
shall not be liable for any loss from such investments to the extent directed by
the Company Representative and to the extent such directions have been complied
with by the Trustee.
Section 4.04. Moneys Held in Trust. The Trustee will hold in trust for
the benefit of the Bondholders all moneys held by it for any payment on the
Bonds. The proceeds of the initial sale of the Bonds shall be held in a separate
and segregated account by the Trustee until disbursed as described in Section
4.01. Money received by the Remarketing Agent or the Trustee from the sale of a
Bond under Section 3.08 or for the purchase of a Bond will be held segregated
from other funds of the Remarketing Agent or the Trustee in trust for the
benefit of
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the person from whom such Bond was purchased or the person delivering such
purchase money, as the case may be, and will not be invested. The Trustee shall
promptly, but in no event later than 30 days of their original deposit, apply
moneys received from the Company in accordance with this Indenture and the Tax
Agreement and as directed by the Company Representative.
ARTICLE V
BOOK-ENTRY SYSTEM
Section 5.01. Book-Entry System. The Bonds shall be initially issued in
the name of Cede & Co., as nominee for The Depository Trust Company as the
initial Securities Depository and registered owner of such Bonds, and held in
the custody of the Securities Depository. A single certificate will be issued
and delivered to the Securities Depository for the Bonds. The Beneficial Owners
will not receive physical delivery of Bond certificates except as provided
herein. For so long as the Securities Depository shall continue to serve as
securities depository for such Bonds as provided herein, all transfers of
beneficial ownership interests will be made by book-entry only, and no investor
or other party purchasing, selling or otherwise transferring beneficial
ownership of such Bonds is to receive, hold or deliver any Bond certificate. The
Issuer, the Company and the Trustee will recognize the Securities Depository or
its nominee as the Bondowner of such Bonds for all purposes, including notices
and voting.
The Issuer and the Trustee covenant and agree, so long as The
Depository Trust Company shall continue to serve as Securities Depository for
the Bonds, to meet the requirements of The Depository Trust Company with respect
to required notices and other provisions of the Letter of Representations
executed with respect to the Bonds.
The Issuer, the Trustee and the Remarketing Agent may conclusively rely
upon (i) a certificate of the Securities Depository as to the identity of the
Participants in the Book-Entry- System and (ii) a certificate of any such
Participant as to the identity of, and the respective principal amount of Bonds
beneficially owned by, the Beneficial Owners.
Whenever, during the term of the Bonds, the beneficial ownership
thereof is determined by a book-entry at the Securities Depository, the
requirements in this Indenture of holding, delivering or transferring Bonds
shall be deemed modified to require the appropriate person to meet the
requirements of the Securities Depository as to registering or transferring the
book-entry to produce the same effect. Any provision hereof permitting or
requiring delivery of Bonds shall, while the Bonds are in a Book-Entry System,
be satisfied by the notation on the books of the Securities Depository in
accordance with applicable law.
The Trustee and the Issuer, at the direction and expense of the Company
and with the consent of the Remarketing Agent, may from time to time appoint a
successor Securities Depository and enter into an agreement with such successor
Securities Depository to establish procedures with respect to the Bonds not
inconsistent with the provisions of this Indenture. Any successor Securities
Depository shall be a "clearing agency" registered under Section 17A of the
Securities Exchange Act of 1934, as amended.
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None of the Issuer, the Company, the Trustee nor the Remarketing Agent
will have any responsibility or obligation to any Securities Depository, any
Participants in the Book-Entry System or the Beneficial Owners with respect to
(i) the accuracy of any records maintained by the Securities Depository or any
Participant; (ii) the payment by the Securities Depository or by any Participant
of any amount due to any Beneficial Owner in respect of the principal amount or
redemption or purchase price of, or interest on, any Bonds; (iii) the delivery
of any notice by the Securities Depository or any Participant; (iv) the
selection of the Beneficial Owners to receive payment in the event of any
partial redemption of the Bonds; or (v) any other action taken by the Securities
Depository or any Participant.
Bond certificates are required to be delivered to and registered in the
name of the Beneficial Owner, under the following circumstances:
(a) The Securities Depository determines to discontinue providing
its service with respect to the Bonds and no successor Securities
Depository is appointed as described above. Such a determination may
be made at any time by giving 30 days' notice to the Issuer, the
Company and the Trustee and discharging its responsibilities with
respect thereto under applicable law; or
(b) The Company determines not to continue the Book-Entry System
through a Securities Depository.
The Trustee is hereby authorized to make such changes to the form of
bond attached hereto as Exhibit A which are not inconsistent with this Indenture
and which are necessary or appropriate to reflect that the Book-Entry System is
not in effect, that a successor Securities Depository has been appointed or that
an additional or co-paying agent or tender agent has been designated pursuant to
Section 13.03 hereof.
If at any time, the Securities Depository ceases to hold the Bonds all
references herein to the Securities Depository shall be of no further force or
effect.
ARTICLE VI
COVENANTS
Section 6.01. Payment of Bonds. The Issuer will promptly pay the
principal or purchase price of, premium, if any, and interest on the Bonds on
the dates and in the manner provided in the Bonds, but only from the amounts
assigned to and held by the Trustee under this Indenture.
Section 6.02. Recording and Filing; Further Assurances. (a) The Trustee
shall cooperate with the Company in causing to be filed all necessary financing
statements and continuation statements related to this Indenture and all
supplements hereto, and such other documents as may be, in the Opinion of
Counsel, necessary to be kept and filed in such manner and in such places as may
be required by law in order to preserve and protect fully the security of the
Bondholders and the rights of the Trustee hereunder.
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(b) The Issuer will execute and deliver such supplemental indentures
and such further instruments, and do such further acts, as the Trustee may
reasonably require for the better assuring, assigning and confirming to the
Trustee the amounts assigned under this Indenture for the payment of the Bonds.
Section 6.03. Tax Covenants. The Issuer and the Company will not
directly or indirectly use or permit the use of any proceeds of the Bonds or any
other funds of the Issuer or the Company, or take or omit to take any action
that would cause the Bonds to be "arbitrage bonds" within the meaning of Section
148(a) of the Code or result in the loss of the exclusion from gross income for
federal income tax purposes of the interest paid on the Bonds. To that end, the
Issuer and the Company will comply with all requirements of the Code and the
1954 Code to the extent applicable to the Bonds. If at any time the Issuer or
the Company is of the opinion that for purposes of this Section 6.03 it is
necessary to restrict or limit the yield on the investment of any moneys held by
the Trustee under this Indenture, the Issuer or the Company shall so instruct
the Trustee in writing, and the Trustee shall take such action as may be
necessary in accordance with such instructions including, if necessary, the
investment of such moneys in obligations of any state, any political subdivision
thereof, or any public corporation or instrumentality of either thereof, the
interest on which is excludable from gross income under the Code.
Without limiting the generality of the foregoing, the Issuer and the
Company agree that there shall be paid from time to time all amounts required to
be rebated to the United States pursuant to Section 148(f) of the Code and any
temporary, proposed or final Treasury Regulations as may be applicable to the
Bonds from time to time. This covenant shall survive payment in full or
defeasance of the Bonds. The obligations imposed upon the Company by this
Section have been acknowledged and accepted by the Company in Section 4.6 of the
Agreement and in the Tax Agreement. The Issuer and the Trustee hereby covenant
and agree to cooperate fully with the Company regarding compliance with the
provisions of this Article VI and Section 4.6 of the Agreement.
Notwithstanding any provision of this Section, if the Company provides
to the Trustee and the Issuer an Opinion of Tax Counsel to the effect that any
action required under this Section is no longer required, or to the effect that
some further action is required, to maintain the exclusion of interest on the
Bonds from federal gross income, the Trustee and the Issuer may conclusively
rely on such opinion in complying with the provisions of this Indenture, and the
covenants under this Indenture shall be deemed to be modified to that extent.
Section 6.04. Termination of Subordinated Security Interest. Upon
Satisfaction by the Company of its obligations under Section 3.1 of the
Agreement, the Trustee shall execute and deliver to the Company such documents
as shall be necessary to effect or evidence the termination and release of the
Subordinated Security Interest (as defined in the Agreement).
