CERTIFICATE OF NOTIFICATION
Filed by
ALABAMA POWER COMPANY
Pursuant to orders of the Securities and Exchange Commission dated September 8,
1995 and November 21, 1997 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. An Eighth 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 $65,000,000 aggregate principal amount of the Board's
Taxable Variable Rate Demand Revenue Bonds (Alabama Power Company
Project), Series 1997, 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 Eighth Supplementary
Installment Sale Agreement between the
Board and the Company, dated as of
November 1, 1997.
Exhibit B -- Copy of Trust Indenture relating to
the Series 1997 between the Board and
SouthTrust Bank, National Association,
dated as of November 1, 1997.
Exhibit C -- Opinion of Balch & Bingham LLP dated December 4,
1997.
Dated December 4, 1997 ALABAMA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit A
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EIGHTH SUPPLEMENTARY
INSTALLMENT SALE AGREEMENT
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
AND
ALABAMA POWER COMPANY
DATED AS OF NOVEMBER 1, 1997
$65,000,000
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
VARIABLE RATE DEMAND REVENUE BONDS
(ALABAMA POWER COMPANY PROJECT)
SERIES 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
SECTION 1.1. Definitions.................................................... 3
SECTION 1.2. Certain Rules of Interpretation................................ 6
SECTION 1.3. Relationship of Agreement to the Original Agreement............ 6
ARTICLE II
REPRESENTATIONS
SECTION 2.1. Representations by the Issuer.................................. 7
SECTION 2.2. Representations by the Company................................. 8
ARTICLE III
THE FACILITIES
SECTION 3.1. Acquisition and Construction...................................10
SECTION 3.2. Construction Fund..............................................10
ARTICLE IV
ISSUANCE OF BONDS; SECURITY; DISBURSEMENTS
SECTION 4.1. Issuance of Bonds..............................................12
SECTION 4.2. Security for the Bonds.........................................12
SECTION 4.3 Investment of Funds............................................12
ARTICLE V
COMPANY OBLIGATIONS; PROVISIONS FOR PAYMENT; COVENANTS
SECTION 5.1. Company Approval of Issuance of Bonds..........................13
SECTION 5.2. Refunding of Bonds.............................................13
SECTION 5.3. Redemption of Bonds............................................13
SECTION 5.4. Installment Sale Payments......................................13
SECTION 5.5. Purchase Price Payments of the Company.........................14
SECTION 5.6. Administrative Expenses........................................15
SECTION 5.7. Payments to Issuer.............................................15
SECTION 5.8. Obligations of the Company Absolute and Unconditional..........15
SECTION 5.9. Option to Prepay Amounts Under Agreement in Whole in
Certain Events.................. 16
SECTION 5.10.Company's Performance Under Indenture..........................16
SECTION 5.11.Covenants Regarding Tax Exemption..............................16
ARTICLE VI
PARTICULAR AGREEMENTS
SECTION 6.1. Issuer's Release and Indemnification Provisions................17
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SECTION 6.2. Incorporation of Certain Provisions of the Original Agreement..18
SECTION 6.3. Agreement of Issuer Not to Assign or Pledge....................18
SECTION 6.4. Reference to Bonds Ineffective After Bonds Paid................18
SECTION 6.5. Amendment of Agreement or Indenture............................18
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. Events of Default..............................................20
SECTION 7.2. Remedies on Default............................................21
SECTION 7.3. Annulment of Acceleration......................................21
SECTION 7.4. Agreement to Pay Attorney's Fees and Expenses..................21
SECTION 7.5. General Enforcement Provisions.................................22
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Term of Agreement..............................................23
SECTION 8.2. Notices........................................................23
SECTION 8.3. Benefit of Parties.............................................24
SECTION 8.4. Severability...................................................24
SECTION 8.5. Counterparts...................................................24
SECTION 8.6. Captions.......................................................24
SECTION 8.7. Law Governing Construction of Agreement........................24
SECTION 8.8. Payments on Non-Business Days..................................24
EXHIBIT A Facilities Description
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EIGHTH SUPPLEMENTARY
INSTALLMENT SALE AGREEMENT
This EIGHTH SUPPLEMENTARY INSTALLMENT SALE AGREEMENT dated as of
November 1, 1997, between THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF
COLUMBIA, a public corporation of the State of Alabama (the "Issuer"), and
ALABAMA POWER COMPANY, an Alabama corporation (the "Company"),
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 certain air and water pollution control and
sewage and solid waste disposal facilities (the "Project") to be installed and
operated as a part of the Company's Joseph M. Farley Nuclear Plant, located
within the geographical area of operation of the Issuer in Houston County,
Alabama; and
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WHEREAS, pursuant to and in accordance with the provisions of the Act,
the Issuer proposes to issue its limited obligation revenue bonds under the Act
for the purpose of financing a portion of the cost of acquiring, constructing
and improving certain sewage and solid waste disposal facilities (the
"Facilities") included in the Project, and paying the expenses of authorizing
and issuing said bonds; and
WHEREAS, as security for the payment of said bonds, the Issuer will
assign and pledge to SouthTrust Bank, National Association, as trustee (the
"Trustee") under the terms of the Trust Indenture dated as of November 1, 1997
(the "Indenture") certain rights, title and interest of the Issuer in (i) this
Agreement (except for the indemnification rights and expense reimbursement
rights contained herein), and (ii) all amounts on deposit from time to time in
the various funds created in, and subject to the conditions set forth in, the
Indenture;
NOW THEREFORE, in consideration of the covenants and agreements herein
made, and subject to the conditions herein set forth, the Issuer and the Company
contract and agree as follows:
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ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
SECTION 1.1. Definitions. All words and terms as used in this Agreement
shall have the same meanings given such words and terms in the Indenture, unless
the context or use clearly indicates another or different meaning or intent. In
addition, the following words and terms as used in this Agreement shall have the
following meanings, unless the context or use clearly indicates another or
different meaning or intent:
"Agreement" means this Eighth Supplementary Installment Sale Agreement,
and all amendments and supplements hereto.
"Authorized Company Representative" means any person or persons at the
time designated to act on behalf of the Company by a written certificate, signed
on behalf of the Company by any one of its officers or authorized
representatives and furnished to the Trustee, containing the specimen signature
of each such person.
"Company" means Alabama Power Company, a corporation organized and
existing under the laws of the State of Alabama, and its successors and assigns.
"Construction Fund" means the segregated account or accounts into which
certain proceeds from the sale and delivery of the Bonds will be deposited as
provided in the Indenture.
"Costs of Issuance" means all costs and expenses incurred by the Issuer
or the Company in connection with the issuance and sale of the Bonds, including
without limitation (i) fees and expenses of accountants, attorneys, engineers,
and financial advisors, (ii) materials, supplies, and printing and engraving
costs, (iii) recording and filing fees, (iv) rating agency fees, (v) initial
fees and expenses (including, without limitation, counsel fees and expenses) of
the Trustee, (vi) any underwriters discount or fee and (vii) the Issuer's
administrative and overhead expenses as provided in Section 5.7 of this
Agreement.
"Event of Bankruptcy" means the filing of a petition in bankruptcy or
the commencement of a proceeding under the United States Bankruptcy Code or any
other applicable law concerning insolvency, reorganization or bankruptcy by or
against the Company as debtor (provided that, in the event of a filing of an
involuntary case in bankruptcy under the United States Bankruptcy Code or the
commencement of a proceeding under any other applicable law concerning
bankruptcy, insolvency or reorganization against the Company, such petition or
proceeding shall remain undismissed or unstayed for a period of sixty (60)
days).
"Facilities" means the facilities described in Exhibit A to this
Agreement as amended from time to time as provided herein, portions of the cost
of which are being financed with the proceeds of the Bonds.
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"Facilities Costs" means all costs incurred by the Issuer or the
Company, whether before or after issuance of the Bonds, with respect to the
acquisition, construction and improvement of the Facilities, including but not
limited to, the following items:
(i) Obligations incurred or assumed for labor, materials and
equipment (including obligations payable to the Company for
expenditures made or costs incurred by the Company);
(ii) Costs of any performance, payment, or surety bonds and
insurance deemed necessary or appropriate by the Company;
(iii) Costs of engineering and other services, including the costs
incurred or assumed for preliminary design and development,
surveys, estimates and plans and specifications, and for
supervising construction and performing all other duties
required by or consequent upon proper construction;
(iv) Costs which the Company shall be required to pay under the
terms of any contract or contracts in connection with the
construction, acquisition and improvement of the Facilities;
(v) Amounts which are required to be paid for taxes, assessments
and other similar charges payable during the period of
construction;
(vi) Expenses incurred in seeking to enforce any remedy against
any contractor, subcontractor or other provider of labor,
materials, equipment or services, in respect of any default,
breach or dispute relating to the Facilities;
(vii) Sums required to reimburse the Company for advances made for
any of the above items, and for any other costs incurred for
work done or caused to be done by the Company which are
properly chargeable to the Facilities;
(viii) Interest on the Bonds actually paid during or attributable
to the period of construction of the Facilities;
(ix) To the extent authorized by the Act, costs of all other
items related to the acquisition, construction and
improvement of the Facilities; and
(x) Costs of Issuance.
"Indemnified Parties" means the Issuer and any of its officers,
directors, members, commissioners, employees, agents, servants and any other
person acting for or on behalf of the Issuer.
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"Indenture" means the Trust Indenture dated as of November 1, 1997,
between the Issuer and the Trustee including all supplements and amendments
thereto.
"Installment Sale Payments" means payments required to be made by the
Company to pay the Debt Service on the Bonds, as provided for in Section 5.4 of
this Agreement and the Indenture, including the principal of, premium, if any
(whether at stated maturity, upon redemption prior to stated maturity, or upon
acceleration of stated maturity), and interest on the Bonds when due.
Installment Sale Payments do not include Purchase Price Payments.
"Issuer" means The Industrial Development Board of the Town of
Columbia, a public corporation of the State of Alabama, and its successors and
assigns.
"Original Agreement" means the Installment Sale Agreement dated as of
May 1, 1978 between the Issuer and the Company, as supplemented and amended by a
First Supplemental Agreement dated as of November 1, 1984, a Second Supplemental
Agreement 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.
"Plant" means the Company's Joseph M. Farley Nuclear Plant located in
Houston County, Alabama.
"Prior Bonds" means all revenue bonds heretofore issued by the Issuer
to finance or refinance the costs of the Project.
"Prior Supplementary Agreements" means the Supplementary Installment
Sale Agreement between the Issuer and the Company 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
the Seventh Supplementary Installment Sale Agreement dated as of November 1,
1996.
"Project" means the air and water pollution control and sewage and
solid waste disposal facilities, including the Facilities, described in the
Original Agreement, the Prior Supplementary Agreements and the Agreement.
"Purchase Price" means the amount due a Registered Owner of any Bond
purchased or deemed purchased pursuant to and as provided in Article IV of the
Indenture which amount is payable from Purchase Price Payments and/or the
proceeds of a remarketing pursuant to the Indenture.
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"Purchase Price Payments" means the payments required to be made by the
Company in Section 5.5 of this Agreement to purchase Bonds tendered for purchase
and not remarketed pursuant to the Indenture.
"Regulations" means the applicable proposed, temporary or final Income
Tax Regulations promulgated under the Code, as such regulations may be amended
or supplemented from time to time.
SECTION 1.2. Certain Rules of Interpretation. The definitions set forth
in Article I and in the Indenture shall be equally applicable to both the
singular and plural forms of the terms therein defined and shall cover all
genders.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore",
"hereinafter" and other equivalent words refer to this Agreement and not solely
to the particular Article, Section or Subdivision hereof in which such word is
used.
Reference herein to an article number (e.g., Article IV) or a section
number (e.g., Section 6.2) shall be construed to be a reference to the
designated article number or section number hereof unless the context or use
clearly indicates another or different meaning or intent.
SECTION 1.3. Relationship of Agreement to the Original Agreement. The
Issuer has heretofore issued the Prior Bonds for the purpose of financing and
refinancing a portion of the costs of acquiring, constructing, installing and
equipping the Project. In connection therewith, and in order to provide a source
of payment of the Prior Bonds, the Issuer has sold the Project to the Company
and the Company has agreed to make certain installment purchase payments to the
Issuer, all pursuant to the terms of the Original Agreement and the Prior
Supplementary Agreements. The Bonds are being issued to finance a portion of the
costs of the Facilities not previously financed or refinanced by the Prior
Bonds. By their execution and delivery of this Agreement, which is intended to
be complementary to the Original Agreement and the Prior Supplementary
Agreements, the Issuer and the Company ratify and confirm the sale of the
Facilities to the Company pursuant to the Original Agreement, agree to continue
the Original Agreement and the Prior Supplementary Agreements, in full force and
effect except for the provisions thereof requiring the Company to make purchase
price payments related to Prior Bonds 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. To
the extent that any statement in, or provision of, this Agreement conflicts with
the Original Agreement or the Prior Supplementary Agreements, the provisions of
this Agreement shall be deemed to control.
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ARTICLE II
REPRESENTATIONS
SECTION 2.1. Representations by the Issuer. The Issuer makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) Organization and Authority. The Issuer is a public corporation duly
existing under the Constitution and laws of the State. The Issuer has all
requisite power and authority under the Act (i) to adopt the Bond Resolution,
(ii) to issue the Bonds, (iii) to use the proceeds thereof to finance a portion
of the costs relating to the acquisition, construction and improvement of the
Facilities and (iv) to enter into, and perform its obligations under the
Indenture and this Agreement.
(b) Pending Litigation. To the knowledge of the Issuer, there are no
actions, suits, proceedings, inquiries or investigations pending or threatened
against or affecting the Issuer in any court or before any governmental
authority or arbitration board or tribunal which involve the possibility of
materially and adversely affecting the transactions contemplated by the
Financing Documents or which, in any way, would adversely affect the validity or
enforceability of the Financing Documents or the ability of the Issuer to
perform its obligations under the Financing Documents.
(c) Agreements Are Legal and Authorized. The adoption of the Bond
Resolution, the issuance and sale of the Bonds and the execution and delivery of
the Financing Documents, and the compliance by the Issuer with all of the
provisions of each thereof and of the Bonds (i) are within the powers and
authority of the Issuer, (ii) have been done in full compliance with the
provisions of the Act, are legal and will not conflict with or constitute on the
part of the Issuer a violation of or a breach of or default under, or result in
the creation of any lien, charge or encumbrance upon any property of the Issuer
(other than as contemplated by this Agreement and the Indenture) under the
provisions of, any by-law or other agreement or instrument to which the Issuer
is a party or by which the Issuer is bound, or any license, judgment, decree,
law, statute, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Issuer or any of its activities or properties
and (iii) have been duly authorized by all necessary action on the part of the
Issuer.
(d) Governmental Consents. Neither the nature of the Issuer nor any of
its activities or properties, nor any relationship between the Issuer and any
other person, nor any circumstance in connection with the offer, issue, sale or
delivery of any of the Bonds is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Issuer in connection with the
execution, delivery and performance of the Financing Documents or the offer,
issue, sale or delivery of the Bonds, other than those already obtained as of
the Issue Date; provided, however, no
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representation is made herein as to compliance with the securities or "blue sky"
laws of any jurisdiction.
(e) No Defaults. No event has occurred and no condition exists with
respect to the Issuer which would constitute an "Event of Default" as defined in
the Indenture or which, with the lapse of time or with the giving of notice or
both, would become an "Event of Default" under the Indenture.
(f) No Prior Pledge. Neither this Agreement nor the Installment Sale
Payments have been pledged or hypothecated in any manner or for any purpose
other than as provided in the Indenture as security for the payment of the
Bonds.
(g) Limited Obligations. The Bonds shall be limited obligations of the
Issuer and shall be payable by the Issuer solely out of the Revenues. The Bonds
shall never be payable out of any other funds of the Issuer except the Revenues.
Neither the State, the Town of Columbia, nor any other political subdivision of
the State shall be obligated to pay the principal of, premium, if any, or
interest on the Bonds. Neither the faith and credit nor the taxing power of the
State, the Town of Columbia, nor any other political subdivision of the State is
pledged to the payment of the principal of and premium, if any, or interest on
such Bonds.
(h) Facilities. Based on representations by the Company, the Issuer
represents that the Facilities constitute a project financeable under the Act.
(i) Requirements Satisfied. All requirements and conditions specified
in the Act and all other laws and regulations applicable to the adoption of the
Bond Resolution, the execution and delivery of the Financing Documents, and the
issuance and delivery of the Bonds will be fulfilled prior to the Issue Date.
SECTION 2.2. Representations by the Company. The Company makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) Corporate Organization and Power. The Company (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Alabama, and (ii) has all requisite power and authority and all
necessary licenses and permits to own and operate its properties and to carry on
its business as now being conducted and as presently proposed to be conducted.
(b) Pending Litigation. There are no actions, suits, proceedings,
inquiries or investigations pending, or to the knowledge of the Company
threatened, against or affecting the Company in any court or before any
governmental authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the transactions contemplated
by the Financing Documents or which, in any way, would adversely affect the
validity or
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enforceability of the Bonds or the Financing Documents or the legal ability of
the Company to perform its obligations under this Agreement.
(c) Agreements Are Valid and Authorized. The execution and delivery by
the Company of this Agreement and the compliance by the Company with all of the
provisions hereof (i) are within the corporate power of the Company, (ii) will
not conflict with or result in any breach of any of the provisions of, or
constitute a default under, any material agreement, charter document, by-law or
other material instrument to which the Company is a party or by which it may be
bound, or any license, judgment decree, law, statute, order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company
or any of its activities or properties, and (iii) have been duly authorized by
all necessary action on the part of the Company.
(d) Governmental Consent. Neither the Company nor any of its business
or properties, nor any relationship between the Company and any other person,
nor any circumstances in connection with the execution, delivery and performance
by the Company of this Agreement or the offer, issue, sale or delivery by the
Issuer of the Bonds, is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Company, other than those already
obtained as of the Issue Date; provided, however, no representation is made
herein as to compliance with the securities or "blue sky" laws of any
jurisdiction.
(e) No Defaults. No event has occurred and no condition exists with
respect to the Company that would constitute an "Event of Default" under the
Indenture or which, with the lapse of time or with the giving of notice or both,
would become an "Event of Default" under the Indenture.
(f) Facilities. The Facilities qualify as a project which is
authorized to be undertaken by the Issuer under the Act.
(g) Permits. The Company has obtained or will obtain all necessary
licenses and permits to enter into and perform this Agreement and the other
documents executed by it in connection with the issuance of the Bonds and to
acquire, construct and operate the Facilities, and the Facilities have been or
will be approved by all necessary governmental bodies or agencies having
jurisdiction.
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ARTICLE III
THE FACILITIES
SECTION 3.1. Acquisition and Construction. The portions of the
Facilities which are being financed by the Bonds have been acquired, constructed
and installed and are currently in operation at the Plant.
SECTION 3.2. Construction Fund. The Construction Fund, as defined in
and required by the Indenture, which shall be drawn on and used by the Issuer to
pay the Costs of Issuance of the Bonds and Facilities Costs when due and
payable, is hereby created. The Issuer shall deposit the proceeds from the sale
and delivery of the Bonds as follows: (1) accrued interest, if any, in the Debt
Service Fund, and (2) the remainder in the Construction Fund. The Trustee, on
behalf of the Issuer, pursuant to request of the Company, shall draw on and use
the Construction Fund as follows:
(a) Immediately after the delivery of the Bonds authorized hereby, the
Company, or the Trustee, upon direction of an Authorized Company Representative,
shall pay directly to the Issuer, the amount (if any) required to reimburse the
Issuer for its administrative and overhead expenses directly attributable and
chargeable to the Costs of Issuance of the Bonds authorized hereby.
(b) So long as no Event of Default shall have occurred and be
continuing, the Trustee shall disburse moneys from the Construction Fund to pay
Facilities Costs upon receipt of the following:
(i) a written requisition (which may incorporate the
certifications set forth in (ii) below) for such payment signed by an
Authorized Company Representative (each requisition to be numbered
consecutively);
(ii) a certificate by an Authorized Company Representative
certifying:
(A) that the obligation described in such requisition
represents a Facilities Cost and has been properly incurred in
connection with the issuance of the Bonds or the acquisition,
construction and installation of the Facilities;
(B) that such obligation is a proper charge against
the Construction Fund and has not been the basis of any
previous withdrawal from the Construction Fund;
(C) that such requisition contains no request for
payment on account of any portion of such obligation which the
Company is, as of the date of such requisition, entitled to
retain under any retained percentage agreements;
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(D) that insofar as such requisition relates to
labor, services, materials, supplies and/or equipment (1) such
labor and/or services were actually performed in a
satisfactory manner and (2) such materials, supplies and/or
equipment were actually used in or about the Plant or
delivered to the Plant for that purpose;
(E) that the expenditure of such amount to be paid,
when added to all disbursements under previous requisitions,
will result in at least 95% of the total of such disbursements
being used to provide "sewage facilities" or "solid waste
disposal facilities" within the meaning of Sections 142(a)(5)
and 142(a)(6), respectively, of the Code; and
(F) in the case of requisitions for Costs of
Issuance, that the cumulative total amount drawn thereunder
for Costs of Issuance does not exceed 2% of the proceeds of
the Bonds (exclusive of any original issue discount).
(c) The Trustee shall rely fully on any such request and certificate
delivered pursuant to this Section and shall not be required to make any
investigation in connection therewith. If amounts paid by the Trustee pursuant
to (b) above with respect to any portion of the Facilities exceed the cost
thereof, the Company shall promptly repay such overpayment into the Construction
Fund.
(d) The Issuer hereby gives its express written authority to the
Company to direct the investment of the Construction Fund by the Trustee as
hereinafter provided. The Issuer hereby finds and determines that the investment
of any money held as part of the Construction Fund in obligations hereinafter
permitted will, to the extent permitted by Section 148 of the Code, yield the
highest possible rate of return while providing necessary protection of the
principal consistent with the needs for such money under this Agreement. Any
money held as part of the Construction Fund shall be invested or reinvested by
the Trustee in the same manner as provided for in the Bond Fund. Upon
acceleration of the maturity of the Bonds pursuant to the Indenture, any amounts
held in or on deposit in the Construction Fund shall be transferred by the
Trustee to the Bond Fund.
(e) Because the Facilities have been completed and placed in service
prior to the issuance of the Bonds, the parties anticipate that the entire
proceeds of the Bonds deposited in the Construction Fund will be withdrawn on
the Issue Date to reimburse the Company for Facilities Costs already incurred by
the Company.
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ARTICLE IV
ISSUANCE OF BONDS; SECURITY; DISBURSEMENTS
SECTION 4.1. Issuance of Bonds. In order to provide funds to finance
the acquisition, construction and improvement of the Facilities (or to reimburse
the Company for the costs thereof), the Issuer, concurrently with the execution
of this Agreement, will sell, issue and deliver to the initial purchasers
thereof the Bonds, all in accordance with the Indenture.
SECTION 4.2. Security for the Bonds. The obligations of the Company
under this Agreement, including specifically the obligation to pay Installment
Sale Payments, Purchase Price Payments and Administrative Expenses and its
obligations under Article V hereof shall be direct general obligations of the
Company. Prior to or simultaneously with the issuance of the Bonds, the Issuer
will assign to the Trustee under the terms of the Indenture all of the Issuer's
right, title, and interest in and to this Agreement including specifically the
Installment Sale Payments but excepting certain sums payable to the Issuer, the
Trustee and the Remarketing Agent under Sections 5.6, 5.7, 6.1 and 7.3 of this
Agreement and the Issuer's rights under Section 6.1 of this Agreement to
indemnification.
SECTION 4.3 Investment of Funds. The Issuer hereby gives its express
written authority to the Company as provided in the Indenture to direct the
investment of the Debt Service Fund or any other Fund held by the Trustee
pursuant to the Indenture. The Issuer hereby finds and determines that such
investment of moneys in any Fund in obligations permitted by the Indenture will
yield the highest possible rate of return while providing necessary protection
of the principal consistent with the needs for such money under this Agreement
and the Indenture.
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ARTICLE V
COMPANY OBLIGATIONS; PROVISIONS FOR PAYMENT; COVENANTS
SECTION 5.1. Company Approval of Issuance of Bonds. The Company hereby
approves the Bond Resolution and the Indenture. It is hereby agreed that the
foregoing approval of the Bond Resolution and the Indenture constitutes the
acknowledgment and agreement of the Company that the Bonds, when issued, sold
and delivered as provided in the Bond Resolution and the Indenture, will be
issued in accordance with and in compliance with this Agreement, notwithstanding
any other provisions of this Agreement or any other contract or agreement to the
contrary. Any Registered Owner is entitled to rely fully and unconditionally on
the foregoing approval. Notwithstanding any provisions of this Agreement or any
other contract or agreement to the contrary, the Company's approval of the Bond
Resolution and the Indenture shall be the Company's agreement that all covenants
and provisions in this Agreement and the Indenture affecting the Company shall,
upon the delivery of the Bonds and the Indenture, become unconditional, valid
and binding covenants and obligations of the Company so long as the Bonds and
the interest thereon are outstanding and unpaid. Particularly, the obligation of
the Company to pay, promptly when due, all Installment Sale Payments and
Purchase Price Payments specified in this Agreement and the Indenture shall be
absolute and unconditional and said obligation may be enforced as provided in
this Agreement and the Indenture.
SECTION 5.2. Refunding of Bonds. After the issuance of any Bonds, the
Issuer shall not refund any of the Bonds or change or modify the Bonds in any
way, except as provided for in the Indenture, without the prior written approval
of an Authorized Company Representative; nor shall the Issuer redeem any Bonds
prior to the Maturity Date except upon the request of an Authorized Company
Representative, unless such redemption is required by the Indenture.
SECTION 5.3. Redemption of Bonds. The Issuer, upon the written request
of the Company (and provided that the affected Bonds are subject to redemption
prior to maturity at the option of the Issuer, or the Company, and provided that
such request is received in sufficient time prior to the date upon which such
redemption is proposed), shall promptly take or cause to be taken all action
that may be necessary under the applicable redemption provisions to effect such
redemption prior to maturity, to the full extent of funds either made available
for such purpose by the Company or already on deposit in the Redemption Fund and
available for such purpose. The redemption of any Outstanding Bonds prior to
maturity at any time shall not relieve the Company of its absolute and
unconditional obligation to pay each remaining Installment Sale Payment, with
respect to any Outstanding Bonds, as specified in the Indenture. If a redemption
of Bonds is required pursuant to the provisions of the Indenture, the Company
agrees as provided herein to promptly make Installment Sale Payments sufficient
to pay the principal of, premium, if any, and interest on the Bonds due on such
redemption date.
SECTION 5.4. Installment Sale Payments. (a) The Company hereby
covenants and agrees to make the Installment Sale Payments, as hereinafter
provided in subsections (b), (c),
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and (e) of this Section, to the Trustee, or the Paying Agent for the account of
the Trustee, on behalf of the Issuer in accordance with this Agreement.
(b) The Company shall make Installment Sale Payments, subject to the
limitations of subsection (e) below of this Agreement, in immediately available
funds directly to the Trustee or for the account of the Trustee with the Paying
Agent for deposit in the Debt Service Fund on or before each day on which any
payment of Debt Service shall become due (whether at maturity or upon redemption
or acceleration or otherwise) in an amount which, together with other money held
by the Trustee under the Indenture and available therefor, will enable the
Trustee to make such payment in full when due.
(c) If the Company should fail to make any of the payments required in
this Section, the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company agrees to pay the same with interest thereon, to the
extent permitted by law, from the date when such payment was due as provided in
the Indenture.
(d) If, subsequent to a date on which the Company is obligated to pay
the Installment Sale Payments (subject to provisions of Article XV of the
Indenture), losses (net of gains) shall be incurred in respect of any
investments, or any other event has occurred causing the money in the Debt
Service Fund, together with any other money then held by the Trustee and
available for the purpose, to be less than the amount sufficient at the time of
such occurrence or other event to pay, in accordance with the provisions of the
Indenture, all Debt Service due and payable or to become due and payable, the
Trustee shall notify the Company of such fact and thereafter the Company, as and
when required for purposes of such Debt Service Fund, shall pay in immediately
available funds to the Trustee for deposit in the Debt Service Fund the amount
of any such reduction below such sufficient amount.
(e) The Company further agrees that in the event payment of the
principal of and the interest on the Bonds is accelerated upon the occurrence of
an Event of Default under the Indenture, all amounts payable under Section
5.4(b) for the remainder of the term hereof (other than interest not yet due)
shall be immediately due and payable.
(f) Any amount held in the Debt Service Fund on any payment date
specified in subsection (b) above shall be credited against the Installment Sale
Payments required to be made by the Company on such date.
SECTION 5.5. Purchase Price Payments of the Company. (a) In addition to
the amounts payable by the Company under Section 5.4, on or prior to each date
on which the Paying Agent is required to disburse the Purchase Price for any
Bond, the Company will pay or cause to be paid, as necessary, by the time and in
the manner specified in the Indenture, the Purchase Price Payments to the Paying
Agent (as agent for the Registered Owners), in lawful money of the United States
of America (as required by the Indenture) which will be held in trust
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for the benefit of the tendering Registered Owners or the Registered Owners of
Bonds that are deemed to have been tendered in an amount which, together with
any amounts available to the Paying Agent for said purpose, will be sufficient
to pay the Purchase Price for all Bonds which are to be purchased on such date.
(b) The Issuer shall have no obligation, financial or otherwise, with
respect to payment of the Purchase Price of any Bonds required to be purchased
pursuant to the Indenture, or for arrangements therefor, except that the Issuer
shall generally cooperate with the Company, the Trustee, the Paying Agent and
the Remarketing Agent, as contemplated in the Indenture.