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ARTICLE VII
DISCHARGE OF INDENTURE
Section 7.01. Bonds Deemed Paid; Discharge of Indenture. Any Bond will
be deemed paid for all purposes of this Indenture when (a) payment of the
principal of and interest on the Bond to the due date of such principal and
interest (whether at maturity, upon redemption or otherwise) or the payment of
the Purchase Price either (1) has been made in accordance with the terms of the
Bonds or (2) has been provided for by depositing with the Trustee (A) moneys
sufficient to make such payment and/or (B) Government Obligations maturing as to
principal and interest in such amounts and at such times as will insure the
availability of sufficient moneys to make such payment, and (b) all compensation
and reasonable expenses of the Trustee pertaining to each Bond in respect of
which such deposit is made have been paid or provided for to the Trustee's
satisfaction. When a Bond is deemed paid, it will no longer be secured by or
entitled to the benefits of this Indenture or be an obligation of the Issuer,
except for payment from moneys or Government Obligations under (a)(2) above and
except that it may be tendered if and as provided in the Bonds and it may be
transferred, exchanged, registered, discharged from registration or replaced as
provided in Article II.
Notwithstanding the foregoing, upon the deposit of funds under clause
(a)(2) of the first paragraph of this Section, the purchase price of tendered
Bonds shall be paid from the sale of Bonds under Section 3.08. If payment of
such purchase price is not made from the above sources, payment shall be made
from funds on deposit pursuant to this Section, in which case such Bonds shall
be surrendered to the Trustee and cancelled.
Notwithstanding the foregoing, no deposit under clause (a)(2) of the
first paragraph of this Section shall be deemed a payment of a Bond until the
Company has furnished the Trustee an Opinion of Tax Counsel stating that the
deposit of such cash or Government Obligations will not cause the Bonds to
become "arbitrage bonds" under Section 148 of the Code and until (a) notice of
redemption of the Bond is given in accordance with Article III or, if the Bond
is not to be redeemed or paid within the next 60 days, until the Company has
given the Trustee, in form satisfactory to the Trustee, irrevocable instructions
(i) to notify, as soon as practicable, the owner of the Bond, in accordance with
Article III, that the deposit required by (a)(2) above has been made with the
Trustee and that the Bond is deemed to be paid under this Article and stating
the maturity or redemption date upon which moneys are to be available for the
payment of the principal of the Bond, and premium, if any, and interest on such
Bond, if the Bond is to be redeemed rather than paid and (ii) to give notice of
redemption not less than 30 nor more than 60 days prior to the redemption date
for such Bond or (b) the maturity of the Bond.
When all outstanding Bonds are deemed paid under the foregoing
provisions of this Section, the Trustee will upon request acknowledge the
discharge of the lien of this Indenture, provided, however that the obligations
relating to the tender for purchase as provided in the Bonds and obligations
under Article II in respect of the transfer, exchange, registration, discharge
from registration and replacement of Bonds shall survive the discharge of the
lien of the Indenture.
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No deposit will be made or accepted and no use made of any such deposit
which would cause any Bonds to be treated as "arbitrage bonds" within the
meaning of Section 148 of the Code.
Section 7.02. Application of Trust Money. The Trustee shall hold in
trust money or Government Obligations deposited with it pursuant to the
preceding Section and shall apply the deposited money and the money from the
Government Obligations in accordance with this Indenture only to the payment of
principal of, premium, if any, and interest on the Bonds and to the payment of
the purchase price of tendered Bonds.
Section 7.03. Repayment to Company. The Trustee shall promptly pay to
the Company upon request any excess money or securities held by the Trustee at
any time under this Article and any money held by the Trustee under any
provision of this Indenture for the payment of principal or interest or for the
purchase of Bonds that remains unclaimed for five years.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01. Events of Default. An "Event of Default" is any of the
following:
(a) Default in the payment of any interest on any Bond when due
and as the same shall become due and payable, which default continues
for five days.
(b) Default in the due and punctual payment of principal on any
Bond when due and payable, whether at maturity, upon redemption, or by
declaration or otherwise.
(c) Default in the payment of the purchase price of any Bond
tendered by its Beneficial Owner pursuant to the Bonds.
(d) An event of default has occurred and is continuing under the
Agreement.
Section 8.02. Acceleration. Whenever an Event of Default has occurred and
is continuing, the Bonds shall without further action become immediately due and
payable.
Section 8.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and upon request of the holders of at least 25% in
principal amount of the Bonds then outstanding shall, pursue any available
remedy by proceeding at law or in equity to collect the principal of or interest
on the Bonds or to enforce the performance of any provision of the Bonds, this
Indenture or the Agreement.
The Trustee, as the assignee of all the right, title and interest of
the Issuer in and to the Agreement, shall enforce each and every right granted
to the Issuer under the Agreement.
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The Trustee may maintain a proceeding even if it does not possess any
of the Bonds or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Bondholder 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.
In the event of a bankruptcy or reorganization of the Company, the
Trustee may file a proof of claim on behalf of all Bondholders with respect to
the obligations of the Company pursuant to the Agreement.
Section 8.04. Waiver of Past Defaults. The holders of a majority in
principal amount of the Bonds then outstanding by notice to the Trustee may
waive an existing Event of Default and its consequences. When an Event of
Default is waived, it is cured and stops continuing, but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent to it.
Section 8.05. Control by Majority. The holders of a majority in
principal amount of the Bonds then outstanding 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 it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture or, subject to
Section 9.01, that the Trustee determines is unduly prejudicial to the rights of
other Bondholders, or would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. A Bondholder may not pursue any
remedy with respect to this Indenture or the Bonds unless (a) the holder gives
the Trustee notice stating that an Event of Default is continuing, (b) the
holders of at least 25% in principal amount of the Bonds then outstanding make a
written request to the Trustee to pursue the remedy, (c) such holder or holders
offer to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense and (d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity.
A Bondholder may not use this Indenture to prejudice the rights of
another Bondholder or to obtain a preference or priority over the other
Bondholders.
Section 8.07. 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 a Bond, on or after the due dates expressed in the
Bond, or the purchase price of a Bond on or after the date for its purchase as
provided in the Bond, or to bring suit for the enforcement of any such payment
on or after such dates, shall not be impaired or affected without the consent of
the holder.
Section 8.08. Collection Suit by Trustee. If an Event of Default under
Section 8.01(a), (b) or (c) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount remaining unpaid.
Section 8.09. 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
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claims of the Trustee and the Bondholders 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. In the
event of a bankruptcy or reorganization of the Company, the Trustee may file a
proof of claim on behalf of all Bondholders with respect to the obligations of
the Company pursuant to the Agreement.
Section 8.10. Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
FIRST: To the Trustee for amounts to which it is entitled under
Section 9.06.
SECOND: To Bondholders for amounts due and unpaid on the Bonds for
principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Bonds for
principal and interest, respectively.
THIRD: To the Company.
The Trustee may fix a payment date for any payment to the Bondholders.
Section 8.11. 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 8.07 or a suit by holders of
more than 10% in principal amount of the Bonds then outstanding.
ARTICLE IX
TRUSTEE AND REMARKETING AGENT
Section 9.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise its rights and powers 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 need perform only those duties that are
specifically set forth in this Indenture and applicable laws and
regulations, and no others and no implied duties or covenants shall be
read into this Indenture against the Trustee, and
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(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, upon certificates, opinions,
requisitions or any other writing furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own grossly
negligent action, its own grossly negligent failure to act or its own willful
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 Responsible Officer, unless it is proved that
the Trustee was grossly negligent in ascertaining the pertinent facts,
(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 8.05, and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to all the paragraphs of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense, but the Trustee may not require indemnity as a condition
to declaring the principal of and interest on the Bonds to be due immediately
under Section 8.02 or to making any payment of principal or interest on the
Bonds.
(f) The Trustee shall not be liable for interest on any cash held by it
except as the Trustee may agree with the Company or the Issuer with the consent
of the Company.