SECTION 5.6. Administrative Expenses. The Company shall pay, or cause
to be paid, an amount equal to (i) the reasonable fees and charges of the
Trustee for services rendered as Trustee under the Indenture and its reasonable
expenses incurred as Trustee under the Indenture, including reasonable fees of
its counsel and (ii) the reasonable fees and charges of the Paying Agent and the
reasonable expenses incurred by the Paying Agent as and when the same become
due, including the reasonable fees of its counsel. In addition, the Company
shall indemnify and hold harmless the Paying Agent from and against any and all
losses, liabilities, claims, actions, damages, and expenses arising out of or in
connection with the Indenture.
SECTION 5.7. Payments to Issuer. The Company shall pay all of the
Issuer's reasonable, actual out-of-pocket expenses and costs of issuance in
connection with the Bonds, including, without limitation, all financing, legal,
printing, and other expenses and costs of issuance incurred in issuing the
Bonds. Also, in the future the Company shall pay to the Issuer, upon receipt of
statements therefore from time to time, such amounts as are necessary to pay or
reimburse the Issuer for its reasonable and necessary expenses and costs
attributable to the Bonds and the Facilities.
SECTION 5.8. Obligations of the Company Absolute and Unconditional. The
obligations of the Company to make the payments required in Sections 5.4, 5.5,
5.6, 5.7, 5.11, 6.1 and 7.3 and to perform and observe the other agreements on
its part contained herein shall be absolute and unconditional and shall not be
subject to diminution by set-off, counterclaim, abatement or otherwise. Until
payment of all Debt Service relating to the Bonds, and payment in full of the
Purchase Price of any Bonds purchased pursuant to the Indenture, the Company (a)
will not suspend or discontinue any payments provided for in this Agreement,
except to the extent the same have been prepaid, (b) will perform and observe
all its other agreements contained herein, and (c) except as provided in Section
6.2, will not terminate this Agreement for any cause, including, without
limiting the generality of the foregoing, any acts or circumstances that may
constitute failure of consideration, sale, loss, eviction or constructive
eviction, destruction of or damage to the Facilities, commercial frustration of
purpose, any change in the tax or other laws of the United States of America or
of the State or any political subdivision of either, 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 in connection herewith or with
the Indenture. Nothing contained in this Section shall be construed to release
the Issuer
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from the performance of any of the agreements on its part herein contained and
in the event the Issuer shall fail to perform any such agreement on its part,
the Company may take such action as the Company may deem necessary to perform or
compel performance, provided that no such action shall violate the agreements on
the part of the Company contained in this Agreement or postpone or diminish the
amounts required to be paid by the Company pursuant to this Agreement. Upon the
issuance and delivery of the Bonds to the initial purchasers thereof the Company
shall have received, and the Issuer shall have given, full and complete
consideration for the Company's obligation hereunder to make Installment Sale
Payments.
SECTION 5.9. Option to Prepay Amounts Under Agreement in Whole in
Certain Events. The Company shall have, and is hereby granted, the option to
prepay the amounts required to be paid by the Company under Section 5.4 in whole
and to direct the Trustee to redeem the Bonds in whole if any of the events
described in the Indenture permitting such redemption shall have occurred. The
Company may at any time deliver money, and/or Government Obligations to the
Trustee with instructions to the Trustee to hold such money and/or Government
Obligations pursuant to Article XV of the Indenture in connection with a
discharge of the Indenture.
The Issuer agrees that, at the request at any time of the Company, it
will cooperate with the Company to cause the Bonds or any portion thereof to be
redeemed to the extent permitted by the Indenture.
SECTION 5.10. Company's Performance Under Indenture. The Company
agrees, for the benefit of the Owners, to do and perform all acts and things
contemplated in the Indenture to be done or performed by it and to not interfere
with the exercise of the power and authority granted to the Trustee and the
Paying Agent in the Indenture. The Company further agrees to aid in furnishing
any documents, certificates or opinions that may be required under the
Indenture.
SECTION 5.11. Covenants Regarding Tax Exemption. It is the intention of
the Company and the Issuer that the interest on the Tax Exempt Bonds be
excludable from the gross income of the holders thereof for federal income tax
purposes by reason of Sections 103(a) and 142(a) of the Code, except for any Tax
Exempt Bond for any period that such Bond is owned by a person who is a
"substantial user" of the Facilities or a "related person" within the meaning of
Section 147(a) of the Code and that substantially all of the proceeds of the
Bonds will be used to provide "sewage facilities" and "solid waste disposal
facilities" within the meaning of Sections 142(a)(5) and (6) of the Code. To
that end, the Company and the Issuer (to the extent reasonably within the
control of the Issuer) covenant with each other, and with the Trustee, to
refrain from any action which would adversely affect, or to take such action to
assure, the treatment of the Tax Exempt Bonds as obligations described in
Section 103(a) of the Code, the interest on which is not includable in the
"gross income" of the holder (other than the income of a "substantial user" of
the Facilities or a "related person" within the meaning of Section 147(a) of the
Code) for purposes of federal income taxation.
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ARTICLE VI
PARTICULAR AGREEMENTS
SECTION 6.1. Issuer's Release and Indemnification Provisions. The
Company agrees, whether or not the transactions contemplated by this Agreement
and the Indenture shall be consummated:
(a) to pay, and save the Issuer harmless against liability for the
payment of all reasonable out-of-pocket expenses arising in connection with said
contemplated transactions, including the reasonable fees and expenses of counsel
to the Issuer; and
(b) to protect, indemnify and save the Indemnified Parties harmless
from and against all liability, losses, damages, costs, reasonable expenses
(including reasonable counsel fees), taxes, causes of action, suits, claims,
demands and judgments of any nature or form, by or on behalf of any person
arising in any manner from the transactions of which this Agreement is a part or
arising in any manner in connection with the Facilities or the financing or
refinancing of the Facilities, and, without limiting the generality of the
foregoing, arising from (i) the issuance, offering, sale, or delivery of the
Bonds, the Indenture, the Underwriting Agreement and this Agreement and the
obligations imposed on the Issuer hereby and thereby, or the design,
construction, installation, operation, use, occupancy, maintenance, or ownership
of the Facilities; (ii) any written statements or representations made or given
by the Company or any of its officers or employees to the Indemnified Parties,
the Trustee, or any underwriters or purchasers of any of the Bonds, with respect
to the Issuer, the Company, the Facilities, the Bonds, the Underwriting
Agreement or the Remarketing Agreement, including, but not limited to,
statements or representations of facts, financial information, or corporate
affairs; (iii) damage to property or any injury to or death of any person that
may be occasioned by any cause whatsoever pertaining to the Facilities; (iv) any
breach or default on the part of the Company in the performance of any of its
obligations under this Agreement; (v) any violation of contract, agreement or
restriction by the Company relating to the Facilities; or (vi) any violation of
law, ordinance or regulation affecting the Facilities or any part thereof or the
ownership or occupancy or use thereof.
If any action or proceeding is brought against the Issuer by reason of
any such claim, such action or proceeding shall be defended against by counsel
to the Issuer or by the Company, as the Issuer, upon advice of counsel to the
Issuer, shall determine. If such defense is by counsel to the Issuer on behalf
of the Issuer, the Company shall indemnify the Issuer for reasonable costs of
counsel to the Issuer allocated to such defense and charged to the Issuer. The
Company, upon notice from the Issuer, shall resist and defend such an action or
proceeding on behalf of the Issuer.
The provisions of this Section shall not apply to any claim or
liability resulting from the Issuer's acts of gross negligence, bad faith, fraud
or deceit or for any claim or liability which
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the Company was not given the opportunity to contest (except as set forth in the
preceding paragraph), due to the gross negligence of the Issuer.
The provisions of this Section shall survive the termination of this
Agreement.
SECTION 6.2. 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.
SECTION 6.3. Agreement of Issuer Not to Assign or Pledge. Except for
the assignment and pledge described in the Indenture, the Issuer agrees that it
will not attempt to further assign, pledge, transfer or convey its interest in
or create any assignment, pledge, lien, charge or encumbrance of any form or
nature with respect to the rights and interests therein described.
SECTION 6.4. Reference to Bonds Ineffective After Bonds Paid. Upon
payment of all Debt Service due relating to the Bonds, payment in full of the
Purchase Price of Bonds required to be purchased pursuant to the Indenture, and
payment of all fees and charges of the Issuer, the Trustee and the Paying Agent,
all references herein to the Bonds and the Trustee shall be ineffective and
neither the Issuer, the Trustee nor the holders of any of the Bonds shall
thereafter have any rights hereunder and the Company shall have no further
obligation hereunder, saving and excepting those that shall have theretofore
vested and any right of the Issuer or the Trustee to indemnification under
Section 6.1 and payment of fees under Section 7.3, which rights shall survive
the payment of all Debt Service due relating to the Bonds and the termination of
this Agreement. Reference is hereby made to Article XV of the Indenture.
SECTION 6.5. Amendment of Agreement or Indenture. No amendment, change,
addition to, or waiver of any of the provisions of this Agreement or the
Indenture shall be binding upon the parties hereto unless in writing signed by
an Authorized Company Representative and the Chairman or Vice Chairman of the
Board of Directors of the Issuer.
Notwithstanding any of the foregoing, it is covenanted and agreed, for
the benefit of the Registered Owners and the Trustee, that (without the
concurrence of all of the Registered Owners and the Trustee) the provisions of
this Agreement shall not be amended, changed, added
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to or waived in any way which would relieve or abrogate the obligations of the
Company to make or pay, or cause to be made or paid, when due, all Installment
Sale Payments and Purchase Price Payments with respect to any then Outstanding
Bonds in the manner and under the terms and conditions provided herein and the
Bond Resolution or the Indenture, or which would materially change or affect
Sections 5.4 through 5.8, 5.11, 6.1 and 7.3.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. 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 any
Installment Sale Payment payable hereunder or any amount which is
attributable to the Purchase Price of any Bonds for a period of one
Business Day after the same shall become due and payable (except when
the Rate Period is one year or longer, in which case the grace period
shall be five Business Days); or
(b) 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 subsection (a) 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; or
(c) The occurrence of an Event of Bankruptcy; or
(d) An "event of default" as defined in Section 10.01 of the
Indenture shall have occurred and be continuing.
A default under clause (b) 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 (b) 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 6.2 hereof) and
Sections 5.4 and 5.5 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;
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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 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 7.2. Remedies on Default. Whenever any Event of Default shall
have occurred and be continuing, the Issuer (or the Trustee) 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 or the
Trustee may declare the total Installment Sale Payments payable under
Section 5.4 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 or the Trustee 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 7.2 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 Agent, and the Remarketing
Agent and all other amounts required to be paid under the Indenture shall have
been paid, to the Company.
SECTION 7.3. Annulment of Acceleration. If, in compliance with the
requirements of Section 10.2 of the Indenture, the Trustee shall annul an
acceleration declared due to any Event of Default under the Indenture such
annulment shall be deemed to also rescind any acceleration of all payments
required under Section 5.4 of this Agreement. In case of any such annulment, or
in case any proceeding taken by the Trustee on account of any such Event of
Default shall have been discontinued or abandoned or determined adversely, then
and in every such case the Issuer, the Company, the Trustee and the Registered
Owners shall be restored to their former positions and rights hereunder, but no
such annulment shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.
SECTION 7.4. Agreement to Pay Attorney's Fees and Expenses. If the
Company should default under any of the provisions of this Agreement and the
Issuer or the Trustee should employ attorneys or incur other expenses for the
collection of payments required
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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 upon demand therefor pay to the Issuer or the Trustee the reasonable fee
of such attorneys and such other expenses so incurred by the Issuer or the
Trustee.
SECTION 7.5. General Enforcement Provisions. (a) The terms of this
Agreement may be enforced as to one or more breaches either separately or
cumulatively.
(b) No remedy conferred upon or reserved to the Issuer, the Trustee, or
the Registered Owners of the Bonds in this Agreement is intended to be exclusive
of any other available remedy or remedies, but each and every such remedy shall
be cumulative and shall be in addition to every other remedy now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default, omission, or failure of performance
hereunder shall impair any such right or power or shall be construed to be a
waiver thereof but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In the event any provision contained in
this Agreement should be breached by the Company and thereafter duly waived,
such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach of this Agreement. No waiver by any party of
any breach by any other party of any of the provisions of this Agreement shall
be construed as a waiver of any subsequent breach, whether of the same or of a
different provision of this Agreement.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Term of Agreement. This Agreement shall terminate when
payment of all Debt Service relating to the Bonds shall have been made.
SECTION 8.2. Notices. All notices, approvals, consents, requests and
other communications hereunder shall be in writing and shall be deemed to have
been given when delivered or mailed by first class registered or certified mail
return receipt requested, postage prepaid, and addressed as follows:
(a) If to the Issuer:
The Industrial Development Board
of the Town of Columbia
Town Hall
Columbia, Alabama 36319
Attention: Chairman
(b) If to the Company:
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Attention: Treasurer
(c) If to the Trustee:
SouthTrust Bank, National Association
100 Office Park Drive
Birmingham, Alabama 35223
Attention: Corporate Trust
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(d) If to the Paying Agent:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust
A duplicate copy of each notice, approval consent, request or other
communication given hereunder by the Issuer, the Company or the Trustee to any
one of the others shall also be given to all of the others. The Issuer, the
Company and the Trustee may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, approvals, consents, requests
or other communications shall be sent or persons to whose attention the same
shall be directed.
SECTION 8.3. Benefit of Parties. This Agreement is made for the
exclusive benefit of the Issuer, the Trustee, the Paying Agent, the Remarketing
Agent, the Registered Owners, the Company, and their respective successors and
assigns herein permitted, and not for any other third party or parties; and
nothing in this Agreement, expressed or implied, is intended to confer upon any
party or parties other than the Issuer, the Trustee, the Paying Agent, the
Remarketing Agent, the Registered Owners, the Company and their respective
successors and assigns herein permitted, any rights or remedies under or by
reason of this Agreement.
SECTION 8.4. Severability. If any provision hereof 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 8.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
SECTION 8.6. Captions. The captions and headings herein are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions hereof.
SECTION 8.7. Law Governing Construction of Agreement. This Agreement
shall be governed by, and construed in accordance with, the laws of the State.
SECTION 8.8. Payments on Non-Business Days. If any payment required
hereunder is due on a date not a Business Day, payment shall be made on the next
succeeding Business Day with the same force and effect as if made on the date
fixed for such payment, and no interest shall accrue on such amount for the
period after such date.
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IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed
by the Chairman or Vice Chairman of its Board of Directors and its seal to be
hereunto affixed and attested by its Secretary or Assistant Secretary and the
Company has caused this Indenture to be executed by its duly authorized officer,
all as of the day and year first above written.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
By: /s/ William D. Lanford, Jr.
Chairman of the Board of Directors
[SEAL]
ATTEST:
By: /s/ E. B. Freeman
Secretary
ALABAMA POWER COMPANY
By: /s/ Art P. Beattie
Title: Vice President, Secretary and Treasurer
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EXHIBIT A
FACILITIES DESCRIPTION
The Facilities consist of the following sewage and solid waste disposal
facilities serving Units 1 and 2 of the Plant:
(i) Solid Radwaste Systems;
(ii) Landfill Area;
(iii) Spent Fuel Storage Systems;
(iv) Water Treatment Plant; and
(v) Sewage Treatment System.
<PAGE>
Exhibit B
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TRUST INDENTURE
between
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
and
SOUTHTRUST BANK, NATIONAL ASSOCIATION, as Trustee
DATED AS OF NOVEMBER 1, 1997
$65,000,000
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
VARIABLE RATE DEMAND REVENUE BONDS
(ALABAMA POWER COMPANY PROJECT)
SERIES 1997
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions...................................................4
ARTICLE II
THE BONDS
SECTION 2.1. Issuance of Bonds: Disposition of Proceeds..................15
SECTION 2.2. Form and Denominations of Bonds; Bonds as Limited
Obligation of Issuer.........................................15
SECTION 2.3. Execution....................................................16
SECTION 2.4. Authentication...............................................16
SECTION 2.5. Registration, Transfer and Exchange..........................16
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Bonds...................18
SECTION 2.7. Payments of Principal, Redemption Price and Interest:
Persons Entitled Thereto.....................................19
SECTION 2.8. Term Bonds...................................................20
SECTION 2.9. Cancellation and Destruction of Surrendered Bonds............20
SECTION 2.10. Acts of Registered Owners: Evidence of Ownership............20
SECTION 2.11. Book Entry System............................................21
ARTICLE III
INTEREST RATES ON BONDS
SECTION 3.1. Initial Interest Rates, Subsequent Rates.....................23
SECTION 3.2. Variable Rates; Conversion to Variable Rate Periods..........23
SECTION 3.3. Flexible Rates; Conversions to Flexible Rate Periods.........30
SECTION 3.4. Fixed Rate Conversion at Option of Company...................31
SECTION 3.5. Taxable Rates; Conversion from Taxable Rates.................33
SECTION 3.6. Additional Limitation on Interest............................34
ARTICLE IV
TENDER AND PURCHASE OF BONDS
SECTION 4.1. Tenders During Variable Rate Periods.........................35
SECTION 4.2. Tender During Taxable or Flexible Rate Periods...............39
SECTION 4.3. Tender Upon Variable, Taxable or Flexible Rate Conversion....41
SECTION 4.4. Tender Upon Fixed Rate Conversion............................42
SECTION 4.5. Inadequate Funds for Tenders.................................43
SECTION 4.6. Tenders or Waivers by Investment Companies...................43
SECTION 4.7. Notice from Beneficial Owners................................43
ARTICLE V
DEPOSIT OF BOND PROCEEDS
SECTION 5.1. Deposit of Proceeds of Bonds.................................44
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ARTICLE VI
DEBT SERVICE FUND, REDEMPTION FUND
AND CONSTRUCTION FUND
SECTION 6.1. Establishment of Funds and Accounts..........................45
SECTION 6.2. Debt Service Fund............................................45
SECTION 6.3. Redemption Fund..............................................45
SECTION 6.4. Return of Moneys from Non-Presentment of Bonds...............45
SECTION 6.5. Reserved.....................................................46
SECTION 6.6. Construction Fund............................................46
SECTION 6.7. Moneys to be Held for All Registered Owners, With
Certain Exceptions...........................................46
SECTION 6.8. Additional Accounts and Subaccounts..........................46
ARTICLE VII
INVESTMENTS; ARBITRAGE BOND COVENANT
SECTION 7.1. Investment of Funds..........................................47
SECTION 7.2. Arbitrage Covenant...........................................47
SECTION 7.3. Covenants Regarding Tax Exemption............................47
ARTICLE VIII
REDEMPTION OF BONDS
SECTION 8.1. Bonds Subject to Redemption..................................49
SECTION 8.2. Selection of Bonds for Redemption............................51
SECTION 8.3. Notice of Redemption.........................................51
SECTION 8.4. Effect of Redemption.........................................52
ARTICLE IX
EPRESENTATIONS AND COVENANTS OF THE ISSUER
SECTION 9.1. General Limitation; Issuer's Representation..................53
SECTION 9.2. Payment of Bonds and Performance of Covenants................53
SECTION 9.3. Enforcement of the Agreement.................................53
SECTION 9.4. No Personal Liability........................................53
SECTION 9.5. Exemption from Federal Income Taxation.......................53
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default Defined....................................54
SECTION 10.2. Acceleration and Annulment Thereof...........................54
SECTION 10.3. Legal Proceedings by Trustee.................................54
SECTION 10.4. Discontinuance of Proceedings by Trustee.....................55
SECTION 10.5. Registered Owners May Direct Proceedings.....................55
SECTION 10.6. Limitations on Actions by Registered Owners..................55
SECTION 10.7. Trustee May Enforce Rights Without Possession of Bonds.......56
SECTION 10.8. Remedies Not Exclusive.......................................56
SECTION 10.9. Delays and Omissions Not to Impair Rights....................56
SECTION 10.10. Application of Moneys........................................56
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SECTION 10.11. Trustee's Right to Receiver..................................57
SECTION 10.12. Trustee and Registered Owners Entitled to All Remedies.......57
SECTION 10.13. Waiver of Past Defaults......................................58
ARTICLE XI
THE TRUSTEE
SECTION 11.1. Certain Duties and Responsibilities of Trustee...............59
SECTION 11.2. Notice if Default Occurs or Notice if Taxability Occurs......60
SECTION 11.3. Certain Rights of Trustee....................................60
SECTION 11.4. Not Responsible for Recitals or Issuance of Bonds............61
SECTION 11.5. May Hold Bonds...............................................62
SECTION 11.6. Money Held in Trust..........................................62
SECTION 11.7. Corporate Trustee Required: Eligibility.....................62
SECTION 11.8. Resignation and Removal of Trustee: Appointment of
Successor....................................................62
SECTION 11.9. Acceptance of Appointment by Successor Trustee...............64
SECTION 11.10. Merger, Conversion, Consolidation or Succession to Business..64
SECTION 11.11. Fees, Charges and Expenses of Trustee........................64
ARTICLE XII
THE PAYING AGENT
SECTION 12.1. The Paying Agent.............................................65
SECTION 12.2. Paying Agent May Act Through Agents; Answerable Only for
Willful Misconduct or Negligence.............................66
SECTION 12.3. Compensation and Indemnity...................................66
SECTION 12.4. Paying Agent May Deal in Bonds...............................66
SECTION 12.5. Removal or Resignation of Paying Agent.......................67
SECTION 12.6. Successor Paying Agents......................................67
ARTICLE XIII
THE REMARKETING AGENT
SECTION 13.1. The Remarketing Agent........................................68
SECTION 13.2. Qualifications of Remarketing Agent..........................68
ARTICLE XIV
AMENDMENTS AND SUPPLEMENTS
SECTION 14.1. Amendments and Supplements Without Registered Owners'
Consent......................................................70
SECTION 14.2. Amendments With Registered Owners' Consent...................70
SECTION 14.3. Amendments to Agreement......................................72
SECTION 14.4. Right to Payment.............................................72
ARTICLE XV
DEFEASANCE
SECTION 15.1. Defeasance...................................................73
SECTION 15.2. Deposit of Funds for Payment of Bonds........................73
SECTION 15.3. Effect of Defeasance.........................................74
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1. Limitations on Recourse, Immunity of Certain Persons.........75
SECTION 16.2. No Rights Conferred on Others................................75
SECTION 16.3. Illegal, Etc. Provisions Disregarded.........................75
SECTION 16.4. Substitute Publication of Notice.............................75
SECTION 16.5. Mailed Notice................................................75
SECTION 16.6. Governing Law................................................77
SECTION 16.7. Successors and Assigns.......................................77
SECTION 16.8. Action by Company............................................77
SECTION 16.9. Headings and Subheadings for Convenience Only................77
SECTION 16.10. Counterparts.................................................77
EXHIBIT A Form of Bond
EXHIBIT B Letter of Representations of DTC
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TRUST INDENTURE
This TRUST INDENTURE dated as of November 1, 1997 (the "Indenture"),
between THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF COLUMBIA, a public
corporation of the State of Alabama (the "Issuer"), and SOUTHTRUST BANK,
NATIONAL ASSOCIATION, a national banking association with its principal
corporate trust office in Birmingham, Alabama, as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, under the laws of the State of Alabama, including particularly
Article 4 of Chapter 54 of Title 11 of the Code of Alabama 1975 (the "Act"), the
Issuer has the following powers, among others:
(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
WHEREAS, an Eighth Supplementary Installment Sale Agreement dated as of
November 1, 1997 (hereinafter the "Agreement"), relating to the hereinafter
defined Bonds has been duly executed between the Issuer and Alabama Power
Company, a corporation organized and existing under and by virtue of the laws of
the State of Alabama (the "Company"); and
WHEREAS, the recitals and provisions of the Agreement are incorporated
herein as if set forth in their entirety, and the capitalized terms of this
Indenture shall have the same meanings, and shall be defined, as set forth in
the Agreement and the Bond Resolution (hereinafter defined); and
WHEREAS, the Issuer has duly authorized the issuance of bonds
designated "The Industrial Development Board of the Town of Columbia Variable
Rate Demand Revenue Bonds (Alabama Power Company Project) Series 1997", in the
aggregate principal amount of $65,000,000 (hereinafter called the "Bonds"); and
<PAGE>
WHEREAS, all of the Bonds are being issued and delivered on their
original issuance date as Taxable Bonds (hereinafter defined), the interest on
which is not excludable from gross income for federal income tax purposes, but
the Company expects that interest on all or a portion of the Bonds will become
excludable from gross income for federal income tax purposes on each date to be
specified as a Tax Exempt Conversion Date (hereinafter defined) in a certificate
of the Company to be delivered to the Trustee and the Remarketing Agent
(hereinafter defined), which certificate shall be accompanied by an opinion of
Bond Counsel (hereinafter defined) to the effect that from and after the Tax
Exempt Conversion Date, interest on the portion of the Bonds described in such
certificate shall be excludable from gross income of the holders thereof for
federal income tax purposes; and
WHEREAS, the Bonds, and the interest thereon, are and shall be payable
from and secured by a first and superior lien on and pledge of the payments
designated as "Installment Sale Payments" to be made by the Company pursuant to
the Agreement in amounts sufficient to pay and redeem, and provide for the
payment of the principal of, premium, if any, and interest on the Bonds, when
due, and the fees and expenses of the Trustee and any paying agent for the
Bonds, all as required by the Bond Resolution; and
WHEREAS, the Trustee has agreed to accept the trusts herein created
upon the terms herein set forth; and
WHEREAS, the parties to the Financing Documents (hereinafter defined)
have each determined that the execution and delivery of the said Financing
Documents will benefit the parties, will further the public purposes of the Act,
will provide additional security for the performance by the Issuer and the
Company of their obligations under the Financing Documents, and will induce the
Owners of the Bonds to purchase the Bonds; and
WHEREAS, all things necessary to make the Bonds, when issued, executed
and delivered by the Issuer and authenticated by the Paying Agent pursuant to
this Indenture, the valid, legal and binding special limited obligations of the
Issuer, and to constitute this Indenture a valid pledge of certain income and
Revenues of the Issuer for the payment of the principal of and premium, if any,
and interest on the Bonds authenticated and delivered under this Indenture, have
been performed and the creation, execution and delivery of this Indenture, and
the creation, execution and issuance of the Bonds, subject to the terms hereof,
have in all respects been duly authorized;
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NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer in consideration of the premises, of the acceptance by
the Trustee of the trusts hereby created, of the mutual covenants herein
contained and of the purchase and acceptance of the Bonds by the Owners thereof,
and for other valuable consideration, the receipt of which is hereby
acknowledged, and in order to secure the payment of the principal of, and
interest and premium, if any, on the Bonds according to their tenor and effect,
and the performance and observance by the Issuer of all the covenants and
conditions herein and therein contained (a) has executed and delivered this
Indenture and (b) has agreed to sell, assign, transfer, set over and pledge, and
by these presents does hereby sell, assign, transfer, set over and pledge unto
the Trustee, and to its successors in trust and its assigns forever, to the
extent provided in this Indenture, all of the right, title and interest of the
Issuer in and to the Agreement (except for the indemnification rights and
expense reimbursement rights contained in the Agreement), and all the Revenues
of the Issuer, and amounts on deposit in the Debt Service Fund as hereinafter in
this Indenture provided (the "Trust Estate").
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 benefit and security of those who shall hold or own the Bonds issued
hereunder, or any of them, without preference of any of said Bonds over any
others thereof by reason of priority in the time of the issue or negotiation
thereof or by reason of the date or maturity thereof, or for any other reason
whatsoever, except as otherwise provided herein.
IT IS HEREBY COVENANTED, declared and agreed by and between the parties
hereto, that all such Bonds are to be issued, authenticated as required by the
Indenture, and delivered and that all property subject or to become subject
hereto, including the Revenues of the Issuer from the Facilities, is to be held
and applied upon and subject to the further covenants, conditions, uses and
trusts hereinafter set forth; and the Issuer, for itself and its successors,
does hereby covenant and agree to and with the Trustee and its successors in
trust, for the benefit of those who shall hold all of the Bonds, or any of them,
as follows:
3
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used in this Indenture and
not otherwise defined in this Indenture have the meanings specified below.
The words "hereof," "herein," "hereto," "hereby," and "hereunder"
(except in the form of Bond) refer to the entire Indenture. All words and terms
importing the singular number shall, where the context requires, import the
plural number and vice versa, and all words and terms used in this Indenture and
not defined herein shall, if defined in the Agreement, have the meaning set
forth therein.
"Act" means Title 11, Chapter 54, Article 4 (Sections 11-54-80 through
11-54-123 inclusive) of the Code of Alabama 1975, as amended from time to time.
"Administrative Expenses" means fees and expenses of the Trustee, the
Issuer, the Remarketing Agent and the Paying Agent.
"Agreement" means the Eighth Supplementary Installment Sale Agreement
dated as of November 1, 1997 between the Issuer and the Company, as the same may
be amended from time to time to the extent permitted hereby or thereby.
"Authorized Company Representative" means any person or persons at the
time designated to act on behalf of the Company by a written certificate, signed
on behalf of the Company by any one of its officers or authorized
representatives and furnished to the Trustee, containing the specimen signature
of each such person.
"Bond Counsel" means any firm or firms of nationally recognized bond
counsel selected by the Company and acceptable to the Issuer and the Trustee.
"Bond Documents" means the Financing Documents and all other
agreements, certificates, documents and instruments delivered in connection with
any of the Financing Documents.
"Bond Obligations" means the Debt Service due and payable and to become
due and payable and any other amounts which may be owed by the Company to, or on
behalf of, the Issuer or the Trustee under the Bond Documents.
"Bond Resolution" means the resolution of the Board of Directors of the
Issuer adopted on November 20, 1997 authorizing the issuance of the Bonds.
4
<PAGE>
"Bonds" means the Variable Rate Demand Revenue Bonds (Alabama Power
Company Project) Series 1997, authorized and issued by the Issuer, authenticated
by the Trustee and delivered hereunder.
"Business Day" means a day (a) other than a day on which banks located
in The City of New York, New York or the cities in which the principal offices
of the Trustee or the Paying Agent are located are required or authorized by law
or executive order to close and (b) on which the New York Stock Exchange is not
closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"1954 Code" means the Internal Revenue Code of 1954, as amended.
"Company" means Alabama Power Company, a corporation organized and
existing under the laws of the State of Alabama, and its successors and assigns.
"Construction Fund" means the fund of that name created pursuant to
Section 6.1 hereof.
"Conversion Date" means: (a) when used with respect to the Fixed Rate
Period, the date on which Bonds are converted to bear interest at the Fixed Rate
pursuant to Section 3.4 hereof, (b) when used with respect to any Variable Rate
Period, the day on which a particular type of Variable Rate becomes effective
for Bonds pursuant to Section 3.2 hereof which is not immediately preceded by a
day on which such Bonds bore interest at the same type of Variable Rate (and,
when used with respect to any Term Rate Period, a date which is not preceded by
a Term Rate Period of the same duration); (c) when used with respect to Flexible
Rate Periods, the date on which such periods become effective for Bonds pursuant
to Section 3.3 hereof following a Rate Period other than Flexible Rate Periods;
and (d) a Tax Exempt Conversion Date. Each Conversion Date shall be an Interest
Payment Date for the Rate Period from which Bonds are converted, except if the
conversion (a) is from a Daily, Weekly or Monthly Rate Period, such Conversion
Date shall be an Interest Calculation Date or (b) is between Daily and Weekly
Rate Periods, the Conversion Date must be a Wednesday, regardless of whether
such Wednesday is an Interest Calculation Date.
"Daily Rate" means the Interest Rate to be determined for Bonds on each
Business Day pursuant to Section 3.2(b) hereof.
"Daily Rate Period" means each Rate Period during which a Bond bears
interest at a specific Daily Rate pursuant to Section 3.2(b) hereof.
"Debt Service" means the principal of, premium, if any, and interest
on the Bonds.
5
<PAGE>
"Debt Service Fund" means the special fund of that name created
pursuant to Section 6.1 hereof.
"Determination of Taxability" means a Final Determination by the
Internal Revenue Service or by a court of competent jurisdiction in the United
States that, as a result of failure by the Company to observe or perform any
covenant, condition or agreement on its part to be observed or performed under
the Agreement or as a result of the inaccuracy of any representation or
agreement made by the Company under the Agreement, the interest payable on any
Bond, other than a Taxable Bond, is includable in the gross income of the
Registered Owner of such Bond (other than a Registered Owner who is a
substantial user or related person of the Facilities within the meaning of the
Code).
"DTC" means The Depository Trust Company, acting as securities
depository as set forth in Section 2.11 hereof.
"Event of Default" means any of the events described in Section 10.1
hereof.
"Extraordinary Optional Redemption" means any redemption of Bonds made
pursuant to Section 8.1(b) hereof.
"Facilities" means the sewage and solid waste disposal facilities
described in Exhibit A to the Agreement.
"Favorable Opinion of Bond Counsel" means an opinion or opinions of
Bond Counsel addressed to the Issuer and the Trustee to the effect that the
action proposed to be taken is authorized or permitted by the laws of the State
and this Indenture and will not, in and of itself, adversely affect any
exclusion of interest on the Tax Exempt Bonds from gross income of the owners
thereof for federal income tax purposes.
"Final Determination" means, with respect to a private letter ruling or
a technical advice memorandum of the Internal Revenue Service, written notice
thereof in a proceeding in which the Company had an opportunity to participate
and otherwise means written notice of a determination from which no further
right of appeal exists or from which no appeal is timely filed with any court of
competent jurisdiction in the United States in a proceeding to which the Company
was a party or in which the Company had the opportunity to participate.
"Financing Documents" means this Indenture, the Agreement and the
Bonds.
"Fixed Rate" means the rate at which Bonds shall bear interest from and
including the Fixed Rate Conversion Date for said Bonds to the maturity date
thereof.
"Fixed Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at the Fixed Rate pursuant to Section 3.4
hereof.
6
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"Fixed Rate Period" means the Rate Period during which a Bond bears
interest at the Fixed Rate.
"Flexible Rates" means, when used with respect to any particular Bond,
the Interest Rate determined for each Flexible Rate Period applicable thereto
pursuant to Section 3.3 hereof.
"Flexible Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at Flexible Rates which is immediately
preceded by a day on which said Bonds did not bear interest at Flexible Rates.
"Flexible Rate Period" means each Rate Period during which a Bond bears
interest at a Flexible Rate.
"Fund" means any of the funds established with the Trustee under this
Indenture.
"Government Obligations" means any one or more of the following:
(i) United States Government Obligations; or
(ii) To the extent permitted by law for the particular investment
contemplated, pre-refunded municipal obligations rated "AAA" by S&P and "Aaa" by
Moody's meeting the conditions set forth in (a) through (e) below:
(a) the municipal obligations are (i) not subject to
redemption prior to maturity or (ii) the trustee for such municipal
obligations has been given irrevocable instructions concerning their
calling and redemption and the issuer of such municipal obligations has
covenanted not to redeem such bonds other than as set forth in such
instructions; and
(b) the municipal obligations are secured by cash or
non-callable United States Government Obligations that may be applied
only to interest, principal and premium payments of such municipal
obligations; and
(c) the principal of and interest on such United States
Government Obligations (plus any cash in an escrow fund) are
sufficient to meet the liabilities of the municipal obligations; and
(d) the cash and/or United States Government Obligations
serving as security for the municipal obligations are held by an
escrow agent or trustee; and
(e) the United States Government Obligations are not available
to satisfy any other claims, including those against the trustee or
escrow agent.
7
<PAGE>
"Indemnified Parties" means the Issuer and any of its officers,
directors, employees, agents and servants, and any other person acting for or on
behalf of the Issuer.
"Indenture" means this Trust Indenture, as amended or supplemented at
the time in question.
"Interest Calculation Date" means (a) when used with respect to Bonds
bearing interest at the Daily, Weekly or Monthly Rate, the first calendar day of
each calendar month; and (b) when used with respect to Bonds in any other case,
the Interest Payment Date for such Bonds.
"Interest Payment Date" means (a) when used with respect to Bonds
bearing interest at the Daily, Weekly or Monthly Rate, the fifth Business Day of
each calendar month following the period in which interest at such rate has
accrued; (b) when used with respect to Bonds bearing interest at the Quarterly
Rate, the first Business Day of the third calendar month following the month in
which the Quarterly Rate Conversion Date occurs and the first Business Day of
each third calendar month thereafter to which interest at such rate has accrued;
(c) when used with respect to Bonds bearing interest at the Semiannual, Term or
Fixed Rate, the first day of the sixth calendar month following the month in
which the Semiannual, Term or Fixed Rate Conversion Date occurs and the first
day of each sixth calendar month thereafter to which interest at such rate has
accrued, except that the last Interest Payment Date for any Semiannual or Term
Rate Period which is followed by a different type of Rate Period other than a
Fixed Rate Period shall be the first Business Day of the sixth calendar month
following the preceding Interest Payment Date; (d) when used with respect to any
particular Bond bearing interest at a Flexible or Taxable Rate, the day
immediately succeeding the last day of each Flexible or Taxable Rate Period
applicable thereto; and (e) the maturity date of the Bonds.
"Interest Period" means the period from and including any Interest
Calculation Date to and including the day immediately preceding the next
following Interest Payment Date.
"Interest Rate" means a Taxable, Daily, Weekly, Monthly, Quarterly,
Semiannual, Term, Flexible or Fixed Rate.
"Investment Company" means an investment company registered under the
Investment Company Act of 1940, as amended.
"Investment Securities" means and includes any of the following
securities on which neither the Company nor any of its subsidiaries is the
obligor: (a) obligations of the United States, its agencies, or United States
government sponsored enterprises; (b) obligations, the principal and interest of
which are guaranteed by the United States or its agencies; (c) obligations of a
state, a territory, or a possession of the United States, or any political
subdivision of any of the foregoing or of the District of Columbia as described
in Section 103 of the Code, and graded in the highest 3 major grades as
determined by two national rating services; (d) banker's acceptances, commercial
accounts, certificates of deposit, or depository
8
<PAGE>
receipts issued by a bank, trust company, savings and loan association, savings
bank, a credit union or other financial institution whose deposits are, as
appropriate, insured by a fund of the Federal Deposit Insurance Corporation or
the National Credit Union Administration; (e) commercial paper rated at the time
of purchase within the two highest classifications established by not fewer than
two national rating services, and which matures within 270 days after the date
of issue; (f) any fund or other pooling arrangement which exclusively purchases
and holds the investments itemized in paragraphs (a) through (e) above; and (g)
as otherwise permitted by Alabama law for such funds.
"Issue Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Issuer" means The Industrial Development Board of the Town of
Columbia, a public corporation of the State, and its successors and assigns.
"Issuer Representative" means the Chairman or the Vice Chairman of the
Board of Directors of the Issuer or the Secretary of the Issuer or such other
officer or employee of the Issuer as shall be appointed by the Issuer in such
capacity.
"Maximum Rate" means twenty percent (20%) per annum for any Bond
bearing interest at a Taxable Rate, and fifteen percent (15%) per annum for any
other Bond, or, as permitted by law, such other higher rate as may be approved
by the Issuer and the Company.
"Monthly Rate" means the interest rate to be determined for Bonds on a
monthly basis pursuant to Section 3.2(d) hereof.
"Monthly Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at a Monthly Rate pursuant to Section
3.2(h) or (i) hereof which is immediately preceded by a day on which said Bonds
did not bear interest at a Monthly Rate.
"Monthly Rate Period" means each Rate Period during which a Bond bears
interest at a Monthly Rate.
"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "Moody's"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Company, with the approval of the Remarketing Agent, by
notice to the Trustee and the Issuer.
"Optional Redemption" means any redemption of Bonds made pursuant to
Section 8.1(a) hereof.
9
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"Outstanding" when used with reference to Bonds means all Bonds
authenticated and delivered under this Indenture as of the time in question,
except:
(a) All Bonds theretofore cancelled or required to be
cancelled under Section 2.9 hereof;
(b) On or after any purchase date for Bonds pursuant to
Article IV hereof, all certificates which represent Bonds (or portions
of Bonds) which are tendered or deemed to have been tendered for
purchase on such date, provided that funds sufficient for such purchase
are on deposit with the Paying Agent;
(c) Bonds for the payment or redemption of which provision has
been made in accordance with Article XV hereof; provided that, if such
Bonds are being redeemed, the required notice of redemption shall have
been given or provision satisfactory to the Trustee shall have been
made therefor; and
(d) Bonds in substitution for which other Bonds have been
authenticated and delivered pursuant to Article II hereof.
In determining whether the Registered Owners of a requisite aggregate
principal amount of Bonds Outstanding have concurred in any request, demand,
authorization, direction, notice, consent or waiver under the provisions hereof,
Bonds which are held by or on behalf of the Company (unless all of the
Outstanding Bonds are then owned by the Company) or an "Affiliate" of the
Company shall be disregarded for the purpose of any such determinations. For the
purpose of this paragraph, an "Affiliate" of the Company means any other Person
which directly or indirectly controls or is controlled by or under direct or
indirect common control with the Company, and "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly whether through the ownership of voting
securities, by contract or otherwise. Notwithstanding the foregoing, Bonds so
owned which have been pledged in good faith shall not be disregarded as
aforesaid if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Bonds and that the pledgee is not
the Company or an Affiliate of the Company. Bonds held by the Remarketing Agent
shall not be deemed to be held on behalf of the Company for the purpose of this
paragraph unless held by the Remarketing Agent as agent for the Company.
"Paying Agent" means The Chase Manhattan Bank, New York, New York, as
paying agent, registrar, transfer agent, authenticating agent and tender agent,
or any successor paying agent, registrar and tender and transfer agent or agents
appointed pursuant to Article XII hereof, at the business address designated in
writing to the Issuer, the Trustee and the Remarketing Agent as its principal
office for its duties as Paying Agent hereunder.
"Person" means an individual, a corporation, a partnership, an
association, a joint stock company, a trust, any unincorporated organization, a
governmental body or a political
10
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subdivision, a municipal corporation, public corporation or any other group or
organization of individuals.
"Plant" means the Company's Joseph M. Farley Nuclear Plant located near
the Town of Columbia in Houston County, Alabama.
"Purchase Contract" means the Purchase Contract between the Issuer and
Goldman, Sachs & Co., in its capacity as the initial purchaser of the Bonds.
"Purchase Price" means the amount due a Registered Owner of any Bond
purchased or deemed purchased pursuant to and as provided in Article IV of this
Indenture which amount is payable from Purchase Price Payments and/or the
proceeds of a remarketing pursuant hereto.
"Quarterly Rate" means the Interest Rate to be determined for Bonds on
a quarterly basis pursuant to Section 3.2(e) hereof.
"Quarterly Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at a Quarterly Rate pursuant to Section
3.2(h) or (i) hereof which is immediately preceded by a day on which said Bonds
did not bear interest at a Quarterly Rate.
"Quarterly Rate Period" means each Rate Period during which a Bond
bears interest at a Quarterly Rate pursuant to Section 3.2(e) hereof.
"Rate Period" means the period during which a particular rate of
interest determined for any Bonds is to remain in effect pursuant to Article III
hereof.
"Redemption Fund" means the special fund of that name created pursuant
to Section 6.1 hereof.
"Register" means the registration books of the Issuer described in
Section 2.5(a) hereof.
"Registered Owner" or "Owner" means the Person in whose name any Bond
is registered pursuant to Article II hereof.
"Regular Record Date" means the close of business on (a) the day
(whether or not a Business Day) immediately preceding an Interest Calculation
Date in the case of Bonds bearing interest at Daily, Weekly and Monthly Rates or
(b) the day (whether or not a Business Day) immediately preceding an Interest
Payment Date in the case of Bonds bearing interest at Taxable, Flexible and
Quarterly Rates or (c) the last day (whether or not a Business Day) of the month
immediately preceding the Interest Payment Date in the case of Bonds bearing
interest at Semiannual or Term Rates or at the Fixed Rate.
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"Regulations" means the applicable proposed, temporary or final Income
Tax Regulations promulgated under the Code, as such regulations may be amended
or supplemented from time to time.
"Remarketing Agent" means Goldman, Sachs & Co. for the Taxable Bonds
and Goldman, Sachs & Co. for the Tax Exempt Bonds, or any successor Remarketing
Agent appointed pursuant to Article XIII hereof.
"Remarketing Agreement" means any remarketing agreement executed by the
Company and a Remarketing Agent pursuant to Article XIII hereof.
"Revenues of the Issuer" or "Revenues" means and includes all payments
by or on behalf of the Company, including specifically the Installment Sale
Payments to or for the account of the Issuer under the Agreement, including but
not limited to all moneys received under the Agreement to be paid into the Debt
Service Fund including the income thereon and the investment thereof, if any,
but not including payments with respect to the indemnification or reimbursement
of certain expenses of the Issuer under Sections 5.6, 5.7, 6.1 and 7.3 of the
Agreement or under any other guaranty or indemnification agreement.
"S&P" means Standard & Poor's Ratings Group, a Division of McGraw-Hill,
Inc., a corporation organized and existing under the laws of the State of New
York, its successors and their assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Company, with the approval of the
Remarketing Agent, by notice to the Issuer and the Trustee.
"Semiannual Rate" means the Interest Rate to be determined for Bonds on
a semiannual basis pursuant to Section 3.2(f) hereof.
"Semiannual Rate Conversion Date" means the Conversion Date on which
any Bonds are converted to bear interest at a Semiannual Rate pursuant to
Section 3.2(h) or (i) hereof, which is immediately preceded by a day on which
said Bonds did not bear interest at a Semiannual Rate.
"Semiannual Rate Period" means each Rate Period during which a Bond
bears interest at a Semiannual Rate.
"Special Mandatory Redemption" means any redemption of Bonds made
pursuant to Section 8.1(c) hereof.
"State" means the State of Alabama.
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"Supplemental Indenture" or "indenture supplemental hereto" means any
indenture amending or supplementing this Indenture which may be entered into in
accordance with the provisions of this Indenture.
"Taxable Bond" means any Bond issued hereunder that has not been the
subject of a tax exempt conversion pursuant to Section 3.5 hereof.
"Taxable Rate" means the Interest Rate to be determined for the Bonds
pursuant to Section 3.5 hereof.
"Taxable Rate Period" means any period during which a Bond bears
interest at a Taxable Rate.
"Tax Exempt Bond" means any Bond issued hereunder that has been the
subject of a tax exempt conversion pursuant to Section 3.5 hereof.
"Tax Exempt Conversion Date" means any date on which any Bond is
converted to a Tax Exempt Bond bearing interest at a Variable Rate as described
in Section 3.5 hereof.
"Term Rate" means the Interest Rate to be determined for any Bonds for
a term of one or more years pursuant to Section 3.2(g) hereof.
"Term Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at a Term Rate pursuant to Section 3.2(h)
or (i) hereof which is immediately preceded by a day on which said Bonds did not
bear interest at a Term Rate or bore interest at a Term Rate for a Term Rate
Period of different duration.
"Term Rate Period" means each Rate Period during which a Bond bears
interest at a Term Rate.
"Trust Estate" means the trust estate as defined in the granting
clauses in this Indenture.
"Trustee" means SouthTrust Bank, National Association, a national
banking association having its principal corporate trust office in Birmingham,
Alabama, serving as trustee pursuant to this Indenture.
"United States Government Obligations" means direct obligations of, or
obligations which are unconditionally guaranteed by, the United States of
America.
"Variable Rate" means, as the context requires, any Daily, Weekly,
Monthly, Quarterly, Semiannual or Term Rate applicable to the Bonds.
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"Variable Rate Conversion Date" means the Conversion Date on which any
Bonds are converted to bear interest at a Variable Rate pursuant to Section
3.2(h) or (i) hereof.
"Variable Rate Period" means each Rate Period during which a Bond bears
interest at a specific Variable Rate.
"Weekly Rate" means the Interest Rate to be determined for any Bonds on
a weekly basis pursuant to Section 3.2(c) hereof.
"Weekly Rate Period" means the Rate Period during which a Bond bears
interest at a Weekly Rate.
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ARTICLE II
THE BONDS
SECTION 2.1. Issuance of Bonds: Disposition of Proceeds. Upon the
execution and delivery of this Indenture, the Issuer shall execute the Bonds and
deliver them to the Paying Agent for authentication. At the written direction of
the Issuer, the Paying Agent shall authenticate the Bonds, and deliver them to
the purchasers thereof upon receipt by the Trustee of the amount due the Issuer
for the initial delivery of the Bonds pursuant to the terms of the Purchase
Contract. The proceeds of the Bonds shall be used as provided in Article V.
SECTION 2.2. Form and Denominations of Bonds; Bonds as Limited
Obligation of Issuer.
(a) Form and Authorized Denominations. All Bonds shall be issued as
fully registered bonds dated as of the Issue Date, in substantially the form
attached as Exhibit A hereto and shall mature on November 1, 2021. In
authenticating the Bonds, the Paying Agent shall add the actual date of its
authentication of Bonds. All of the Bonds shall initially bear interest at a
Taxable Rate. All Bonds bearing interest at Daily, Weekly, Monthly, Quarterly or
Semiannual Rates shall be issued in denominations of $100,000 or whole multiples
thereof. All Bonds bearing interest at Taxable or Flexible Rates shall be issued
in multiples of $1,000, but in no denomination smaller than $100,000. All Bonds
bearing interest at a Term Rate or the Fixed Rate shall be in denominations of
$5,000 or whole multiples thereof. In the event of a change in Interest Rate so
that a Registered Owner owns any Bond in an unauthorized denomination for such
Interest Rate, the principal amount of such Bond will be considered for all
purposes hereunder to be a temporarily authorized denomination while held by
that Registered Owner only. Prior to the first Tax Exempt Conversion Date, all
Bonds shall be designated "The Industrial Development Board of the Town of
Columbia, Taxable Variable Rate Demand Bonds (Alabama Power Company Project)
Series 1997" and shall be numbered separately from T-1 upwards. It is
anticipated that all or a portion of the Bonds will be converted from time to
time to Tax Exempt Bonds. On and after the Tax Exempt Conversion Date with
respect to any Bonds, such Bonds shall have the same designation except that the
word "Taxable" shall be deleted and replaced with the words "Tax Exempt". The
Tax Exempt Bonds shall be numbered separately from TE-1 upwards. Tax Exempt
Bonds shall bear a distinct CUSIP number from Taxable Bonds. The Bonds shall be
issued only in fully registered form without coupons in authorized
denominations.
(b) Bonds as Limited Obligations of Issuer. The Bonds shall constitute
limited obligations of the Issuer payable by the Issuer solely out of the
Revenues and other security pledged under this Indenture, and neither the Bonds
nor any obligation of the Issuer under or arising out of this Indenture or the
Agreement shall, under any circumstances, constitute or give rise to a debt or
indebtedness of the Issuer within the meaning of any provision or limitation of
the Constitution or laws of the State, or, except as noted above, constitute or
give rise to a
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pecuniary liability of the Issuer or a charge against its general credit.
Neither the State nor any political subdivision of the State shall in any event
be liable for the payment of the principal of, premium (if any) or interest on
the Bonds, or for the performance of any pledge, obligation or agreement of any
kind whatsoever which may have been undertaken by the Issuer in the Financing
Documents or otherwise, and neither the Bonds nor any of such agreements or
obligations of the Issuer shall be construed to constitute an indebtedness or
obligation of the State or any other political subdivision of the State within
the meaning of any constitutional or statutory provision whatsoever.
All covenants, promises, agreements, duties and obligations of the
Issuer set forth in the Financing Documents shall be solely the covenants,
promises, agreements, duties and obligations of the Issuer and shall not be
deemed to be, or be, the covenants, promises, agreements, duties or obligations
of any director, officer, employee or agent of the Issuer or the State in his or
her individual capacity, and no recourse shall be had for the payment of the
principal of, or interest on the Bonds or any other amount payable hereunder or
in connection herewith, or for any claim based hereon or on the Bonds or the
Agreement, against any such member, officer, employee or agent in his or her
individual capacity.
SECTION 2.3. Execution. The Bonds shall be executed by the manual or
facsimile signature of the Chairman or Vice Chairman of the Board of Directors
of the Issuer and attested by the Secretary or Assistant Secretary of the Issuer
and shall have impressed or printed thereon or affixed thereto the official seal
of the Issuer. The validity of any Bond so executed shall not be affected by the
fact that one or more of the authorized officers or members whose signatures
appear on such Bond have ceased to be an authorized officer or member at the
time of issuance or authentication or at any time thereafter.
SECTION 2.4. Authentication. No Bonds shall be valid for any purpose
hereunder until the certificate of authentication printed thereon is duly
executed by the manual signature of an authorized signatory of the Trustee or
the Paying Agent, acting as authenticating agent. Such authentication or
registration shall be proof that the Registered Owner is entitled to the benefit
of the trusts hereby created.
SECTION 2.5. Registration, Transfer and Exchange. (a) The ownership of
each Bond shall be recorded in the registration books of the Issuer (the
"Register"), which books shall be kept by the Paying Agent, acting as bond
registrar, at its principal corporate trust office and shall contain such
information as is necessary for the proper discharge of the duties of the
Trustee and the Paying Agent hereunder.
(b) While Bonds are registered to Cede & Co., transfer of beneficial
ownership in Bonds by Beneficial Owners may be made through the DTC book entry
system pursuant to Section 2.11 hereof. Bonds no longer in book entry-only form
may be transferred or exchanged by the Registered Owners, as follows:
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(i) Any Bond may be transferred if endorsed for such transfer
by the Registered Owner thereof and surrendered by such Registered
Owner or his duly appointed attorney to the Paying Agent, whereupon the
Paying Agent shall authenticate and deliver to the transferee a new
Bond or Bonds having the same Rate Period and in the same denominations
as the Bond surrendered for transfer or in different authorized
denominations equal in the aggregate to the principal amount of the
surrendered Bond.
(ii) Any Bond or Bonds may be exchanged for one or more Bonds
and in the same principal amount, but in a different authorized
denomination or denominations. Each Bond so to be exchanged shall be
surrendered by the Registered Owner thereof or his duly appointed
attorney to the Paying Agent, whereupon a new Bond or Bonds having the
same Rate Period and shall be authenticated and delivered to the
Registered Owner.
(iii) In the case of any Bond properly surrendered for partial
redemption, the Paying Agent shall authenticate and deliver a new Bond
in exchange therefor, such new Bond bearing interest at the same
Interest Rate and to be in an authorized denomination equal to the
unredeemed principal amount of the surrendered Bond without cost to the
Owner; provided that, at its option, the Paying Agent may certify the
amount and date of partial redemption upon the partial redemption
certificate, if any, printed on the surrendered Bond and return such
surrendered Bond to the Registered Owner in lieu of an exchange.
(iv) No additional resolutions need be adopted by the Board of
Directors of the Issuer or any other body or person so as to accomplish
the foregoing conversion and exchange or replacement of any Bond or
portion thereof, and the Paying Agent shall provide for the completion,
authentication, and delivery of the substitute Bonds in the manner
prescribed herein.
Except as provided in subparagraph (iii) above or in Article IV hereof,
the Paying Agent shall not be required to effect any transfer or exchange during
the 15 days immediately preceding the date of mailing of any notice of
redemption or at any time following the mailing of any such notice in the case
of Bonds selected for such redemption. No charge shall be imposed upon
Registered Owners in connection with any transfer or exchange, but Beneficial
Owners or Registered Owners may be required to pay taxes or governmental charges
related thereto. No transfers or exchanges shall be valid for any purposes
hereunder except as provided above and in Article IV hereof.
(c) Each Taxable Bond shall bear a restrictive legend substantially in
the form set forth on the form of Bond in Exhibit A hereto. Each purchaser of a
Taxable Bond shall be deemed to have represented and agreed as follows:
(1) the purchaser understands that the Taxable Bonds are being
issued only in transactions not involving any public offering within
the meaning of the Securities Act
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of 1933 (the "1933 Act"); (2) the purchaser is a "Qualified
Institutional Buyer" as defined in Rule 144A under the 1933 Act (or is
a Qualified Institutional Buyer purchasing the Bonds on behalf of one
or more other Qualified Institutional Buyers); (3) if in the future the
purchaser (or any such other investor or any other fiduciary or agent
representing such investor) decides to sell such Taxable Bond prior to
the date fixed for mandatory purchase, it will be sold only in a
transaction exempt from registration under the 1933 Act and only to the
Remarketing Agent or through the Remarketing Agent to an institutional
investor approved by the Remarketing Agent as a Qualified Institutional
Buyer; (4) the purchaser understands that, although the Remarketing
Agent may repurchase Taxable Bonds, the Remarketing Agent is not
obligated to do so, and accordingly the purchaser (or any such other
investor) should be prepared to hold such Taxable Bonds until maturity;
(5) the purchaser acknowledges that the Taxable Bonds sold to the
purchaser by the Remarketing Agent may be sold to it pursuant to Rule
144A; and (6) the purchaser understand that such Taxable Bonds will
bear a legend substantially as set forth in Exhibit A hereto.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Bonds. (a) If any
Bond is mutilated, lost, stolen or destroyed, the Registered Owner thereof shall
be entitled to the issuance of a substitute Bond provided that:
(i) in all cases, the Registered Owner must provide indemnity
to the Issuer, the Company and the Paying Agent reasonably satisfactory
to each such party to be indemnified against any and all claims arising
out of or otherwise related to the issuance of substitute Bonds
pursuant to this Section;
(ii) in the case of a mutilated Bond the Registered Owner
shall surrender the Bond to the Paying Agent for cancellation; and
(iii) in the case of a lost, stolen or destroyed Bond, the
Registered Owner shall provide evidence, satisfactory to the Paying
Agent, of the ownership and the loss, theft or destruction of the
affected Bond.
Upon compliance with the foregoing, a new Bond of like tenor and
denomination, executed by the Issuer, shall be authenticated by the Paying Agent
and delivered to the Registered Owner, all at the expense of the Registered
Owner to whom the substitute Bond is delivered. Notwithstanding the foregoing,
the Paying Agent shall not be required to authenticate and deliver any
substitute for a Bond which has been called for redemption or which has matured
or is about to mature and, in any such case, the principal or redemption price
then due or becoming due shall be paid by the Paying Agent in accordance with
the terms of the mutilated, lost, stolen or destroyed Bond without substitution
therefor.
(b) Every Bond issued pursuant to this Section 2.6 shall constitute an
additional contractual obligation of the Issuer, whether or not the Bond alleged
to have been destroyed, lost
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or stolen shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Bonds duly issued hereunder.
(c) All Bonds shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any
and all other rights or remedies, unless expressly inconsistent with any law or
statute existing or hereafter enacted with respect to the replacement or payment
of negotiable instruments, investments or other securities without their
surrender.
SECTION 2.7. Payments of Principal, Redemption Price and Interest:
Persons Entitled Thereto. (a) The principal or redemption price of each Bond
shall be payable in lawful money of the United States of America upon surrender
of such Bond to the Paying Agent. During Flexible Rate Periods or any Taxable,
Daily, Weekly, Monthly or Quarterly Rate Period, the principal or redemption
price of the Bonds shall be payable in immediately available funds.
During Semiannual, Term and Fixed Rate Periods the principal or
redemption price of the Bonds shall be payable in next day funds. Such payments
shall be made to the Registered Owner of the Bond so surrendered, as shown on
the registration books maintained by the Paying Agent on the date of payment.
(b) Subject to the further provisions of Article III hereof, each Bond
shall bear interest and be payable as to interest as follows:
(i) Each Bond shall bear interest (at the applicable rate
determined pursuant to Article III hereof) (A) from the date of
authentication, if authenticated on an Interest Payment Date to which
interest has been paid or duly provided for, or (B) if the Bonds bear
interest at a Daily, Weekly or Monthly Rate, from the last preceding
Interest Calculation Date to which interest has been paid or duly
provided for, or (C) from the last preceding Interest Payment Date to
which interest has been paid or duly provided for (or the Issue Date if
no interest thereon has been paid) in all other cases.