(g) In addition to the funds and accounts established by this
Indenture, the Trustee may establish such funds and accounts as it deems
necessary and appropriate in order to discharge its duties under this Indenture.
Section 9.02. Rights of Trustee. Subject to the foregoing Section:
(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.
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(b) The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on any certificate of an
appropriate officer or officers of the Issuer or the Company or Opinion
of Counsel.
(c) The Trustee may act through agents or co-trustees but shall
be answerable for the conduct of the same in accordance with the
standards specified in this Indenture.
Section 9.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Bonds and
may otherwise deal with the Issuer or with the Company or its affiliates with
the same rights it would have if it were not Trustee.
Section 9.04. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture, the Agreement or the Bonds, and
it shall not be responsible for any statement in the Bonds other than its
certificate of authentication.
Section 9.05. Notice of Defaults. If an event occurs which with the
giving of notice or lapse of time or both would be an Event of Default, and if
the event is continuing and if it is known to the Trustee, the Trustee shall
promptly mail to each Bondholder notice of the event. Except in the case of a
default in payment or purchase on any Bonds, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Bondholders.
Section 9.06. Compensation and Indemnity of Trustee. For acting under
this Indenture, the Trustee shall be entitled to payment of reasonable fees for
its services and reimbursement of advances, reasonable counsel fees and other
expenses reasonably and necessarily made or incurred by the Trustee as shall be
agreed upon in writing by the Trustee and the Company from time to time in
connection with its services under this Indenture.
To secure the payment or reimbursement to the Trustee provided for in
this Section, the Trustee shall have a senior claim, to which the Bonds are made
subordinate, on all money or property held or collected by the Trustee, except
that held under Article VII or otherwise held in trust to pay principal of and
interest on particular Bonds.
The Company has agreed in the Agreement to indemnify the Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the reasonable costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
Section 9.07. Eligibility of Trustee. This Indenture shall always have
a Trustee that is a corporation or association organized and doing business
under the laws of the United States or any state or the District of Columbia, is
authorized under such laws to exercise corporate trust powers, is subject to
supervision or examination by United States, state or District of Columbia
authority and has a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. If at any time
the Trustee ceases to be eligible in accordance with this Section, the Trustee
will resign immediately as set forth in Section 9.08.
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Section 9.08. Replacement of Trustee. (a) The Trustee may resign by
notifying the Issuer and the Company and by mailing notice by first class mail
to the Bondholders.
Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by an instrument in writing; provided that the
Company may not make such appointment if an Event of Default has occurred and is
continuing, or if an event has occurred and is continuing which, with the
passage of time or the giving of notice or both will become an Event of Default.
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee or any Bondholder who has been a bona fide
holder of a Bond for at least six months may, on behalf of himself and others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and may prescribe, appoint a successor trustee.
(b) In case at any time either of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.07 and shall fail to resign after written
request therefor by the Company or the Issuer, or
(2) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company shall remove the Trustee and appoint a
successor trustee by an instrument in writing; provided that the Company may not
make such appointment if an Event of Default has occurred and is continuing, or
if an event has occurred and is continuing which, with the passage of time or
the giving of notice or both will become an Event of Default, or any Bondholder
may, on behalf of itself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and may prescribe, remove the Trustee and appoint a successor
trustee.
(c) Except as otherwise provided in this subsection (c), the Company or
holders of a majority in aggregate principal amount of the Bonds at the time
outstanding may at any time remove the Trustee and appoint a successor trustee
by an instrument or concurrent instruments in writing signed by the Company or
such Bondholders, as the case may be. The Company may not remove the Trustee if
an Event of Default has occurred and is continuing or if an event has occurred
and is continuing which, with the passage of time or the giving of notice will
become an Event of Default.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.09. The Company shall give
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written notification to any rating agency then rating the Bonds of such
successor trustee appointed pursuant to this Section.
Section 9.09. Acceptance of Trust by Successor Trustee. Any successor
trustee appointed as provided in Section 9.08 shall execute, acknowledge and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties, and obligations of its predecessor in the trusts
hereunder, with like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the Issuer or the request of the
successor trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor trustee, upon the trusts herein
expressed, all the rights, power and trusts of the Trustee so ceasing to act.
Upon request of any such successor trustee, the Issuer shall execute any and all
instruments in writing necessary or desirable for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers, and
duties. Any Trustee ceasing to act shall, nevertheless, retain a lien upon all
property or funds held or collected by such Trustee to secure the amounts due it
as compensation, reimbursement, expenses, and indemnity afforded to it by
Section 9.06.
No successor trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.07.
At the time of appointment, the Company and the successor trustee shall
execute an agreement with respect to the compensation of the successor trustee.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Issuer or such successor trustee shall give Bondholders notice
of the succession of such trustee to the trusts hereunder in the manner
prescribed in Section 9.08 for the giving of notice of resignation of the
Trustee.
Section 9.10. [reserved].
Section 9.11. Duties of Remarketing Agent. The Remarketing Agent will
set the interest rates on the Bonds and perform the other duties provided for in
Section 2.02 and will remarket Bonds as provided in Section 3.08, subject to any
provisions of a remarketing agreement between the Company and the Remarketing
Agent, which shall control in the case of any conflict with this Indenture. The
Remarketing Agent may for its own account or as broker or agent for others deal
in Bonds and may do anything any other Bondholder may do to the same extent as
if the Remarketing Agent were not serving as such.
Section 9.12. Eligibility of Remarketing Agent. The initial Remarketing
Agent appointed under this Indenture is Merchant Capital L.L.C., Montgomery,
Alabama. The Remarketing Agent will be a bank, trust company or member of the
National Association of Securities Dealers, Inc. organized and doing business
under the laws of the United States or any state or the District of Columbia,
and any successor Remarketing Agent must have a combined capital stock, surplus
and undivided profits of at least $15,000,000 as shown in its most recent
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published annual report, be a Participant in the Securities Depository and must
be authorized by law to perform all the duties imposed upon it by this
Indenture. Any successor Remarketing Agent shall be rated at least Baa3/P-3 or
otherwise qualified by Moody's Investors Service, Inc.
or have an equivalent rating of another rating agency.
Section 9.13. Replacement of Remarketing Agent. The Remarketing Agent
may resign by notifying the Issuer, Trustee, and Company. Such resignation will
take effect on the day a successor Remarketing Agent appointed in accordance
with this Section has accepted the appointment or, if no successor has so
accepted, 30 days after notice of resignation has been sent. The Company may
remove the Remarketing Agent at any time by an instrument signed by the Company
and filed with the Remarketing Agent, the Issuer, and the Trustee at least 30
days prior to the effective date of such removal (which will not in any event
occur prior to the appointment of a successor Remarketing Agent). A new
Remarketing Agent may be appointed by the Company upon the resignation or
removal of the Remarketing Agent. The Trustee shall promptly notify the
Bondholders of any change in the Remarketing Agent.
Section 9.14. Compensation of Remarketing Agent. The Remarketing Agent
will not be entitled to any compensation from the Issuer, the Trustee or any
property held under this Indenture but must make separate arrangements with the
Company for compensation.
Section 9.15. Successor Trustee or Remarketing Agent by Merger. If the
Trustee or Remarketing Agent consolidates with, merges or converts into, or
transfers all or substantially all its assets (or, in the case of a bank or
trust company, its corporate trust assets) to another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee or Remarketing Agent, provided that such successor shall
be eligible under the applicable provisions in this Article.
ARTICLE X
AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE
Section 10.01. Without Consent of Bondholders. The Issuer and the Trustee
may amend or supplement this Indenture or the Bonds without notice to or consent
of any Bondholder:
(a) to cure any ambiguity, inconsistency, or formal defect or
omission;
(b) to grant to the Trustee for the benefit of the Bondholders
additional rights, remedies, powers, or authority;
(c) to subject to this Indenture additional collateral or to add
other agreements of the Issuer;
(d) to modify this Indenture or the Bonds to permit qualification
under the Trust Indenture Act of 1939 or any similar federal statute
at the time in effect, or to permit the qualification of the Bonds for
sale under the securities laws of any state of the United States;
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(e) to authorize different authorized denominations of the
Bonds and to make correlative amendments and modifications to this
Indenture regarding exchangeability of Bonds of different authorized
denominations, redemptions of portions of Bonds of particular
authorized denominations and similar amendments and modifications of a
technical nature;
(f) to increase or decrease the number of days specified for
the giving of notices in Section 2.02 and to make corresponding changes
to the period for notice of redemption of the Bonds; provided that no
decreases in any such number of days shall become effective except
while the Bonds bear interest at a Daily Rate or a Weekly Rate and
until 30 days after the Trustee has given notice to the owners of the
Bonds;
(g) to provide for an uncertificated system of registering the
Bonds or to provide for the change to or from a Book-Entry System for
the Bonds;
(h) to evidence the succession of a new Trustee or the
appointment by the Trustee or the Issuer of a co-trustee; or
(i) to make any change (including a change in Section 4.01 to
reflect any amendment to the Code or interpretations thereof by the
Internal Revenue Service) that does not materially adversely affect the
rights of any Bondholder.
Section 10.02. With Consent of Bondholders. If an amendment of or
supplement to this Indenture or the Bonds without any consent of Bondholders is
not permitted by the preceding Section, the Issuer and the Trustee may enter
into such amendment or supplement without prior notice to any Bondholders but
with the consent of the holders of at least a majority in principal amount of
the Bonds then outstanding. However, without the consent of each Bondholder
affected, no amendment or supplement may (a) extend the maturity of the
principal of, or interest on, any Bond, (b) reduce the principal amount of, or
rate of interest on, any Bond, (c) effect a privilege or priority of any Bond or
Bonds over any other Bond or Bonds, (d) reduce the percentage of the principal
amount of the Bonds required for consent to such amendment or supplement, (e)
impair the exclusion from federal gross income of interest on any Bond, (f)
eliminate the holders' rights to tender the Bonds, or any mandatory redemption
of the Bonds, extend the due date for the purchase of Bonds tendered by the
holders thereof or call for mandatory redemption or reduce the purchase or
redemption price of such Bonds, (g) create a lien ranking prior to or on a
parity with the lien of this Indenture on the property described in the Granting
Clause of this Indenture, or (h) deprive any Bondholder of the lien created by
this Indenture on such property. In addition, if moneys or Government
Obligations have been deposited or set aside with the Trustee pursuant to
Article VII for the payment of Bonds and those Bonds shall not have in fact been
actually paid in full, no amendment to the provisions of that Article shall be
made without the consent of the holder of each of those Bonds affected.
Section 10.03. Effect of Consents. Any consent received pursuant to
Section 10.02 will bind each Bondholder delivering such consent and each
subsequent holder of a Bond or portion of a Bond evidencing the same debt as the
consenting holder's Bond.
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Section 10.04. Notation on or Exchange of Bonds. If an amendment or
supplement changes the terms of a Bond, the Trustee may require the holder to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Bond about the changed terms and return it to the holder. Alternatively, if the
Trustee, the Issuer and the Company determine, the Issuer in exchange for the
Bond will issue and the Trustee will authenticate a new Bond that reflects the
changed terms.
Section 10.05. Signing by Trustee of Amendments and Supplements. The
Trustee will sign any amendment or supplement to the Indenture or the Bonds
authorized by this Article if the amendment or supplement 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 an amendment or
supplement, the Trustee will be entitled to receive and (subject to Section
9.01) will be fully protected in relying on an Opinion of Counsel stating that
such amendment or supplement is authorized by this Indenture.
Section 10.06. Company Consent Required. An amendment or supplement to this
Indenture or the Bonds shall not become effective unless the Company delivers to
the Trustee its written consent to the amendment or supplement.
Section 10.07. Notice to Bondholders. The Trustee shall cause notice of
the execution of each supplement or amendment to this Indenture or the Agreement
to be mailed to the Bondholders. The notice will at the option of the Trustee,
either (i) briefly state the nature of the amendment or supplement and that
copies of it are on file with the Trustee for inspection by Bondholders or (ii)
enclose a copy of such amendment or supplement.
ARTICLE XI
AMENDMENTS OF AND SUPPLEMENTS TO THE AGREEMENT
Section 11.01. Without Consent of Bondholders. The Issuer may enter
into, and the Trustee may consent to, any amendment of or supplement to the
Agreement, or may waive compliance by the Company of any provision of the
Agreement, without notice to or consent of any Bondholder, if the amendment,
supplement, or waiver is required or permitted (a) by the provisions of the
Agreement or this Indenture (including in connection with transactions permitted
by Section 6.3 of the Original Agreement, relating to maintenance of the
Company's existence), (b) to cure any ambiguity, inconsistency or formal defect
or omission, (c) to identify more precisely the Project, (d) in connection with
any authorized amendment of or supplement to this Indenture or (e) to make any
change that does not materially adversely affect the rights of any Bondholder.
Section 11.02. With Consent of Bondholders. If an amendment of or
supplement to the Agreement without any consent of Bondholders is not permitted
by the foregoing Section, the Issuer may enter into, and/or the Trustee may
consent to (as the case may be), such amendment or supplement, or may waive
compliance by the Company of any provision of the Agreement, without notice to
any Bondholder but with the consent of the holders of at least a majority in
principal amount of the Bonds then outstanding. However, without the consent of
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each Bondholder affected, no amendment, supplement or waiver may result in
anything described in the lettered clauses of Section 10.02.
Section 11.03. Consents by Trustee to Amendments or Supplements. The
Trustee will consent to any amendment or supplement to the Agreement authorized
by this Article if the amendment or supplement 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 a consent to an amendment or
supplement, the Trustee shall be entitled to receive and (subject to Section
9.01) shall be fully protected in relying on an Opinion of Counsel stating that
such amendment or supplement is authorized by this Indenture.
ARTICLE XII
[reserved]
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Notices. (a) Any notice, request, direction, designation,
consent, acknowledgment, certification, appointment, waiver, or other
communication required or permitted by this Indenture or the Bonds must be in
writing except as expressly provided otherwise in this Indenture or the Bonds.
(b) Any notice or other communication shall be sufficiently given and
deemed given when delivered by hand or mailed by first-class mail, postage
prepaid, addressed as follows: if to the Issuer, if by mail to the Chairman of
the Board of Directors, at Town Hall, Columbia, Alabama 36319; if to the
Trustee, to P. O. Box 2554, Birmingham, Alabama 35290, Attention: Corporate
Trust Department; if to the Company, to 600 North 18th Street, Birmingham,
Alabama 35203, Attention: Treasurer; and if to the Remarketing Agent, to
Merchant Capital L.L.C., 250 Commerce Street, Montgomery, Alabama 36104,
Attention: Muni Syndicate. Any addressee may designate additional or different
addresses for purposes of this Section.
Section 13.02. Bondholders' Consents. Any consent or other instrument
required by this Indenture to be signed by Bondholders may be in any number of
concurrent documents and may be signed by a Bondholder or by the holder's agent
appointed in writing. Proof of the execution of such instrument or of the
instrument appointing an agent and of the ownership of Bonds, if made in the
following manner, shall be conclusive for any purposes of this Indenture with
regard to any action taken by the Trustee under the instrument:
(a) The fact and date of a person's signing an instrument may
be proved by the certificate of any officer in any jurisdiction who by
law has power to take acknowledgments within that jurisdiction that the
person signing the writing acknowledged before the officer the
execution of the writing, or by an affidavit of any witness to the
signing.
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(b) The fact of ownership of Bonds, the amount or amounts,
numbers and other identification of such Bonds and the date of holding
shall be proved by the registration books kept pursuant to this
Indenture.
In determining whether the holders of the required principal amount of
Bonds outstanding have taken any action under this Indenture, Bonds owned by the
Company or any person controlling, controlled by or under common control with
the Company shall be disregarded and deemed not to be outstanding. In
determining whether the Trustee shall be protected in relying on any such
action, only Bonds which the Trustee knows to be so owned shall be disregarded.