(ii) The interest due on any Bond on any Interest Payment Date
shall be paid to the Registered Owner of such Bond as shown on the
registration books kept by the Paying Agent as of the Regular Record
Date. The amount of interest payable on any Interest Payment Date shall
be computed (A) on the basis of a 365- or 366-day year for the number
of days actually elapsed during Daily, Weekly, Monthly, Quarterly and
Flexible Rate Periods, (B) on the basis of a 360-day year of twelve
30-day months during Semiannual and Term Rate Periods and the Fixed
Rate Period, and (C) on the basis of a 360-day year consisting of the
number of days actually elapsed during any Taxable Rate Period. If any
Daily, Weekly, Monthly, Quarterly or Flexible Rate Period falls in both
365- and 366-day years, the amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 365-day year for the
number of days actually elapsed when such rate period begins in a
365-day year and shall be computed on the
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basis of a 366-day year for the number of days actually elapsed when
such rate period begins in a 366-day year.
(iii) Interest shall be paid in lawful money of the United
States of America.
(iv) All payments of interest on the Bonds bearing interest at
Semiannual, Term or Fixed Rates shall be paid in next day funds to the
Persons entitled thereto pursuant to Section 2.7(b)(ii) by check mailed
on the Interest Payment Date and all payments of interest on Bonds
bearing interest at Taxable, Flexible, Daily, Weekly, Monthly or
Quarterly Rates shall be payable to persons entitled thereto pursuant
to Section 2.7(b)(ii) in immediately available funds.
(c) Interest accrued during any Taxable or Flexible Rate Period and at
the maturity of the Bonds shall be paid only upon presentation and surrender of
Bonds.
SECTION 2.8. Term Bonds. Pending preparation of definitive Bonds, the
Issuer may issue, in lieu of definitive Bonds, one or more temporary printed or
typewritten Bonds in authorized denominations, of substantially the tenor
recited above. At the request of the Issuer, the Paying Agent shall authenticate
definitive Bonds in exchange for and upon surrender of an equal principal amount
of temporary Bonds. Until so exchanged, temporary Bonds shall have the same
rights, remedies and security hereunder as definitive Bonds. Temporary Bonds
shall be numbered consecutively upward from TR-1.
SECTION 2.9. Cancellation and Destruction of Surrendered Bonds. The
Paying Agent shall cancel and destroy (a) all Bonds surrendered for transfer or
exchange, for payment at maturity or for redemption (unless the surrendered Bond
is to be partially redeemed and the Paying Agent elects to return the Bond,
certified as to the partial redemption, to the Registered Owner thereof pursuant
to Section 2.5(b)(iii)), and (b) all Bonds purchased at the direction of the
Company and surrendered to the Paying Agent for cancellation. The Paying Agent
shall deliver to the Issuer a certificate of cancellation and destruction in
respect of all Bonds cancelled and destroyed in accordance with this Section.
SECTION 2.10. Acts of Registered Owners: Evidence of Ownership. Any
action to be taken by Registered Owners may be evidenced by one or more
concurrent written instruments of similar tenor signed or executed by such
Registered Owners in person or by an agent appointed in writing. The fact and
date of the execution by any Person of any such instrument may be proved by
acknowledgment before a notary public or other officer empowered to take
acknowledgments or by an affidavit of a witness to such execution. Any action by
the Registered Owner of any Bond shall bind all future Registered Owners of the
same Bond in respect of anything done or suffered by the Issuer, the Trustee or
the Paying Agent in pursuance thereof.
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SECTION 2.11. Book Entry System. The Bonds shall be initially issued in
the name of Cede & Co., as nominee for DTC, as registered owner of the Bonds,
and held in the custody of DTC. The Issuer and the Trustee acknowledge that they
have executed and delivered a Letter of Representations with DTC, a copy of
which is attached hereto as Exhibit B and made a part hereof, and that the terms
and provisions of said Letter of Representations shall govern in the event of
any inconsistency between the provisions of this Indenture and said Letter of
Representations. A single Bond certificate will be initially issued and
delivered to DTC; however, upon any Tax Exempt Conversion Date a Bond
certificate representing the Bonds so converted shall be delivered to DTC. The
owners of beneficial interest in the Bonds (the "Beneficial Owners") will not
receive physical delivery of Bond certificates except as provided herein. For so
long as DTC shall continue to serve as securities depository for the Bonds as
provided herein, all transfers of beneficial ownership interest will be made by
book-entry only, and no investor or other party purchasing, selling or otherwise
transferring beneficial ownership of Bonds is to receive, hold or deliver any
Bond certificate. The Issuer, the Trustee, the Paying Agent, the Company and the
Remarketing Agent shall have no responsibility or liability for transfers of
beneficial ownership interest in the Bonds.
For every transfer and exchange of the Bonds, the Beneficial Owner may
be charged a sum sufficient to cover such Beneficial Owner's allocable share of
any tax, fee or other governmental charge that may be imposed in relation
thereto.
Bond certificates are required to be delivered to and registered in the
name of the Beneficial Owner, under the following circumstances:
(a) DTC determines to discontinue providing its service with
respect to the Bonds. 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.
(b) The Company determines that continuation of the system of
book-entry transfer through DTC (or a successor securities depository)
is not in the best interest of the Company.
In the event that Bond certificates are required to be issued to
Beneficial Owners, the Trustee, the Company, the Paying Agent, the Issuer and
the Remarketing Agent shall be fully protected in relying upon a certificate of
DTC or any DTC participant as to the identity of and the principal amount of
Bonds held by such Beneficial Owners.
The Issuer, the Company, the Paying Agent and the Trustee win recognize
DTC or its nominee as the Bondholder for all purposes, including notices and
voting.
With respect to Bonds registered in the name of DTC or its nominee, the
Issuer, the Trustee and the Paying Agent shall be entitled to treat the person
in whose name any Bond is
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registered in the Register as the absolute owner of such Bond for all purposes
of this Indenture, and neither the Issuer, the Trustee nor the Paying Agent
shall have any responsibility or obligation with respect to (a) the accuracy of
the records of DTC, its nominee, or any other person with respect to any
ownership interest in the Bonds, (b) the delivery to any person, other than an
Owner as shown on the Register, of any notice with respect to the Bonds,
including any notice of redemption or refunding, (c) the selection of the
particular Bonds or portions thereof to be redeemed in the event of a partial
redemption or refunding of part of the Bonds outstanding or (d) the payment to
any person, other than an Owner as shown in the Register, of any amount with
respect to the principal of, redemption premium, if any, purchase price or
interest on the Bonds.
Notwithstanding any other provision of this Indenture to the contrary,
so long as DTC is acting in such capacity with respect to the Bonds, interest on
the Bonds and all notices with respect to the Bonds, including any notices of
redemption or refunding of all or part of the Bonds, shall be made and given,
respectively, at the times, in the manner and in accordance with the Letter of
Representations.
Whenever during the term of the Bonds the beneficial ownership thereof
is determined by a book entry at DTC, the requirements of this Indenture of
holding, delivering or transferring Bonds shall be deemed modified to require
the appropriate person to meet the requirements of DTC as to registering or
transferring the book entry to produce the same effect.
If at any time DTC ceases to hold the Bonds, all references hereto to
DTC shall be of no further force or effect. A successor to DTC may be authorized
by the Issuer and the Company without the consent of the Registered Owners or
the use of a Supplemental Indenture.
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ARTICLE III
INTEREST RATES ON BONDS
SECTION 3.1. Initial Interest Rates, Subsequent Rates. All Bonds
delivered pursuant to Section 2.1 shall initially bear interest at a Taxable
Rate from the Issue Date determined from time to time in accordance with the
provisions of Section 3.5 hereof. As provided in Section 3.5 hereof, all or a
portion of the Bonds bearing interest at a Taxable Rate may be converted to Tax
Exempt Bonds bearing interest at Variable Rates determined from time to time in
accordance with the provisions of Section 3.2 hereof and thereafter all or a
portion of said Bonds so converted to Variable Rates may be converted to or from
Variable Rates, Flexible Rates or to the Fixed Rate pursuant to Section 3.2, 3.3
or 3.4 hereof; provided, however, that any such conversion is subject to the
veto of the Issuer, which veto may not be unreasonably exercised and shall be
exercised by sending a telephonic notice to the Company, the Remarketing Agent
and the Paying Agent within 24 hours of receipt by the Issuer of notice of such
conversion; and provided further that prior to any conversion from a Rate Period
during which the Interest Rate on the Tax Exempt Bonds is set at intervals of
less than one year to a Rate Period during which the Interest Rate on the Tax
Exempt Bonds is set at intervals of one year or in excess of one year, or vice
versa, the Company must deliver a Favorable Opinion of Bond Counsel relating to
such conversion to the Trustee, the Issuer, the Remarketing Agent and the Paying
Agent.
SECTION 3.2. Variable Rates; Conversion to Variable Rate Periods.
(a) Determination by Remarketing Agent. Subject to the further
provisions of this Article III with respect to particular Variable Rates or
conversions between Rate Periods, the Variable Rate to be applicable to the Tax
Exempt Bonds during any Variable Rate Period for said Bonds shall be determined
by the Remarketing Agent.
(i) In each case, the Variable Rate for the Variable Rate
Period in question shall be determined by the Remarketing Agent on the
date or dates and at the time or times required pursuant to subsection
(b), (c), (d), (e), (f) or (g) below, whichever is applicable.
(ii) The Variable Rate for any Tax Exempt Bond shall be
determined by the Remarketing Agent as the minimum rate of interest
which, in the judgment of the Remarketing Agent, would cause the Bond
to have a market value as of the date of determination equal to the
principal amount thereof, plus accrued interest, taking into account
prevailing market conditions; provided that: (A) except with respect to
the determination of a new Daily Rate for any Tax Exempt Bond pursuant
to Section 3.2(b)(ii), if the Remarketing Agent fails for any reason to
determine the Variable Rate for any Variable Rate Period when required
hereunder or if any condition to the conversion of any Rate Period to a
Variable Rate Period for any Tax Exempt Bond is not satisfied on or
before the Conversion Date, the Rate Period for said Bond shall
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automatically convert to the Daily Rate Period and the Daily Rate shall
be determined in accordance with the provisions of Section 3.2(b)(i)
and (ii) hereof; and (B) in no event shall the Variable Rate for any
Variable Rate Period exceed the Maximum Rate. The Paying Agent shall
promptly notify all Bondholders affected thereby of any conversion to
the Daily Rate pursuant to Section 3.2(a)(ii)(A).
(iii) All determinations of Variable Rates pursuant to this
Section shall be conclusive and binding upon the Issuer, the Company,
the Trustee, the Paying Agent and the Registered Owners of the Bonds to
which such rates are applicable. The Remarketing Agent or the Paying
Agent shall advise any Bondholder upon request to either of them as to
the then current Variable Rate.
(b) Daily Rates. A Daily Rate for any Tax Exempt Bond shall be
established for each Daily Rate Period as follows:
(i) Daily Rate Periods shall commence on a Business Day and
shall extend to, but not include, the next succeeding Business Day.
(ii) The Daily Rate for each Daily Rate Period shall be
effective from and including the commencement date thereof and shall
remain in effect to, but not including, the next succeeding Business
Day; provided however, with respect to any day, if the Remarketing
Agent shall not have determined a Daily Rate, the Daily Rate shall be
the same as the Daily Rate for the immediately preceding day. Each such
Daily Rate shall be determined not later than 9:30 a.m., New York City
time, on the Business Day which is the commencement date of the Daily
Rate Period to which it relates and shall be provided to the Paying
Agent and the Company by telephonic notice from the Remarketing Agent
by the close of business on the same day.
(iii) Notice of Daily Rates determined for each Daily Rate
Period during the preceding Interest Period shall be given by the
Paying Agent by first class mail to each Registered Owner of any Tax
Exempt Bond bearing interest at a Daily Rate by monthly statement
within seven Business Days after each Interest Payment Date on which
interest at a Daily Rate or Rates is to be paid.
(c) Weekly Rates. A Weekly Rate for any Tax Exempt Bond shall be
determined for each Weekly Rate Period as follows:
(i) Weekly Rate Periods shall commence on Wednesday of each
week and end on the day preceding the first day of the next Weekly Rate
Period; except that (a) in the case of a conversion from a different
Rate Period, the Weekly Rate Period for Bonds shall commence on the
last Interest Payment Date of the Bonds so converted and end on the day
preceding the first day of the next Weekly Rate Period; (b) in the case
of a conversion from a Weekly Rate Period to a different Rate Period,
the last Weekly Rate
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Period prior to conversion shall end on the last day immediately
preceding the Conversion Date to the new Rate Period.
(ii) The Weekly Rate for each Weekly Rate Period shall be
effective from and including the commencement date of such period and
shall remain in effect through and including the last day thereof. Each
such Weekly Rate shall be determined by the Remarketing Agent no later
than the commencement date of the Weekly Rate Period to which it
relates and shall be provided to the Paying Agent and the Company by
the Remarketing Agent by written notice by the close of business on the
date of determination.
(iii) If the Remarketing Agent fails to establish a Weekly
Rate with respect to any Tax Exempt Bond bearing interest at Weekly
Rates, the Weekly Rate Period shall automatically convert to the Daily
Rate Period and the Daily Rate shall be determined in accordance with
the provisions of Section 3.2(b)(i) and (ii) hereof. The Paying Agent
shall promptly notify all Bondholders affected thereby of any
conversion to the Daily Rate pursuant to Section 3.2(a)(ii)(A).
(iv) Notice of Weekly Rates determined for each Weekly Rate
Period during the preceding Interest Period shall be given by the
Paying Agent by first class mail to each Registered Owner of any Tax
Exempt Bond bearing interest at a Weekly Rate by monthly statement
within seven Business Days after each Interest Payment Date on which
interest at a Weekly Rate or Rates is to be paid.
(d) Monthly Rates. A Monthly Rate for any Tax Exempt Bond shall be
determined for each Monthly Rate Period as follows:
(i) Monthly Rate Periods shall (A) commence on the Monthly
Rate Conversion Date and on the first Business Day of each calendar
month thereafter and (B) end on the day prior to either the
commencement date of the following Monthly Rate Period or the
Conversion Date on which a different type of Rate Period shall become
effective.
(ii) The Monthly Rate for each Monthly Rate Period shall be
effective from and including the commencement date of such period and
shall remain in effect through and including the last day thereof. Each
such Monthly Rate shall be determined by the Remarketing Agent not
later than the commencement date of such period and shall be provided
to the Paying Agent and the Company by the Remarketing Agent by written
notice by the close of business on the date of determination.
(iii) If the Remarketing Agent fails to establish a Monthly
Rate with respect to any Tax Exempt Bond bearing interest at Monthly
Rates, the Monthly Rate Period shall automatically convert to the Daily
Rate Period and the Daily Rate shall be
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determined in accordance with the provisions of Section 3.2(b)(i) and
(ii) hereof. The Paying Agent shall promptly notify all Bondholders
affected thereby of any conversion to the Daily Rate pursuant to
Section 3.2(a)(ii)(A).
(iv) Notice of the Monthly Rate for each Monthly Rate Period
shall be given by the Paying Agent by first class mail to each
Registered Owner of any Tax Exempt Bond bearing interest at a Monthly
Rate for whom such rate is effective within seven Business Days after
its determination pursuant to Section 3.2(d)(ii) above.
(e) Quarterly Rates. A Quarterly Rate for any Tax Exempt Bond shall be
determined for each Quarterly Rate Period as follows:
(i) Quarterly Rate Periods shall (A) commence on a Quarterly
Rate Conversion Date and on the first Business Day of each third month
thereafter; and (B) end on the day preceding either the commencement
date of the following Quarterly Rate Period or the Conversion Date on
which a different type of Rate Period shall become effective.
(ii) The Quarterly Rate for each Quarterly Rate Period shall
be effective from and including the commencement date of such period
and shall remain in effect through and including the last day thereof.
Each such Quarterly Rate shall be determined by the Remarketing Agent
not later than the commencement date of such period and shall be
provided to the Paying Agent and the Company by the Remarketing Agent
by the close of business on the date of determination.
(iii) If the Remarketing Agent fails to establish a Quarterly
Rate with respect to any Tax Exempt Bond bearing interest at Quarterly
Rates, the Quarterly Rate Period shall automatically convert to the
Daily Rate Period and the Daily Rate shall be determined in accordance
with the provisions of Section 3.2(b)(i) and (ii) hereof. The Paying
Agent shall promptly notify all Bondholders affected thereby of any
conversion to the Daily Rate pursuant to Section 3.2(a)(ii)(A).
(iv) Notice of the Quarterly Rate shall be given by the Paying
Agent by first class mail to each Registered Owner of any Tax Exempt
Bond bearing interest at a Quarterly Rate promptly after such Quarterly
Rate is determined pursuant to Section 3.2(e)(ii) above.
(f) Semiannual Rates. A Semiannual Rate for any Tax Exempt Bond shall
be determined for each Semiannual Rate Period as follows:
(i) Semiannual Rate Periods shall (A) commence on a Semiannual
Rate Conversion Date and on the first day of each sixth (6th) calendar
month thereafter; and (B) end on the day preceding either the
commencement date of the following Semiannual
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Rate Period or the Conversion Date on which a different type of Rate
Period shall become effective.
(ii) The Semiannual Rate for each Semiannual Rate Period shall
be effective from and including the commencement date of such period
and shall remain in effect through and including the last day thereof.
Each such Semiannual Rate shall be determined by the Remarketing Agent
not later than the commencement date of such period and shall be
provided to the Paying Agent and the Company by the Remarketing Agent
by written notice by the close of business on the date of
determination.
(iii) If the Remarketing Agent fails to establish a Semiannual
Rate with respect to any Tax Exempt Bond bearing interest at Semiannual
Rates, the Semiannual Rate Period shall automatically convert to the
Daily Rate Period and the Daily Rate shall be determined in accordance
with the provisions of Section 3.2(b)(i) and (ii) hereof. The Paying
Agent shall promptly notify all Bondholders affected thereby of any
conversion to the Daily Rate pursuant to Section 3.2(a)(ii)(A).
(iv) Notice of the Semiannual Rate shall be given by the
Paying Agent by first class mail to each Registered Owner of any Tax
Exempt Bond bearing interest at a Semiannual Rate promptly after such
Semiannual Rate is determined pursuant to Section 3.2(f)(ii) above.
(g) Term Rates. A Term Rate for any Tax Exempt Bond shall be
determined for each Term Rate Period as follows:
(i) Term Rate Periods shall (A) commence on a Term Rate
Conversion Date and on the first day of a calendar month which is an
integral multiple of 12 calendar months thereafter; and (B) end on the
day preceding either the commencement date of the following Term Rate
Period or the Conversion Date on which a different Rate Period shall
become effective.
(ii) The Term Rate for each Term Rate Period shall be
effective from and including the commencement date of such period and
remain in effect through and including the last day thereof. Each such
Term Rate shall be determined not later than the commencement date of
such period and shall be provided to the Paying Agent and the Company
by the Remarketing Agent by written notice by the close of business on
the date of determination.
(iii) If the Remarketing Agent fails to establish a Term Rate
with respect to any Tax Exempt Bond bearing interest at Term Rates, the
Term Rate Period shall automatically convert to the Daily Rate Period
and the Daily Rate shall be determined in accordance with the
provisions of Section 3.2(b)(i) and (ii) hereof. The Paying Agent
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shall promptly notify all Bondholders affected thereby of any
conversion to the Daily Rate pursuant to Section 3.2(a)(ii)(A).
(iv) Notice of the Term Rate shall be given by the Paying
Agent by first class mail to each Registered Owner of any Tax Exempt
Bond bearing interest at a Term Rate promptly after such Term Rate is
determined pursuant to Section 3.2(g)(ii) above.
(h) Conversions Between Variable Rate Periods. All or a portion of the
Tax Exempt Bonds may be converted from one Variable Rate Period to another
Variable Rate Period, and from a Term Rate Period to a Term Rate Period of a
different duration, upon notice by the Company to the Remarketing Agent, the
Paying Agent and the Issuer. All or a portion of the Tax Exempt Bonds may be
converted from one Variable Rate Period to another as follows:
(i) Such conversion shall be on a Conversion Date for the Tax
Exempt Bonds to be converted.
(ii) The Company shall give written notice of any such
conversion to the Issuer, the Trustee, the Paying Agent and the
Remarketing Agent not fewer than 20 days prior to the proposed
Conversion Date between any Variable Rate Periods; provided, however,
in the case of conversion to a Term Rate Period, or from a Term Rate
Period to a Term Rate Period of a different duration, the notice shall
be given not fewer than 30 days prior to the proposed Conversion Date,
but the Company shall have the right to rescind any conversion to a
Term Rate Period by up to the 15th day prior to the Conversion Date.
Such notice shall specify the particular Tax Exempt Bonds to be
converted, the proposed Conversion Date and the Variable Rate Period to
which the conversion will be made, and in the case of conversion to a
Term Rate Period, or from a Term Rate Period to a Term Rate Period of a
different duration, the number of years to be included within such Term
Rate Period.
(iii) Not fewer than 15 days prior to the Conversion Date in
the case of conversions between Variable Rate Periods the Paying Agent
shall mail (by first class mail) a written notice of the conversion to
the Registered Owners affected thereby. Such notice shall be prepared
by the Company and shall:
(A) contain the information set forth in the notice
described in subpara- graph 3.2(h)(ii) above,
(B) set forth the matters required to be stated
pursuant to Section 4.3(c) hereof with respect to purchases of
Bonds governed by such Section, and
(C) with respect to Term Bonds only, set forth the
redemption provisions which will apply to the Bonds.
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(iv) The Variable Rate for the Variable Rate Period commencing
on the Conversion Date shall be determined by the Remarketing Agent in
the manner provided in subsection (a) above on the date set forth in
subsection (b), (c), (d), (e), (f) or (g) above, whichever is
applicable to the Variable Rate Period to which the conversion shall be
made and made available to the Bondholders affected thereby upon
request.
(i) Conversions to Variable Rate Period from Taxable or Flexible Rate
Periods. All or any portion of the Bonds may be converted from a Taxable or
Flexible Rate Period to a Variable Rate Period upon notice by the Company to the
Remarketing Agent, the Paying Agent and the Issuer. All or any portion of the
Bonds may be converted from Taxable or Flexible Rate Periods to a Variable Rate
Period as follows:
(i) Such conversion shall be on a Conversion Date for the
Bonds to be converted.
(ii) The Company shall give written notice of any such
conversion to the Issuer, the Trustee, the Paying Agent and the
Remarketing Agent no fewer than 20 days prior to the proposed
Conversion Date (or 30 days in the case of conversion to a Term Rate
Period). Such notice shall specify the particular Bonds to be
converted, the proposed Conversion Date and the type of Variable Rate
Period to which the conversion will be made, and in the case of
conversion to a Term Rate Period, the number of years to be included
within such Term Rate Period. The Paying Agent shall give notice of
conversion to Registered Owners affected thereby not fewer than 15 days
prior to the Conversion Date in the manner prescribed by Section
3.2(h)(iii) hereof. Notwithstanding the foregoing, however, no
conversion shall be effected and no such notice shall be given to said
Registered Owners unless, prior to the date on which such notice is
required to be given, the Paying Agent shall have received written
confirmation from the Remarketing Agent to the effect that it has not
established and will not establish any Taxable or Flexible Rate Periods
for the Bonds to be converted extending beyond the Conversion Date for
said Bonds.
(iii) The Variable Rate for the Variable Rate Period
commencing on the Conversion Date shall be established and made
available in the same manner as is provided for conversions from one
Variable Rate Period to another pursuant to subsection 3.2(h)(iv)
above.
(iv) If the conversion is from Taxable Rate Periods, the
Company shall also comply with Section 3.5(b) hereof.
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SECTION 3.3. Flexible Rates; Conversions to Flexible Rate Periods.
(a) Flexible Rates. A Flexible Rate for each Flexible Rate Period for a
Tax Exempt Bond shall be determined as follows:
(i) The Flexible Rate Period for a Tax Exempt Bond shall be of
such duration, not exceeding 270 days, as may be offered by the
Remarketing Agent and specified by the purchaser pursuant to Section
4.2 or 4.3 hereof and any Tax Exempt Bond may bear interest at a
Flexible Rate for a Flexible Rate Period different from any other Tax
Exempt Bond; provided that each such Flexible Rate Period shall (A)
commence on the Flexible Rate Conversion Date and on a Business Day
thereafter and (B) end on a day which is immediately prior to a
Business Day. The Remarketing Agent shall determine the Flexible Rate
no later than the commencement date of such Flexible Rate Period.
(ii) The Flexible Rate and Flexible Rate Period shall be
determined by the Remarketing Agent so as to achieve the minimum net
interest cost on the Tax Exempt Bonds bearing interest at a Flexible
Rate taking into account prevailing market conditions as provided in
Section 4.2 hereof. In no event shall the Flexible Rate for any
Flexible Rate Period exceed the Maximum Rate. In determining a Flexible
Rate, the Remarketing Agent may take into account derivative
transactions entered into by the Company with respect to the Tax Exempt
Bonds bearing interest at a Flexible Rate and may determine the rate on
the Tax Exempt Bonds bearing interest at a Flexible Rate based on the
lowest rate actually payable by the Company after taking into account
such derivative transactions; provided that the interest rate on the
Tax Exempt Bonds bearing interest at a Flexible Rate without regard to
the derivative transaction is a rate that causes the market value of
said Bonds to be par plus accrued interest on the effective date of
such determination. In connection with such transactions, the interest
payable on Tax Exempt Bonds during a Flexible Rate Period need not be a
fixed percentage of the principal amount of said Bonds and may be
determined on a contingent basis. If the Flexible Rate is determined
pursuant to this section, the Flexible Rate may be stated on an
attachment to said Bonds. If the Remarketing Agent fails for any reason
to determine the Flexible Rate or Flexible Rate Period or if any
condition to the conversion of any Rate Period to a Flexible Rate
Period is not satisfied on or before the Conversion Date, the Rate
Period for each Tax Exempt Bond for which the Flexible Rate or Flexible
Rate Period is not determined shall automatically convert to a Daily
Rate Period and the Daily Rate shall be determined in accordance with
the provisions of Section 3.2(b)(i) and (ii) hereof; the affected Bonds
shall be subject to mandatory purchase on said Conversion Date as
provided in Section 4.3(a) hereof; and in any such event the affected
Bonds shall be remarketed as Daily Rate Bonds.
(iii) All determinations of Flexible Rates pursuant to this
Section shall be conclusive and binding upon the Issuer, the Company,
the Trustee, the Paying Agent and
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the Registered Owners of the Bonds to which such rates are applicable.
The Remarketing Agent shall promptly notify the Paying Agent of all
determinations of Flexible Rates. The Remarketing Agent or the Paying
Agent shall advise any of them as to the then current Flexible Rate.
(b) Conversions to Flexible Rate Periods from Variable Rate Periods.
All or a portion of the Tax Exempt Bonds may be converted from one Variable Rate
Period to a Flexible Rate Period upon notice by the Company to the Remarketing
Agent, the Paying Agent and the Issuer. All or a portion of the Tax Exempt Bonds
may be converted from a Variable Rate Period to Flexible Rate Periods as
follows:
(i) Such conversion shall be on a Conversion Date for the Tax
Exempt Bonds to be converted.
(ii) The Company shall give written notice of any such
conversion to the Issuer, the Trustee, the Paying Agent and the
Remarketing Agent in the manner and at the times prescribed by Section
3.2(h)(ii) above.
(iii) Not fewer than 15 days prior to the Conversion Date, the
Paying Agent shall mail (by first class mail) a written notice prepared
by the Company of the conversion to the Registered Owners of the Tax
Exempt Bonds affected thereby, specifying the particular Tax Exempt
Bonds to be converted and the Conversion Date and setting forth the
matters required to be stated pursuant to Section 4.3(c) hereof with
respect to purchase of Bonds governed by such Section.
SECTION 3.4. Fixed Rate Conversion at Option of Company. All or any
portion of the Tax Exempt Bonds bearing interest at a Variable Rate or Flexible
Rates may be converted to bear interest at a Fixed Rate to their final maturity.
Any such conversion shall be made as follows:
(a) Such conversion shall be on a Conversion Date for the Tax Exempt
Bonds to be converted.
(i) The Company shall give written notice of any such
conversion to the Issuer, the Trustee, the Remarketing Agent and the
Paying Agent, not fewer than 45 days prior to the proposed Conversion
Date. Such notice shall specify the particular Tax Exempt Bonds to be
converted and the Fixed Rate Conversion Date.
(ii) Not fewer than 15 days prior to the Fixed Rate Conversion
Date, the Paying Agent shall mail (by first class mail) a written
notice prepared by the Company of the conversion to the Registered
Owners of the Tax Exempt Bonds affected thereby, specifying the
particular Tax Exempt Bonds to be converted and the Conversion Date and
setting forth the matters required to be stated pursuant to Section 4.4
hereof.
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(b) The Remarketing Agent shall determine the Fixed Rate, which shall
be no greater than the lowest rate of interest which, in the judgment of the
Remarketing Agent as of the date of determination and under prevailing market
conditions, would cause the Tax Exempt Bonds so converted to have a market value
equal to the principal amount thereof plus accrued interest. The Remarketing
Agent shall notify the Paying Agent and the Paying Agent shall notify the
Issuer, the Trustee and the Company by telephone (promptly confirmed in
writing), telegram, telecopy, telex or other similar means of communication of
the Fixed Rate so determined.
(c) Not later than the Fixed Rate Conversion Date the Remarketing Agent
shall determine the Fixed Rate for the Tax Exempt Bonds so converted and make
the Fixed Rate available to the Paying Agent. Such determination shall be
conclusive and binding upon the Issuer, the Company, the Trustee, the Paying
Agent and the Registered Owners of the Bonds to which such rate will be
applicable. Promptly after the date of determination, the Paying Agent shall
give notice of such Fixed Rate by first class mail to the Issuer, the Company
and the Trustee.