Any consent or other instrument shall be irrevocable and shall bind any
subsequent owner of such Bond or any Bond delivered in substitution therefor.
Section 13.03. Appointment of Separate Paying Agent and/or Tender
Agent. If, at any time, the Securities Depository ceases to hold the Bonds, with
the effect that the Bonds are no longer subject to the Book-Entry System, then
the Issuer and the Trustee, acting at the request of the Company, may appoint
one or more banks or trust companies to act as paying agent and/or tender agent
for the Bonds hereunder. Any such paying agent or tender agent shall be a bank
or trust company organized under the laws of the United States of America or any
state thereof, shall have a reported capital and surplus of at least
$100,000,000 and a corporate trust office located in New York, New York at which
Bonds may be presented for payment or purchase and shall perform such duties and
responsibilities as may be delegated to it hereunder. If such a paying agent or
tender agent is appointed, then all references herein to the "Trustee" shall
include such paying agent or tender agent to the extent of the duties performed
by such entity.
Section 13.04. Limitation of Rights. Nothing expressed or implied in
this Indenture or the Bonds shall give any person other than the Trustee,
Issuer, Company, Remarketing Agent, and the Bondholders any right, remedy or
claim under or with respect to this Indenture.
Section 13.05. Severability. If any provision of this Indenture shall be
determined to be unenforceable, that shall not affect any other provision of
this Indenture.
Section 13.06. Payments Due on Non-Business Days. If a payment date is
not a Business Day at the place of payment, then payment may be made at that
place on the next Business Day, and no interest shall accrue for the intervening
period.
Section 13.07. Governing Law. This Indenture shall be governed exclusively
by and construed in accordance with the applicable laws of the State.
Section 13.08. Captions. The captions in this Indenture are for convenience
only and do not define or limit the scope or intent of any provisions or
Sections of this Indenture.
Section 13.09. No Recourse Against Issuer's Officers. No member, director,
officer, agent, or employee of the Issuer shall be individually or personally
liable for any payment on the Bonds or be subject to any personal liability or
accountability by reason of the issuance of the
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Bonds, but this Section shall not relieve any such officer, director, member,
agent, or employee from the performance of any official duty provided by law or
this Indenture.
Section 13.10. Limitation of Liability. Notwithstanding anything
contained in this Indenture to the contrary, the Bonds shall be limited
obligations of the Issuer and shall be payable solely from the revenues and
receipts and other amounts received by or on behalf of the Issuer pursuant to
the Agreement or the First Mortgage Bonds.
Section 13.11. Counterparts. This Indenture may be signed in several
counterparts. Each will be an original, but all of them together constitute the
same instrument.
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IN WITNESS WHEREOF, The Industrial Development Board of the Town of
Columbia has caused this Indenture to be signed in its name and its seal to be
hereunto affixed and attested by its duly authorized officers, respectively, and
SouthTrust Bank of Alabama, National Association, to evidence its acceptance of
the trust created hereunder, has caused this Indenture to be signed in its name
and its seal to be hereunto affixed and attested by its duly authorized
officers, respectively, all as of the day and year first above written.
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
TOWN OF COLUMBIA
[SEAL]
By:
Chairman of the Board of Directors
ATTEST:
Secretary
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, as Trustee
[SEAL]
By:
Title:
ATTEST:
By:
Title:
40
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EXHIBIT A
[FORM OF BOND]
UNITED STATES OF AMERICA
STATE OF ALABAMA
No. __________ $
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
POLLUTION CONTROL REVENUE REFUNDING BOND, 1996 SERIES A
(ALABAMA POWER COMPANY PROJECT)
TYPE OF INTEREST
MATURITY DATE DATED DATE CUSIP RATE PERIOD
November 1, 2021 November , 1996 197210 AQ0 Daily
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The Industrial Development Board of the Town of Columbia (the
"Issuer"), a public corporation organized and existing under the laws of the
State of Alabama, hereby promises to pay, solely from the sources described in
this Bond, to the Registered Owner identified above, or registered assigns, on
the Maturity Date stated above (or if this Bond is called for earlier redemption
as described herein, on the redemption date) the principal amount identified
above and to pay interest as provided in this Bond.
1. Indenture; Agreement. This Bond is one of the bonds (the "Bonds"),
limited to $21,000,000 in principal amount, issued under the Indenture of Trust
dated as of November 1, 1996 (the "Indenture"), between the Issuer and
SouthTrust Bank of Alabama, National Association, as trustee (the "Trustee").
The terms of the Bonds include those in the Indenture. Bondholders are referred
to the Indenture for a statement of those terms. When used with reference to the
Bonds, the term "principal" includes any premium payable on those Bonds.
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Indenture.
The Issuer has sold certain air and water pollution control and sewage
treatment and disposal facilities (the "Project") located at the Farley Plant
(the "Plant") of Alabama Power Company (the
A-1
<PAGE>
"Company") to the Company pursuant to an Installment Sale Agreement dated as of
May 1, 1978, between the Issuer and the Company, as heretofore supplemented and
amended, including a Seventh Supplementary Installment Sale Agreement dated as
of November 1, 1996 (the "Agreement"). Under the Agreement, Company is obligated
to pay to the Issuer amounts sufficient to pay all amounts coming due on the
Bonds and other expenses incurred in connection therewith, and the Issuer has
assigned its rights to such payments under the Agreement to the Trustee as
security for the Bonds. The proceeds of the Bonds will be used to refund certain
outstanding revenue bonds issued to finance and refinance the Project.
The Indenture and the Agreement may be amended, and references to them
include any amendments.
The Issuer has established a book-entry only system of registration for
the Bonds (the "Book- Entry System"). Except as specifically provided otherwise
in the Indenture, a Securities Depository (or its nominee) will be the
registered owner of this Bond. By acceptance of a confirmation of purchase,
delivery or transfer, the Beneficial Owner (if any) of this Bond shall be deemed
to have agreed to this arrangement. If the Securities Depository (or its
nominee) is the registered owner of this Bond, it shall be treated as the owner
of it for all purposes.
2. Source of Payments. The principal or purchase price of, premium, if
any, and interest on the Bonds are limited obligations of the Issuer and, as
provided in the Indenture, are payable solely and only from payments derived
from the sale of the Project to the Company under the Agreement and from any
other moneys held by the Trustee under the Indenture for such purpose. The Bonds
shall not in any respect be a general obligation of the Issuer, nor shall they
be an obligation of the Town of Columbia, Alabama or the State of Alabama.
Neither the faith and credit nor the taxing power of the Town of Columbia,
Alabama, the State of Alabama or any political subdivision thereof, is pledged
to the payment of the principal of the Bonds or the interest thereon or other
costs incident thereto.
3. Interest Rate. Interest on this Bond will be paid at the lesser of
(a) a Daily Rate, a Weekly Rate, a Commercial Paper Rate, or a Long-Term
Interest Rate as selected by the Company and as determined in accordance with
the Indenture and (b) 10%. Interest will initially be payable at a Daily Rate as
set forth in the Indenture. The Company may change the interest rate
determination method from time to time. A change in the method will result in
mandatory redemption of the Bonds (see "Redemption" below). While there exists
an Event of Default under the Indenture, the interest rate on the Bonds will be
the rate on the Bonds on the day before the Event of Default occurred, except
that if interest on any Bond was then payable at a Commercial Paper Rate, the
default rate for all Bonds then bearing interest at a Commercial Paper Rate will
be the highest Commercial Paper Rate then in effect for any Bond.
When interest is payable at a Daily, Weekly or Commercial Paper Rate,
it will be computed on the basis of the actual number of days elapsed over a
year of 365 days (366 in leap years), and when payable at a Long-Term Interest
Rate on the basis of a 360-day year of twelve 30-day months. Interest on overdue
principal and, to the extent lawful, on overdue premium and interest will be
payable at the rate on the Bonds on the day before the default occurred.
4. Interest Payment and Record Dates. Interest will accrue on the unpaid
portion of the principal of this Bond from the last date to which interest was
paid, or if no interest has been paid, from the date of the original issuance of
the Bonds until the entire principal amount of this Bond is
A-2
<PAGE>
paid. When interest is payable at the rate in the first column below, interest
accrued during the period (an "Interest Period") shown in the second column will
be paid on the date (an "Interest Payment Date") in the third column to holders
of record on the date (a "Record Date") in the fourth column:
INTEREST ACCRUAL INTEREST
RATE PERIOD PAYMENT DATE RECORD DATE
Daily* Calendar month Fifth Business Day Last Business Day
of the next month of the month
Weekly* Calendar month First Business Day Last Business Day
of the next month before Interest
Payment Date
Commercial Paper From 1 to 365 days Day after the last Last Business Day
as determined for day of Commercial before Interest
each Bond pursuant to Paper Period Payment Date
Section 2.02(a)(3) of
the Indenture
("Commercial Paper
Period")
- --------
*If there shall be a change from a Daily Rate or a Weekly Rate on a day other
than the first day of a calendar month, the then current Interest Period
relating to such Daily Rate or Weekly Rate shall end on the day immediately
preceding the date on which the new interest rate on the Bonds shall become
effective, which date in the case of a change from a Weekly Rate, shall be the
Interest Payment Date for such Interest Period, for which the Record Date shall
be the immediately preceding Business Day; but in the case of a change from a
Daily Rate, the Interest Payment Date for such Interest Period shall be the
fifth Business Day after the last day of such Interest Period, for which the
Record Date shall be the last Business Day of such Interest Period. If such new
interest rate shall be a Daily Rate or a Weekly Rate, the first Interest Period
relatIng thereto shall begin on the effective date of such new interest rate and
end on the last day of the then current calendar month, for which the Interest
Payment Date and the Record Date shall be as prescribed in this Table.
A-3
<PAGE>
INTEREST
RATE INTEREST PERIOD PAYMENT DATE RECORD DATE
Long-Term** Six-month period or Next day (May 1 or Fifteenth of the
portion thereof November 1) month before the
ending on the last day Interest Payment
of April or October Date (April 15 or
October 15)***
"Business Day" is defined in the Indenture. Payment of defaulted interest will
be made to holders of record as of the fifth-to-last Business Day before
payment.
5. Method of Payment. Holders must surrender Bonds to the Trustee to
collect principal at maturity or upon redemption. (See "Tenders" below for the
payment of purchase price of tendered Bonds.) Interest on Bonds bearing interest
at a Commercial Paper Rate is payable only upon presentation of such Bonds to
the Trustee. Interest on Bonds bearing interest at a Daily, Weekly, or Long-Term
Interest Rate will be paid to the registered holder hereof as of the Record Date
by check mailed by first-class mail on the Interest Payment Date to such
holder's registered address. A holder of $1,000,000 or more in principal amount
of Bonds may be paid interest at a Daily, Weekly or Commercial Paper Rate by
wire transfer in immediately available funds to an account in the continental
United States if the holder makes a written request of the Trustee (in form
satisfactory to the Trustee) at least two Business Days before the Record Date
specifying the account address. The notice may provide that it will remain in
effect for later interest payments until changed or revoked by another written
notice. Principal and interest will be paid in money of the United States that
at the time of payment is legal tender for payment of public and private debts
or by checks or wire transfers payable in such money. If any payment on the
Bonds is due on a non-Business Day, it will be made on the next Business Day,
and no interest will accrue as a result.
6. Tenders. "Tender" means to require, or the act of requiring, the Trustee
to purchase a Bond at the holder's option under the provisions of this Section 6
at 100% of the principal amount plus interest accrued to the date of purchase.
During a Daily Rate Period, if a Bond is tendered after the Record Date and
before the Interest Payment Date for that Interest Period, the Trustee will pay
- --------
**If there shall be a change from a Long-Term Interest Rate on a day
other than the day after the last day of the then current Long-Term Interest
Rate Period, or if there shall be an early termination of such Long-Term
Interest Rate Period and a new Long-Term Interest Rate shall be set, such Long-
Term Interest Rate Period shall end on the day immediately preceding the date on
which the new interest rate shall become effective, which date shall be the
Interest Payment Date for such Long- Term Interest Rate Period, for which the
Record Date shall be 15 days prior to such Interest Payment Date or, if sooner,
the first day of such Long-Term Interest Rate Period. If such new interest rate
shall be a Daily Rate or a Weekly Rate, the first Interest Period relating
thereto shall begin on the effective date of such new interest rate and end on
the last day of the then current calendar month, for which the Interest Payment
Date and the Record Date shall be prescribed in this Table.
***If an Interest Payment Date occurs less than 15 days after the first day of
a Long-Term Interest Rate Period, the first day of such Long-Term Interest Rate
Period is the Record Date for such interest Payment Date.
A-4
<PAGE>
a purchase price of principal plus interest accruing after the last day of that
Interest Period. The holder will receive interest for that Interest Period by
check or wire transfer as described in Section 5 above.
Daily Rate Tender. When interest on the Bonds is payable at a
Daily Rate and a Book-Entry System is in effect, a Beneficial Owner
(through its direct Participant in the Securities Depository) may
tender his interest in a Bond (or portion of Bond) by delivering an
irrevocable written notice or an irrevocable telephone notice, promptly
confirmed in writing, to the Trustee (any such telephone notice to be
delivered to a trust officer of the Trustee) and an irrevocable notice
by telephone, telegraph, or facsimile transmission to the Remarketing
Agent, in each case by 11:00 a.m., New York City time, on a Business
Day, stating the principal amount of the Bond (or portion of Bond being
tendered), payment instructions for the purchase price and the Business
Day (which may be the date the notice is delivered) the Bond (or
portion of Bond) is to be purchased. The Beneficial Owner shall effect
delivery of such Bonds by causing such direct Participant to transfer
its interest in the Bonds equal to such Beneficial Owner's interest on
the records of the Securities Depository to the participant account of
the Trustee with the Securities Depository. Any notice received by the
Trustee after 11:00 a.m., New York City time, shall be deemed to have
been given on the next Business Day.
When interest on the Bonds is payable at a Daily Rate and a
Book-Entry System is not in effect, a holder of a Bond may tender the
Bond (or portion of Bond) by delivering the notices as described above
(which shall include the certificate number of the Bond), and shall
also deliver the Bond to the Trustee by 1:00 p.m., New York City time,
on the date of purchase (see additional requirements below).
Weekly Rate Tender. When interest on the Bonds is payable at a
Weekly Rate and a Book-Entry System is in effect, a Beneficial Owner
(through its direct Participant in the Securities Depository) may
tender his interest in a Bond (or portion of Bond) by delivering an
irrevocable written notice or an irrevocable telephone notice, promptly
confirmed in writing, to the Trustee (any such telephone notice to be
delivered to a trust officer of the Trustee) and an irrevocable notice
by telephone, telegraph, or facsimile transmission to the Remarketing
Agent, in each case prior to 5:00 p.m., New York City time on a
Business Day stating the principal amount of the Bond (or portion of
Bond) being tendered, payment instructions for the purchase price, and
the date, which must be a Business Day at least seven days after the
notice is delivered, on which the Bond (or portion of Bond) is to be
purchased. The Beneficial Owner shall effect delivery of such Bonds by
causing such direct Participant to transfer its interest in the Bonds
equal to such Beneficial Owner's interest on the records of the
Securities Depository to the participant account of the Trustee with
the Securities Depository.
When interest on the Bonds is payable at a Weekly Rate and a
Book-Entry System is not in effect, a holder of a Bond may tender the
Bond (or portion of Bond) by delivering the notices as described above
(which shall include the certificate number of the Bond), and shall
also deliver the Bond to the Trustee by 1:00 p.m., New York City time,
on the date of purchase (see additional requirements below).
Payment of Purchase Price. The purchase price for a tendered Bond will
be paid in immediately available funds to the registered owner of the Bond by
the close of business on the date of purchase.