(d) Any conversion to a Fixed Rate pursuant to this Section 3.4 shall
be subject to the following conditions:
(i) As of the Fixed Rate Conversion Date, sufficient funds
shall be available to purchase Bonds which are then required to be
purchased pursuant to Section 4.4 hereof. If this condition is not met
for any reason, the conversion shall not be effective and said Bonds
shall be automatically converted to the Daily Rate as provided in
paragraph (iii) below.
(ii) The determination of the Fixed Rate pursuant to this
Section shall be conclusive and binding upon the Issuer, the Company,
the Trustee, the Paying Agent and the Registered Owners of the Bonds to
which such rates are applicable. The Issuer, the Company, the Trustee,
the Paying Agent and the Remarketing Agent shall not be liable to any
Registered Owners for failure to give any notice required above or for
failure of any Registered Owners to receive any such notice. After the
Fixed Rate Conversion Date, the Registered Owners of the Bonds
converted to a Fixed Rate shall have no right to tender their Bonds for
purchase.
(iii) If the Remarketing Agent fails for any reason to
establish a Fixed Rate or if the Company rescinds its notice of
conversion by giving written notice of such rescission to the Issuer,
the Remarketing Agent and the Paying Agent not later than the
establishment of the Fixed Rate as provided in Section 3.4(c) above, or
if the conditions specified in (i) above or in Section 3.1 are not met,
the Rate Period for the Bonds proposed to be converted shall be
automatically converted to a Daily Rate Period and the Daily Rate shall
be determined in accordance with the provisions of Section 3.2(b)(i)
and (ii) hereof.
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(e) At any time prior to the Fixed Rate Conversion Date by notice in
writing to the Issuer, the Trustee, the Paying Agent and the Remarketing Agent,
the Company may elect to not convert to the Fixed Rate but rather to convert on
the stated Conversion Date to a Variable Rate or to a Flexible Rate by following
the conversion procedures for such Rate Periods set forth herein; provided,
however, no additional notice of the conversion need be given to the Registered
Owners in connection with such conversion.
SECTION 3.5. Taxable Rates; Conversion from Taxable Rates.
(a) Taxable Rates. A Taxable Rate for each Taxable Rate Period shall be
determined as follows:
(i) The Taxable Rate Period for each Taxable Bond shall be of
such duration, not exceeding 270 days, as may be offered by the
Remarketing Agent and specified by the purchaser pursuant to Section
4.2 or 4.3 hereof and any Taxable Bond may bear interest at a Taxable
Rate and for a Taxable Rate Period different from any other Taxable
Bond; provided that each such Taxable Rate Period shall (A) commence on
a Business Day and (B) end on a day which is immediately prior to a
Business Day. The Remarketing Agent shall determine the Taxable Rate no
later than the commencement date of such Taxable Rate Period.
(ii) The Taxable Rate and Taxable Rate Period shall be
determined by the Remarketing Agent so as to achieve the minimum net
interest cost on the Taxable Bonds taking into account prevailing
market conditions as provided in Section 4.2 hereof.
In no event shall the Taxable Rate for any Taxable Rate Period
exceed the Maximum Rate. In determining a Taxable Rate, the Remarketing
Agent may take into account derivative transactions entered into by the
Company with respect to the Taxable Bonds and may determine the rate on
the Taxable Bonds based on the lowest rate actually payable by the
Company after taking into account such derivative transactions;
provided that the interest rate on the Taxable Bonds without regard to
the derivative transaction is a rate that causes the market value of
said Bonds to be par plus accrued interest on the effective date of
such determination. In connection with such transactions, the interest
payable on Taxable Bonds need not be a fixed percentage of the
principal amount of said Bonds and may be determined on a contingent
basis. If the Taxable Rate is determined pursuant to this section, the
Taxable Rate may be stated on an attachment to said Bonds. If the
Remarketing Agent fails for any reason to determine the Taxable Rate or
Taxable Rate Period, the Taxable Bonds shall have a Taxable Rate Period
of one day and shall bear interest at a per annum rate equal to 110% of
the 15-day Federal Reserve Composite rate until a new Taxable Rate
Period and a new Taxable Rate is established with respect to such
Bonds.
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(b) Conversion from Taxable Rates. The Company may give written notice
at any time to the Issuer, the Remarketing Agent, the Paying Agent and the
Trustee that it intends to effect a conversion of all or a portion of the
Taxable Bonds to Tax Exempt Bonds bearing interest at a Variable Rate on the day
specified in such notice, which date shall be the Tax Exempt Conversion Date for
such Taxable Bonds to be converted and shall be not less than 20 days (30 days
if the Tax Exempt Bonds are to be in a Term Rate Period) from the date of such
notice and shall be the day following the end of a Taxable Rate Period with
respect to the Taxable Bonds to be converted. Said conversion shall be effected
in accordance with the provisions of Section 3.2(i) hereof. In addition, the
Company shall file with the Issuer, the Remarketing Agent, the Paying Agent and
the Trustee opinions of Bond Counsel and other counsel, as appropriate,
acceptable to the Issuer, the Remarketing Agent, the Paying Agent and the
Trustee to the effect that (i) the conversion of such Taxable Bonds is
authorized or permitted by the laws of the State and by this Indenture and win
not adversely affect the validity of the Bonds, (ii) the interest on the Tax
Exempt Bonds shall be excludable from gross income for federal income tax
purposes in the hands of the Owners thereof (except for "substantial users" and
"related persons" pursuant to the Code) and (iii) the conversion will not
adversely affect the exclusion of interest on the then outstanding Tax Exempt
Bonds (if any) from gross income for federal income tax purposes in the hands of
the Owners thereof (except for "substantial users" and "related persons"
pursuant to the Code). The Company shall also be required to provide such other
documentation as may be reasonably requested by the Remarketing Agent. No
proposed conversion of Taxable Bonds to Tax Exempt Bonds shall become effective
unless the Company shall also file with the Issuer, the Remarketing Agent and
the Trustee such opinions dated the Tax Exempt Conversion Date. In the event
such opinions are not delivered on a Tax Exempt Conversion Date, such Taxable to
Tax Exempt Bonds and will continue at a Taxable Rate, with a Taxable Rate Period
of one day and shall bear interest at a per annum rate equal to 110% of the
15-day Federal Reserve Composite rate until a new Taxable Rate Period and a new
Taxable Rate is established with respect to such Bonds.
SECTION 3.6. Additional Limitation on Interest. Notwithstanding any
provision of this Indenture to the contrary, in no event shall the interest paid
or payable on the Bonds (including interest calculated as provided herein,
together with all other amounts that constitute interest on the Bonds under the
laws of the State which are contracted for, charged, reserved, taken or received
pursuant to this Indenture) through any Interest Payment Date or through the
date of payment on the Bonds (whether at maturity, by acceleration or upon
earlier redemption) exceed the Maximum Rate.
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ARTICLE IV
TENDER AND PURCHASE OF BONDS
SECTION 4.1. Tenders During Variable Rate Periods.
(a) Purchase Dates. The Registered Owners of Tax Exempt Bonds bearing
interest at Variable Rates may elect to have their Bonds (or portions thereof in
amounts equal to the lowest denomination then authorized pursuant to Section 2.2
hereof or whole multiples of such lowest denomination) purchased or shall be
required to tender their Bonds for purchase at a Purchase Price equal to 100% of
the principal amount of such Bonds (or portions), plus accrued interest, if any,
on the following purchase dates and upon the giving of the following telephonic
or written notices meeting the further requirements of subsection (b) below:
(i) Tax Exempt Bonds bearing interest at Daily Rates may be
tendered for purchase at a price payable in immediately available funds
on any Business Day by telecopy, telex or facsimile notice, promptly
confirmed in writing, of tender given to the Paying Agent and the
Remarketing Agent not later than 11:00 a.m., New York City time, on the
purchase date.
(ii) Tax Exempt Bonds bearing interest at Weekly Rates may be
tendered for purchase at a price payable in immediately available funds
on any Business Day by telecopy, telex or facsimile notice, promptly
confirmed in writing, to the Paying Agent not later than 5:00 p.m., New
York City time, on a Business Day not fewer than seven days prior to
the purchase date.
(iii) Tax Exempt Bonds bearing interest at Monthly or
Quarterly Rates may be tendered for purchase on any Interest Payment
Date for such Bonds at a price payable in immediately available funds
upon delivery of a written notice of tender to the Paying Agent not
later than 5:00 p.m., New York City time, on a Business Day which is
not fewer than (A) three Business Days prior to the purchase date in
the case of Bonds bearing interest at a Monthly Rate, or (B) seven days
prior to the purchase date in the case of Bonds bearing interest at a
Quarterly Rate.
(iv) Tax Exempt Bonds bearing interest at a Semiannual Rate or
Term Rate may be tendered for purchase on the commencement date of the
succeeding Rate Period for such Bonds at a price payable in next day
funds upon delivery of a written notice of tender to the Paying Agent
not later than 5:00 p.m., New York City time, on a Business Day which
is not fewer than seven days prior to the purchase date.
(b) Notice of Tender. Each notice of tender:
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(i) shall be delivered to the Paying Agent at its principal
corporate trust office and be in form satisfactory to the Paying Agent;
(ii) shall state (A) the principal amount of the Tax Exempt
Bond to which the notice relates, (B) that the Registered Owner
irrevocably demands purchase of such Bond or a specified portion
thereof in an amount equal to the lowest denomination then authorized
pursuant to Section 2.2 hereof or a whole multiple of such lowest
denomination, (C) the date on which such Bond or portion is to be
purchased, (D) and payment instructions with respect to the purchase
price; and
(iii) shall automatically constitute (A) an irrevocable offer
to sell the Tax Exempt Bond (or portion thereof) to which the notice
relates on the purchase date at a price equal to the principal amount
of such Bond (or portion thereof) plus, with respect to Tax Exempt
Bonds bearing interest at a Daily Rate or a Weekly Rate, any interest
thereon accrued and unpaid as of the purchase date, (B) an irrevocable
authorization and instruction to the Paying Agent to effect transfer of
such Bond (or portion thereof) upon payment of such price to the Paying
Agent on the purchase date, (C) an irrevocable authorization and
instruction to the Paying Agent to effect the exchange of the Tax
Exempt Bond to be purchased in whole or in part for other Tax Exempt
Bonds in an equal aggregate principal amount so as to facilitate the
sale of such Bond (or portion thereof to be purchased), and (D) an
acknowledgment that such Registered Owner will have no further rights
with respect to such Bond (or portion thereof) upon payment of the
purchase price thereof to the Paying Agent on the purchase date, except
for the right of such Registered Owner to receive such purchase price
upon surrender of such Bond to the Paying Agent. The determination of
the Paying Agent as to whether a notice of tender has been properly
delivered pursuant to the foregoing shall be conclusive and binding
upon the Registered Owner.
(c) Bonds to be Remarketed. Not later than 11:00 a.m., New York City
time, on the Business Day immediately following the date of receipt of any
notice of tender (or immediately upon such receipt, in the case of Tax Exempt
Bonds bearing interest at Daily Rates), the Paying Agent shall notify, by
telephone, promptly confirmed in writing, in the case of a Daily or Weekly Rate,
and in writing by facsimile to the Remarketing Agent in all other cases, the
Company and the Remarketing Agent of the principal amount of Tax Exempt Bonds
(or portions thereof) to be purchased and the date of purchase.
(d) Remarketing of Tendered Tax Exempt Bonds. Unless otherwise
instructed by the Company, the Remarketing Agent shall offer for sale and use
its best efforts to find purchasers for all Bonds or portions thereof for which
notice of tender has been received pursuant to Section 4.1(b) above at a
Purchase Price of 100% of the principal amount thereof, plus accrued interest,
if any, on the ensuing purchase dates. The terms of any sale by the Remarketing
Agent shall provide for the payment of the Purchase Price for tendered Tax
Exempt Bonds by the Remarketing Agent to the Paying Agent (in exchange for new
registered Bonds) (i) in
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immediately available funds at or before 2:15 p.m., New York City time, on the
purchase date, in the case of Tax Exempt Bonds bearing interest at Daily Rates,
(ii) in immediately available funds at or before 12:00 noon, New York City time,
on the purchase date, in the case of Tax Exempt Bonds bearing interest at
Weekly, Monthly or Quarterly Rates and (iii) in next day funds at or before
12:00 noon, New York City time, on the purchase date, in the case of Tax Exempt
Bonds bearing interest at Semiannual or Term Rates. Notwithstanding the
foregoing, the Remarketing Agent shall not sell any Tax Exempt Bond as to which
a notice of conversion from one type of Rate Period to another Rate Period has
been given by the Paying Agent unless the Remarketing Agent has advised the
Person to whom the sale is made of such conversion.
(e) Purchase of Tendered Tax Exempt Bonds.
(i) Notice. At or before 3:00 p.m., New York City time, on the
Business Day immediately preceding the date fixed for purchase of
tendered Tax Exempt Bonds (or 12:45 p.m., New York City time, on the
purchase date in the case of Tax Exempt Bonds bearing interest at Daily
Rates), the Remarketing Agent shall give notice by telephone, telegram,
telecopy, telex, or other similar communication to the Paying Agent of
the principal amount of tendered Tax Exempt Bonds which were
remarketed. Not later than 5:00 p.m. (or 1:30 p.m., in the case of Tax
Exempt Bonds bearing interest at Daily Rates), New York City time, on
the date of receipt of such notice the Paying Agent shall give notice
by telephone, telegram, telecopy, or other similar communication to the
Company, specifying the principal amount of tendered Tax Exempt Bonds
as to which the Remarketing Agent has not found a purchaser at that
time. At or before 3:00 p.m., New York City time, on the Business Day
prior to the purchase date to the extent known to the Remarketing
Agent, but in any event, no later than 11:00 a.m. (or 1:00 p.m., in the
case of Tax Exempt Bonds bearing interest at Daily Rates), New York
City time, on the date fixed for purchase (or two Business Days prior
to the date fixed for purchase in the event tendered Tax Exempt Bonds
bear interest at Semiannual or Term Rates), the Remarketing Agent shall
give notice to the Paying Agent by telephone (promptly confirmed in
writing) of the names, addresses and taxpayer identification numbers of
the purchasers, the denominations of Tax Exempt Bonds to be delivered
to each purchaser and, if available, payment instructions for regularly
scheduled interest payments, or of any changes in any such information
previously communicated.
(ii) Sources of Payments. The Remarketing Agent shall cause to
be paid to the Paying Agent on the date fixed for purchase of tendered
Tax Exempt Bonds, all amounts representing proceeds of the remarketing
of such Bonds, such payments to be made in the manner and at the time
specified in Section 4.1(d) above. If such amounts, plus all other
amounts received by the Paying Agent for the purchase of tendered Tax
Exempt Bonds, are not sufficient to pay the principal amount thereof
plus the accrued and unpaid interest thereon (if any) to the purchase
date, the Paying Agent shall immediately notify the Trustee and the
Company of any deficiency. The Company shall deliver or cause to be
delivered to the Paying Agent (A) immediately available funds in
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an amount equal to such deficiency prior to 2:15 p.m., New York City
time, on the date set for purchase of tendered Tax Exempt Bonds bearing
interest at Daily Rates, (B) immediately available funds in an amount
equal to such deficiency prior to 12:00 noon, New York City time, on
the date set for purchase of tendered Tax Exempt Bonds bearing interest
at Weekly, Monthly or Quarterly Rates, and (C) next day funds in an
amount equal to such deficiency prior to 12:00 noon, New York City
time, on the date set for purchase of tendered Tax Exempt Bonds bearing
interest at Semiannual or Term Rates. All moneys received by the Paying
Agent as remarketing proceeds and additional amounts, if any, received
from the Company shall be deposited by the Paying Agent in a special
trust account to be used solely for the payment of the purchase price
of tendered Tax Exempt Bonds and shall not be commingled with other
funds held by the Paying Agent or the Trustee.
(iii) Payments by the Paying Agent. On the date set for
purchase of tendered Tax Exempt Bonds, and upon receipt by the Paying
Agent of 100% of the aggregate Purchase Price of the tendered Tax
Exempt Bonds, and at or before 3:00 p.m., New York City time, the
Paying Agent shall pay the purchase price of such Bonds to the
Registered Owners thereof. Such payments shall be made in immediately
available funds (or by wire transfer) unless the Tax Exempt Bonds bear
interest at Semiannual or Term Rates, in which event such payments
shall be made in next day funds. The Paying Agent shall apply in order
(A) moneys paid to it by the Remarketing Agent as proceeds of the
remarketing of such Tax Exempt Bonds by the Remarketing Agent, and (B)
other moneys made available by the Company. If sufficient funds are not
available for the purchase of all tendered Tax Exempt Bonds, no
purchases shall be consummated, all as further set forth in Section 4.5
hereof.
(iv) Registration and Delivery of Tendered or Purchased Tax
Exempt Bonds. On the date of purchase, the Paying Agent shall register
and deliver (or hold) all Tax Exempt Bonds purchased on any purchase
date as follows: (A) Tax Exempt Bonds purchased or remarketed by the
Remarketing Agent shall be registered and made available to the
Remarketing Agent by 2:15 p.m., New York City time, in accordance with
the instructions of the Remarketing Agent; and (B) Tax Exempt Bonds
purchased with amounts provided by the Company shall be registered in
the name of the Company and shall be held in trust by the Paying Agent
on behalf of the Company and shall not be released from such trust
unless the Paying Agent shall have received written instructions from
the Company.
(v) Resale of Tax Exempt Bonds Purchased by the Company. If
any Tax Exempt Bonds are registered to the Company pursuant to
subparagraph (iv) above, to the extent requested by the Company, the
Remarketing Agent shall offer for sale and use its best efforts to sell
such Tax Exempt Bonds at a price approved by the Company within 30 days
of the purchase by the Company of such Bonds. No such Bonds held by the
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Company for more than 30 days shall be remarketed without a Favorable
Opinion of Bond Counsel.
(vi) Delivery of Tax Exempt Bonds; Effect of Failure to
Surrender Tax Exempt Bonds. All Tax Exempt Bonds to be purchased on any
date shall be required to be delivered to the principal corporate trust
office of the Paying Agent at or before (A) 1:00 p.m., New York City
time, on the purchase date in the case of Tax Exempt Bonds bearing
interest at Daily Rates; (B) 12:00 noon, New York City time, on the
purchase date in the case of Bonds bearing interest at Weekly, Monthly
or Quarterly Rates; or (C) 5:00 p.m., New York City time, on the second
(2nd) Business Day prior to the purchase date in the case of Bonds
bearing interest at Semiannual or Term Rates, except for Tax Exempt
Bonds delivered by or on behalf of an Investment Company in accordance
with Section 4.6 hereof which may be delivered by 3:00 p.m., New York
City time, on the purchase date. If the Registered Owner of any Tax
Exempt Bond (or portion thereof) that is subject to purchase pursuant
to this Section fails to deliver such Bond to the Paying Agent for
purchase on the purchase date, and if the Paying Agent is in receipt of
the purchase price therefor, such Tax Exempt Bond (or portion thereof)
shall nevertheless be deemed purchased on the day fixed for purchase
thereof and ownership of such Tax Exempt Bond (or portion thereof)
shall be transferred to the purchaser thereof as provided in subsection
(e)(iv) above. Any Registered Owner who fails to deliver such Tax
Exempt Bond for purchase shall have no further rights thereunder except
the right to receive the purchase price thereof upon presentation and
surrender of said Bond to the Paying Agent. The Paying Agent shall, as
to any tendered Tax Exempt Bonds which have not been delivered to it
(i) promptly notify the Remarketing Agent of such nondelivery and (ii)
place a stop transfer against an appropriate amount of Tax Exempt Bonds
registered in the name of such Registered Owner(s) on the bond
registration books. The Paying Agent shall place such stop(s)
commencing with the lowest serial number Tax Exempt Bond registered in
the name of such Registered Owner(s) until stop transfers have been
placed against an appropriate amount of Tax Exempt Bonds until the
appropriate tendered Tax Exempt Bonds are delivered to the Paying
Agent. Upon such delivery, the Paying Agent shall make any necessary
adjustments to the bond registration books. On the tender date, the
Paying Agent shall authenticate and deliver substitute Tax Exempt Bonds
in lieu of such undelivered Bonds.
SECTION 4.2. Tender During Taxable or Flexible Rate Periods.
(a) Purchase Dates. Each Bond bearing interest at a Taxable or Flexible
Rate shall be subject to mandatory tender for purchase, on the day immediately
succeeding the last day of each Taxable or Flexible Rate Period applicable to
such Bond at a purchase price equal to 100% of the principal amount thereof,
plus interest accrued during such Taxable or Flexible Rate Period. Each Taxable
or Flexible Rate Period and mandatory tender date for a Bond shall be
established on the date of purchase of such Bond as hereinafter provided. The
Registered Owner
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of any Bond bearing interest at a Taxable or Flexible Rate and tendered for
purchase as provided in this Section 4.2(a) shall provide the Paying Agent with
payment instructions for the purchase price of its Bond upon tender thereof to
the Paying Agent.
(b) Remarketing of Tendered Bonds. Not later than 12:00 noon, New York
City time, on each purchase date, the Remarketing Agent shall offer for sale and
use its best efforts to find purchasers for all Bonds bearing interest at
Taxable or Flexible Rates required to be purchased on such purchase date at a
Purchase Price of 100% of the principal amount thereof, plus accrued interest,
if any, on the ensuing purchase dates. In remarketing the Bonds, the Remarketing
Agent shall offer and accept purchase commitments for the Bonds for such Taxable
or Flexible Rate Periods and at such Taxable or Flexible Rates as it deems to be
advisable in order to minimize the net interest cost on the Bonds taking into
account prevailing market conditions; provided, however, that the foregoing
shall not prohibit the Remarketing Agent from accepting purchase commitments for
longer Taxable or Flexible Rate Periods (and at higher Taxable or Flexible
Rates) than are otherwise available at the time of any remarketing if the
Remarketing Agent determines that, taking into account prevailing market
conditions, a lower net interest cost on the Bonds can be achieved over the
longer Taxable or Flexible Rate Period; provided, however, that, notwithstanding
the foregoing, no Taxable or Flexible Rate Period may be established which
exceeds 270 days and provided further that, if the Remarketing Agent has given
or received notice of conversion of any Bond to a Variable Rate Period or Fixed
Rate Period, the Remarketing Agent shall not establish a Taxable or Flexible
Rate Period for the Bonds to be converted which exceeds the remaining number of
days prior to the Conversion Date. 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 Paying Agent in immediately available funds in
exchange for Bonds registered in the name of the new Registered Owner delivered
by the Paying Agent to the Remarketing Agent at or before 2:15 p.m., New York
City time, on the purchase date. Such payment by the Remarketing Agent pursuant
to authorization shall be made no later than 3:00 p.m., New York City time, on
such date.
(c) Purchase of Tendered Bonds. The provisions of Section 4.1(e) shall
apply to tenders pursuant to this Section 4.2, provided that, for the purpose of
so applying such provisions:
(i) The notices required pursuant to Section 4.1(e)(i) shall
be given on the purchase date at or before (A) 1:00 p.m., New York City
time, in the case of the notice from the Remarketing Agent as to the
principal amount of Bonds remarketed and information concerning the
purchasers of the Bonds and (B) 1:30 p.m., New York City time, in the
case of the notice from the Paying Agent of the principal amount of
Bonds tendered as to which the Remarketing Agent has not found a
purchaser at that time.
(ii) the manner and time of payment of remarketing proceeds
shall be as specified in Section 4.2(b) above;
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(iii) all payments to tendering Registered Owners shall be
paid in immediately available funds at or before 3:00 p.m., New York
City time, on the purchase date; and
(iv) the deliveries of Bonds under Section 4.2(a) shall be
required to be made at or before 3:00 p.m., New York City time, on each
purchase date.
SECTION 4.3. Tender Upon Variable, Taxable or Flexible Rate Conversion.
(a) Conversions to Variable Rate Periods. Bonds to be converted
pursuant to Section 3.2(h), 3.2(i) or 3.5(b) hereof, from Taxable or Flexible
Rate Periods to a Variable Rate Period or from any Variable Rate Period to a
different type of Variable Rate Period (other than Tax Exempt Bonds to be
converted from a Weekly Rate Period to a Daily Rate Period or from a Daily Rate
Period to a Weekly Rate Period) or from a Term Rate Period to a Term Rate Period
of a different duration shall be subject to mandatory tender on such date at a
purchase price equal to the principal amount thereof plus accrued interest, if
any.
(b) Conversion to Flexible Rate Periods From Variable Rate Periods. On
any Flexible Rate Conversion Date pursuant to Section 3.3(b) hereof, the Tax
Exempt Bonds are subject to mandatory tender for purchase on the applicable
Conversion Date at a purchase price equal to the principal amount thereof plus
accrued interest, if any.
(c) Notice to Registered Owners. Any notice of a Conversion Date given
to Registered Owners pursuant to Section 3.2(h)(iii), 3.2(i), 3.3(b)(iii) or
3.5(b) hereof shall, in addition to the requirements of such Section, state
whether the Bonds to be converted will be subject to mandatory tender for
purchase on the Conversion Date and the time and place at which Bonds are to be
tendered for purchase.
(d) Remarketing. The Remarketing Agent shall offer for sale and use its
best efforts to find purchasers for the Bonds. The terms of any sale by the
Remarketing Agent shall provide for the payment of the purchase price of
tendered Bonds by the Remarketing Agent to the Paying Agent in immediately
available funds (or next day funds if Bonds are converted from a Semiannual or
Term Rate Period) at or before 12:00 noon, New York City time, on the Conversion
Date (or 2:15 p.m., New York City time, in the case of conversion from a Daily
Rate or Weekly Rate or by 3:00 p.m., New York City time, as provided in Section
4.2(b) in the case of conversion from Taxable or Flexible Rates).
(e) Purchase of Tendered Bonds. The provisions of Section 4.1(e) shall
apply to tenders pursuant to this Section 4.3 with respect to Tax Exempt Bonds
bearing interest at Variable Rates; provided that, for the purpose of applying
such provisions:
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(i) the notices required pursuant to Section 4.1(e)(i) shall
be given as therein described, except that the provisions relating
specifically to Tax Exempt Bonds bearing interest at Daily Rates shall
be disregarded;
(ii) the manner and time of payment of remarketing proceeds
referred to in Section 4.1(e)(ii) shall be as specified in subsection
(d) above;
(iii) all payments to tendering Registered Owners referred to
in Section 4.1(e)(iii) shall be made in immediately available funds
unless the Tax Exempt Bonds to be purchased bear interest at
Semi-annual or Term Rates, in which event such payments shall be made
in next day funds; and
(iv) the deliveries of Bonds under Section 4.1(e)(vi) shall be
required to be made at or before 12:00 noon New York City time (or 1:00
p.m. New York City time, in the case of Bonds bearing interest at Daily
Rates or 3:00 p.m., New York City time in the case of Bonds bearing
interest at Flexible Rates) on the Conversion Date (or 5:00 p.m., New
York City time, on the second (2nd) Business Day prior to the
Conversion Date in the case of Bonds bearing interest at Semiannual or
Term Rates).
The provisions of Section 4.2(c) shall apply to tenders pursuant to
this Section 4.3 with respect to Bonds bearing interest at Taxable or Flexible
Rates.
SECTION 4.4. Tender Upon Fixed Rate Conversion.
(a) Mandatory Tender Upon Conversion. Any Tax Exempt Bonds to be
converted to bear interest at the Fixed Rate pursuant to Section 3.4 hereof
shall be subject to mandatory tender for purchase on the Fixed Rate Conversion
Date at a price equal to the principal amount thereof.
(b) Notice to Registered Owners. The Paying Agent shall give notice of
conversion to Registered Owners affected thereby stating that the Tax Exempt
Bonds to be converted will be subject to mandatory tender for purchase on the
Conversion Date and the time and place at which the Tax Exempt Bonds are to be
tendered for purchase.
(c) Remarketing. The Remarketing Agent shall offer for sale and use its
best efforts to find purchasers for the Tax Exempt Bonds; provided that, in no
event shall the Remarketing Agent sell any such Bond to any Person unless the
Remarketing Agent has advised such Person of the fact that, after the Fixed Rate
Conversion Date, the Tax Exempt Bonds will no longer be subject to tender at the
option of the Registered Owner. The terms of any sale by the Remarketing Agent
shall provide for the payment of the purchase price to the Paying Agent of the
tendered Tax Exempt Bonds in immediately available funds (or next day funds in
the event of a conversion from a Semiannual Rate or Term Rate) at or before
12:00 noon, New York City time, or 2:15 p.m., New York City time, if the
conversion is from Daily or Weekly Rates or
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3:00 p.m., New York City time, as described in Section 4.2(b) upon conversions
from Flexible Rates on the Fixed Rate Conversion Date.
(d) Purchase of Tendered Bonds. The provisions of Section 4.1(e) shall
apply to mandatory tenders pursuant to this Section 4.4; provided that, for the
purpose of so applying such provisions:
(i) the notices required pursuant to Section 4.1(e)(i) shall
be given as therein described, except that the provisions relating
specifically to Tax Exempt Bonds bearing interest at Daily Rates shall
be disregarded;
(ii) the manner and time of payment of remarketing proceeds
referred to in Section 4.1(e)(ii) shall be as specified in subsection
(c) above; and
(iii) the deliveries of Tax Exempt Bonds under Section
4.1(e)(vi) shall be required to be made at or before 12:00 noon, New
York City time (or 1:00 p.m., New York City time, in the case of Tax
Exempt Bonds bearing interest at Daily Rates or 3:00 p.m., New York
City time in the case of Tax Exempt Bonds bearing interest at Flexible
Rates) on the Conversion Date (or 5:00 p.m., New York City time, on the
second (2nd) Business Day prior to the Conversion Date in the case of
Bonds bearing interest at Semiannual or Term Rates).
SECTION 4.5. Inadequate Funds for Tenders. If the funds available for
purchases of Bonds pursuant to this Article IV are inadequate for the purchase
of all Bonds tendered on any purchase date, the Paying Agent shall, after any
applicable grace period: (a) return all tendered Bonds to the Registered Owners
thereof; (b) return all moneys received for the purchase of such Bonds to the
Persons providing such moneys; and (c) notify the Trustee of the return of such
Bonds and moneys and the failure to make payment for tendered Bonds.
SECTION 4.6. Tenders or Waivers by Investment Companies. The Registered
Owner of any Bond issued hereunder that is an Investment Company, or is holding
Bond(s) on behalf of an Investment Company, may, at its option, notify the
Remarketing Agent and the Paying Agent of such fact in writing and in such
notice irrevocably elect or offer on the purchase date to have its Bond(s)
purchased on the next date on which such Bond(s) may be purchased pursuant to
Section 4.1 hereof. The notice from the purchaser shall contain the information
required under Section 4.1(b) hereof. Any notice delivered by an Investment
Company with respect to its Bond(s) shall be irrevocable with the same effect
described in Section 4.1(b)(iii).
SECTION 4.7. Notice from Beneficial Owners. Upon receipt by the Paying
Agent of a notice of tender as described in this Article from any Beneficial
Owner of the Bonds, the Paying Agent shall notify, by telephone, promptly
confirmed in writing, in the case of a Daily or Weekly Rate, and in writing by
facsimile in all other cases, the Remarketing Agent of the receipt by the Paying
Agent of such notice of tender.
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ARTICLE V
DEPOSIT OF BOND PROCEEDS
SECTION 5.1. Deposit of Proceeds of Bonds. The proceeds of the Bonds
delivered to the Trustee pursuant to Section 2.1 hereof shall be applied by the
Trustee as follows:
(a) in the Debt Service Fund, established pursuant to Section 6.1
hereof, a sum equal to the accrued interest, if any, paid by the initial
purchasers of the Bonds, and
(b) in the Construction Fund, established pursuant to Section 6.1
hereof, the balance of the proceeds received from the initial purchaser(s) of
the Bonds.
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ARTICLE VI
DEBT SERVICE FUND, REDEMPTION FUND
AND CONSTRUCTION FUND
SECTION 6.1. Establishment of Funds and Accounts. The Issuer hereby
establishes with the Trustee the Debt Service Fund, the Redemption Fund and the
Construction Fund.
SECTION 6.2. Debt Service Fund. The Trustee shall maintain the Debt
Service Fund as follows:
(a) The Trustee shall deposit into the Debt Service Fund all payments
received pursuant to Section 5.4 of the Agreement.
(b) Moneys on deposit in the Debt Service Fund shall be transferred to
the Paying Agent on or before each Interest Payment Date, principal maturity
date or redemption date for the payment, when due, of (i) the interest payable
on any Bonds on any Interest Payment Date or mandatory redemption date pursuant
to Section 8.1 hereof, and (ii) the principal or redemption price payable on any
Bonds at maturity or upon mandatory redemption or acceleration.
SECTION 6.3. Redemption Fund. The Trustee shall deposit into the
Redemption Fund such amounts as are received from the Company pursuant to
Section 5.9 of the Agreement, if the Company specifies that such moneys are to
be used for redemption of Bonds in advance of their scheduled maturity pursuant
to the provisions of this Indenture. Moneys in the Redemption Fund shall be
applied to the Optional, Extraordinary Optional, or Special Mandatory Redemption
of Bonds pursuant to Article VIII hereof. So long as any moneys are on deposit
in the Redemption Fund, the Trustee shall provide the Company with quarterly
statements of all activity in the Redemption Fund.
SECTION 6.4. Return of Moneys from Non-Presentment of Bonds. If any
Bond shall not be presented for payment when the principal thereof becomes due,
either at maturity, at the date fixed for redemption thereof, or otherwise is
not thereafter presented for payment, or is not delivered for purchase on the
purchase date, any funds which shall be held for such purchase by the Trustee or
the Paying Agent and which remain unclaimed by the Owner of the Bond not
presented for payment for a period of two (2) years after such due date thereof,
shall, upon request in writing by the Company, and subject to applicable
unclaimed property or similar law of the State, be paid to the Company as an
overpayment of the Installment Sale Payments under the Agreement free of any
trust or lien and thereafter the Registered Owner of such Bond shall look only
to the Company for payment without any interest thereon, and neither the Trustee
nor the Paying Agent shall have any further responsibility with respect to such
moneys. The Trustee shall notify the Company in writing of such amounts on
deposit for more than two (2) years. Any amount so retained by the Trustee shall
be invested in an interest bearing demand deposit account and the earnings
thereon shall be returned to the Company. In the event any funds are
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paid to the Company under the preceding sentence, the Trustee or the Paying
Agent shall at the time of payment to the Company of such funds also notify the
Company of the numbers of the Bonds that have not been presented for payment and
the names of the Owners thereof. In addition, if at any time after there are no
longer any Bonds Outstanding the Trustee determines that the amounts on deposit
in the Funds and accounts created under this Indenture are in excess of the
amounts necessary to pay the Bond Obligations, the Trustee shall pay such excess
to the Company as an overpayment of Installment Sale Payments under the
Agreement free of any trust or lien.
SECTION 6.5. Reserved.
SECTION 6.6. Construction Fund. The proceeds of the sale of the Bonds,
except accrued interest thereon, shall be deposited by the Trustee in the
Construction Fund and shall be used to pay Facilities Costs (including Costs of
Issuance) as provided in Section 3.2 of the Agreement. Any amounts remaining
after delivery of the Completion Certificate shall be used by the Trustee as
provided in Section 3.2 of the Agreement.
SECTION 6.7. Moneys to be Held for All Registered Owners, With Certain
Exceptions. Until applied as herein provided, moneys and investments held in all
Funds and accounts established hereunder shall be held in trust for the benefit
of the Registered Owners of all Outstanding Bonds, except that on and after the
date on which the interest on or principal or redemption price of any particular
Bond or Bonds is due and payable from the Debt Service Fund or Redemption Fund,
the unexpended balance of the amount deposited or reserved in either or both of
such Funds for the making of such payments shall, to the extent necessary
therefor, be held for the benefit of the Registered Owner or Registered Owners
entitled thereto.
SECTION 6.8. Additional Accounts and Subaccounts. At the written
request of the Company, the Trustee shall establish and maintain additional
accounts within the Funds or subaccounts within the accounts established
hereunder as the Company may reasonably request; provided that (a) in each case,
the written request of the Company shall set forth in reasonable detail the
sources of deposits into and disbursements from the account or subaccount to be
established, (b) in each case, the sources of deposits into and disbursements
from the account or subaccount to be established shall be limited to the sources
of deposits permitted or required to be made into and the disbursements
permitted or required to be made from the fund or account within which it is to
be established, and (c) each additional account or subaccount established
hereunder shall be held in trust for the benefit of the Registered Owners of all
Outstanding Bonds, except as provided in Section 6.7 hereof.
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ARTICLE VII
INVESTMENTS; ARBITRAGE BOND COVENANT
SECTION 7.1. Investment of Funds. Pending disbursement of the amounts
on deposit in any Fund, the Trustee is hereby directed to invest and reinvest
such amounts in Investment Securities promptly upon receipt of, and, subject to
the limitations set forth in this Article, in accordance with the instructions
of the Company. All such investments shall be credited to the Fund from which
the money used to acquire such investments shall have come, and all income and
profits on such investments shall be credited to, and all losses thereon shall
be charged against, such Fund. As amounts invested are needed for disbursement
from any Fund, the Trustee shall cause a sufficient amount of the investments
credited to that Fund to be redeemed or sold and converted into cash to the
credit of that Fund. The Trustee shall not be liable or responsible for any loss
resulting from any such investment or reinvestment as herein authorized; except
that the Trustee shall be liable for any loss resulting from its willful or
negligent failure, within a reasonable time after receiving the direction from
the Company to make any investment or reinvestment in the manner provided for
herein at the Company's direction. If the Trustee is unable, after reasonable
effort and within a reasonable time, to make any such investment or
reinvestment, it shall so notify in writing the Company and thereafter the
Trustee shall be relieved of all responsibility with respect thereto.
The Company by its execution of the Agreement covenants to restrict the
investment of money in the Funds created under this Indenture in such manner and
to such extent, if any, as may be necessary, so that the Tax Exempt Bonds will
not constitute arbitrage bonds under Section 148 of the Code and the
Regulations, and the Trustee hereby agrees to comply with the Company's
instructions with respect to the investment of money in the Funds created under
this Indenture.
SECTION 7.2. Arbitrage Covenant. With respect to the authority to
invest funds granted in this Indenture, the Issuer and the Trustee hereby
covenant with the Bondholders that, subject to the Company's direction of the
investment of funds, they will make no use of the proceeds of the Tax Exempt
Bonds, or any other funds which may be deemed to be proceeds of the Tax Exempt
Bonds pursuant to Section 148 of the Code, which would cause the Tax Exempt
Bonds to be "arbitrage bonds" within the meaning of such Section.
The Trustee shall provide such information as the Company may request
to enable the Company to calculate the amount of gross earnings on the Debt
Service Fund.
SECTION 7.3. Covenants Regarding Tax Exemption. The Issuer covenants to
refrain from any action which would adversely affect, or to take such action as
is reasonable and available and within its control to assure, the treatment of
the Tax Exempt Bonds as obligations described in Section 103 of the Code, and to
assure with respect to the Tax Exempt Bonds that the interest on such Tax Exempt
Bonds will not be includable in the "gross income" of the
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holder (other than the income of a "substantial user" of the Facilities or a
"related person" within the meaning of Section 147(a) of the Code) for purposes
of federal income taxation.
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ARTICLE VIII
REDEMPTION OF BONDS
SECTION 8.1. Bonds Subject to Redemption. The Bonds shall be subject to
redemption prior to maturity as set forth below:
(a) Optional Redemption. Bonds shall be subject to redemption at the
option of the Issuer, in whole or in part, at the direction of the Company, from
funds available for such purpose in the Redemption Fund, as follows:
(i) If the Bonds bear interest at Taxable, Flexible, Daily,
Weekly, Monthly, Quarterly or Semiannual Rates, the Bonds shall be
subject to Optional Redemption on any Interest Payment Date at an
Optional Redemption price equal to 100% of the principal amount
thereof, plus accrued interest to the redemption date.
(ii) After conversion to the Fixed Rate or if the Bonds bear
interest at a Term Rate, the Bonds shall be subject to Optional
Redemption at any time on and after the dates and at the Optional
Redemption prices set forth below, together with accrued interest, if
any, to the redemption date:
<TABLE>
<CAPTION>
================================================================================================
Length of Term Rate Period
or Years to Maturity
After Fixed Rate Conversion Redemption Prices
- ------------------------------------------------------------------------------------------------
<S> <C>
Greater than 13 After 10 years at 102%, declining by
1/2 of 1% every 12 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 13 and greater After 5 years at 102%, declining by1/2
than 10 of 1% every 12 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 10 and greater After 4 years at 101 1/2%, declining by
than 7 1/2 of 1% every 6 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 7 and greater After 3 years at 101%, declining by1/2
than 4 of 1% every 6 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 4 and greater After 2 years at 100 1/2%, declining by
than 3 1/2 of 1% every 6 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 3 and greater After 1 year at 100 1/2%, declining by
than 2 1/2 of 1% every 6 months to 100%
- ------------------------------------------------------------------------------------------------
Less than or equal to 2 and greater After 1 year at 100%
than 1
- ------------------------------------------------------------------------------------------------
Less than or equal to 1 Nonredeemable
================================================================================================
</TABLE>
49
<PAGE>
Notwithstanding the Optional Redemption provisions stated in (ii)
above, such redemption provisions may be revised by the Remarketing Agent in
connection with a conversion to a Term Rate Period or a Fixed Rate Period upon
delivery by the Company of a Favorable Opinion of Bond Counsel in form
satisfactory to the parties. In determining any revisions to the Optional
Redemption provisions, the Remarketing Agent shall take into account redemption
provisions and call protection for securities having an investment quality which
is, in the judgment of the Remarketing Agent, approximately the same as the
Bonds.
(b) Extraordinary Optional Redemption. Bonds shall be subject to
redemption at the direction of the Company in whole or in part at any time, as
described below, at an Extraordinary Optional Redemption price equal to 100% of
the principal amount thereof, plus accrued interest to the redemption date, if
one or more of the following events shall have occurred:
(i) Damage or destruction to the Plant or the Facilities 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 Facilities, 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; or
(ii) Loss of title to or use of a substantial part of the
Plant or the Facilities 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; or
(iii) Any event occurs which, in the opinion of the Company's
board of directors (expressed in a resolution), renders the Facilities
or the Plant so uneconomical that they or it are abandoned.
(c) Special Mandatory Redemption. The Bonds, other than Taxable Bonds,
are subject to Special Mandatory Redemption prior to maturity not later than 180
days after the occurrence of a Determination of Taxability at a redemption price
equal to 100% of the principal amount thereof, plus accrued interest to the
redemption date. Any such Special Mandatory Redemption shall be in whole unless
the Trustee receives an opinion of Bond Counsel that the interest on an amount
less than all the Bonds (other than Taxable Bonds) is so includable in the gross
income of Registered Owners, in which case only such amount need be redeemed.
If the Trustee receives written notice from any Registered Owner
stating that (i) the Registered Owner has been notified in writing by the
Internal Revenue Service that it proposes
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<PAGE>
to include the interest on any Bond (other than Taxable Bonds) in the gross
income of such Registered Owner for the reasons stated in the definition of
"Determination of Taxability" set forth herein or any other proceeding has been
instituted against such Registered Owner which may lead to a Final
Determination, and (ii) such Registered Owner will afford the Company the
opportunity to contest the same, either directly or in the name of the
Registered Owner, and until a conclusion of any appellate review, if sought, and
the Trustee is satisfied that such information is accurate, then the Trustee
shall promptly give notice thereof to the Company and the Issuer and to the
Registered Owners of all Bonds (other than Taxable Bonds) then Outstanding. The
Trustee shall thereafter coordinate any similar requests or notices it may have
received from other Registered Owners and shall keep informed of the progress of
any administrative proceedings or litigation. If a final determination
thereafter occurs, the Trustee shall make demand for prepayment of the unpaid
Installment Sale Payments under the Agreement or necessary portions thereof from
the Company and give notice of the Special Mandatory Redemption of the
appropriate amount of Bonds (other than Taxable Bonds) on the earliest
practicable date within the required period of 180 days. In taking any action or
making any determination under this Section 8.1(c), the Trustee may rely on an
opinion of counsel.
SECTION 8.2. Selection of Bonds for Redemption. If fewer than all Bonds
subject to redemption are to be redeemed, Bonds shall be selected for redemption
in the following manner:
(a) In the case of any Optional, Extraordinary or Special
Mandatory Redemption, Bonds shall be selected by the Paying Agent for
redemption (i) first, by lot, from Bonds subject to such redemption
(other than Bonds owned by the Company), and (ii) second, from Bonds
subject to such redemption owned by the Company.
(b) In the case of Bonds of varying denominations, each Bond
shall be treated as representing that number of Bonds which is obtained
by dividing the face amount thereof by the smallest authorized
denomination.
SECTION 8.3. Notice of Redemption. The Company shall deliver notice by
first class mail to the Issuer, the Trustee and the Paying Agent of its
intention to prepay the amounts due under the Agreement and cause the Bonds to
be called for Extraordinary, Optional or Special Mandatory Redemption at least
45 days (20 days with respect to Bonds bearing interest at the Daily Rate or
Weekly Rate) prior to the proposed redemption date, except that no prior notice
from the Company shall be necessary in connection with a Special Mandatory
Redemption of Bonds due to the occurrence of a Determination of Taxability. The
Paying Agent shall cause notice of any redemption of Bonds hereunder, which
notice shall be prepared by the Company, to be mailed to the Registered Owners
of all Bonds to be redeemed at the registered addresses appearing in the
registration books kept for such purpose pursuant to Article II hereof. Each
such notice shall (i) be mailed by first class mail at least 30 days (15 days in
the case of Bonds bearing interest at the Daily Rate or Weekly Rate) prior to
the redemption date, (ii) identify the Bonds to be redeemed (specifying the
CUSIP numbers, if any, assigned to the Bonds), (iii) specify the redemption date
and the redemption price, and (iv) state that on the redemption date
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<PAGE>
the Bonds called for redemption will be payable at the principal corporate trust
office of the Paying Agent, that from that date interest will cease to accrue,
and that no representation is made as to the accuracy or correctness of the
CUSIP numbers printed therein or on the Bonds. No defect affecting any Bond,
whether in the notice of redemption or mailing thereof (including any failure to
mail such notice), shall affect the validity of the redemption proceedings for
any other Bonds. In addition, the Paying Agent shall give notice of redemption
of Bonds by mail, first-class postage prepaid at least thirty (30) days (fifteen
(15) days in the case of Bonds bearing interest at the Daily or Weekly Rate)
prior to a redemption date to each registered securities depository and to any
national information service that disseminates redemption notices. Any notice
sent to registered securities depositories or such national information services
shall be sent so that they are received at least two (2) days prior to the
general mailing or publication date of such notice. The Paying Agent shall also
send a notice of prepayment or redemption by first class mail to the Registered
Owner of any Bond who has not sent the Bonds in for redemption sixty (60) days
after the redemption date.
SECTION 8.4. Effect of Redemption. If payment of the redemption price
of the Bonds has been duly provided for on the redemption date, then interest
will cease to accrue, and the Registered Owners will have no rights with respect
to such Bonds nor will they be entitled to the benefits of the Indenture except
to receive payment of the redemption price thereof and unpaid interest accrued
to the date fixed for redemption.
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ARTICLE IX
REPRESENTATIONS AND COVENANTS OF THE ISSUER
SECTION 9.1. General Limitation; Issuer's Representation. The
representations and covenants of the Issuer herein and in any proceeding,
document or certification incidental to issuance of the Bonds shall not create a
pecuniary liability of the Issuer, except to the extent of the Trust Estate, or
the State in any event. The Issuer represents and covenants that it has made no
pledge, assignment or other conveyance of its rights, title and interest in the
Trust Estate except to the Trustee as provided herein.
SECTION 9.2. Payment of Bonds and Performance of Covenants. The Issuer
shall, but only out of the Revenues, promptly pay the principal of, premium, if
any, and interest on the Bonds at the place, on the dates and in the manner
provided in the Bonds. The Issuer shall promptly perform and observe all of its
other covenants, undertakings and obligations set forth in the Financing
Documents.
SECTION 9.3. Enforcement of the Agreement. Subject to Section 9.4
hereof, the Trustee may enforce against the Company or any Person any rights of
the Issuer or obligations of the Company under or arising from the Bonds or the
Agreement, whether or not the Issuer is in default hereunder or under the Bonds,
but the Trustee shall not be deemed to have thereby assumed the obligations of
the Issuer under the Agreement. The Issuer shall fully cooperate with the
Trustee in the enforcement by the Trustee of any such rights.
At the request of the Trustee and upon provision for reasonable
indemnification to the Issuer, the Issuer shall (i) in its name commence legal
action or take such other actions as the Trustee shall reasonably request to
enforce the rights of the Issuer or the Trustee under or arising from the Bonds
or the Agreement, and (ii) cooperate in any effort of the Trustee on behalf of
the Issuer to enforce the Agreement, or any remedy provided in Section 7.1 of
the Agreement.
SECTION 9.4. No Personal Liability. No director, officer or employee of
the Issuer, including any person executing the Financing Documents on behalf of
the Issuer and no individual officer, employee or agent of the Company shall be
liable personally on the Bonds or be subject to any personal liability for any
reason relating to the issuance of the Bonds.
SECTION 9.5. Exemption from Federal Income Taxation. The Issuer will
not knowingly take any action, or omit to take any action, which action or
omission will adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Tax Exempt Bonds, and in the event of
such action or omission will promptly, upon receiving knowledge thereof, take
all lawful actions, based on advice of counsel and at the expense of the
Company, as may rescind or otherwise negate such action or omission.
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ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default Defined. (a) Each of the following
shall be an Event of Default hereunder:
(i) payment of any installment of interest, principal,
redemption price or Purchase Price on the Bonds is not made within one
Business Day of the date it becomes due and payable (except when the
Rate Period is one year or longer, in which case the grace period shall
be five Business Days); or
(ii) the occurrence of an Event of Default under Article VIII
of the Agreement.
(b) The Trustee shall immediately notify the Issuer and the Company of
the occurrence of any Event of Default.
SECTION 10.2. Acceleration and Annulment Thereof. (a) If any Event of
Default has occurred and is continuing the Trustee may and, at the written
direction of the Registered Owners of 25% or more in principal amount of the
Bonds then Outstanding, shall, by notice in writing to the Issuer and the
Company, declare the principal of all Bonds then Outstanding to be immediately
due and payable, and upon such declaration, the said principal, together with
interest accrued thereon, shall become due and payable immediately at the place
of payment provided therein, anything in this Indenture or in the Bonds to the
contrary notwithstanding; provided, however, that no such declaration shall be
made if the Company cures such Event of Default prior to the date of the
declaration.
(b) If after the principal then due on the Bonds has been so declared
to be due and payable, and the redemption price and purchase price then due and
all arrears of interest upon the Bonds are paid or caused to be paid by the
Issuer, and the Issuer also performs or causes to be performed all other things
in respect to which it may have been in default hereunder and pays or causes to
be paid the reasonable charges of the Trustee, the Registered Owners, plus
reasonable attorney's fees, or any such default is waived as provided in Section
10.13, then, and in every such case, the Trustee may or, upon the direction in
writing of the Registered Owners of a majority in principal amount of the Bonds
then Outstanding, shall annul such declaration and its consequences and such
annulment shall be binding upon the Trustee and upon all Registered Owners of
Bonds issued hereunder. No such annulment shall extend to or affect any
subsequent default or impair any right or remedy consequent thereon.
SECTION 10.3. Legal Proceedings by Trustee. If any Event of Default has
occurred and is continuing, the Trustee in its discretion may, and upon the
written request of
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<PAGE>
the Registered Owners of 25% or more in principal amount of the Bonds then
Outstanding and receipt of indemnity to its satisfaction shall, in its own name;
(a) By mandamus, or other suit, action or proceeding at law or
in equity, enforce all rights of the Registered Owners, including the
right to require the Issuer or the Company to carry out any other
agreements with, or for the benefit of, the Registered Owners;
(b) Bring suit upon the Bonds;
(c) By action or suit in equity require the Issuer to account
as if it were the trustee of an express trust for the Registered
Owners; and
(d) By action or suit in equity enjoin any acts or things
which may be unlawful or in violation of the rights of the Registered
Owners.
SECTION 10.4. Discontinuance of Proceedings by Trustee. If any
proceeding taken by the Trustee on account of any default is discontinued or is
determined adversely to the Trustee, then the Issuer, the Trustee, the Company
and the Registered Owners shall be restored to their former positions and rights
hereunder as though no such proceeding had been taken.
SECTION 10.5. Registered Owners May Direct Proceedings. The Registered
Owners of a majority in principal amount of the Bonds then Outstanding hereunder
shall have the right to direct the method and place of conducting all remedial
proceedings by the Trustee hereunder, provided such directions shall not be
otherwise than in accordance with law or the provisions of this Indenture, and
that the Trustee shall have the right to decline to follow any such direction
which in the opinion of the Trustee would be unjustly prejudicial to Registered
Owners not parties to such direction.
SECTION 10.6. Limitations on Actions by Registered Owners. No
Registered Owner shall have any right to pursue any remedy hereunder unless (a)
the Trustee shall have been given written notice of an Event of Default, (b) the
Registered Owners of at least 25% in principal amount of the Bonds then
Outstanding shall have requested the Trustee, in writing, to exercise the powers
hereinabove granted or to pursue such remedy in its or their name or names, (c)
the Trustee shall have been offered indemnity satisfactory to it against costs,
expenses and liabilities, and (d) the Trustee shall have failed to comply with
such request within a reasonable time. Notwithstanding any other provision of
this Indenture, the right of any Registered Owner 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 Registered Owner.
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<PAGE>
SECTION 10.7. Trustee May Enforce Rights Without Possession of Bonds.
All rights under this Indenture and the Bonds may be enforced by the Trustee
without the possession of any Bonds or the production thereof at the trial or
other proceedings relative thereto, and any proceeding instituted by the Trustee
shall be brought in its name for the ratable benefit of the Registered Owners of
the Bonds.
SECTION 10.8. Remedies Not Exclusive. Except as limited under Section
16.1 of this Indenture no remedy herein conferred is intended to be exclusive of
any other remedy or remedies, and each remedy is in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.
SECTION 10.9. Delays and Omissions Not to Impair Rights. No delay or
omission in respect of exercising any right or power accruing upon any default
shall impair such right or power or be a waiver of such default, and every
remedy given by this Article may be exercised from time to time and as often as
may be deemed expedient.
SECTION 10.10. Application of Moneys. All moneys received by the
Trustee pursuant to any right given or action taken under the provisions of this
Article shall, after payment of the costs and expenses of the proceedings
resulting in the collection of such moneys and of the expenses, liabilities and
advances incurred or made by the Trustee, or the Paying Agent be deposited in
the Debt Service Fund and all moneys in the Debt Service Fund shall be applied,
as follows:
(a) Unless the principal of all of the Bonds shall have become
or shall have been declared due and payable, all such moneys shall be
applied:
First - to the payment to the persons entitled
thereto of all interest then due on the Bonds (other than
Bonds owned by the Company) or if the amount available shall
not be sufficient for such purpose, then to the payment
ratably, to the persons entitled thereto (other than Bonds
owned by the Company) without any discrimination or privilege;
and
Second - to the payment to the persons entitled
thereto, (other than Bonds owned by the Company) of the unpaid
principal or principal component of the Purchase Price of any
of the Bonds which shall have become due or are required to be
purchased (other than Bonds matured or called for redemption
for the payment of which moneys and/or Government Obligations
are held pursuant to this Indenture), in the order of their
due or purchase dates, with interest on such Bonds from the
respective dates upon which they become due and, if the amount
available shall not be sufficient to pay in full Bonds due or
required to be purchased on any particular date, together with
such interest, then to the payment ratably, according to the
amount of principal due or required to be purchased on
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<PAGE>
such date, to the persons entitled (other than Bonds owned by
the Company) thereto without any discrimination or privilege.
(b) If the principal of all the Bonds shall have become due or
shall have been declared due and payable, all such moneys shall be
applied to the payment of the principal and the interest then due and
unpaid upon the Bonds (other than installments of interest, and amounts
of principal of Bonds matured or called for redemption, for the payment
of which moneys and/or Government Obligations are held pursuant to this
Indenture) without preference or priority of principal over interest or
of interest over principal, or of any installment of interest over any
other installment of interest, or of any Bond over any other persons
entitled thereto without any discrimination or privilege.
(c) If the principal of all the Bonds shall have been declared
due and payable, and if such declaration shall thereafter have been
rescinded and annulled under the provisions of this Article, then,
subject to the provisions of paragraph (b) of this Section in the event
that the principal of all the Bonds shall later become due or be
declared due and payable, the moneys shall be applied in accordance
with the provisions of paragraph (a) of this Section.
Whenever moneys are to be applied pursuant to the provisions of this
Section, such moneys shall be applied as soon as practicable as the Trustee
shall in good faith determine having due regard to the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such funds, it shall fix the date (which shall be the date of acceleration of
the Bonds or if there shall not have been an acceleration, such date as shall be
determined by the Trustee) upon which such application is to be made and upon
such date interest on the amounts of principal to be paid on such dates shall
cease to accrue. The Trustee shall give such notice as it may deem appropriate
of the deposit with it of any such moneys and of the fixing of any such date,
and shall not be required to make payment to the holder of any Bond until such
Bond shall be presented to the Trustee.
Any moneys remaining after all other payments required by this Section
shall be paid to the Company.
SECTION 10.11. Trustee's Right to Receiver. The Trustee shall be
entitled as of right to the appointment of a receiver; and the Trustee, the
Registered Owners and any receiver so appointed shall have such rights and
powers and be subject to such limitations and restrictions as are permitted by
law.
SECTION 10.12. Trustee and Registered Owners Entitled to All Remedies.
It is the purpose of this Article to make available to the Trustee and
Registered Owners all lawful remedies; but should any remedy herein granted be
held unlawful, the Trustee and the Registered Owners shall nevertheless be
entitled to every other remedy provided by law. It is
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<PAGE>
further intended that, insofar as lawfully possible, the provisions of this
Article shall apply to and be binding upon any trustee or receiver who may be
appointed hereunder.
SECTION 10.13. Waiver of Past Defaults. The Registered Owners of not
less than a majority in principal amount of the Outstanding Bonds may on behalf
of the Registered Owners of all the Bonds waive any past default hereunder and
its consequences, except a default
(1) in the payment of the principal of, redemption premium, if
any, or interest on, or the Purchase Price of, any Bond, or
(2) in respect of a covenant or provision hereof which under
Article XIV cannot be modified or amended without the consent of the
Registered Owner of each Outstanding Bond.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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ARTICLE XI
THE TRUSTEE
SECTION 11.1. Certain Duties and Responsibilities of Trustee. (a) The
Trustee accepts the trusts hereby created and agrees to perform the duties
herein required of it upon the terms and conditions hereof. The Trustee shall
have the right, power and authority, at all times, to do all things not
inconsistent with the express provisions of this Indenture which it may deem
necessary or advisable in order to: (i) enforce the provisions of this
Indenture, (ii) take any action with respect to any Event of Default, (iii)
institute, appear in or defend any suit or other proceeding with respect to an
Event of Default, or (iv) protect the interests of the Owners of any Outstanding
Bonds. The Trustee shall be responsible only for performing those duties of the
Trustee specifically provided for herein and no implied duties or liabilities
shall be read into this Indenture against the Trustee.