A-5
<PAGE>
7. Delivery Address; Additional Delivery Requirements. Notices in respect
of tenders and Bonds tendered must be delivered to the Trustee as follows:
SouthTrust Bank of Alabama, National Association
P. O. Box 2554
Birmingham, Alabama 35290
Attention: Corporate Trust Department
Telephone: (205) 254-5017
Fax: (205) 254-4180
Notices in respect of tenders shall be delivered to the Remarketing
Agent as follows:
Merchant Capital L.L.C.
250 Commerce Street
Montgomery, Alabama 36104
Attention: Muni Syndicate
Telephone: (334) 834-5100
Fax: (334) 269-0902
The delivery addresses or telephone numbers of the Trustee or the Remarketing
Agent may be changed by notice mailed by first class mail to the Bondholders at
their registered addresses.
All tendered Bonds must be accompanied by an instrument of transfer
satisfactory to the Trustee, executed in blank by the registered owner or his
duly authorized attorney, with the signature guaranteed by an eligible guarantor
institution.
Limitation on Tenders. No Bonds may be tendered while they bear
interest at a Commercial Paper Rate or a Long-Term Interest Rate.
Irrevocable Notice Deemed to be Tender of Bond; Undelivered Bonds. The
giving of notice by an owner of a Bond as provided in Section 6 constitutes the
irrevocable tender for purchase of each Bond (or portion thereof) with respect
to which such notice was given, irrespective of whether such Bond was delivered
as provided in Section 6. The determination of the Trustee as to whether a
notice of tender has been properly delivered shall be conclusive and binding
upon the Bondholders.
The Trustee may refuse to accept delivery of any Bond for which a
proper instrument of transfer has not been provided. If any owner of a Bond who
gave notice fails to deliver his Bond to the Trustee at the place and on the
applicable date and time specified, or fails to deliver his Bond properly
endorsed, his Bond shall constitute an undelivered Bond as described in Section
2.06 of the Indenture. BY ACCEPTANCE OF THIS BOND, THE OWNER AGREES TO SELL AND
SURRENDER THIS BOND, PROPERLY ENDORSED, TO THE TRUSTEE AFTER THE GIVING OF
IRREVOCABLE NOTICE OF TENDER FOR PURCHASE AS DESCRIBED ABOVE.
8. Redemptions. As provided below, the Company has the right to purchase
Bonds in lieu of certain redemptions. BY ACCEPTANCE OF THIS BOND, THE OWNER
AGREES TO SELL AND SURRENDER THIS BOND, PROPERLY ENDORSED, TO THE COMPANY IN
LIEU OF REDEMPTION UNDER THE CONDITIONS DESCRIBED BELOW. All redemptions and
purchases in lieu of redemption will be made in funds immediately available on
the redemption or purchase date
A-6
<PAGE>
and will be at a redemption or purchase price of 100% of the principal amount of
the Bonds being redeemed or purchased (unless a premium is required as provided
below) plus interest accrued to the redemption or purchase date, except that
interest accruing at a Daily Rate will be paid on the fifth Business Day
following the redemption or purchase date. Bonds tendered for purchase on a date
after a call for redemption but before the redemption date will be purchased
pursuant to the tender. No purchase of Bonds by the Company or advance use of
any funds to effectuate any such purchase shall be deemed to be a payment or
redemption of the Bonds or of any portion thereof and such purchase will not
operate to extinguish or discharge the indebtedness evidenced by such Bonds.
Optional Redemption at a Premium During Long-Term Interest Rate Period.
During any Long-Term Interest Rate Period of less than or equal to five years,
the Bonds will not be redeemable pursuant to this provision during the Long-Term
Interest Rate Period.
If the Long-Term Interest Rate Period is greater than five years, the
Bonds will not be redeemable for five years after the date on which the Bonds
begin to bear interest at the Long-Term Interest Rate. After the five year
no-call period, the Bonds may be redeemed at any time in whole or in part at
102% of their principal amount. The premium will decline every year on the
anniversary of the date on which the Bonds begin to bear interest at the
Long-Term Interest Rate, by one percentage point until the Bonds are redeemable
without premium.
As an alternative to and in lieu of the foregoing redemption provisions
if, with respect to any Long-Term Interest Rate Period, a Favorable Opinion of
Tax Counsel is delivered to the Trustee not later than the date of the
establishment of such Long-Term Interest Rate Period, the Bonds may be redeemed
during such Long-Term Interest Rate Period at the option of the Company in whole
or in part at any time after a no-call period, if any, established by the
Remarketing Agent, at the percentages of their principal amount, plus accrued
interest, as follows: The Remarketing Agent shall, given the duration of the
Long-Term Interest Rate Period, determine and inform the Trustee, on a date
which is no later than the establishment of the Long-Term Interest Rate, the
periods during which the Bonds shall not be subject to redemption (the "Call
Protection Period"), the redemption premium or premiums (the "Call Premiums"),
if any, applicable to the redemption of Bonds after the Call Protection Period,
and the period or periods during which the Call Premiums shall be effective (the
"Call Premium Periods") necessary to establish the Long-Term Interest Rate. Such
Call Protection Period, Call Premiums and Call Premium Periods shall be
established in accordance with optional call redemption provisions which in the
judgment of the Remarketing Agent, are generally accepted as the standard
features for obligations such as the Bonds, given the length of the Long- Term
Interest Rate Period.
Extraordinary Optional Redemption. The Bonds may be redeemed in whole at
the option of the Company at any time after the occurrence of any of the
following:
(a) Damage or destruction to the Plant or the Project to such
extent that in the opinion of the Company's board of directors
(expressed in a resolution) filed with the Issuer and the Trustee: (1)
the Plant or the Project, as the case may be, cannot be reasonably
repaired, rebuilt or restored within a period of six months to their
condition immediately preceding such damage or destruction, or (2) the
Company is thereby prevented from carrying on its normal operations at
the Plant for a period of six months.
A-7
<PAGE>
(b) Loss of title to or use of a substantial part of the Plant
or the Project as a result of the exercise of the power of eminent
domain which, in the opinion of the Company's board of directors
(expressed in a resolution) filed with the Issuer and the Trustee,
results or is likely to result in the Company being thereby prevented
from carrying on its normal operations therein for a period of six
months.
(c) Any event occurs which, in the opinion of the Company's
board of directors (expressed in a resolution), renders the Project or
the Plant so uneconomical that it is abandoned.
Any such redemption shall be on any date within 90 days from the time
the Company files the required resolution and directs that the Bonds are to be
redeemed, which direction must be given, if at all, within 180 days following
the occurrence of one of the events listed above.
Optional Redemption During Daily or Weekly Rate Period. When interest
on the Bonds is payable at a Daily or Weekly Rate, the Bonds may be redeemed in
whole or in part at the option of the Company, on any Business Day.
Mandatory Redemption at Beginning of a New Long-Term Interest Rate
Period. When the Bonds bear interest at a Long-Term Interest Rate and a new
Long-Term Interest Rate is to be determined, the Bonds will be redeemed or
purchased by the Company in lieu of redemption on the effective date of the new
Long-Term Interest Rate. In the case of a change prior to the day originally
established as the day after the last day of a Long-Term Interest Rate Period,
the Bonds will be redeemed or purchased at the percentage of their principal
amount which would be payable upon the applicable redemption described under
"Optional Redemption at a Premium During Long-Term Interest Rate Period" above.
Mandatory Redemption on Each Interest Payment Date During Commercial
Paper Mode. When Bonds bear interest at a Commercial Paper Rate, each Bond will
be redeemed or purchased by the Company in lieu of redemption on the Interest
Payment Date for such Bond. If Bonds are scheduled to be redeemed under the
following paragraph, the Bonds will be called under, and redemption will be
governed by, that paragraph and not this paragraph.
Mandatory Redemption Upon a Change in the Method of Determining the
Interest Rate on the Bonds. On the effective date of the change in the method of
determining the interest rate on the Bonds (the four methods being Daily,
Weekly, Commercial Paper, or Long-Term Interest Rates) the Bonds will be
redeemed or purchased by the Company in lieu of redemption on the effective date
of such change. Any such redemption or purchase shall be at a price equal to
100% of the principal amount of the Bonds, except that in the case of a change
prior to the day originally established as the day after the last day of a
Long-Term Interest Rate Period, the Bonds will be redeemed or purchased at the
percentage of their principal amount which would be payable upon the applicable
redemption described under "Optional Redemption at a Premium During Long-Term
Interest Rate Period" above.