(b) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and, except as provided in the
next succeeding sentence in respect of the period during the continuance of an
Event of Default, the Trustee shall not be liable for any action reasonably
taken or omitted to be taken by it in good faith and reasonably believed by it
to be within the discretion or power conferred upon it hereby, or be responsible
other than for its own negligence or willful misconduct. In case an Event of
Default has occurred and is continuing of which the Trustee has been notified as
provided in Section 11.3(h) or of which it is deemed to have notice pursuant to
such Section, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise under the circumstances in the conduct
of his own affairs.
(c) The Trustee shall not be required to give any bond or surety in
respect of the execution of its rights and duties under this Indenture.
(d) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(i) this subsection shall not be construed to limit the effect
of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by its officers, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with any direction of the Registered Owners
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of a majority in aggregate principal amount of the Outstanding Bonds
permitted to be given by them under this Indenture except as otherwise
provided herein; and
(iv) 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, satisfactory to the Trustee, against such risk or liability
is not assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 11.2. Notice if Default Occurs or Notice if Taxability Occurs.
Within 45 days after the occurrence of any default hereunder, the Trustee shall
give to the parties to the Financing Documents and the Registered Owners written
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, in the case of a default of
the character described in Section 10.1(a)(iii) or (iv), the Trustee shall be
protected in withholding such notice if and so long as the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Registered Owners; and provided, further, that in the case of any default of the
character described in Section 10.1(a)(iii) or (iv) no such notice to Registered
Owners shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default. The
Trustee shall also give to the parties to the Financing Documents and the
Registered Owners notice of receipt by it of any notification from the Internal
Revenue Service that the interest on the Bonds is, or may be, subject to federal
income taxation.
SECTION 11.3. Certain Rights of Trustee. Except as otherwise provided
in Section 11.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Issuer or the Company mentioned
herein shall be sufficiently evidenced by a writing signed by an Issuer
Representative or an Authorized Company Representative and any resolution of the
Issuer may be sufficiently evidenced by a copy of such resolution certified by
an Issuer Representative;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action
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hereunder, the Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon a certificate of an
Authorized Company Representative or Issuer Representative;
(d) the Trustee may consult with counsel, engineers or other experts as
may be appropriate, and the written advice of such counsel, engineers or other
experts as may be appropriate shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Registered Owners pursuant to this Indenture, unless such Registered
Owners shall have offered to the Trustee security or indemnity acceptable to the
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice and during regular
business hours, and subject, further to the Company's safety and confidentiality
requirements to examine the books, records and premises of the Company and the
books and records of the Issuer concerning the Bonds personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys provided that the Trustee shall be responsible for any
misconduct or negligence on the part of any agent or attorney appointed by it
hereunder; and
(h) the Trustee shall not be required to take notice or be deemed to
have notice of any default hereunder unless the Trustee shall be specifically
notified of such default in writing by the Issuer, or the Company or by the
Owners of a majority in principal amount of the Outstanding Bonds, and in the
absence of such notice the Trustee may conclusively assume there is no default;
provided, however, that the Trustee shall be required to take and be deemed to
have notice of its failure to receive the moneys necessary to make payments when
due of the Bond Obligations.
SECTION 11.4. Not Responsible for Recitals or Issuance of Bonds. The
recitals contained herein and in the Bonds, except the certificate of
authentication signed on behalf of the Paying Agent as bond registrar, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture, except that the Trustee represents that said
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Indenture has been duly authorized, executed and delivered by the Trustee and
constitutes a legal, valid and binding obligation of the Trustee in accordance
with the terms hereof, except as its enforceability may be subject to (i) the
exercise of judicial discretion in accordance with general equitable principles;
and (ii) applicable bankruptcy, insolvency, reorganization, moratorium and other
laws for the relief of debtors heretofore or hereafter enacted to the extent
that the same may be constitutionally applied. Further, the Trustee makes no
representations as to the validity or sufficiency of the Bonds. The Trustee
shall not be accountable for the use or application by the Issuer or the Company
of Bonds or the proceeds thereof.
SECTION 11.5. May Hold Bonds. The Trustee or any other agent of the
Issuer or the Company, in its individual or any other capacity, may become the
owner of Bonds and may otherwise deal with the Issuer or the Company with the
same rights it would have if it were not Trustee or such other agent.
SECTION 11.6. Money Held in Trust. All money in the Debt Service Fund
under any provision of this Indenture shall be held in trust for the benefit of
the Owners but, except as provided in Article XV of this Indenture, need not be
segregated from other funds held in trust under this Indenture by the Trustee,
but shall be segregated at all times from all funds of the Issuer or the Trustee
not held by the Trustee under this Indenture. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
provided in this Indenture.
SECTION 11.7. Corporate Trustee Required: Eligibility. There shall at
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America or of any state
that is either a trust company or a bank, authorized under such laws to exercise
trust powers, having a combined capital, surplus and undivided profits of at
least $50,000,000, subject to supervision or examination by federal or state
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 11.8. Resignation and Removal of Trustee: Appointment of
Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 11.9 of this
Indenture.
(b) The Trustee may resign at any time by giving written notice thereof
to the other parties to the Financing Documents. If an instrument of acceptance
by a successor Trustee shall
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not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by the Owners of a majority
in aggregate principal amount of the Outstanding Bonds, by a written request for
removal delivered to the parties to the Financing Documents.
(d) If at any time:
(i) the Trustee shall cease to be eligible under Section 11.7
of this Indenture or under applicable law and shall fail to resign
after written request therefor by any party to a Financing Document or
by a Registered Owner who has been a bona fide Owner for at least six
months, or
(ii) 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, (x) the Company or Issuer may remove the Trustee, or (y)
any Registered Owner who has been a bona fide Owner for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, with the prior consent of the Company, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by the
Owners of a majority in aggregate principal amount of the Outstanding Bonds and
notice of acceptance of such appointment is delivered to the parties to the
Financing Documents, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee and supersede
the successor Trustee appointed by the Issuer. If no successor Trustee shall
have been so appointed by the Issuer or the Registered Owners and accepted
appointment in the manner hereinafter provided, any Registered Owner who has
been a bona fide Registered Owner for at least six months may, on behalf of
himself and all other Owners similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Issuer shall give prompt notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event to
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the Registered Owners and to the parties to the Financing Documents. Each notice
shall include the name of the successor Trustee and the address of its principal
corporate trust office.
SECTION 11.9. Acceptance of Appointment by Successor Trustee. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the parties to the Financing Documents, including the retiring Trustee, an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Issuer or the successor Trustee, such retiring Trustee shall, upon payment
of its charges and expenses, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder. Upon request of
any such successor Trustee, the Issuer shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article, to the extent operative.
SECTION 11.10. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, to the extent operative, without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
SECTION 11.11. Fees, Charges and Expenses of Trustee. Pursuant to the
provisions of Section 5.6 and 7.3 of the Agreement, the Trustee shall be
entitled to be paid by the Company reasonable compensation for its services
rendered hereunder and to reimbursement for its actual out-of-pocket expenses
(including reasonable counsel fees) necessarily incurred in connection
therewith. The Company may, without creating a default hereunder, contest in
good faith the necessity for and the reasonableness of any such services and
expenses after making payment therefor.
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ARTICLE XII
THE PAYING AGENT
SECTION 12.1. The Paying Agent. (a) The Issuer hereby appoints The
Chase Manhattan Bank as the Issuer's Paying Agent for the Bonds. The Paying
Agent shall act in such capacity and as bond registrar, transfer agent,
authenticating agent and tender agent. In taking any action under Article IV of
this Indenture with respect to optional or mandatory tenders of Bonds, the
Paying Agent shall be acting for the Company and not the Issuer notwithstanding
the directions to the Paying Agent described in this Indenture. The Paying Agent
shall signify its acceptance of its duties hereunder by a written instrument of
acceptance filed with the Issuer, the Company, the Trustee and the Remarketing
Agent and shall:
(i) hold all sums delivered to it by the Trustee or the
Company for the payment of principal or redemption price of, premium,
if any, and interest on the Bonds in trust for the benefit of the
Registered Owners until such sums shall be paid to such Registered
Owners or otherwise disposed of as herein provided;
(ii) hold all Bonds tendered to it hereunder in trust for the
benefit of the respective Registered Owners 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 Registered Owners;
(iii) hold all moneys delivered to it hereunder for the
purchase of Bonds in trust for the benefit of the Person or entity
which shall have so delivered such moneys until the Bonds purchased
with such moneys shall have been delivered to or for the account of
such Person or until otherwise disposed of as provided herein; and
(iv) keep such books and records as shall be consistent with
prudent industry practice (including specifically the Bond registration
books) at its principal corporate trust office and make such books and
records available for inspection by the parties hereto, the Company and
the Remarketing Agent at all reasonable times.
(b) Except as otherwise provided in this Article:
(i) the Paying Agent may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) any request or direction of the Issuer or the Company
mentioned herein shall be sufficiently evidenced by a writing signed by
an Issuer Representative or an
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Authorized Company Representative and any resolution of the Issuer may
be sufficiently evidenced by a copy of such resolution certified by an
Issuer Representative;
(iii) whenever in the administration of this Indenture the
Paying Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Paying Agent (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon a certificate of an Authorized Company Representative or
Issuer Representative;
(iv) The recitals contained herein and in the Bonds, except
the Certificate of Authentication signed on behalf of the Paying Agent
as Bond Registrar shall be taken as the statement of the Issuer and the
Paying Agent assumes no responsibility for their correctness.
SECTION 12.2. Paying Agent May Act Through Agents; Answerable Only for
Willful Misconduct or Negligence. The Paying Agent may execute any powers
hereunder and perform any duties required of it through attorneys, agents,
officers, or employees, and shall be entitled to advice of counsel concerning
all questions hereunder; provided that the Paying Agent shall not be answerable
for the negligence or misconduct of any attorney or agent (other than an officer
or an employee) selected by it with reasonable care. The Paying Agent shall not
be answerable for the exercise of any discretion or power under this Indenture,
except only its own negligence or willful misconduct or that of any officer or
employee. No provision of this Indenture shall require the Paying Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of its duties hereunder. The Paying Agent may consult with counsel
and the written advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith in reliance thereon.
SECTION 12.3. Compensation and Indemnity. Pursuant to Section 5.6 of
the Agreement the Company has agreed to pay the Paying Agent reasonable
compensation for its services hereunder, including reasonable compensation for
all attorneys or agents reasonably employed by it, and also all its reasonable
expenses and disbursements, and to indemnify the Paying Agent, including its
officers, directors, employees and agents, against any liabilities which it may
incur in the exercise and performance of its powers and duties hereunder except
with respect to its own negligence or willful misconduct.
SECTION 12.4. Paying Agent May Deal in Bonds. The Paying Agent may in
good faith buy, sell, own, hold and deal in any of the Bonds and may join in any
action which any Registered Owners may be entitled to take with like effect. The
Paying Agent may also engage in or be interested in financial or other
transactions with the Company and the Issuer; provided that such transactions
are not in conflict with its duties under this Indenture.
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SECTION 12.5. Removal or Resignation of Paying Agent. The Issuer, at
the direction of the Company, shall discharge the Paying Agent from time to time
and appoint a successor. The Issuer shall also designate a successor if the
Paying Agent resigns or becomes ineligible. If no Event of Default under the
Agreement has occurred and is continuing, the Company may remove the Paying
Agent and appoint a successor by an instrument filed with the Trustee, the
Paying Agent, and the Issuer. The Paying Agent may resign by giving at least
forty-five (45) days' written notice to the parties hereto, the Company and the
Remarketing Agent. Each successor Paying Agent shall be a bank or trust company
having a capital and surplus of not less than $100,000,000, shall be registered
as a transfer agent with the Securities and Exchange Commission, and shall be
capable of performing the duties prescribed for it herein in New York, New York.
The Paying Agent may but need not be the same person as the Trustee. The Trustee
shall give notice of the appointment of a successor Paying Agent in writing to
each Registered Owner. The Trustee will promptly certify to the Issuer that it
has mailed such notice to all Registered Owners and such certificate will be
conclusive evidence that such notice was given in the manner required hereby. In
the event of the resignation or removal of the Paying Agent, the Paying Agent
shall pay over, assign and deliver any moneys and Bonds, including
unauthenticated Bonds, held by it and the books of registry maintained by it in
such capacity to its successor or, if there be no successor, to the Trustee who
shall hold such Bonds as Paying Agent, and, as required, as tender agent for the
Company.
SECTION 12.6. Successor Paying Agents. (a) Any corporation,
association, partnership or firm which succeeds to the business of the Paying
Agent as a whole or substantially as a whole, whether by sale, merger,
consolidation or otherwise, shall thereby become vested with all the property,
rights and powers of such Paying Agent under this Indenture. In case any Bonds
shall have been authenticated, but not delivered, by the Paying Agent then in
office, any successor by merger, conversion or consolidation to such
authenticating Paying Agent may adopt such authentication and deliver the Bonds,
so authenticated with the same effect as if such Paying Agent had itself
authenticated such Bonds.
(b) If the Paying Agent shall resign or be removed, or be dissolved, or
if the property or affairs by the Paying Agent shall be taken under the control
of any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and the Issuer, with the approval of the
Company, shall not have appointed its successor, the Trustee shall ipso facto be
deemed to be Paying Agent for all purposes until a successor is appointed.
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ARTICLE XIII
THE REMARKETING AGENT
SECTION 13.1. The Remarketing Agent. The Issuer, at the direction of
the Company, appoints Goldman, Sachs & Co. as the Remarketing Agent for the
Taxable Bonds and the Tax Exempt Bonds, subject to the conditions set forth in
Section 13.2 hereof. The Remarketing Agent shall designate its principal office
to the Paying Agent and Trustee and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of acceptance
delivered to the Issuer, the Paying Agent and the Trustee under which the
Remarketing Agent will agree, particularly to:
(a) determine the Taxable Rates or the Variable Rates, the
Flexible Rates and Fixed Rate, as appropriate, and give notice of such
rates in accordance with Article III hereof;
(b) keep such books and records with respect to its duties as
Remarketing Agent as shall be consistent with prudent industry
practice;
(c) use reasonable efforts to remarket Bonds in accordance
with this Indenture;
(d) hold all Bonds delivered to it hereunder for the benefit
of the respective Registered Owners which shall have so delivered 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 Registered
Owners; and
(e) hold all moneys delivered to it hereunder for the purchase
of Bonds for the benefit of the Person or entity which shall have so
delivered such moneys until the Bonds purchased with such moneys shall
have been delivered to or for the account of such Person or entity.
SECTION 13.2. Qualifications of Remarketing Agent. The Remarketing
Agent shall have a capitalization of at least $100,000,000 and be authorized by
law to perform all the duties imposed upon it by this Indenture. The Remarketing
Agent may at any time resign and be discharged of the duties and obligations
created by this Indenture by giving at least thirty (30) days' written notice to
the Issuer, the Company, the Paying Agent and the Trustee. The Remarketing Agent
may be removed at any time at the direction of the Company, by an instrument
filed with the Remarketing Agent, the Issuer, the Paying Agent and the Trustee.
In the event of the resignation or removal of the Remarketing Agent,
the Remarketing Agent shall pay over, assign and deliver any moneys and Bonds
held by it in such capacity to its successor or, if there is no successor, to
the Trustee.
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If the Issuer shall fail to appoint a Remarketing Agent hereunder, or
if the Remarketing Agent shall resign or be removed, or be dissolved, or if the
property or affairs of the Remarketing Agent shall be taken under the control of
any state or federal court or administrative body because of bankruptcy or
insolvency or for any other reason, and the Issuer shall not have appointed its
successor as Remarketing Agent, the Trustee, notwithstanding the provisions of
the first paragraph of this Section 13.2, shall ipso facto be deemed to be the
Remarketing Agent for all purposes of this Indenture until the appointment by
the Issuer of the Remarketing Agent or successor Remarketing Agent, as the case
may be; provided, however, that the Trustee, in its capacity as Remarketing
Agent, shall not be required to sell Bonds or determine the Fixed Rate on the
Bonds or to perform the duties set forth in Sections 3.1, 3.2 or 3.3 hereof.
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ARTICLE XIV
AMENDMENTS AND SUPPLEMENTS
SECTION 14.1. Amendments and Supplements Without Registered Owners'
Consent. This Indenture may be amended or supplemented from time to time,
without the consent of the Registered Owners by a Supplemental Indenture
authorized by a certified resolution of the Issuer filed with the Trustee, for
one or more of the following purposes:
(a) to add additional covenants of the Issuer or to surrender
any right or power herein conferred upon the Issuer; or
(b) to cure any ambiguity or to cure, correct or supplement
any defective (whether because of any inconsistency with any other
provision hereof or otherwise) provision of this Indenture in such
manner as shall not be inconsistent with this Indenture and shall not
impair the security hereof or adversely affect the Registered Owners;
or
(c) to provide procedures permitting Registered Owners to
utilize an uncertificated system of registration for Bonds or for the
issuance of Bonds pursuant to a book entry system with a securities
depository or other entity; or
(d) to modify, alter, amend, supplement or restate this
Indenture in any and all respects necessary, desirable or appropriate
in connection with the delivery to the Trustee of a letter of credit or
other security arrangement obtained or provided by the Company but only
to the extent such supplement does not adversely affect any then
current rating from Moody's or S&P on the Bonds; or
(e) to modify, alter, amend, supplement or restate this
Indenture in any and all respects necessary, desirable or appropriate
in order to satisfy the requirements of any rating agency which may
from time to time provide a rating on the Bonds, or in order to obtain
or retain such rating on the Bonds as is deemed necessary by the
Company and the Remarketing Agent; or
(f) to make any change which in the judgment of the Trustee,
does not adversely affect the rights or security of the Registered
Owners.
SECTION 14.2. Amendments With Registered Owners' Consent.
(a) Consent of Majority. With the consent of the Company and, with
respect to any amendment or supplement which affects the rights and obligations
of the Paying Agent, the Paying Agent, the parties to this Indenture may enter
into Indentures supplemental to this Indenture or amendments to this Indenture
modifying, adding to or eliminating any of the provisions hereof but, if such
supplement or amendment is not of the character described in
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Section 14.1, only with the consent of the Registered Owners of not less than a
majority of the aggregate principal amount of the Outstanding Bonds.
(b) Consent of All Bondholders. Notwithstanding the foregoing, no
supplement or amendment to this Indenture shall, without the consent of the
Registered Owner of each Outstanding Bond so affected, (i) extend the maturity
date of any Bond, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof, or reduce any premium payable
upon the redemption thereof, or extend or reduce the amount of any mandatory
redemption requirement or change the method of calculation of interest on the
Bonds, (ii) deprive such Registered Owner of the lien hereof on the Revenues
pledged hereunder and on the Trust Estate, (iii) decrease the amounts payable by
the Company under Sections 6.4 and 6.5 of the Agreement, (iv) reduce the
aggregate principal amount of Bonds the Registered Owners of which are required
to approve any such supplement or amendment to this Indenture, (v) increase the
percentage of the aggregate principal amount of Bonds the Registered Owners of
which are required to direct the Trustee to accelerate the maturity of the
Bonds, or (vi) provide a privilege or priority of any Bond over any other Bond.
(c) Effective Date of Amendment. The Trustee shall establish a record
date for purposes of approval of any such amendment or supplement described in
subsections (a) and (b) of this Section 14.2, and shall cause notice of such
record date and such proposed amendment to be given in the same manner as
notices of redemption are given by the Trustee. Such notice shall briefly set
forth the nature of the proposed amendment and shall state that copies thereof
are on file at the principal office of the Trustee for inspection by all
Registered Owners. If, within 60 days (or such longer period as shall be
prescribed by the Company) following the mailing of such notice, the Registered
Owners of the requisite aggregate principal amount of the Bonds Outstanding at
the time of the record date established for such purpose shall have consented to
and approved such amendment, no Registered Owner of any Bond shall have any
right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the parties to such amendment from adopting
the same or from taking any action pursuant to the provisions thereof. Upon
receipt of the consent of the Registered Owners of the requisite aggregate
principal amount of the Bonds Outstanding the Issuer and the Trustee may execute
such amendment.
The consent of a Registered Owner shall be evidenced by an instrument
executed by such Registered Owner, delivered to the Trustee, which instrument
shall refer to the proposed amendment described in said notice and shall
specifically consent to and approve such amendment. Any consent given by a
Registered Owner as of such record date shall be irrevocable for a period of six
months from the date such consent is given, and shall be conclusive and binding
upon all future Registered Owners of the same Bond during such period. Such
consent may be revoked at any time after six months from the date such consent
was given by such Registered Owner or by a successor in title, by filing notice
thereof with the Issuer, the Company and the Trustee, but such revocation shall
not be effective if the Registered Owners
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of the requisite aggregate principal amount of the Bonds Outstanding have, prior
to the attempted revocation, consented to and approved such amendment.
Notwithstanding any provision herein to the contrary, no amendment to
this Indenture which affects the rights or obligations of the Paying Agent shall
be effective against the Paying Agent without its written consent.
SECTION 14.3. Amendments to Agreement. The Agreement may be amended by
written agreement of the Issuer and the Company, provided that no amendment may
be made which would adversely affect the rights of some but less than all
Outstanding Bonds without the consent of (a) the Registered Owners of 51% in
aggregate principal amount of the Bonds then Outstanding and (b) the Registered
Owners of 51% in aggregate principal amount of the Bonds so affected; and no
amendment may be made which would (i) decrease the amounts payable under the
Agreement; (ii) change the date of payment or prepayment provisions under the
Agreement; or (iii) change the amendment provisions of the Agreement without the
consent of all of the Registered Owners of the Bonds adversely affected thereby,
and provided further that the Agreement may be amended by written agreement of
the Issuer and the Company in order to make conforming changes with respect to
amendments made to this Indenture pursuant to Section 14.1(e).
SECTION 14.4. Right to Payment. Notwithstanding any other provisions in
this Indenture, the right of the Owner of any Bond to receive payment of the
principal of, and the premium, if any, and interest on, such Bond, on or after
the respective due dates expressed herein, or the Purchase Price of a Bond on or
after the date for its purchase as provided in such Bond, or to institute suit
for the enforcement of any such payment on or after such respective dates, will
not be impaired or affected without the consent of such Owner.
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ARTICLE XV
DEFEASANCE
SECTION 15.1. Defeasance. When interest on, and principal or redemption
price (as the case may be) of all Bonds issued hereunder have been paid, or
there shall have been deposited with the Trustee an amount, evidenced by moneys
or Government Obligations the principal of and interest on which, when due, will
provide sufficient moneys to fully pay the Bonds at the maturity date or date
fixed for redemption thereof, as well as the Purchase Price of tendered Bonds on
any optional or mandatory purchase date and all other sums payable hereunder by
the Issuer, the right, title and interest of the Trustee shall thereupon cease
and the Trustee, on demand of the Issuer, shall release this Indenture and shall
execute such documents to evidence such release as may be reasonably required by
the Issuer and, after paying any remaining amounts owed to the Issuer, Trustee
and Paying Agent, shall turn over to the Company or to such person, body or
Issuer as may be entitled to receive the same all balances remaining in any
funds hereunder.
SECTION 15.2. Deposit of Funds for Payment of Bonds. (a) If the Issuer
deposits with the Trustee moneys or Government Obligations the principal of and
interest on which are sufficient (without reinvestment) to pay the principal or
redemption price and purchase price of any particular Bond or Bonds becoming
due, either at maturity or by call for redemption or optional or mandatory
purchase or otherwise, together with all interest accruing thereon (provided
that interest shall be computed at the Maximum Rate to the extent that any
interest accruing on the Bonds cannot be determined as of the date of such
deposit) to the due date, interest on the Bond or Bonds shall cease to accrue on
the due date and all liability of the Issuer with respect to such Bond or Bonds
shall likewise cease, except as provided in subsection (b) below, provided, that
with respect to any Bonds which are to be called for redemption, notice of
redemption of such Bonds shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of such
notice for the redemption of such Bonds on the specified redemption date.
Thereafter such Bond or Bonds shall be deemed not to be Outstanding hereunder
and the Registered Owner or Registered Owners of such Bond or Bonds shall be
restricted exclusively to the funds so deposited for any claim of whatsoever
nature with respect to such Bond or Bonds, and the Trustee shall hold such funds
in trust for such Registered Owner or Registered Owners. Notwithstanding the
foregoing, no deposit of funds or Government Obligations with the Trustee shall
be deemed sufficient for the payment of any Bond or Bonds and the Bonds shall
not be defeased hereunder until the Issuer or the Company has furnished to the
Trustee a Favorable Opinion of Bond Counsel with respect to the deposit of funds
and/or Government Obligations and the defeasance of Bonds thereby.
(b) Moneys deposited with the Trustee pursuant to Section 15.1 or
15.2(a) hereof shall after the maturity or specified redemption date be invested
as set forth in Section 6.4 hereof, and any such moneys which remain unclaimed
two (2) years after the date payment thereof becomes due shall, upon written
request of the Company, if the Company is not at the
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time to the knowledge of the Trustee in default with respect to any covenant in
the Financing Documents contained, be paid to the Company; and the Registered
Owners of the Bonds for which the deposit was made shall thereafter be limited
to a claim against the Company; provided, however, that the Trustee, before
mailing payment to the Company, may, at the expense of the Company, cause a
notice to be published stating that the moneys remaining unclaimed will be
returned to the Company after a specified date, such notice to be published in a
newspaper or newspapers published at least once a day, six days a week, and
generally circulated in the City of New York, New York. All payments made
hereunder shall be subject to all applicable unclaimed property or similar laws
of the State.
SECTION 15.3. Effect of Defeasance. Notwithstanding anything stated to
the contrary in this Article, no defeasance hereunder shall relieve the Trustee
or Paying Agent of any duty with respect to, or discharge or terminate the
provisions hereof with respect to, the payment, transfer, purchase, exchange,
registration or redemption of Bonds.
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1. Limitations on Recourse, Immunity of Certain Persons. No
recourse shall be had for any claim based on this Indenture or the Bonds against
any past, present or future Indemnified Party, either directly or through the
Issuer or any such successor body, under any constitutional provision, statute
or rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability and all such claims being hereby expressly waived and
released as a condition of, and as consideration for, the execution of this
Indenture and the issuance of the Bonds. The Bonds are payable solely from the
revenues pledged hereunder and other monies held by the Trustee hereunder for
such purpose. The Issuer shall be conclusively deemed to have complied with all
of its covenants and other obligations hereunder, including but not limited to
those set forth in Articles V, VI and IX hereof, upon requiring the Company in
the Agreement to agree to perform such Issuer covenants and other obligations
(excepting only any approvals or consents permitted or required to be given by
the Issuer hereunder, and any exceptions to the performance by the Company of
the Issuer's covenants and other obligations hereunder, as may be contained in
such agreement in the Agreement). However, nothing contained in any such
agreement in the Agreement shall prevent the Issuer from time to time, in its
discretion, from performing any such covenants or other obligations. The Issuer
shall have no liability for any failure to fulfill, or breach by the Company of,
the Company's obligations under the Financing Documents, or otherwise, including
without limitation the Company's obligation to fulfill the Issuer's covenants
and other obligations under this Indenture.
SECTION 16.2. No Rights Conferred on Others. Nothing herein contained
shall confer any right upon any person other than the parties hereto and the
Registered Owners of the Bonds.
SECTION 16.3. Illegal, Etc. Provisions Disregarded. If any term or
provision of this Indenture or the Bonds or the application thereof for any
reason or circumstances shall to any extent be held invalid or unenforceable,
the remaining provisions or the application of such term or provision to persons
and situations other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision hereof and thereof
shall be valid and enforced to the fullest extent permitted by law.
SECTION 16.4. Substitute Publication of Notice. If for any reason it
shall be impossible to make publication of any notice required hereby in a
newspaper or newspapers, then such publication in lieu thereof as shall be made
with the approval of the Trustee shall constitute a sufficient publication of
such notice.
SECTION 16.5. Mailed Notice. All notices required or authorized to be
given to the Company, the Issuer, the Trustee and the Paying Agent, pursuant to
this Indenture shall be
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in writing and shall be sent unless otherwise directed by registered or
certified mail, or overnight mail, postage prepaid, to the following address:
(a) to the Company, to:
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Attention: Treasurer
(b) to the Issuer, to:
The Industrial Development Board
of the Town of Columbia
Town Hall
Columbia, Alabama 36319
Attention: Chairman
(c) to the Trustee, to:
SouthTrust Bank, National Association
100 Office Park Drive
Birmingham, Alabama 35223
Attention: Corporate Trust Department
(d) to the Paying Agent, to:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Department
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(e) to the Remarketing Agent, to:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Municipal Finance Department
or to such other addresses as may from time to time be furnished to the parties,
effective upon the receipt of notice thereof given as set forth above.
SECTION 16.6. Governing Law. This Indenture shall be governed, in all
respects including validity, interpretation and effect by, and shall be
enforceable in accordance with, the laws of the United States of America and of
the State.
SECTION 16.7. Successors and Assigns. All the covenants, promises and
agreements in this Indenture contained by or on behalf of the Issuer or by or on
behalf of the Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed or not.
SECTION 16.8. Action by Company. Any requirement imposed by this
Indenture or the Agreement on the Issuer may, if not performed by the Issuer, be
performed by the Company and such performance by the Company shall constitute
compliance with the requirements of this Indenture or the Agreement as if
performed by the Issuer.
SECTION 16.9. Headings and Subheadings for Convenience Only. The table
of contents and descriptive headings and subheadings in this Indenture are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
SECTION 16.10. Counterparts. This Indenture may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original; but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
by the Chairman or Vice Chairman of its Board of Directors thereunto duly
authorized and its seal to be hereunto affixed and attested by the Secretary or
Assistant Secretary of the Issuer and the Trustee has caused this Indenture to
be executed by its duly authorized officer, all as of the day and year first
above written.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
By: /s/ William D. Lanford, Jr.