Notice of Redemption. At least 30 days before each redemption except
"Mandatory Redemption on Each Interest Payment Date During Commercial Paper
Mode" described above, the Trustee will mail a notice of redemption by
first-class mail to each Bondholder at the holder's registered address. Failure
to give any required notice of redemption as to any particular Bonds will not
affect the validity of the call for redemption of any Bonds in respect of which
no failure occurs.
A-8
<PAGE>
Any notice mailed as provided in this paragraph shall be effective when sent and
will be conclusively presumed to have been given whether or not actually
received by the addressee.
Effect of Notice of Redemption. When notice of redemption is required
and given, and when Bonds are to be redeemed without notice, Bonds called for
redemption become due and payable on the redemption date at the applicable
redemption price, subject to the Company's right to purchase Bonds as provided
above; in such case when funds are deposited with the Trustee sufficient for
redemption or for purchase, interest on the Bonds to be redeemed or purchased
ceases to accrue as of the date of redemption or purchase.
9. Denominations; Transfer; Exchange. The Bonds are in registered form
without coupons in denominations as follows: (1) when interest is payable at a
Daily, Weekly, or Commercial Paper Rate, $100,000 or any integral multiple
thereof; and (2) when interest is payable at a Long- Term Interest Rate, $5,000
and integral multiples of $5,000 thereafter. A holder may transfer or exchange
Bonds in accordance with the Indenture. The Trustee may require a holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. Except in
connection with the purchase of Bonds tendered for purchase or purchased in lieu
of redemption, the Trustee will not be required to transfer or exchange any Bond
which has been called for redemption or during the period beginning 15 days
before the mailing of notice calling the Bonds or any portion of the Bonds for
redemption and ending on the redemption date.
10. Persons Deemed Owners. The registered holder of this Bond may be
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal, premium,
interest, or purchase price remains unclaimed for five years, the Trustee will
pay the money to or for the account of the Company. After that, holders entitled
to the money must look only to the Company and not to the Trustee or the Issuer
for payment unless an abandoned property law designates another person.
12. Discharge Before Redemption or Maturity. If the Company at any time
deposits with the Trustee money or Government Obligations as described in the
Indenture sufficient to pay at redemption or maturity principal of and interest
on the outstanding Bonds, and if the Company also pays all other sums then
payable by the Company under the Indenture, the lien of the Indenture will be
discharged. After discharge, Bondholders must look only to the deposited money
and securities for payment. Government Obligations are securities backed by the
faith and credit of the United States or securities evidencing ownership
interest in such full-faith and credit securities.
13. Amendment, Supplement, Waiver. Subject to certain exceptions, the
Indenture, the Agreement, or the Bonds may be amended or supplemented, and any
past default or compliance with any provision may be waived, with the consent of
the holders of a majority in principal amount of the Bonds then outstanding. Any
such consent shall be Irrevocable and shall bind any subsequent owner of this
Bond or any Bond delivered in substitution for this Bond. Without the consent of
any Bondholder, the Issuer may amend or supplement the Indenture, the Agreement,
or the Bonds as described in the Indenture, among other things, to cure any
ambiguity, omission, defect, or inconsistency, to provide for uncertificated
Bonds in addition to or in place of certificated Bonds, to provide for a
Book-Entry System for the Bonds or to make any change that does not materially
adversely affect the rights of any Bondholder.
A-9
<PAGE>
14. Defaults and Remedies. The Indenture provides that the occurrences
of certain events constitute Events of Default. If an Event of Default relating
to payment of principal of, interest on, or purchase price of the Bonds occurs
and is continuing, the Bonds shall without further action become immediately due
and payable. Whenever any other Event of Default occurs and is continuing, the
Bonds shall without further action become due and payable immediately. An Event
of Default and its consequences may be waived as provided in the Indenture.
Bondholders may not enforce the Indenture or the Bonds except as provided in the
Indenture. Except as specifically provided in the Indenture, the Trustee may
refuse to enforce the Indenture or the Bonds unless it receives indemnity
satisfactory to it. Subject to certain limitations, holders of a majority in
principal amount of the Bonds then outstanding may direct the Trustee in its
exercise of any trust or power.
15. No Recourse Against Others. A member, director, officer, or
employee, as such, of the Issuer shall not have any liability for any
obligations of the Issuer or the Company under the Bonds or the Indenture or for
any claim based on such obligations or their creation. Each Bondholder by
accepting a Bond waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Bond.
16. Authentication. This Bond shall not be valid until the Trustee signs
the certificate of authentication.
17. Abbreviations. Customary abbreviations may be used in the name of a
Bondholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
A copy of the Indenture may be inspected at the corporate trust office
of the Trustee located at 100 Office Park Circle, Birmingham, Alabama 35223.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts,
conditions, and things required to exist, happen, and be performed precedent to
and in the execution and delivery of the Indenture and the issuance of this Bond
do exist, have happened and have been performed in due time, form, and manner as
required by law.
This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been duly executed by the Trustee.
A-10
<PAGE>
IN WITNESS WHEREOF The Industrial Development Board of the Town of
Columbia has caused this Bond to be executed in its name by the Chairman or Vice
Chairman of its Board of Directors by his manual or facsimile signature and
attested by the manual or facsimile signature of its Secretary or Assistant and
its corporate seal to be hereunto affixed or printed hereon.
Date of Authentication: ,
THE INDUSTRIAL DEVELOPMENT BOARD OF
TOWN OF COLUMBIA
[SEAL]
By:
Chairman of the Board of Directors
Attest:
Secretary
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION
Trustee, certifies that this is one of the
Bonds referred to in the Indenture
By:
Authorized Signature
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<PAGE>
The following abbreviations, when used in the inscription on the face of the
within Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM- as tenants in
common
TEN ENT- as tenants by the
entireties
JT TEN- as joint tenants
with right of
survivorship and
not as tenants in
common
UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in list above.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
attorney to transfer the said Bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated:
Signature guaranteed:
Medallion Number:
*Signature(s) must be guaranteed by an eligible guarantor institution which is a
member of a recognized signature guarantee program, i.e., Securities Transfer
Agents Medallion Program (STAMP), or New York Stock Exchange Medallion Signature
Program (MSP).
NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears upon the face of the within Bond in every
particular, without alteration or enlargement or any change whatever.
A-12
EXHIBIT C
Balch & Bingham
1901 Sixth Avenue North
Birmingham, Alabama 35203
205-251-8100
December 10, 1996
Securities and Exchange Commission
Washington, DC 20549
Re: Statement on Form U-1
of Alabama Power Company
(herein called the "Company")
File No. 70-8661
Ladies and Gentlemen:
We have read the statement on Form U-1, as amended, referred to above and are
furnishing this opinion in connection with the issuance and sale by The
Industrial Development Board of the Town of Columbia (Alabama) of $21,000,000
aggregate principal amount of its Pollution Control Revenue Refunding Bonds
(Alabama Power Company Project), 1996 Series A (the "Revenue Bonds").
We are of the opinion that:
(a) the Company is validly organized and duly existing as a corporation under
the laws of the State of Alabama;
(b) the transactions have been consummated in accordance with such statement on
Form U-1, as amended;
(c) all state laws applicable to the transactions have been complied with;
(d) the Company's obligations with respect to the Revenue Bonds are valid and
binding obligations of the Company in accordance with their terms; and
(e) the consummation of the transactions did not violate the legal rights of
the holders of any securities issued by the Company or any associate
company thereof.
We hereby give our written consent to the use of this opinion in connection with
the above-mentioned statement on Form U-1 and to the filing thereof with the
Commission at the time of the filing of the certificate pursuant to Rule 24.
Very truly yours,
/s/ Balch & Bingham