Chairman of the Board of Directors
[SEAL]
ATTEST:
By: /s/ E. D. Freeman
Title: Secretary
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
Trustee
By: /s/ Woodie E. Alston
Title: Vice President - Corporate Trust
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EXHIBIT A
TO TRUST INDENTURE
[FORM OF BOND]
No.[T][TE]-_____ CUSIP NO._______
UNITED STATES OF AMERICA
STATE OF ALABAMA
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE TOWN OF COLUMBIA
[TAXABLE][TAX EXEMPT] VARIABLE RATE DEMAND REVENUE BOND
(ALABAMA POWER COMPANY PROJECT)
SERIES 1997
[The following legend shall appear on all Taxable Bonds]
The securities represented hereby have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), or any
state securities laws. Neither this security nor any interest or
participation herein may be reoffered, sold, assigned, transferred,
pledged, encumbered or otherwise disposed of in the absence of such
registration or unless such transaction is exempt from, or not subject
to, registration as set forth below.
By its acquisition hereof, the purchaser (a) represents that
it is a qualified institutional buyer as defined in Rule 144A under the
1933 Act ("QIB") acting on behalf of itself or another QIB (and
acknowledges that it is aware that the seller may rely on an exemption
from the provisions of Section 5 of the 1933 Act pursuant to Rule 144A)
and (b) agrees that any resale hereof will be made only in a
transaction exempt from registration under the 1933 Act and only to
Goldman, Sachs & Co. ("Goldman") or through Goldman to a QIB in a
transaction made under Rule 144A.
[The following legend shall appear so long as the Book-Entry System
described in Section 2.11 of the Indenture has not been discontinued.]
THE ISSUER HAS ESTABLISHED A BOOK ENTRY SYSTEM OF REGISTRATION FOR THIS BOND.
EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE IN THE INDENTURE, CEDE & CO., AS
NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), WILL BE
THE REGISTERED OWNER AND WILL HOLD THIS BOND ON BEHALF OF THE BENEFICIAL OWNER
HEREOF. BY ACCEPTANCE OF A CONFIRMATION OF PURCHASE, DELIVERY OR TRANSFER, THE
BENEFICIAL OWNER OF THIS BOND SHALL BE DEEMED TO HAVE AGREED TO
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SUCH ARRANGEMENT. CEDE & CO., AS REGISTERED OWNER OF THIS BOND,
SHALL BE TREATED AS THE OWNER OF IT FOR ALL PURPOSES.
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE,OR PAYMENT, AND ANY BOND ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
This bond is subject to mandatory tender for purchase at the times and
in the manner hereinafter described and must be so tendered or will be deemed to
have been so tendered under circumstances described herein.
Maturity Date: November 1, 2021
Registered Owner: Cede & Co.
Original Issue Date: November 25, 1997
Principal Amount: _____________________ Dollars ($__________)
THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF COLUMBIA
(the "Issuer"), a public corporation of the State of Alabama (the "State"),
promises to pay (but solely from the sources hereinafter referred to), to the
Registered Owner named above or registered assigns, on the Maturity Date
specified above (unless this Bond shall have been previously called for
redemption in whole or in part and payment of the redemption price shall have
been duly made or provided for) the Principal Amount shown above upon surrender
of this Bond at the principal corporate trust office of the Trustee or Paying
Agent (hereinafter defined) and to pay interest thereon at Taxable, Flexible,
Daily, Weekly, Monthly, Quarterly, Semiannual or Term Rates or at a Fixed Rate
(all as herein described). This Bond shall bear interest from the date of
authentication, if authenticated on an Interest Payment Date (hereinafter
described) to which interest has been paid, or, if this Bond bears interest at a
Daily, Weekly or Monthly Rate, from the last preceding Interest Calculation Date
(hereinafter described), or from the last preceding Interest Payment Date to
which interest has been paid (or the Original Issue Date if no interest hereon
has been paid) in all other cases. "Interest Calculation Date" means (a) when
used with respect to Bonds bearing interest at the Daily, Weekly or Monthly
Rate, the first calendar day of each calendar month; and (b) when used with
respect to Bonds in any other case, the Interest Payment Date for such Bonds.
The principal or redemption price of this Bond shall be payable in immediately
available funds or in next day funds, depending on the applicable Rate
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Period. The principal or redemption price of this Bond (or of a portion of this
Bond in the case of a partial redemption) is payable to the registered owner
hereof at the principal corporate trust office of The Chase Manhattan Bank, New
York, New York (the "Paying Agent" for the Bonds), or its successor as Paying
Agent. Interest shall be paid to the registered owner hereof whose name appears
on the registration books kept by the Paying Agent as of the close of business
on the Regular Record Date by check mailed on the Interest Payment Date;
provided that interest for any Taxable, Flexible, Daily, Weekly, Monthly or
Quarterly Rate Period shall be paid in immediately available funds. Interest
accrued during any Taxable or Flexible Rate Period and at the maturity of the
Bonds shall be paid only upon presentation and surrender of Bonds. The Regular
Record Date for any Interest Payment Date shall be the close of business on (a)
the day immediately preceding the Interest Calculation Date if this Bond bears
interest at Daily, Weekly or Monthly Rates, or (b) the day immediately preceding
the Interest Payment Date if this Bond bears interest at Taxable, Flexible or
Quarterly Rates, except that, while this Bond bears interest at the Semiannual
or Term Rates or at the Fixed Rate (as described herein), the Regular Record
Date shall be the close of business on the last day of the calendar month
immediately preceding such Interest Payment Date. This Bond is registered as to
both principal and interest on the registration books kept by the Paying Agent
and may be transferred or exchanged subject to the further conditions specified
in the Indenture herein mentioned, only upon surrender hereof at the principal
corporate trust office of the Paying Agent. This Bond is payable solely from the
sources hereinafter mentioned.
THIS BOND IS A LIMITED OBLIGATION OF THE ISSUER, PAYABLE SOLELY FROM
THE REVENUES AND RECEIPTS DERIVED FROM THE EIGHTH SUPPLEMENTARY AGREEMENT
(DESCRIBED BELOW) EXCEPT TO THE EXTENT PAID OUT OF MONEYS ATTRIBUTABLE TO THE
PROCEEDS OF THE BONDS. THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OR OTHER
LIABILITY OF THE STATE, THE TOWN OF COLUMBIA, ALABAMA OR OF ANY OTHER POLITICAL
SUBDIVISION OF THE STATE. NEITHER THE FAITH OR CREDIT OF THE STATE, THE TOWN OF
COLUMBIA, ALABAMA NOR ANY OTHER POLITICAL SUBDIVISION OF THE STATE IS PLEDGED TO
THE PAYMENT OF THE DEBT SERVICE ON THIS BOND OR THE PURCHASE PRICE OF THIS BOND,
AND THE ISSUANCE OF THIS BOND DOES NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY
OBLIGATE THE STATE, THE TOWN OF COLUMBIA OR ANY OTHER POLITICAL SUBDIVISION OF
THE STATE TO APPLY MONEY FOR, OR TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATEVER
TO THE PAYMENT OF THE DEBT SERVICE ON, OR PURCHASE PRICE OF, THIS BOND. THE
ISSUER HAS NO TAXING POWER.
This Bond shall not be entitled to any right or benefit under the
Indenture, or be valid or become obligatory for any purpose, until this Bond
shall have been authenticated by execution by the Trustee or the Paying Agent,
acting as authenticating agent, of the certificate of authentication inscribed
hereon.
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This Bond is one of the Issuer's duly authorized [Taxable] [Tax Exempt]
Variable Rate Demand Revenue Bonds (Alabama Power Company Project) Series 1997
aggregating $65,000,000 original principal amount (the "Bonds"), issued under
and pursuant to the Constitution and laws of the State, and the Trust Indenture
dated as of November 1, 1997 (the "Indenture"), between the Issuer and
SouthTrust Bank, National Association, as trustee (the "Trustee"). The Bonds are
issued for the purpose of providing funds to finance certain sewage and solid
waste disposal facilities (the "Facilities") on behalf of Alabama Power Company
(the "Company") and paying certain costs of issuing the Bonds. Pursuant to an
Eighth Supplementary Installment Sale Agreement dated as of November 1, 1997
(the "Eighth Supplementary Agreement") between the Issuer and the Company, the
Company has agreed to make Installment Sale Payments to the Trustee, on behalf
of the Issuer, in amounts and at the times sufficient to pay the principal of,
redemption premium, if any, and interest on the Bonds. [The Bonds initially have
been issued as Taxable Bonds but all or any portion of the Taxable Bonds may be
converted to Tax Exempt Bonds as provided in the Indenture.]
Reference is made to (a) the Indenture for provisions concerning the
rights of the Registered Owners and the rights and obligations of the Issuer,
the Company, the Paying Agent and the Trustee and (b) each Remarketing Agreement
pursuant to which Goldman, Sachs & Co. is serving as remarketing agent for the
Taxable Bonds and the Tax Exempt Bonds for the purposes set forth in the
Indenture (such agent or its successors being herein collectively referred to as
the "Remarketing Agent"). The acceptance of the terms and conditions of the
foregoing documents, including amplifications and qualifications of the
provisions hereof each of which is on file at the principal corporate trust
office of the Trustee, is an explicit and material part of the consideration of
the Issuer's issuance hereof and each registered owner hereof by acceptance of
this Bond accepts and assents to all such terms and conditions as if fully set
forth herein.
Capital terms used in this Bond which are not defined herein but which
are defined in the Indenture shall have the respective meanings set forth in the
Indenture.
INTEREST ON BONDS
The rate of interest applicable to any Rate Period shall be determined
in accordance with the applicable provisions of the Indenture. The amount of
interest payable on any Interest Payment Date shall be computed (A) on the basis
of a 365- or 366-day year for the number of days actually elapsed during Daily,
Weekly, Monthly, Quarterly and Flexible Rate Periods, (B) on the basis of a
360-day year of twelve 30-day months during Semiannual and Term Rate Periods and
the Fixed Rate Period, and (C) on the basis of a 360-day year consisting of the
number of days actually elapsed during any Taxable Rate Period. If any Daily,
Weekly, Monthly, Quarterly or Flexible Rate Period falls in both 365- and
366-day years, the amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 365-day year for the number of days actually
elapsed when such rate period begins in a 365-day year and shall be computed on
the basis of a 366-day year for the number of days actually elapsed when such
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rate period begins in a 366-day year. Notwithstanding any provision of this Bond
or the Indenture to the contrary in no event shall the rate of interest paid on
this Bond exceed the Maximum Rate.
Rate Period means the period during which a particular rate of interest
determined as hereinafter provided for the Bonds is to remain in effect.
The Bonds shall initially bear interest at a Taxable Rate from the
Issue Date determined from time to time in accordance with the provisions of the
Indenture. As provided in the Indenture, all or a portion of the Bonds bearing
interest at a Taxable Rate may be converted to Tax Exempt Bonds bearing interest
at Variable Rates determined from time to time in accordance with the provisions
of the Indenture and thereafter all or a portion of said Bonds so converted to
Variable Rates may be converted to or from Variable Rates, Flexible Rates or to
the Fixed Rate pursuant to the Indenture. The rate of interest to be borne by
the Bonds during any particular Taxable Rate Period, Flexible Rate Period or
Variable Rate Period will be determined by the Remarketing Agent. The Bonds may
bear interest as follows:
Taxable Rate Period. When Taxable Bonds bear interest at a Taxable Rate
the Interest Rate for each particular Taxable Bond will be determined by the
Remarketing Agent and will remain in effect from and including the commencement
date of the Taxable Rate Period selected for that Bond by the Remarketing Agent
to a day which is immediately prior to a Business Day. While Taxable Bonds bear
interest at the Taxable Rate, Taxable Bonds may have successive Taxable Rate
Periods of any duration up to 270 days each and any Taxable Bond may bear
interest at a rate and for a period different from any other Taxable Bond. If
the Remarketing Agent fails for any reason to determine the Taxable Rate or
Taxable Rate Period, the Taxable Bonds shall have a Taxable Rate Period of one
day and shall bear interest at a per annum rate equal to 110% of the 15-day
Federal Reserve Composite rate until a new Taxable Rate Period and a new Taxable
Rate is established with respect to such Bonds.
Flexible Rate Period. When Tax Exempt Bonds bear interest at a Flexible
Rate the Interest Rate for each particular Tax Exempt Bond will be determined by
the Remarketing Agent and will remain in effect from and including the
commencement date of the Flexible Rate Period selected for that Bond by the
Remarketing Agent to a day which is immediately prior to a Business Day. While
Tax Exempt Bonds bear interest at the Flexible Rate, Tax Exempt Bonds may have
successive Flexible Rate Periods of any duration up to 270 days each and any Tax
Exempt Bond may bear interest at a rate and for a period different from any
other Tax Exempt Bond. If the Remarketing Agent fails for any reason to
determine the Flexible Rate for any Flexible Rate Period when required or if any
condition to the conversion of any Rate Period to a Flexible Rate Period is not
satisfied on or before the Conversion Date, the Rate Period for the Tax Exempt
Bond for which the Rate Period or Rate is not determined shall automatically
convert to the Daily Rate Period and the Daily Rate shall be in effect so long
as the Remarketing Agent fails to establish the Flexible Rate for such Bond.
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Variable Rate Periods. The Tax Exempt Bonds may bear interest at a
Variable Rate computed on a Daily, Weekly, Monthly, Quarterly, Semiannual or
Term basis. Except with respect to the determination of a new Daily Rate, if the
Remarketing Agent fails for any reason to determine the Variable Rate for any
Variable Rate Period when required or if any condition to the conversion of any
Rate Period to a Variable Rate Period for any Tax Exempt Bond is not satisfied
on or before the Conversion Date, the Rate Period for said Bond shall
automatically convert to the Daily Rate Period and the Daily Rate shall be in
effect so long as the Remarketing Agent fails to establish the applicable
Variable Rate for such Bond.
Daily Rate Period. While any Tax Exempt Bonds bear interest at a Daily
Rate the Interest Rate established for said Bonds will be effective from and
including the commencement date thereof and shall remain in effect to, but not
including, the next succeeding Business Day, unless the Remarketing Agent fails
to establish a new Daily Rate in which case the Daily Rate for the immediately
preceding date shall remain in effect.
Weekly Rate Period. While any Tax Exempt Bonds bear interest at a
Weekly Rate the Interest Rate will be determined by the Remarketing Agent to be
effective for a period commencing on Wednesday (whether or not Wednesday is a
Business Day) of each week and end on the day preceding the first day of the
next Weekly Rate Period. The length of the period, the day of commencement and
the last day of the period may vary in the event of a conversion to or from a
different Rate Period.
Monthly Rate Period. While any Tax Exempt Bonds bear interest at a
Monthly Rate the Interest Rate will be determined by the Remarketing Agent to be
effective for periods commencing on the Conversion Date from a different Rate
Period and on the first Business Day of each calendar month thereafter and
ending on the day prior to either the commencement date of the following Monthly
Rate Period or the Conversion Date to a different Rate Period.
Quarterly Rate Period. While any Tax Exempt Bonds bear interest at a
Quarterly Rate the Interest Rate will be determined by the Remarketing Agent to
be effective for periods commencing on the Conversion Date from a different Rate
Period and on the first Business Day of each third calendar month thereafter and
ending on the day prior to either the commencement date of the following
Quarterly Rate Period or the Conversion Date to a different Rate Period.
Semiannual Rate Period. While any Tax Exempt Bonds bear interest at a
Semiannual Rate the Interest Rate will be determined by the Remarketing Agent to
be effective for periods commencing on the Conversion Date from a different Rate
Period and on the first day of each sixth calendar month thereafter and ending
on the day prior to either the commencement date of the following Semiannual
Rate Period or the Conversion Date to a different Rate Period.
Term Rate Period. While any Tax Exempt Bonds bear interest at a Term
Rate, the Interest Rate will be determined by the Remarketing Agent to be
effective for periods commencing on the Conversion Date from a different Rate
Period and on the first day of a
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calendar month which is an integral multiple of 12 calendar months thereafter
and ending on the day prior to either the commencement date of the following
Term Rate Period or the Conversion Date to a different Rate Period.
Unless the Remarketing Agent fails to establish a rate for a Rate
Period for any Bond, the Rate Period for said Bond will remain in effect until
changed by the Remarketing Agent upon notice by the Company to the Issuer, the
Trustee, the Paying Agent and the Remarketing Agent as appropriate, in
accordance with the Indenture. During each Rate Period, the rate of interest on
the Bonds shall be that minimum rate which in the determination of the
Remarketing Agent if borne by the Bonds on the date of such determination taking
into account prevailing market conditions would result in the market value of
the Bonds being 100% of the principal amount thereof plus accrued interest if
any. While any Bond bears interest at a Taxable or Flexible Rate each Taxable or
Flexible Rate and Taxable or Flexible Rate Period for such Bond shall be
determined by the Remarketing Agent in connection with the sale of the Bond or
Bonds to which they relate by the offer and acceptance of purchase commitments
for such Bonds at a Taxable or Flexible Rate or Rates and for such Taxable or
Flexible Rate Periods as it deems to be advisable in order to minimize the net
interest cost on the Bonds taking into account prevailing market conditions.
AUTHORIZED DENOMINATIONS
Bonds which bear interest at Taxable or Flexible Rates will be issued
in the denomination of $1,000 and whole multiples thereof with a minimum
denomination of $100,000. Bonds which bear interest at a Daily, Weekly, Monthly,
Quarterly or Semiannual Rate will be issued in denominations of $100,000 and
whole multiples thereof. Bonds which bear interest at a Term or Fixed Rate will
be issued in the denomination of $5,000 and whole multiples thereof. In the
event of a change in Interest Rate mode so that a Registered Owner owns any Bond
in an unauthorized denomination for such interest rate mode, the principal
amount of such Bond will be considered to be a temporarily authorized
denomination while it is held by the Registered Owner only.
OPTIONAL TENDERS
While this Bond bears interest at a Variable Rate the registered owner
of this Bond has the right to tender this Bond (or portions thereof in amounts
equal to the lowest authorized denomination or whole multiples thereof) for
purchase by or on behalf of the Company at the principal amount hereof plus
accrued interest only as follows: (i) during a Daily Rate Period on any Business
Day upon telecopy, telex or facsimile notice, promptly confirmed in writing, to
the Paying Agent and the Remarketing Agent not later than 11:00 a.m. New York
City time on such Business Day,(ii) during a Weekly Rate Period on any Business
Day upon telecopy, telex or facsimile notice, promptly confirmed in writing to
the Paying Agent not later than 5:00 p.m. New York City time on any Business Day
at least seven days prior to the purchase date, (iii) during a Monthly or
Quarterly Rate Period on any Interest Payment Date upon written
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notice to the Paying Agent on or prior to 5:00 p.m. New York City time on any
Business Day at least three Business Days prior to the purchase date for Bonds
bearing interest at a Monthly Rate or at least seven days prior to the purchase
date for Bonds bearing interest at a Quarterly Rate and (iv) during the
Semiannual or Term Rate Period on the commencement date of the succeeding Rate
Period upon written notice to the Paying Agent on or prior to 5:00 p.m. New York
City time on any Business Day at least seven Business Days prior to the purchase
date.
MANDATORY TENDERS
This Bond is subject to mandatory tender for purchase by or on behalf
of the Company on the effective date of (i) a conversion from one Rate Period to
a different Rate Period (except for changes between a Daily Rate Period and a
Weekly Rate Period) or from a Term Rate Period to a Term Rate Period of a
different duration and (ii) a change from one Taxable or Flexible Rate Period to
another Taxable or Flexible Rate Period; provided that payment of principal or
redemption price shall only be made upon presentation and surrender at the
principal corporate trust office of the Paying Agent.
Interest on any Bond which is not tendered on the mandatory tender date
but for which there has been deposited with the Paying Agent an amount
sufficient to pay the purchase price thereof shall cease to accrue on the
mandatory tender date and such Bond shall be deemed purchased on the date fixed
for purchase thereof and the registered owner of such Bond shall not be entitled
to any payment other than the purchase price and such Bond shall no longer be
outstanding and entitled to the benefits of the Indenture except for the payment
of the purchase price of such Bond from monies held by the Paying Agent for such
payment. On the mandatory tender date the Paying Agent shall authenticate and
deliver substitute Bonds in lieu of such untendered Bonds.
WRITTEN NOTICE OF CONVERSION
The Paying Agent shall give notice by first class mail to the
registered owners of all Bonds of the conversion from one Rate Period to
another.
INTEREST PAYMENT DATES
While this Bond bears interest at a Taxable or Flexible Rate, interest
is payable on the day immediately succeeding the last day of each Taxable or
Flexible Rate Period, as the case may be. While this Bond bears interest at
Daily, Weekly or Monthly Rates interest is payable on the fifth Business Day of
each calendar month following the period in which interest at such rate has
accrued. During Quarterly Rate Periods interest is payable quarterly on the
first Business Day of the third calendar month following the month in which the
conversion to a Quarterly Rate occurs and on the first Business Day of each
third calendar month thereafter to which interest at such Quarterly Rate has
accrued. During any Semiannual or Term Rate Period
A-8
<PAGE>
or during the Fixed Rate Period interest is payable semiannually on the first
day of the sixth calendar month following the month in which the conversion to a
Semiannual Rate Period, Term Rate Period or the Fixed Rate Period, as the case
may be, commences and the first day of each sixth calendar month thereafter to
which interest at such rate has accrued except that the last interest payment
date for the Semiannual or Term Rate Period which is followed by a different
type of Rate Period other than a Fixed Rate Period shall be the first Business
Day of the sixth calendar month following the preceding Interest Payment Date.
Interest on this Bond is also payable on the Maturity Date hereof.
CONVERSION TO A FIXED RATE
The Indenture provides that the Company has the right to convert the
Interest Rate on Tax Exempt Bonds to a Fixed Rate to maturity upon the terms and
conditions set forth therein.
OPTIONAL REDEMPTION
During any Taxable, Flexible, Daily, Weekly, Monthly, Quarterly or
Semiannual Rate Period this Bond is subject to optional redemption by the Issuer
at the direction of the Company on any Interest Payment Date in whole or in part
at a redemption price equal to 100% of the principal amount thereof plus accrued
interest to the redemption date.
While the Bonds bear interest at a Term Rate or after conversion to a
Fixed Rate the Bonds are subject to optional redemption by the Issuer at the
direction of the Company in whole or in part on and after the dates and at the
redemption prices set forth below.
A-9
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Length of Term Rate Period
or Years to Maturity
After Fixed Rate Conversion Redemption Price
- --------------------------------------------------------------------------------------------------------
<S> <C>
Greater than 13 After 10 years at 102%, declining by 1/2
of 1% every 12 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 13 and greater than After 5 years at 102%, declining by 1/2 of
10 1% every 12 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 10 and greater than 7 After 4 years at 101-1/2%, declining by
1/2 of 1% every 6 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 7 and greater than 4 After 3 years at 101%, declining by 1/2 of
1% every 6 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 4 and greater than 3 After 2 years at 100-1/2% declining by 1/2
of 1% every 6 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 3 and greater than 2 After 1 year at 101-1/2%, declining by 1/2
of 1% every 6 months to 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 2 and greater than 1 After 1 year at 100%
- --------------------------------------------------------------------------------------------------------
Less than or equal to 1 Nonredeemable
========================================================================================================
</TABLE>
Notwithstanding the optional redemption provisions stated above, such
redemption provisions may be revised by the Remarketing Agent in connection with
a conversion to a Term Rate Period or a Fixed Rate Period upon delivery by the
Company of a Favorable Opinion of Bond Counsel in form satisfactory to the
parties. In determining any revisions to the optional redemption provisions, the
Remarketing Agent shall take into account redemption provisions and call
protection for securities having an investment quality which is, in the judgment
of the Remarketing Agent, approximately the same as the Bonds.
A-10
<PAGE>
EXTRAORDINARY OPTIONAL REDEMPTION
The Bonds shall be subject to extraordinary optional redemption by the
Issuer at the direction of the Company, in whole or in part at any time, at an
extraordinary optional redemption price of 100% of the principal amount thereof
plus accrued interest to the redemption date if one or more of the following
events occurs.
(a) Damage or destruction to the Plant or the Facilities 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 Facilities, 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.
(b) Loss of title to or use of a substantial part of the Plant
or the Facilities 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 Facilities
or the Plant so uneconomical that they or it are abandoned.
SPECIAL MANDATORY REDEMPTION
The Bonds, other than Taxable Bonds, are also subject to special
mandatory redemption prior to maturity not later than 180 days after the
occurrence of a Determination of Taxability at a redemption price of 100% of the
principal amount hereof plus accrued interest to the redemption date. The manner
of redeeming Bonds is described in detail in the Indenture.
DEFAULT PROVISIONS
In case an Event of Default as defined in the Indenture shall have
occurred, the principal of all Bonds then outstanding under the Indenture may
become due and payable prior to their scheduled maturity date.
GENERAL PROVISIONS
The Bonds are and will be equally and ratably secured to the extent
provided by the Indenture by the Installment Sale Payments to be received from
the Company under the Eighth Supplementary Agreement and other amounts payable
by the Company under the Eighth Supplementary Agreement. The Issuer has also
pledged and assigned to the Trustee as security
A-11
<PAGE>
for the Bonds all other rights and interest of the Issuer under the Eighth
Supplementary Agreement (other than its rights to indemnification and payment of
certain administrative expenses and certain other rights).
No Registered Owner shall have any right to pursue any remedy under the
Indenture unless (a) the Trustee shall have first been given written notice of
an Event of Default; (b) the Registered Owners of at least 25% in principal
amount of the Bonds then Outstanding shall have requested the Trustee in writing
to exercise the powers granted in the Indenture or to pursue such remedy in its
or their name or names; (c) the Trustee shall have been offered indemnity
satisfactory to it against costs, expenses and liabilities; and (d) the Trustee
shall have failed to comply with such request within a reasonable time.
While Bonds are registered to Cede & Co., transfer of beneficial
ownership in Bonds by Beneficial Owners may be made through the DTC book entry
system pursuant to the Indenture. The transfer of Bonds no longer in book-entry
only form shall be registered upon the registration books kept at the principal
corporate trust office of the Paying Agent, at the written request of the
Registered Owner hereof or his attorney duly authorized in writing, upon
surrender of this Bond at said office, together with the attached instrument of
transfer duly executed by the Registered Owner or his duly authorized attorney.
Except in the case of a partial redemption and in connection with the
remarketing of Bonds, the Paying Agent shall not be obligated to make any such
exchange or transfer of Bonds during the 15 days preceding the date of the first
mailing of notice of any proposed redemption of Bonds, nor shall the Paying
Agent be required to make any registration or registration of transfer of Bonds
called for redemption.
The Indenture and the Agreement may be modified or amended only with
the consent, with certain exceptions, of the Registered Owners of not less than
a majority in aggregate principal amount of all Bonds Outstanding under the
Indenture.
Reference is hereby made to the Indenture and the Agreement, copies of
which are on file with the Trustee, for the provisions, among others, with
respect to the nature and extent of the rights, duties and obligations of the
Issuer, the Company, the Trustee, the Paying Agent, and the Remarketing Agent
appointed pursuant to the Indenture, and the Registered Owners of the Bonds. The
Registered Owner of this Bond, by the acceptance hereof is deemed to have agreed
and consented to the terms and provisions of the Indenture and the Agreement.
The Issuer, the Trustee, the Paying Agent, and the Remarketing Agent
may deem and treat the person in whose name this Bond is registered on the
registration books of the Issuer maintained by the Paying Agent as the absolute
Registered Owner hereof for all purposes, whether or not this Bond is overdue,
and neither the Issuer, the Trustee, the Paying Agent nor the Remarketing Agent
shall be affected by any notice to the contrary.
A-12
<PAGE>
IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the issuance of
this Bond and the Bonds is duly authorized by law; that all acts, conditions and
things required to exist and necessary to be done or performed precedent to and
in the issuance of this Bond and the Bonds to render the same lawful valid and
binding have been properly done and performed and have happened in regular and
due time, form and manner as required by law; that all acts, conditions and
things necessary to be done or performed by the Issuer or to have happened
precedent to and in the execution and delivery of the Indenture and the Eighth
Supplementary Agreement have been done and performed and have happened in
regular and due form as required by law; that due provision has been made for
the payment of the principal of and premium, if any, and interest on this Bond
and the Bonds by irrevocably assigning the described Revenues as provided in the
Indenture; that payment in full for the Bonds has been received; and that the
issuance of the Bonds does not contravene or violate any constitutional or
statutory limitation.
IN WITNESS WHEREOF, The Industrial Development Board of the Town of
Columbia, has caused this Bond to be executed with the manual or facsimile
signature of the Chairman or Vice Chairman of its Board of Directors and its
official seal to be imprinted hereon and attested with the manual or facsimile
signature of its Secretary or Assistant Secretary.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE TOWN OF COLUMBIA
(SEAL)
By:
Chairman of the Board of Directors
Attest:
By:
Secretary
A-13
<PAGE>
CERTIFIC TE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned
indenture.
Date of Authentication:
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By:
Authorized Signatory
A-14
<PAGE>
(To appear on face of Bond while the Bonds are in Taxable, Flexible or Variable
Rate Periods, except for Initial Bond)
Interest Payment Date* Interest Rate*
Number of Days in Period* Interest Due at End
of Period*
Type of Rate Period
*Complete only for Bonds bearing Interest at Flexible or Taxable Rates
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
- -------------------------------------------------------------------------------
Please insert Social Security or Taxpayer Identification Number of Transferee
\ /
- -------------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code of Transferee)
- -------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
- -------------------------------------------------------------------------------
attorney to register the transfer of the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
- --------------------------------------------
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a securities transfer
association recognized signature guarantee
program.
- ---------------------------------------------
NOTICE: The signature above must correspond
with the name of the Registered
Owner as it appears upon the front of this
Bond in every particular, without
alteration or enlargement or any change
whatsoever.
A-15
<PAGE>
EXHIBIT B
Letter of Representations of DTC
B-1
EXHIBIT C
Balch & Bingham LLP
Birmingham, Alabmama
205-251-8100
December 4, 1997
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 $65,000,000
aggregate principal amount of its Taxable Variable Rate Demand Revenue Bonds
(Alabama Power Company Project), Series 1997 (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 LLP
